Structural Features of Democracy in Developing Countries

1. Structural Features of Democracy in Developing Countries Mushtaq H. Khan, Department of Economics, SOAS

2. The evidence and the response Democracy in developing countries appears to operate very differently from democracy in advanced countries The popular response is that democracy is failing because of weak institutions, corrupt politicians and powerful groups preventing the expression of the popular will’ Democracy in any country does not directly reflect the ‘popular will’ because a winning coalition can be cobbled together in many different ways A better starting point is Schumpeter’s definition of democracy as a system where elites compete for power by trying to win elections In this alternative view, democracy is a method of conflict resolution (probably the least bad system over time) The real question is why is elite competition is relatively civilized in advanced countries but frequently results in crisis in developing societies?

3. Democracy in Advanced Countries Democracy in advanced countries is relatively ordered because of powerful feedback mechanisms on competing elite groups The existence of a dominant capitalist sector has at least three significant implications for politics First, the welfare of most people depends on the health of the capitalist sector (including workers, middle class as well as capitalists) As a result, democratic politics remains broadly pro-capitalist even though capitalists are the minority. Secondly, the size of the fisc means that most powerful groups can meet their redistributive demands through formal politics to control the budget Thirdly, development rules out some types of politics. Most assets are productive and therefore property rights are well protected.

4. Developing countries In contrast, the capitalist sector is not dominant in developing countries The welfare of most people does not directly depend on the health of the capitalist sector. Moreover the capitalist sector often lacks legitimacy and cannot openly fund politics or influence policy As a result, democratic politics can vary widely in the ideological and political strategies of elites to organize their vote blocks Secondly, the small size of the budget means that most redistributive groups cannot hope to meet their demands through the budget. Off budget politics dominates and discussions over the budget absorbs relatively little political energy Thirdly, the low productivity of most assets means that property rights are weakly defined and many assets are up for grabs

5. Developing countries Patron-client politics is therefore the rational form of politics, not a deviant form that artificially exists because of inadequate accountability or democracy Deepening democracy or improving accountability will not affect the dominance of patron-client politics. Political stability in developing country democracies depends on the ability of competing elite groups to achieve ‘live and let live’ compromises Indian democracy is a very good example: it is stable not because it represents the interests of the poor or the majority, but because its federal structure and the ability of intervention through Presidential rule gives competing elite groups confidence that they cannot be excluded for ever The specifically Indian balance of power between states and the federal government that allows live and let live compromises cannot be easily replicated but some general conclusions follow

6. Supporting democracy Fighting political corruption, or ensuring better electoral processes are good things but they will not solve the structural instability of democracy Democratic stability in developing countries is a much more fragile achievement that depends on implicit political compromises between elite factions: we have virtually no effective analysis or programmes on how to promote that One reason is that the elite groups in question are most unlikable in developing countries: the recent experience of Bangladesh is that most people would like both major parties to disappear but of course they will not In the long run if stability can be maintained and economic growth continues advanced country variants of democracy will slowly emerge My real concern is that by following implausible reform strategies in poor countries to make democracy more real we are setting developing countries targets that they cannot reach and the result may be a dangerous pessimism about modernity and democracy