resource curse? by cade ratcliff

8/18/2019 Resource Curse? by Cade Ratcliff

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Resource Curse?Explaining Botswana’s Democratic Success as a Rentier-State

Cade Ratclif

Abstract

Rent-seeking economies have often been shown to have considerable

diculty in producing substantive democracy within their political

regimes. An exception to this rule is Botswana, which despite having a

signicant proportion of government revenue derived from mining

resources has still been able to consistently procure substantive

elections. !hree interdependent variables that can potentially explain

this phenomenon are" #$% &thnic 'omogeneity, #(%

)orruption*+atronage, and #% Bureaucratic Autonomy. By analying

this case alongside that of another comparable rentier-state, abon,

the in/uence of these variables over a rent-seeking state0s capacity to

democratie can be evaluated.

I. Introduction

Rentier-states have consistently been aligned with a diculty to

produce substantive democracy. 1ome explanations have relied on

a correlation between tax revenues and democracy. 2hile this

explanation of the in/uence of rents on democracy has retained

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logical plausibility, certain states have deed expectation. )hie/y

among them is Botswana, which has procured regular and

substantive elections.

!he 3uestion then emerges, 4why and how56 Botswana0s success

compared to many other rent-seeking countries is clear from

several analyses. !he strength of Botswana0s electoral processes

and pluralism, as well as its propensity for civil liberties are among

the highest on the globe, and certainly the highest in Africa

#&conomist 7ntelligence 8nit, (9$:%. 7t has also been evaluated that

the +residency of Botswana, despite increased power to the

executive branch, has not exhibited abuses of such power #)enter

for 1ystematic +eace, (9$9%. !he country0s ability to exhibit an

exceptional amount of economic as well as political success has

derived from its ability to host free, fair, and regular elections

without fail, producing a consistent basis of constitutional and

civilian government #1kidmore-'ess, (99(%.

7n the range of analysis, it is tting to look at the dialogue

already expressed on the sub;ect of state building, specically state

building that creates incentives for democracy. Alongside this

dialogue, a comparison with rentier states that have lacked thus far

in generating substantive democracies is also appropriate. !ogether,

these two components may shed light on the variables that make

Botswana such a distinct case within the African continent.

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II. Review o Literature

Institutional Frameworks

<rancis <ukuyama exhibits a powerful explanatory model

regarding political development, concentrating on three primary

components" a strong centralied and ecient state, an impartial rule

of law, and prevalent democratic institutions and norms. &ach of these

components can be divided further into sub-components. !he

development of a strong and centralied state for instance, re3uires

the development of a relatively autonomous bureaucracy, shielded

from appointments and e3uipped with the proper resources. !he

state0s ability to tax, and its ability to develop e=ective and

programmatic policy, are both contingent on the centralied strength

of the state, and a merit based bureaucracy.

7n many cases, the historical development of the state

determines the ability to generate this type of bureaucracy. <ukuyama

argues that issues of patronage and clientelism emerge when

democracy is introduced prior to the development of a strong

centralied state with an autonomous bureaucracy already present.

>any positions in the bureaucracy are often used to as appointments

to reward constituents rather than serve the interest of the overall

state. 'istorical comparisons of the +russian >odel and the American

>odel of development highlight this behavior #<ukuyama, (9$?%.



@nce democracy has been introduced however, transitions away

from this clientelistic system are not impossible, but increasingly

dicult.

emocracy can be hindered in these situations, especially where both

rent seeking and multi-ethnic populations are involved. igeria is a

case o=ered to illustrate this point. espite the introduction of formal

democratic prospects, igeria is still fueled by corruption. 1cholar

Robert Coseph explains this phenomenon as being one in which political

ties are exerted along vertical lines rather than horiontal onesD a

steady /ow of revenue from rents allow elites in the country to draw

from a pool of resources independent of the citiens and allows them

to payo= political obedience. &ven though E9F of the population lives

beneath the poverty line, the multi-ethnic distinctions in society make

collective action dicult when patronage politics produce greater

individual payo=s #Coseph, $GHE%. !hus, the persistent presence of

patronage-based bureaucracy simply exacerbates corruption, and is

maintained by rent seeking and impediments to collective action to

counter reliance on this spoils system. 7n such clientelistic political

systems, ethnicity becomes an e=ective signaling device between

patron and clients #+osner, (99:%.

7n/uence over state institutions is not entirely endogenous

however. @utside forces, especially in the case of colonialism, can

in/uence institutional development #<ukuyama, (9$?%. Regarding both

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<rench and British colonial models, the post-colonial in/uence of both

is enough to highlight stark di=erences in the e=ectiveness of the

conglomerate of di=erent states in Africa. By accepting clientelistic

behavior as a necessary evil and part of the process of democratic

development #<ukuyama, (9$?%, but still developing institutional

connements to incentivie more programmatic policy development,

some states have fared o= better democratically than others in Africa.

Ethnic Heteroeneit!

As a cluster of developing countries, African states are prone not

only to rent seeking and institutional in/uence from post-imperialism,

but also succumb to the in/uence of ethnic tension and thus

internal*external con/ict. As a part of Besley and +ersson0s >odel of

1tate evelopment, +olitical Iiolence, along with <iscal and Jegal

)apacity, are also important components to consider. +olitical

heterogeneity exacerbates instability when states lack centraliation

#Besley K +ersson, (9$$%.

!ying this to <ukuyama0s analysis, ethnic homogeneity can

reduce internal political violence and allow the population to overcome

the corruption tied with rent seeking*clientelism in the government. <or

example, in igeria, the prevalence of multi-ethnic groups is a likely

impediment to overcoming corruption. 7n a state such as Botswana

however, nearly H9F of the population is of the !swana ethnic ma;ority.

:



!his distinction may play a ma;or factor in the propensity of Botswana

to overcome corruption.

Rents and "atronae

!he analysis of compatibility between democracy and resource

exports is a sub topic of )ollier0s work on the challenges facing

developing countries. 1imilarly in line with the analysis o=ered

previously, )ollier illustrates the way in which resource rents

undermine electoral competition by making patronage politics more

cost-ecient than provisions for public service.

7n many cases, the cost of large-scale patronage is unfeasible if

the institutions for democratic electoral processes already exist. 2hen

resources are introduced, the cost is lowered and it becomes more

ecient for parties to draw from public funds. 7n certain situations,

autocracy is even shown to be more e=ective at economic growth than

democracy, but primarily relies on the presence of resources that can

contribute to rent seeking #)ollier, (99E%.

!he introduction of certain restraints, through a series of checks

and balances, can reduce the cost eciency of patronage politics in

these types of economies, and protect such democracies from

faltering. <urthermore, such restraints would contribute to increased

economic growth by channeling accumulated rents to public services

rather than private interest #)ollier, (99E%.

#tate $wned Enter%rises

L



7ntegrating a perspective on development within resource rich

countries in Africa also re3uires reviewing di=erences of behavior

within the public sector. !he case to be made for the e=ectiveness of

autonomous authority can be drawn out of structures surrounding

state owned enterprises in the ulf Region. 7n many gulf countries,

state owned enterprises are mostly shielded from royal and

bureaucratic forces playing an in/uence over prot ob;ectives, due in

large part to the fact that these 1@&0s en;oy relative managerial

autonomy #'ertog, (9$9%. !hus, )&@0s in these 1@&0s do not have to

be concerned with appealing to public demands and can operate

e=ectively to produce purely rational decisions on policy within the

enterprise. 2elfare employment is not a concern, and insulation from

patronage politics is key #'ertog, (9$9%.

Indicators o &ureaucratic Autonom!

A consistent issue within the social sciences has been the ability

to properly measure characteristics of behavior #especially those

regarding society%, and to know the proper indicators for such

measurements. Bureaucratic Autonomy is no exception, and is a prime

example of this issue in terms of today. o resources exist currently to

measure a total amount of bureaucratic autonomy, but research has

nonetheless been conducted in an attempt to distinguish possible

indicators that could be searched for as a means of measurement.

1uch research has yielded two facets of autonomy" independent goal

E



formation and the capacity to achieve desired outcomes #)aughey,

)hateld, K )ohon, (99G%

2ithin the context of a rentier-state, and the corruption that

tends to emerge from utiliing public resources for private political

gain, a key characteristic for measurement would be 4Jegal >andates6,

which is an indicator that falls under the facet of independent goal

formation #)aughey, )hateld, K )ohon, (99G%. !he reasons for this

being a sucient indicator are both its ability to clarify the extent to

which bureaucratic positions in an agency can be used for

appointment, and also the extent to which an agency can develop its

structural norms and expectations internally rather than from external

forces. !he ability to develop policy preferences based o= agency

research rather than outside demands, and to promote individuals

based o= recognition of merit internal to the agency.

#ummar! o Literature

!hus, in analying these components of research, state development

with regard to resource rich economies #t for rent seeking policies%

create di=erent political outcomes. !hese outcomes are contingent on

the institutional framework of the state, in large part from inherited

institutions in cases of colonialism. Another component is the

propensity for ethnic homogeneity. Above all however, is the ability for

the state to produce relatively autonomous bureaucratic positions,

sheltered from patronage and clientelistic behavior. !his may help

H



explain a large part of the reason why Botswana has succeeded so

well. >any of its policies could be labeled as 4programmatic6, allowing

a balance of power between ruling elites within the country, cattle

farmers #a dominant group%, ethnic chieftains #via the tlo ya ikgosi%,

and peasants #&riksen, (9$$%. +olicies of this sort are tied to

autonomous bureaucratic frameworks #<ukuyama, (9$?%.

III. 'odel o Anal!sis

Based o= the previous body of literature, three principal

variables stand as being indicative of the likelihood of democratic

development in a rentier state. !he three variables are also

interwoven, and cannot be considered outside the context of each

other. !hey are as follows, with their own denitions"

$. &thnic 'omogeneity M !he scale of a society0s diversity of ethnic

groupsD maximied when either the number of ethnic identities

are $ or less #where ethnic identity is not the scope of group

identity and the scope of group identity is instead focused on

national identity #)ottam, iet-8hler, >astors, K +reston, (9$9%.(. +atronage M !he propensity of politicians or public oce holders

to trade votes and support for oce with favors of appointment

or legislation* funding toward the specic interest of those who

were their supporters or will remain their supporters.

G



. Bureaucratic Autonomy M !he capacity of bureaucratic bodies to

engage in both the development of goals independent of

external preferences and to achieve said goals #)aughey,

)hateld, K )ohon, (99G%.

!he interaction of these variables is an interwoven and mutually

dependent structure, the explanation of which relies primarily on the

thoughts and arguments expressed by <rancis <ukuyama. &thnic

homogeneity is the rst variable of consideration, along with its ties to

patronage. !he argument regarding their connection was expressed

above on page , when Richard Coseph explained the way in which

&thnic iversity produces what is often called a 4)ollective Action

+roblem6. 7n a highly heterogeneous state of ethnic diversity,

individuals face a highly complex prisoners0 dilemma that largely

eliminates the ability of each group to unify in a common interest.

!hus, the only means of political #and in turn economic% mobility is to

support those with the greatest collection of power within the state,

namely the politician. !hus, political participation and the preferences

emerging from society are based more-so on a vertical relationship,

based o= status of power, rather than a horiontal relationship of group

unity to generate power through vote.

!he tie between patronage and bureaucratic autonomy is directly

related to the preferences that emerge from ethnic homogeneity. 2hen

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ethnic homogeneity is low, it is more dicult for the public to demand

transparency and collectively accepted programs. !hus, these groups

prefer special advantages that best serve their individual group

associations. 2hen this type of power is a=orded to those within power

#especially so within rent-seeking states%, they will be given an

incentive to procure both personal prot from public resources as well

as to retain power over policies regarding the use of such public

resources and the public programs that might emerge from such public

policies. 'owever, when the ability of politicians to exert their

preferences over the preferences of bureaucratic bodies is constrained,

the bureaucracies are better able to freely develop policy preferences

that are more ob;ectively goal oriented and produce benets for

society as a whole. !his in turn can reduce the public0s reliance on

patronage, since now their interest as a state entity is being addressed

rather than in terms of individual ethnic groups. !his e=ect in turn can

allow these ethnic groups to vote for politicians based less on returns

through patronage, and instead on views of the needs of the overall

state.

I(. 'ethod o Research

!esting the explanatory strength of this previous analysis re3uires both

a comparative case as well as viable indicators. <or indicators of the

previously given variables, the following are used"

$$



• Ethnic Homogeneity: +ercentage of population concentrated

within the largest ethnic group, as provided by the )7A 2orld <act

Book and the )line )enter for emocracy.

• Patronage" >easurements of )orruption as given by

!ransparency 7nternational• Bureaucratic Autonomy: Analysis of external in/uence upon

the public sector by outside actors and the e=ectiveness of the

public sector to generate programmatic policy through the use of

extractive resource revenues, as provided by Agence <ranNaise

de Oveloppement.

Regarding comparison, necessary variables to control for

constituted" +opulation 1ie, overnment Revenues rawn from an

&xtracted Resources, + per )apita, Regional 1imilarity, Rentier-

1tatism, and emocratic <ramework. !o properly understand the

anomalous behavior exhibited by Botswana, the interaction of

population and economic demands needed to be relatively similar.

Regional similarity was also important due to the fact that a stark

di=erence in climate or overall geopolitical associations would change

expectations concerning technology, external sources of in/uence and

con/ict and regional norms in a signicant way. >ost important, the

concentration of revenue ac3uired from extracted resources needed to

by similar. 7n this way, the potential for the use of revenues to either

$(



procure clientelistic or programmatic policy decisions would be largely

e3uivalent.

7n this case, the closest comparable state was that of abon. !he

two absolute factors both countries shared was their regional and

economic similarity as both are considered rentier-states and also

belong within 1ub-1aharan Africa. 7n addition, both states exhibited

similar details to make them appropriate comparisons for the purpose

of this research #As shown in <ig.$%.

FI). *

&otswana )abon

"o%ulation*+ (,$H(,EHG $,E9:, L)," %er Ca%ita-+ P$L,999 P((,G99#tate Revenuebased of etractedresource-+

?9F from >ining

Rents

?(F from @il Rents

(. Findins

!he ndings of the research were shown to be consistent with

the expectations of the hypothesis laid out within previously written

$ ata from )7A 2orld <actBook( ata from 2orld Bank #!he 2orld Bank%

$



literature on the sub;ect. onetheless, there is room for interpretation

regarding the actual causal links that lead to the ndings listed below.

&thnic 'omogeneity

!he density of &thnic 'omogeneity was clearly in Botswana0s favor

#see <ig (, below%. 2ith nearly H of every $9 individuals within

Botswana being part of the dominant !swana ethnicity, the aptitude for

collective demands over public policy decisions to be programmatic is

predictably stronger. 7n abon however, the presence of a diverse

range of ethnic backgrounds would be predicted to generate a higher

propensity for political tensions that concentrate on favoritism for a

selective apportionment of the population0s welfare. ue to this, it

would be predictable that corruption within abon would be more likely

than in Botswana.

FI). -

&otswana )abon/

'a0or Ethnic)rou%s 1"ercentaeo "o%ulation2

!swana #EGF%Qalanga #$$F%Basarwa #F%@ther #EF%

?9 &thnic roups"<ang #(F%>pongwe #((F%Bapounou #$$F%

+atronage

As predicted previously, corruption was more prevalent in abon than

in Botswana #1ee <ig .% 7n the )orruption +erceptions 7ndex, scores

ata from population estimates calculated by the )line )enter foremocracy

$?



ranged from 9 #high corruption% to $99 #low corruption%. 7n the )ontrol

of )orruption indicator, scores ranged from -(.: to (.:, with higher

scores indicating better governance outcomes #!ransparency

7nternational, (9$:%.

FI). /

&otswana )abon

Corru%tion"erce%tions Inde+

Rank" $*$E:1core" L*$99

Rank" G?*$E:1core"E*$99

Control o

Corru%tion+

+ercentile Rank" H9F1core" 9.GE:

+ercentile Rank" (?F1core" - 9.EL

Bureaucratic Autonomy

>easurements for bureaucratic autonomy were di=erent than

those within &thnic 'omogeneity or )orruption. 7ndicators for such

measurements are still not clear within political or economic elds of

study. 7nstead, information regarding components that likely related to

the autonomy of bureaucracies within the public sector was drawn

from the 7nstitutional +role atabase compiled by the Agence

<ranNaise de Oveloppement #A<%. !he database is based o= data

collected in a survey by private professionals and experts located

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within the countries in 3uestion and then compiled by A<. Below in

gure ?, are six factors drawn from the database that attempt to

illustrate autonomy. !hey way that the factors are measured and

presented are based o= a scale, ranging from 9 to ?. !he higher the

score was given, the greater the measurement of the listed indicator.

!he rst two indicators are expected to be negative in correlation with

bureaucratic autonomy, while the last four are expected to be positive.

!he rst two indicators show the amount of political capture by elites

and their in/uence on both public policy and the use of public funds

and revenues. !he last four indicators show the level of

nonpartisanship that drives the public policy making process, and the

extent to which public interest versus private interest plays a role in

the overall 3uality and development of public policy. <ollowing this

assertion, Botswana illustrates a much higher propensity for both

autonomy and e=ectiveness from its public sector than abon.

FI) . 3

&otswana )abon

In4uence oEconomic#takeholders on"ublic "olic!

$.LE .

"riorit! o the Elitein relation todevelo%ment and

(.99 (.:9

$L



rowth

5ualit! o the"ublic "olic!'akin "rocess

$.H9 9.?9

#u%%ort oremerin d!namicsectors

(.99 9.99

Consideration o%ublic interest inrelationshi%sbetween state andbusiness

(.:9 (.99

)overnance o6atural Resources

.99 (.

(I. Conclusion

!here are several considerations worth mentioning after

reviewing the research of this paper. 2hile the data above appears to

fall in line with the predictions previously listed, it also leaves plenty of

room for interpretation. <irst and foremost, the causal linkages

between each of the variables listed above cannot be established with

certainty by the data alone. +erhaps the data above o=ers strength to

the hypothetical framework it is was derived from, but the proof of

causality is still lacking.

@ne example is that the data above could possibly be explained

in a very di=erent way. &xplaining Botswana0s success in developing

greater programmatic policies may have very little to do with a lack of

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corruption or bureaucratic autonomy. 7nstead, the high concentration

of !swana within the population may force public policy decisions to

still follow a behavior that appears ob;ectively programmatic, but is still

based largely o= patronage to ethnic loyalties. As it is illustrated

above, corruption is still considerably present within Botswana by

global standards, even if it is relatively well o= within Africa.

Another issue present within this research is the di=erence

between the resources extracted within Botswana and abon. 2hile

Botswana0s public sector derives a large sum of its revenue from the

>ining sector, abon draws its revenues from oil. !he di=erence in

volatility between these two markets may be considerable, and

deserves further research for clarication.

Jastly, there turned out to be signicant diculty in locating

data or research on the sub;ect of bureaucratic autonomy. 2hile

research into proper indicators for measurements of bureaucratic

autonomy was available, actual data directly listing a ranking of public

sectors within di=erent states was not to be found. 1uch a resource

deserves to be further investigated and collected for public and

academic use. 8ntil it is, a ma;or component of public policy analysis

and comparative political analysis may be missing from the greater

dialogue of political economics.

After evaluating the ndings of this research, a commitment to

the strength of the hypothesis formed out of the previous literature on

$H



this sub;ect is arguably ;ustied. !he data given above was predictable,

even despite its inability to show direct causal links. <urther research

into this framework, given enough time, may motivate a change in

tone within political economics over the idea of the resource curse and

its e=ects on democracy.

$G



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resource curse? by cade ratcliff

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