As part of a leadership team within the World Bank tasked with integrating governance into development strategy. I participated in forging the good governance consensus. But I’m now convinced that it is wrong, he writes for Foreign Policy’s Democracy Lab:
I’ve come to realize that it completely underestimates how much time and commitment are needed to transform a country’s institutions. As my new book argues, we need to shift our attention away from trying to achieve everything at once and focus instead on gains that can initially seem quite modest — but which, if pursued persistently, can sometimes.
Here is what makes efforts at far-reaching institutional reform in nascent democracies so unlikely to succeed. Many emerging democracies depend for their stability on complex personal alliances and compromises. Rival factions may agree to use an election to decide who gets to govern — but beyond that they’re generally unwilling or unable to commit to formal rules for either the economic or political game. Instead, as Nobel Prize-winning economic historian Douglass North has underscored in his recent work, what really holds things together are deals on how to share the spoils of power. Sometimes insiders can be wholly predatory. But at other times, personalized arrangements can provide just enough stability to push economic development forward and to strengthen democratic institutions.
Economically, an approach that goes “with the grain” offers three key lessons on how we might engage differently, Levy contends:
First, do no harm. The experience of Bangladesh offers an excellent example of the advantages of caution. In both 2001 and 2005, Transparency International rated Bangladesh as the world’s most corrupt country. Even so, since its transition to democracy in the early 1990s, its economy has grown at a rate of 6 percent annually, while the child mortality rate has fallen by two-thirds, from 151 per thousand in 1990 to 52 per thousand by 2009. Far-reaching institutional reforms — such as high-profile campaigns against corruption — might have destabilized the (ethically ambiguous) institutional arrangements that have made these achievements possible, potentially doing more harm than good….
Second, practitioners should focus on achieving concrete results via “islands of effectiveness” rather than on across-the-board overhauls. Political and economic elites are rarely willing to give up their special privileges in settings where they enjoy enormous power. In such situations, reformers have a better chance of doing good by nurturing zones of economic dynamism rather than endlessly (and fruitlessly) pushing for a “level playing field.” ….
Third, don’t overreach. One form of overreaching is to over-promise — suggesting, for example, that newly democratizing countries can quickly create market-supporting institutional arrangements that usually take decades to build. A similar error is to insist that all good things come by traveling the democratic path — and only along that path. The evident success of East Asian autocracies — from South Korea’s quarter-century of strong, inclusive growth under military rule to China’s historically unprecedented success in lifting close to a billion people out of poverty in just a few decades — make a powerful counter-argument to this simplistic view.