Political Settlements and Development

Abstract

A ‘political settlement’ refers to a distribution of power and capabilities across organizations, which changes relatively slowly and is itself a result of historical institutionalist processes. It can also be described as an equilibrium between organizations and institutions that is reproducible, that is, the institutions help to reproduce the distribution of power and capabilities across organizations. Institutions are the rules that describe the rights and responsibilities that inform the behaviour of organizations while organizations work to influence, maintain, or create new rules and policies. Power (whether economic or organisational) and institutional benefits (such as tax breaks, subsidies or preferential contracts) can be both formal or informal or informal modifications of formal rules. The distribution of power describes both formal and informal power. For governance and policy reform efforts to be feasible and impact development outcomes, the changes in formal rules that are being considered need to take account of how organizations are likely to respond to support, distort or transform these rules. This in turn depends on the power and capabilities of organizations and how the rule changes affect them, positively or negatively. Otherwise, the reform is likely to have unexpected effects and may even fail. This makes understanding a country’s political settlement crucial for designing policy. Doing so requires analysing the social order, that is, understanding the power and capabilities of different ‘actors’ in society, including informal actors and groups, and how the broad features of the established order are reproduced through their cooperation and contestation The productive and unproductive capabilities of the relevant actors is a particularly important part of this understanding. Organizations can add value to themselves in different ways, productively by adding value to society (whether the value is economic, social, cultural, or other), or unproductively, by extracting from others and redistributing this formally or informally within networks. Studying both the formal and informal (rent-seeking) activities of organizations is therefore critical for understanding how a political settlement is reproducing and evolving. This panel will present four important papers outlining critical elements of the political settlements framework described above. One paper extends the applicability of the political settlement framework by using the lens of informality to understand illegal economies, in this case cross-border trade in North Africa. Informality and illegal trade are necessary for the political reproduction of organizations in this region, some of which are also part of the state. The second paper on the illegal drugs economy in Myanmar deepens the framework by understanding how the informal and illegal drugs trade has to be understood as a system of informal governance that is structural to the Myanmarese state. A third paper outlines a theoretical framework for studying unequal distributions of power and collective action challenges when formal institutions are incompatible with underlying informal institutions. The final paper contrasts the political settlement ‘as process approach’ (as described here) and the political settlements ‘as agreement’ model and the outcome of these contrasting approaches for development policy.

Title	Details
Beyond Borders: The Interplay of Foreign Policy and Political Settlement in Tanzania	View Paper Details
Political Settlements and the Margins: Smuggling in North Africa	View Paper Details
When Donors and Disciplines Meet Political Settlements: Co-opting Critical Approaches for Governance and State-Building	View Paper Details
Foundations of Developmental Policy Failure: Power, Informal Institutions, and Second-Order Collective-Action Problems	View Paper Details
Embedded illegality: How the drug trade shapes development trajectories in the Myanmar-China borderlands	View Paper Details