monitoring government workers and holding them accountable for failures in
performing their duties, and monitoring politicians at all levels and sharing this
information with voters. Expectations about what people should expect from
government often end up turning into self-fulfilling prophecies. Nurses who
are expected to be in work are more likely to be present and when present
villagers are more likely to attend the health centre, thus further encouraging
norms of attendance.
Chapter 10 explored the long history of institutions that were successful in
developed countries but withered away once transplanted to developing coun-
tries. The most egrerious example is that of democracy quickly becoming
dictatorship in so many newly independent countries in the 1950s and 1960s.
A good principle here is that to be successful, institutional reform needs to be
carefully mapped onto the existing underlying informal institutional and orga-
nizational constraints. Chapter 10 examined the paradox of thirty years of
rapid growth in China since the mid-1970s with its massive levels of (private)
investment in the absence of well-protected property rights. In this case
China’s institutions seem to have made reform compatible with the interests of
the powerful (Qian,2003). The Township and Village Enterprises (TVEs) were
not private but collectively owned by local communities and managed by local
government. The latter provided protection against anti-private property
campaigns by the Communist Party. The absence of other revenue sources
gave the local government the incentive to ensure the TVEs successfully
generated the profits necessary to fund local government spending. Local offi-
cials in turn had an incentive to promote the local economy in the hope this
would be noticed and contribute to promotion through the ranks of the
Communist Party.
Don’t forget government capacity
Chapter 3 noted that some policy changes are very demanding of government
capacity. Recall the ‘state business model’ whereby the state ensures high rates
of profit, investment and technological upgrading. To implement this policy
package requires that the state be ‘developmental’. This required that the state
fulfil six criteria: that leaders have a politically driven desire to promote
growth; that state institutions be autonomous; that the bureaucracy be compe-
tent and insulated from politics; that civil society be weak or crushed; that the
state has acquired its power and autonomy before national or MNC capital
became consolidated; and finally, that the state enjoy widespread legitimacy,
whether of the democratic variety or not.
State capacity is not a variable that can easily be ‘constructed’ and such
capacity has its own deep causes. Chapter 9 showed how the nature of the
contemporary state has often been a legacy of colonialism. Chapter 12 showed
how state capacity can be weakened by cultural diversity. Chapter 11 showed
how geography could influence the nature of the state.
Conclusion: Eight Principles for Policy-Makers 297