The Political Economy of Poverty, Equity, and Growth: A Comparative Study

The Political Economy of Poverty, Equity, and Growth: A Comparative Study

The Political Economy of Poverty, Equity, and Growth: A Comparative Study

The Political Economy of Poverty, Equity, and Growth: A Comparative Study

Synopsis

This wide-ranging and innovative book synthesises the findings of a major international study of the political economy of poverty, equity, and growth. It is based primarily on analytical economic histories of twenty-one developing countries from 1950 to 1985, but also takes into account of the much wider literature on the subject. It represents an ambitious interdisciplinary attempt to identify patterns in the interplay of initial conditions, institutions, interests, and ideas which can help to explain the different growth and poverty alleviation outcomes in the Third World. Three different types of poverty are distinguished, based on their causes, and a more nebulous notion of equity - in contrast to egalitarianism - is shown to have influenced policy. Since growth is found to be the major means of alleviating mass structural policy, much of the book is concerned with probing for explanations for policies which are found to be the most important influence on the proximate causes of growth. The authors also consider the available evidence of the role of direct transfers - public and private - in alleviating destitution and conjunctural poverty. A novel organizing framework for the comparative analysis of different growth outcomes is developed. This framework distinguishes between the different relative factor endowments of land, labour, and capital, and between the different organizational structures of peasant versus plantation and mining economies. It also differentiates between the polities of `autonomous' and `factional' states in the countries studied, breaking the analysis down into further typological subdivisions and providing important new insights into the differing behaviour of economies that are rich in natural resources and those with abundant labour. These insights constitute a richer explanation for the divergent developmental outcomes in East Asia compared with Latin America and Africa. The evidence marshalled is used to argue for the continuing relevance of the classical liberal viewpoint on public policies for development, and to show why, even so, nationalist ideologies are likely to be adopted and to lead to cycles of dirigisme and liberalism. The evidence is also used to provide an explanation for the surprising current world-wide Age of Reform.

Excerpt

This book synthesizes the findings emerging from a comparative analysis of 'The Political Economy of Poverty, Equity, and Growth' of twenty-one developing countries, sponsored by the World Bank. The country studies themselves are being published as part of a series in ten volumes, of which this is the last.

I. DESIGN OF THE COMPARATIVE STUDY

The aim of the study was to provide a critical evaluation of the economic history of these twenty-one developing countries during the period 1950- 85. It explored the processes which contributed to different outcomes in terms of growth, poverty, and equity in these countries in relation to: (a) the initial conditions--resource endowment and economic structure; (b) national political institutions and forms of economic organization; and (c) economic policies (including those which might have been undertaken).

A coherent story of the growth and income distribution experiences of each country based on the methods of what may be termed 'analytical economic history' and 'political economy' (see Sections II-III below) are the basic building-blocks of the project. Each country study provided both a historical narrative and an exploration of deeper questions of how and why things happened. The 'political economy' dimension of each country study sought to identify the role of ideology and interest groups in shaping policy.

Our comparative approach involved an initial pairing of countries which seemed to show significant similarities or contrasts of initial conditions or policies. Whilst initial impressions of similarity or difference were not borne out on closer inspection in every case (see Chapter 3), nevertheless we feel that this binary approach offered a novel and promising way of reconciling in-depth case study with a broader comparative study approach. The second comparative stage is contained in the synthesis of the political and economic determinants of growth and poverty outcomes contained in the rest of the chapters of this book.

In order to provide an in-depth study of individual cases, a smaller number of countries (21) was selected than is conventional in comparative statistical studies. We have serious doubts about the validity of inferences . . .

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