On "Good" Politicians and "Bad" Policies : Social Cohesion, Institutions, and Growth
Social cohesion - that is, the inclusiveness of a country's communities - is essential for generating the trust needed to implement reforms. Citizens have to trust that the short-term losses that inevitably arise from reform, will be more than...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2000/09/693293/good-politicians-bad-policies-social-cohesion-institutions-growth http://hdl.handle.net/10986/19790 |
| Summary: | Social cohesion - that is, the
inclusiveness of a country's communities - is essential
for generating the trust needed to implement reforms.
Citizens have to trust that the short-term losses that
inevitably arise from reform, will be more than offset by
long-term gains. However, in countries divided along class
and ethnic lines, and with weak institutions, even the
boldest, most civic-minded and well-informed politician (or
interest group) will face severe constraints in bringing
about policy reform. The authors hypothesize that key
development outcomes (particularly economic growth) are most
likely to be associated with countries that are both
socially cohesive and governed by effective public
institutions. They test this hypothesis for the sample of
countries with available data. The authors develop a
conceptual framework based on the idea of social cohesion,
then review the evidence on which it is based. While several
earlier studies have shown that differences in growth rates
among developing countries are a result of weak rule of law,
lack of democracy, and other institutional deficiencies, the
authors focus on the social conditions that give rise to
these deficiencies. They also seek to establish empirically
a causal sequence from social divisions to weak institutions
to slow growth. The essence of their argument, supported by
new econometric evidence, is that pro-development policies
are comparatively rare in the developing world less because
of the moral fiber of politicians (though that surely
matters) than because good politicians typically lack the
room for maneuver needed to make desired reforms. This lack
of maneuverability is a product of insufficient social
cohesion and weak institutions. The authors also explore the
determinants of social cohesion, focusing on historical
accidents, initial conditions, and natural resource
endowments. Social cohesion should not be seen as a concern
primarily of developing and transition economies. Indeed, it
is important in the United Kingdom as in Ukraine, in Canada
as in Colombia, in the Netherlands as in Australia. |
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