Political conflict 2015 - 'Economic basis to conflict'

See also in the 'Political Crisis 2015' series:
- Analysis of the deaths (updated to 5 Feb)

- Criminal responsibility and the killings (20 Jan)
- Extrajudicial killings (20 Jan)
- 'Treacherous Waters" (22 Jan)
- Understanding the crisis (25 Jan)
- No clean hands (4 Feb)
Law Enforcement 'Unlawful killings'  (7 Feb)
'International Crisis Group report' (10 Feb)
'Its the Elections, Stupid' (10 Feb)

In December 2014, before the explosion of violence in Bangladesh, BRAC University's Institute of Governance Studies organized an international conference on 'Political Economy, Accountability and Governance'

At one of the very early sessions, the economist Professor Mushtaq Khan, based at London's SOAS gave a short response to a couple of papers looking at the relationship between governance and economic success (little relationship, they found).

Musthtaq Khan is one of the most interesting and insightful thinkers on Bangladesh (indeed someone said of Mushtaq that 'in full flow [he] is a thing of beauty"!) and I mention him now as in his short comments at an early session of the conference he referred to the economic basis to the political conflict between the Awami League and the Bangladesh Nationalist Party (without referring to them by name).

And what he stated was rather prescient.

A transcript of what he said is set out below, but in summary  Mushtaq raised the question (as a hypothesis) about whether political stability in Bangladesh is dependent on the country's two corrupt political parties exchanging power every five years, as one party staying in power for any longer does not 'include enough people in its patronage structures …. In our kind of political settlement ... the only guarantee of political stability … is to give [all members of the elite] a chance "to eat".' The word "eat" here is of course used as a euphemism.

He suggested that in Bangladesh, because of this, where you had one party keeping another group out of power permanently, it could result in "eruptions of violence ... an explosion".

He then suggested that Tamil Nadu was ones of India's most successful state's despite its corrupt politics as the political parties there have a 'live and let live compromise with each other and the agreement is that I will make money for five years [and you can make money in the next five years]." He said that in Tamil Nadu there was an implicit understanding between the elites "because both sides know that they will come back to power in five years, so you don’t want to kill the goose that is laying the golden eggs. You want the economy to be growing because you are coming back in power soon, and whoever is in power is not going to kill you while you are out of power."

Here is the extract:

There is a big discussion going on. We have a big elephant in the room in Bangladesh today. Can the current political system, that we have now engaged in, continue? Can a system which has actually excluded a large chunk of organised forces or groups in Bangladesh from access to power and resources continue?

And my hypothesis, and it is a hypothesis because we will only know the answer five years down the line: that the political settlement in Bangladesh (and the political settlement is my description for the distribution of organisational power), does not allow the management of political stability without this rather corrupt process of democracy that we have.

And that this democratic process is actually important for maintaining political stability, because our current political system does not allow one party or one administration to include enough people in the patronage structures to achieve political stability. This is the hypothesis.

We have tried this before many times in the past and it has never worked in Bangladesh. It might take five years, it may take ten years but it always comes to a sticky end.

I might be wrong. This might be the point at which we have fundamentally changed our political settlement and where we might be at a situation where actually one party can continue in power indefinitely. Whether or not the opposition comes to the elections it will stay in power.

I think this is one of the really sensitive but critically important questions that we need to discuss as academics looking at governance, not because this has anything to do with service delivery, as I agree there is no link between this corrupt process of democracy and service delivery outcomes, since this is really an administrative process. But this process of political democracy and clientalism and patronage is extremely important for understanding whether we are going to be in a stable state in the next five or ten years or whether there will be eruptions of violence and so on that will disrupt our development.

So this is the one question that I want to put on the table and that requires disentangling of what we mean by accountability, what we mean by democracy and what we mean administrative capacity, these things are linked but are also seperate

The other point that I want to quickly make is that we should not be complacent in comparing ourselves with India. Because India is a very diverse country. And when you look at overall Indian averages, it can give you completely the wrong picture.

So there are parts of India which are far far advanced compared to Bangladesh and parts of India which are behind. And that diversity of India is what actually makes India work because the parts that are working can in some sense control and discipline the parts which are not working. Whilst Bangladesh has no other parts. So, if Bngladesh is not working, we are not working. And I think that is extremely important to understand.

Just one fact. India can run credible elections which people accept as credible elections. And the diversity of India means that no State controls that election. If West Bengal was a separate country, it would probably be in the same mess that we are. As would be the case if Gujrat was a separate country.

But elections are run by the Federal administration. The Federal administration is the third party which is distant from the politics of the state. The problem in Bangladesh is that we have no third parties. The only third party that we used have in the past is the army, and every time the army came in, it would make things worse.

So we have no third party to discipline Bangladesh's unique politics, whereas in India the federal system allows a semblance of a third party, so that the election commission, or these institutions which are necessary for the system to work, are not linked to the local politics in the way that they have become linked in Bangladesh. And this is a huge challenge for Bangladesh: how do you construct institutions which are not politically linked when you have a small country and everyone knows everyone?

In India that is possible precisely because of its diversity which gives the country a low average performance but its institutions actually work better than ours.

So I don’t believe these indicators which suggest that Bangladesh institutions are working better. Service delivery might be better for all kinds of accidental reasons, but our institutions don’t work well because they are too politicized in a way that India’s institutions are not.

The final point I want to make is that corruption and clientilism is not inconsistent with either service delivery or economic development and this is proved not only by Bangladesh but the state of Tamil Nadu.

The state of Tamil Nadu is one of the states with the highest growth in India, one of the highest levels of industrialization, and one of the most intensely clientist and corrupt. How does it manage this? How does the state of Tamil Nadu manage these high levels of corruption? And if you look at DMK versus AIADMK politics it can remind one  of Bangladeshi politics – intensely personsalised, intensely competitive. Who ever is in power will accuse the opposition of being corrupt …. Why does Tamil Nadu work? Why is it is such a big destination for foreign direct investment? Why is India’s electronic industry locating there? Why is it such a dynamic state?

I am not saying that it is perfect or that it is not vulnerable, and the state might have a crisis very soon, but the fundamental difference with Bangladesh is that DMK versus AIADMK share in a common ideology, and they have a live and let live compromise with each other and the agreement is that I will make money for five years [and you can make money in the next five years]

And in our kind of political settlement, that is the only guarantee of political stability. You must give everyone the chance to eat.

And if you are keeping one group out permanently you will have an explosion. So Tamil Nadu is a very good example of how clientalism, patronage and a live-and-let-live agreement within elites allows quite a rapid rate of industrial development and also a very good service delivery. Tamil Nadu’s school and eating programmes are some of the best in India.

Why does this happen? It is because elites agree that we will make money in these areas and we will not make money in those areas. So we will not make money in the school feeding programme, but we will make money in the land allocations to industry because that a lot of 'rents' can be made. Why do the parties do this? Because both sides know that they will come back to power in five years, so you don’t want to kill the goose that is laying the golden eggs. You want the economy to be growing because you are coming back in power soon, and whoever is in power is not going to kill you while you are out of power.

That is a trick that we have not learnt. So I think I would not say that we have nothing to learn from India – there are many things in India that are working a lot better than Bangladesh, with the same political settlement with the same kinds of issues of governance that we have and we need to put these extremely sensitive questions of politics, democracy, governance, accountability and adminstrative capacity on the table and discuss it without taking partisan positions.