R.H. Bates


A summary 

In a Nutshell

Antony Downs’ theory of the median voter suggests that politicians should be sensitive to the policy preferences of the median voter. This suggests that in developing countries the government should be working for the poor given that the likelihood of the median voter being amongst the rural poor is very high. Yet we do not always observe this. If democracy does not help the majority of citizens then this suggests that the power of democracy for good may be less pronounced than Sen etc. believe. Thus we need to know why this phenonemon persists.

 One answer is alluded to in the Lake and Baum piece – the costs of participating in the political process may not be distributed evenly throughout the population. This means that it may be far easier for a small group to participate and make demands of the state than for the majority. The small group benefits not only from their status as a privileged group (Olson), but also from cheaper access to government. The more democratic is the democracy, the more evenly spread are the costs of participation, and yet even in advanced democracies some groups have much cheaper access to government (e.g. Rupert Murdoch). Thus in developing countries which are often characterized by strong presidents (Sub Saharan Africa/Latin America), or whose system is characterized as a delegative democracy (O’Donnel), this effect can be many times greater and leave much of the population excluded from the political process.

 Another issue may be the development rationale which has emphasized the superiority of industry over agriculture. As agriculture often is the dominant economic activity in the developing world policies that argue for industry at the expense of agriculture implicitly are arguing for a small group of favoured industrialists over the large majority of agricultural workers.

 This is a characteristic of the states that Bates examines in this book. They adopted policies in line with developmental economics at the time which argued for a suppression of agricultural commodity production in favour of industry and manufacturing. This was initially effected through the surpluses earned by monopsony marketing boards who bought agricultural goods at a cost below the international price level, exported those goods and used the surplus to fund development projects, meaning investments in industry. These marketing boards eventually became the faithful servants of government that effectively taxed the agricultural poor in order to benefit industrialists. This redistribution of income was partly due to the equation of industry with modernity, and partly for political economy reasons of influential industrial elites seeking to maintain their power and obtaining rents. Another beneficiary is the bureaucracies that administer the system, as they set the prices they could afford to be corrupt and inefficient and simply pass on the cost to the agricultural producers.  The bottom line is that governments in Africa were willing to sacrifice the interests of farmers in order to promote the formation of industrial establishments.

 Often the redistribution was wasted as investments were made in industries for which there was no comparative advantage, no synergies with local businesses and no native expertise.

 Whether the key motive for these policies was developmental thinking or simply elite preference promotion is unimportant. What is important is that the mix of policies chosen for development permitted the entrenchment of hugely powerful private interest and this has been the source of the durability of those policy commitments. The value of the rent (from underpaying then selling at world price) could be appropriated in bribes, or used to win clients by supplying the commodity cheaper than it was otherwise available. Indeed the ability to ration the goods meant that political coalitions could be built in order to sustain the system. This was later seen in import licensing. The protected industries were stuffed full of employee friends of those in power as the noncompetitive rents meant all costs could be passed on whilst clients could be won by the provision of secure employment. In sum, the rents generated by the system of development were both economically valuable to those who could control them, and politically useful to those who could distribute them. A network of self-interest was created.

 But why would the rural poor stand for such a system? The answer is that they were politically marginalized. Obvious problems of education, geographic dispersion, large group organizational challenges (Olson) etc. were impediments. But they were also deliberately excluded from politics. Organizations and parties that sought to represent them were banned and prohibited from operating often by coercive means. The governments could also fragment rural opposition by making it the private interest of certain individuals to cooperate in programmes that are harmful to producers as a whole (by distributing certain rents conditional upon support). These benefits could then be used to construct political allies. Another tool was the ability of the government to allocate public spending in order to ensure acquiescence.

 Thus there was no sensitivity to the policy preferences of the rural poor. Through violence and coercion organization was prevented. They bought off some members of the producing population and encouraged others by strategically location public works. This is the story of how individuals are marginalized into accepting policies that hurt agricultural producers as a whole.

 [Latin America makes an interesting comparison. The ISI policies were targeted at industrialization. This was at the expense of agricultural producers, although that market was characterized by oligarchies rather than independent producers. Thus industrial policy is always pursued at the expense of another sector. However, in LA the median voter was almost certainly an urban dweller. I think there is an interesting point here but I’m not yet sure what it is….]

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