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Bargaining for Development: An Assessment of the World Bank’s 2017 World Development Report, "Governance and the Law"

8 Jan 2019



“Why do countries experience wars? Why is growth elusive in some countries? What accounts for inequality within nations? Why is service provision poor in poor countries? How can countries achieve development? These questions are about security, growth and equity and are at the heart of the development challenge. Countries that are mired in violence often experience sharp dips or volatility in growth and high levels of inequality; high growth that is not widely shared can lead to legitimation problems and violent challenges to the political order; and redistributive policies that are not grounded in growth strategies may reinforce poverty and lead to inequality and instability.

“Security, growth and equity are, thus, intertwined. However, they have often been studied separately by different disciplines, with political scientists focusing on security, mainstream economists on growth, and political economists on equity. This often results in discrete solutions that may impact adversely on different dimensions of development. The World Bank’s 2017 World Development Report, Governance and the Law, seeks to overcome these problems by providing a framework for understanding security, growth and equity from a governance perspective. It argues that development is better understood by transcending ‘proximate factors’ and focusing instead on ‘deeper underlying determinants’, with governance as the key determinant. It is a hugely ambitious effort, which is refreshing in parts, especially for its recognition of power, conflict and bargaining as central factors in understanding why policies fail.

[…]

Governance and the Law is the World Bank’s most comprehensive report on governance. It not only treats governance as the primary determinant of development; it also uses insights from game theory on bargaining to analyse how governance can promote good outcomes. It defines governance as ‘the process through which state and nonstate actors interact to design and implement policies within a given set of formal and informal rules that shape and are shaped by power’ (p. 3, Box 0.1). This definition may overplay the importance of bargaining in governance. However, it is instructive that the Bank now recognizes the centrality of power, politics and bargaining in the study of development.

Governance and the Law provides many useful insights. The focus on the core functions of institutions—commitment, coordination and cooperation —helps to explain the conditions under which policies can be effective; and when combined with the insights on power asymmetries, this throws light on why supposedly good policies may fail to produce good outcomes. The discussion on how unequal power relations can undermine the core functions of institutions through exclusion, capture and clientelism is a useful reminder of the problems often encountered by the poor in accessing the policy arena.

“Nevertheless, Governance and the Law has significant gaps and limitations. First, while the core functions of institutions may explain policy effectiveness, it is the interaction of specific institutions, policies and practices, or the way they are configured, that may explain development outcomes. The Report recognizes this dynamic in the core chapters, but does not incorporate it in the conceptual framework. Second, despite the treatment of governance as bargaining, there is little discussion on real bargaining regimes that have fundamentally improved outcomes in security, growth and equity. There is a tendency to draw on numerous examples, often without a macro-historical context, to understand the policy process. Policy capture and clientelism, perceived as a drag on governance, may not always undermine security, growth and equity; in fact, they may advance them. Third, the treatment of elites and citizens as drivers of bargains is superficial. This two-actor approach may be good in modelling strategic calculations in game theory, but it simplifies the relations between citizens and elites in successful bargains. It does not identify the configuration of social forces and politics that can produce win-win outcomes. Fourth, the discussion on the role of international actors and rules in influencing domestic bargaining processes largely ignores the role of the World Bank and the International Monetary Fund (IMF) in shaping policy making in poor countries. Indeed, those working on the governance and development problems of these countries will be disappointed that the bargaining model supported by the Bank and IMF, the Poverty Reduction Strategy Papers (PRSPs), is barely mentioned.

Yusuf Bangura's Assessment provides “an overview of the Report’s conceptual framework, highlighting some of the drawbacks in its treatment of governance and the policy-making process. It then analyses the impact of governance on security, growth and equity, highlighting the constellation of institutions and politics that underpin successful bargains, as well as the role of capture and clientelism in such bargains. The final substantive section examines the key drivers of change, showing why the elites–citizens model is insufficient to capture complex social forces and politics in delivering development. It also discusses the effects of international actors and rules on domestic bargaining processes, pointing out the Report’s failure to engage the PRSP bargaining model in poor countries. A brief final section concludes.”

Yusuf Bangura is a Senior Research Associate with the United Nations Research Institute for Social Development (UNRISD) in Geneva. He was the lead author of the UNRISD flagship report Combating Poverty and Inequality: Structural Change, Social Policy and Politics (UNRISD, 2010). In 2013–14, he taught international political economy at Fourah Bay College, University of Sierra Leone.


Excerpted from: Development and Change 49(2), FORUM 2018, March 2018, pages 644–661 (paywall)
DOI: 10.1111/dech.12375