Markets, states and democracy: Patron–client networks and the case for democracy in developing countries

Abstract

SummaryThe debate between modernization theory and its opponents is over. Neither evidence nor argument can support the claim that authoritarianism is necessary for economic development. However, is democracy necessary for development, as opposed to obviously being desirable on other grounds? The evidence on how democracy actually operates in developing countries raises important questions about the relationship between markets, states, and democracies. In particular, the role of patron-client networks in these countries questions the relevance of the standard arguments made for the positive economic effects of democracy in developing countries. There is, however, an argument from the neo-Weberian school that claims that democratization can begin to undermine the patron-client relationships (neopatrimonialism) that impede development. But in fact, there are powerful structural reasons why this is not likely to happen. Economic characteristics of developing countries make patron-client politics both rational for redistributive coalitions and effective as strategies for achieving the goals of powerful constituencies within these coalitions. These are unlikely to be affected by democratization. The evidence strongly supports our analysis. If this is right, and if many types of patron-client politics are damaging for development, democratization is unlikely to accelerate economic development. The case for democratization has to be made on other grounds.

Institutional Transformations, Polity and Economic Outcomes: Testing the North-Wallis-Weingast Doorsteps Framework

“…Countries which are welladvanced along the transition path from a fragile to a mature natural state tend to have medium scores under the democracy indicator but very poor scores under the corruption indicator. This confirms in fact that many of the "flawed democracies" still show several features of clientelism (Khan, 2005). Only once countries have passed the average score of the overall doorstep index, corruption is waning faster, while further democratic reforms take shape.…”

Governance and Growth Challenges for Africa

“…In this respect, the argument is close to the general good governance one summarized earlier in Khan (this volume). However, this theoretical argument is not supported by any historical observation from anywhere in the world that shows that democratization has systematically driven (rather than having followed or co-evolved in complex ways with) the emergence of a modern capitalist economy and the Weberian state that is associated with it (Khan 2005). In particular, democratization in developing countries does not do away with patron-client politics but does change their organization in ways that are sometimes more developmental and sometimes less.…”

“…Clearly democracy is an end in itself and should be supported on these grounds alone (Khan 2005). But if we support democracy because we believe it is a mechanism that reduces rent seeking and corruption, we are likely to be frequently disappointed.…”

“…While all these characteristics are clearly visible in Africa, a comparative historical analysis shows that these features are common to all developing countries going through the developmental transformation. The scarcity of fiscal resources for providing generalized public goods means that in all developing countries variants of patron-client politics are used as a means of delivering to politically powerful constituencies whose support is vital for the survival of the ruling group (Khan 2005).…”

“…In these contexts, programmes to increase democratic accountability may or may not directly assist the management of growth and productivity enhancement strategies. Sometimes, powerful patron-client factions who are the primary players in the democratic process in these countries are the very organizations that impede the efficient allocation of public resources, while at other times their competition may enable the introduction of reforms and the efficient allocation of resources (Jenkins 2000;Khan 2005). The only general conclusion that we can draw is that support for democracy in developing countries should not be justified by the assertion that democracy will always improve market efficiency.…”