The Development Dilemma: Security, Prosperity, and a Return to History

Published by EH.Net (July 2018)

Robert H. Bates, The Development Dilemma: Security, Prosperity, and a Return to History. Princeton: Princeton University Press, 2017. xii + 188 pp. $28 (hardcover), ISBN: 978-0-691-16735-0.

Reviewed for EH.Net by Eoin McGuirk, Department of Economics, Yale University.

 
In The Development Dilemma, Robert Bates (Harvard) addresses a fundamental question on the political economy of development: when is power used to foster economic growth? His approach is shaped by the idea that, in order to study the development process, it is unwise to limit one’s analysis to countries that are yet to develop. With this in mind, he turns to early modern Europe for illustrative case studies. From similar beginnings following the fall of Rome, England and France embarked on divergent paths that left the former on the cusp of the Great Transformation and the latter mired in violence. Bates attributes this divergence to the use of power: in England, regional interests were aligned with the center; in France, they were not. These competing interests created a trade-off between development and political stability in France that was not present to the same extent in England. Drawing lessons from this historical comparison, Bates revisits his fieldwork in Kenya and Zambia, where, he argues, colonial intrusions generated political environments more akin to medieval France than to medieval England.

The foundation of Bates’ argument lies in what he calls the “fundamental tension” between security and prosperity — a theory of development that puts power and coercion at the center of the development process. He begins with a Malthusian setting: agrarian societies are destined to be poor, owing to the diminishing marginal returns to land, and poor societies are destined to be agrarian, owing to Engel’s law. To escape this trap, families must either migrate in search of better land or specialize and trade. This produces the first dilemma: once families begin to accumulate wealth in this manner, they in turn attract the specter of violent appropriation from other families. As long as private families control both production and coercion, therefore, society’s choice is one between poverty and security on the one hand, or wealth and violence on the other.

This tension was evident as England and France recovered following the fall of Rome. In France, the emerging rural elite sought to concentrate their landholdings into estates that would pass only to the eldest surviving male. The growth of prosperity was thus accompanied by a new class of younger, unmarried warriors with little stake in social order. The violence, extortion and fear that they generated ultimately led families to recruit their own armed companies in response, giving rise to the “era of the chatelain,” characterized by growing prosperity and conflict in the countryside. Over time, this outbreak of violence was met by a demand for peace and the successful attempt to centralize the means of coercion by the church and the royal family. Power would be vested in their hands, and the private use of violence would be outlawed.

A similar process took hold in twelfth century England. Following his death in 1135, the battle to succeed Henry I exacerbated existing tensions over land in the countryside. This pattern of conflict resulted in “The Anarchy” — a period in which private armies were established and violence spread throughout the country. When the Angevins eventually captured the throne, the new monarch, Henry II, sought to secure his possessions by enacting statutes that prohibited private acts of violence. As in France, such acts were to be deemed crimes against the political community.

A second tension emerges at this point in Bates’ model. In theory, removing the means of coercion from rival families ought to lay the groundwork for private investment and the pursuit of prosperity. The problem, of course, is that any central authority that has the power to secure property also has the power to seize it. Here, the fates of England and France diverged. While the Norman conquest of England resulted in a relatively unified political class under William, by contrast the regions of France were both culturally and economically distinct under the House of Capet. Facing diverse and powerful families, the Capetians “assembled” rather than seized France. In this environment, political expediency meant placating diverse interests rather than pursuing common goals.

Bates argues that these contrasting terrains shaped political behavior in a manner that would have profound and lasting effects. This is best illustrated by the development of their respective public finance systems. In England, landowners and merchants were willing to provide tax revenues to finance wars in return for political influence. As a result, the entire political class had a shared interest in both military victory and policies that facilitated private enterprise. From these origins also emerged a tax infrastructure that would underpin state capacity into the future. In France, competing interests undermined any attempt to foster cohesion. Under Charles V, for example, vulnerable duchies from the west were willing for pay for military protection while those from Paris were not. In return for political quiescence, kings in France were therefore apt to exchange private privileges to regional families — such as exemptions from taxes — rather than orchestrate collective agreements in the name of the national interest. In many instances, the authority to collect taxes on behalf of the center was devolved to the regions themselves, who, Bates notes, tended to underreport their collections and inflate their costs.

Bates provides further enriching examples of how these contrasting political landscapes determined the use of power in both countries. By the end of the eighteenth century, England strode toward the Great Transformation while the French monarchy descended into predation, violence and state failure.

The central tenet of Bates’ analysis is that lessons for contemporary development can be drawn from these historical case studies. To this end, he introduces his considerable expertise on the political economy of development in twentieth century Africa. European colonization, he argues, created fractured, decentralized states throughout the continent that resembled medieval France. First, the crude imposition of arbitrary borders threw together large numbers of ethnically, culturally and regionally diverse groups into the same polity; second, European colonial powers found it more profitable to govern by “indirect rule,” whereby the national interest was relegated in favor of placating regional leaders to ensure political stability; and third, the investments made by European settlers served to exacerbate regional inequalities rather than promote broad-based development.

To illustrate the effect of this political environment on the subsequent use of power, Bates focuses on post-independence Kenya and Zambia, and their first presidents, Jomo Kenyatta and Kenneth Kaunda. Both had to consolidate the support of their core constituencies: the Central Province for Kenyatta and the United National Independence Party for Kaunda; both had to garner the support of competing interests beyond their core: the Rift Valley for Kenyatta and the Copperbelt for Kaunda; and both altered the rules of the game upon their failure to ensure political stability through legitimate means. The result in both countries was an era of authoritarianism, corruption and violence.

This is a beautifully written book that will add much to the scholarly discourse on the origins of comparative development. By looking to medieval Europe for insights on contemporary development, it presents a rare and valuable analysis that has important lessons for all readers. While the core argument is provocative — that there exists a trade-off between economic growth and political stability in polities with incongruent regional interests — it is refreshing to note that there is much in the state-of-the-art empirical literature that aligns well with its implications (e.g., see Michalopoulos and Papaioannou, 2016; Alesina, Michalopoulos and Papaioannou, 2016; and Burgess, Jedwab, Miguel, Morjaria and Padro i Miquel, 2015).

Ultimately, like all grand theories in development, this book raises several interesting questions for future scholarship: How can the low-income countries of today escape the trade-off between growth and stability? Is it better to sacrifice scale economies in the name of secession, or it is better to invest in nation building? And if national unity is indeed a first order condition for development, then why is Kenya richer than neighboring Tanzania, where a common identity has been carefully fostered since independence? The Development Dilemma will inspire political economists to tackle questions such as these for years to come. It is an essential addition to a paramount research agenda.

References:

Alberto Alesina, Stelios Michalopoulos and Elias Papaioannou, 2016. “Ethnic Inequality.” Journal of Political Economy, 124 (2): 428-88.

Robin Burgess, Remi Jedwab, Edward Miguel, Ameet Morjaria, and Gerard Padró i Miquel. 2015. “The Value of Democracy: Evidence from Road Building in Kenya.” American Economic Review, 105 (6): 1817-51.

Stelios Michalopoulos and Elias Papaioannou, 2016. “The Long-Run Effects of the Scramble for Africa.” American Economic Review, 106 (7): 1802-48.

 
Eoin McGuirk is a Postdoctoral Associate the Department of Economics and the Economic Growth Center at Yale University. He will join the Department of Economics at Tufts University as an Assistant Professor in 2019.

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