Leadershipand Political Regime

Policy Formulation in Developing CountriesGRIPS Development Forum

Leadership is Crucial Top leader with proper vision and decisive action

is crucial for development. Not all strong leaders are effective leaders.

Economic literacy is the key requirement. A good leader is the primary force in institutional

change, because he/she can build other necessary conditions and systems.

Effectiveleaders

Strong leaders

All leaders

Good Leaders:Given or Can be Promoted? Obviously, for anyone and for any political regime,

existence or absence of good leaders is not directly controllable.

But there are indirect ways to raise the probability of emergence of good leaders: Leadership and elite education Comparative studies in development politics Systematic analysis of technical aspects of effective policy

making (eg. This course and my book, Learning to Industrialize)

Well-calculated cooperation and pressure from foreign governments and aid agencies (eg. Leftwich’s DLP)

Regional contagion of good leadership (eg. East Asian AD) Biographies, dramas, movies of excellent national leaders

Typology of StateRobert Wade’s lecture at GRIPS (May 2006)

1. Neopatrimonial state (predatory state) No separation of public & private domain, leaders and

officials use state power to enrich themselves.

2. Fragmented-multiclass state (populism, soft state) Public & private domain are separated, but power base is

diverse and decisions are fragmented.

3. Cohesive-capitalist state (developmental state, hard state)

Authority is centralized, power base is narrow (serves capitalists only), and state power penetrates deeply.

Wade argues that 2 and 3 can implement industrial policies, but not 1 – but static analysis?

East Asia’s SolutionAdopt Authoritarian Developmentalism (AD) during

the take-off (for a few decades)

Key ingredients of AD Powerful and wise (=economically literate) top leader Development as a supreme national goal (obsession) Technocrat group to support leader and execute

policies Legitimacy derived from successful development Popular support (because of rising income)

The leader, as the primary force of change, creates the other four conditions.

Why Power Concentration is Needed? Growth requires a critical mass of mutually

enforcing policies. A free hand of the state is needed to mobilize resources quickly and flexibly.

Private sector is weak in most developing countries. The state must lead initially.

If broad participation is allowed, policies are too slow and can’t achieve critical mass due to:

--Power struggle, party politics, interest groups, etc.--Processes which require patience and compromise, including parliamentary debate and consensus building--Some groups refuse to cooperate with state purposes

Authoritarian Developmental States in East Asia1945 50 55 60 65 70 75 80 85 90 95 2000 05 10 15

49 76 97 02 12

China

48 60 61 79 80 88 93 98 03 08 13

South Korea

49 75 78 88 00 08

Taiwan

46 48 53 57 61 65 86 92 98 01 10

Philippines

67 98 99 01 04 14

Indonesia

59 65 90 04

Singapore

57 70 76 81 03 09

Malaysia

48 57 58 63 73 75 76 77 80 88 91 92 95 97 01 06 08 11 14

Thailand

55 76 87 88 91 97 06

Vietnam

53 75 91 98 01 06 10

Laos

49 53 60 70 76 79 89 93 98

Cambodia

48 62 88 97 11

Myanmar

48 94 11

North Korea Kim Jong Un

Note: The pink area shows authoritarian developmental leaders and the dark area indicates pre-independence periods. For China, the most influential leader among those holding highest positions is indicated.Source: Information in Suehiro (2000), p.115 was revised, updated, and expanded by the author.

Kim Il Sung Kim Jong Il

People's Republic ofKampuchea

RanariddhHun Sen

Hun Sen

U Nu Burma Socialist Programme Party /Ne Win SLORC SPDC/Than Shwe Thein Sein

IndependentKingdom

Monarchy-RegencyKhmer

Republic

Phan Van Khai Nguyen Tan Dung

Kingdom of Laos Kaysone Phomvihane KhamtaySisav

athBounnyang

Bouasone

Thongsing

Chuan ThaksinAbhisi

tYinglu

ckPrayut

Ho Chi Minh Pham Van Dong Pham Van DongDo

MuoiVo Van Kiet

Najib

Pibulsonggram Sarit Thanom PremChua

n

LaborParty

People'sAction Party

Lee Kuan-yew Goh Chok-tong Lee Hsien Loong

UMNO / Rahman Razak Hussein Mahathir Abdullah

Estrada

Arroyo B.AquinoⅢ

SukarnoWahid

Megawati

Yudhoyono Widodo

Chen Shui-bian Ma Ying-jeou

Quirino Garcia Aquino Ramos

Kim YNKim Dae-

jungRoh Moo-

hyunLee MB

ParkGH

Nationalist Party Chiang Kai-shekYenCK

Chiang Ching-kuo Lee Teng-hui

Mao Zedong Deng Xiaoping Jiang Zemin Hu Jintao XiJinping

Rhee Syng-man Park Chung-hee Chun Doo-hwan Noh Tae-woo

Marcos

Suharto

Emergence of AD AD emerges through election as well as a coup. AD is more likely to rise when the nation’s

existence is threatened by: External enemy Internal ethnic/social instability Incompetent and corrupt leader

The rise and fall of AD depends on: - Development stage of each country - International environment

Eg. Cold War – reduced global criticism of authoritarian states Present – non-democratic states are not allowed

Guaranteed Failure of Development?

Samuel P.Huntington and Joan M. Nelson, No Easy Choice: Political Participation in Developing Countries, Harvard Univ. Press, 1976.

Technocratic Model Populist Model

Economic growth Equalization

Political suppression

(authoritarianism)

Increased participation (democracy)

Rising inequality

Economic stagnation

Political instability

Political instability

Social explosion!!!

Political suppression!!!

START START

END END

E.Asia’s Authoritarian Developmentalism

Economic growth

New social problems (inequality,

crime, pollution...)

Political stability

Developmental policies

Exit to a richer & more democratic society (examples: Korea, Taiwan)

START

END

Supplementing policies

(checked)

A few decades later

Exit of AD

AD is a temporary regime of convenience, needed only to push up the country to a higher level.

Once a certain level is reached, AD becomes an obstacle to further development.

Watanabe (1998) argues that successful AD melts away automatically through social change and democratic aspiration.

“if development under authoritarian regime proceeds successfully, it will sow the seeds of its own dissolution” [improved living standards and diversified social strata]

Low income trap

High income society

Catching-up period(AD useful)

DemocracyPluralism

Gov’tװ

Capitalists

Farmers

Suppress

Farmers

Gov’tװ

Capitalists

Middle Mass

Workers, urban dwellers,professionals, students

Demand for democracy

20-30 years ofsustained growth

The Rise and Fall of East Asian Authoritarian Developmentalism

Government-capitalist coalition

(undemocratic)

Workers, urban dwellers

Features:

- Crisis as a catalyst

- Strong leader

- Elite technocrat group

- Developmental ideology

- Legitimacy through economic results (not election)

- Social change after 2-3 decades of success

Exit of AD – A Less Optimistic View However, there are also barriers to exit: stubborn

leader, bureaucratic resistance, interest groups. Therefore, leadership, policy and struggle are also needed for an exit.

Succession problem--strong leaders often refuse to step down because they will be revenged, jailed and even executed after transition, with most (all?) of their policies denied and reversed.

For a smooth exit, political maturity must accompany economic growth (difficult, but not impossible)

Opponents of AD Many people oppose AD for lack of democracy.

“I do not subscribe to the idea that you need to delay democratization just so that you can actually have growth or that you can have democracy only when you can afford it.” (Dani Rodrik, 2006)

Some argue that freedom, equality, participation, empowerment are required for development.

“Expansion of freedom is viewed… both as the primary end and as the principal means of development.” (Amartya Sen, 1999)

Millennium Development Goals (MDG), pro-poor growth,

endogenous development, human security

Korean Experience N.T.T.Huyen “Is There a Developmental Threshold for Democracy?:

Endogenous factors in the Democratization of South Korea” (2004)

“Democracy as an advanced form of politics is not independent from socio-economic development.”

“Developmental threshold for democracy [is] a point in the development process beyond which democracy can be effectively installed and sustained.”

1960 1970 1980 1990

SyngmanRhee

(dictator)

Park Chung Hee(dictator)

Chun DooHwan

(dictator)

RohTaeWoo

Student protests

Minjung Movement

Yushin Constitution (1972)

Kwangju Massacre (1980)

Return to democracy (1987)

History of South Korean Politics

Corrupt & inefficient

Growth under AD & North threat

People’s protest mounts

Picked by Chun to be

elected

Economicgrowth

Socialmobilization

UrbanizationIndustrializationModernization

Political cultureCompromise as common political culture

Active political participationValues such as equality, moderation

Social structureRise of workers & middle class

Old classes losing powerEmergence of civil society

Democracy

0100020003000400050006000700080009000

10000

1960 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94

Korea: Per Capita GDP in 1990 USD

Ms. Huyen’s Model

Farmers80%

RulersRulers and upper bourgeoisie

Students and professionals

Industrial workers, peasants, miners More than 50%

Middle class

38.5%

1961 1985Source: N.T.T.Huyen (2004)

Form vs. Substance of Democracy in the Context of Latecomer Development Is AD replicable in Africa? Central Asia? Elsewhere? Does 21st Century allow AD? The Cold War already ended. Can we separate “authoritarian” elements from

“developmental” elements, and take only the latter? Countries that already have free election, functioning

parliament, human rights—can they adopt developmentalism without sacrificing their political achievements?

Need to go beyond simple dichotomy between AD vs. democracy

Need to decompose democracy into components and stages and analyze its structure

Components of Democracy Human rights and freedom Legitimacy (election) Rule of law Participation Public purpose Power decentralization (L-E-J, center-local)

Only some components should be restricted, if at all, to conduct development policy. Amount of restriction should be reasonable.

Random, excessive oppression should never be allowed.

Instability of Developing Country Politics Even under the form of democracy, politics may

be characterized by instability, personal gains, intolerance and radicalism.

Rules have not been institutionalized, and authority is not firmly established or accepted.

Election results, human rights, parliamentary rules can be bended, and contested by opponents.

Disputes go to extremes (violence and terrorism). Negotiation and compromise are rejected.

“Revenge politics” – prosecution, ousting or even execution of former PM or President; complete denial of his/her policies.

Africa: Political Regimes 1955-2010

Sources: Author’s classification based on the following datasets and studies: M. Miyamoto & M. Matsuda, eds, Shinsho African History, Kodansha (1997); B. Ndulu, S.A. O’Connell, R.H. Bates, P. Collier and C.C. Soludo, eds, The Political Economy of Economic Growth in Africa 1960-2000, Cambridge University Press (2008); CIA, World Fact Book, various issues; Japanese Ministry of Foreign Affairs, Basic Data of Countries, various issues.

0

10

20

30

40

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

Transition period

At civil war

Multi-party system

Military regime

One-party system

Colony

Number of countries (total 48)

Ethiopia’sDemocratic Developmentalism (DD) Prime Minister Meles Zenawi (in power 1991-2012) Aiming at paradigm shift from Neo-liberalism to DD DD: “A developmental regime that stays in power for long

by winning free elections under multiple parties”- Strong state promoting value creation and punishing rent seeking- Small farmers as political base (not capitalists)- Agricultural Development Led Industrialization (ADLI)

Example: leather industry promotion- Sticks: tax & ban for unfinished/semi-finished exports- Carrots: Leather Institute (training, technology, etc.), donor support, twinning with India, prioritized allocation of loans/forex, matching with foreign firms, monthly gov’t-business meetings and monitoring, etc.

Gov’tװ

Ruling party

Capitalists(Large & medium size producers, merchants, banks, foreign firms)

Urban workers, SMEs, service providers

Small farmers(Drivers of agriculture?)

Political coalition

Drivers of industrialization

Leadership by strong developmental state

Institutions, policies, incentives (carrots & sticks) for allocating

rents to value creators and punishing rent

seekers

Donors

ProfessionalsIntellectuals

Ethiopia: DD, ADLI, GTP

Are AD and DD Really Different? Today’s latecomers are not necessarily more

advanced than past latecomers in political maturity, HRD or PSD.

They must adopt “democracy (elections),” free market and globalization because these principles now rule in the world (since 1990s).

The substance of development (productivity, competitiveness, policy quality, etc) cannot be realized just by changing political or economic frameworks.

AD and DD are different adaptations by national leaders to shifting global environments for the same purpose of development through receiving international aid and support.

PM Meles of Ethiopia（ Letter dated July 30, 2009)

“Democratization in developing countries that comes as a result of external pressure is in my view unsustainable… because the external pressure is unsustainable. The neo-liberal triumphalism… is coming to an end.”

“There is an unavoidable trade-off between democratization and policy continuity… There is always the risk that the developmental state will be voted out… [but] it is not inevitable.”

“One last point I want to stress however is that AD and DD are much closer to each other than AD is to other Authoritarian governments or DD is to other democratic governments.”

Pure dictatorship

Advanced democracyAD DD

REFERENCES Huntington, Samuel P., and Joan M. Nelson, No Easy Choice: Political

Participation in Developing Countries, Harvard University Press, 1976. Iwasaki, Ikuo, Ajia Seiji wo Miru Me: Kaihatsu Dokusai kara Shimin

Shakai e (The Perspective on Asian Politics: From Developmental State to Civil Society), Chuko Shinsho, 2001, Japanese.

Leftwich, Adrian, "Democracy and Development: Is There Institutional Incompability?" Democratization, 12:5, Dec. 2005, pp.686-703.

Nguyen Thi Thanh Huyen, "Is There a Developmental Threshold for Democracy?: Endogenous Factors in the Democratization of South Korea," in AsDB and VDF, Which Institutions Are Critical to Sustain Long-term Growth in Vietnam? AsDB, 2004 (English and Vietnamese).

Noman, A., K. Botchwey, H. Stein, and J.E. Stiglitz, eds, Good Growth and Governance in Africa: Rethinking Development Strategies, Oxford Univ. Press, 2012.

Ohno, Kenichi, Shijo Iko Senryaku (Strategy for Market Transition), Yuhikaku, 1996, Japanese.

Ohno, Izumi, and Kenichi Ohno, “Dynamic Capacity Development: What Africa Can Learn from Industrial Policy Formulation in East Asia,” ch.7, A. Noman, et al. eds (2012), pp.221-245.

Ohno, Kenichi, "The Role of Government in Promoting Industrialization under Globalization: The East Asian Experience," in ADB and VDF, Which Institutions Are Critical to Sustain Long-term Growth in Vietnam? Asian Development Bank, 2004 (English and Vietnamese).

Ohno, Kenichi, Learning to Industrialize: From Given Growth to Policy-aided Value Creation, Routledge, 2013.

Ohno, Kenichi, and Izumi Ohno, eds, Japanese Views on Economic Development: Diverse Paths to the Market, Routledge, 1998.

Rodrik, Dani, "Home-grown Growth: Problems and Solutions to Economic Growth," an interview with Harvard International Review, Winter 2006, pp.74-77.

Sen, Amartya, Development as Freedom, Anchor Books, 1999. Suehiro, Akira, Catch-up gata Kogyoka ron (Catch-up Type

Industrialization), Nagoya University Press, 2000, Japanese. Wade, Robert, "The Case for Open-economy Industrial Policy," paper

for PREM conference on the Institutional Foundation of Growth, World Bank, April 2006, Washington, DC, and GRIPS seminar, May 2006, Tokyo.

Watanabe, Toshio, Shinseiki Asia no Koso (Designing Asia for the Next Century), Chikuma Shinsho, 1995, Japanese. English translation in Ohno-Ohno (1998).

Zenawi, Meles, “States and Markets: Neoliberal Limitations and the Case for a Developmental State,” ch.5, A. Noman et al. eds (2012), pp.140-174.