The post-conflict literature amongst practitioners (including the Bank’s WDR 2011 and the OECD’s INCAF) has increasingly focussed on the role of ‘inclusive enough’ political settlements as a precondition for political stability and economic growth. What does this mean? Can an understanding of political settlements help mould the Bank’s responses to moments of crisis in our client countries or inform our “business as usual” operations in countries where the seeds of future violence are apparent or looming? How do we recognize tenuous settlements, where grievances are likely to lead to an outbreak of, or return to, widespread conflict?
Good institutions matter for development. Institutions enable societies to address challenges – from managing irrigation and schools systems, to raising and spending revenues. In the terms of Nobel Prize laureate Elinor Ostrom, the right institutions enable effective collective action, while poor or missing institutions hinder problem-solving.
A while back I was working for a small education foundation in Bangalore. Every day I took the bus to the office along a road that had so many pot holes it felt like the driver had decided to take a short cut across the surface of the moon. About a month before I left the whole stretch was covered by a smooth layer of gleaming tarmac and a series of huge posters appeared – announcing the hard work and successful lobbying conducted by our local city councillor.
The term ‘political economy’ has become an increasingly popular part of the vernacular at the World Bank and other development agencies. In parallel, interest in the political economy aspects of development has also seen a resurgence in academia, within both economics and political science departments, and even in leading business programs.