Why do existing development approaches based on transfer of western social and political dynamics to non-western countries often fail? This paper proposes a conceptual model of developed countries, or open access orders (OAOs) and developing countries, or limited access orders (LAOs). OAOs organise themselves around competition and a government monopoly over violence. Since they do not have a secure state monopoly on violence, LAOs organise themselves to control violence among elite factions which divide the country’s economy among themselves. Development reforms will fail if they attempt to create OAOs in societies ill-prepared for such fundamental change in their social and political dynamics.
OAOs are upper-income, advanced industrial countries that have open competition, multi-party democratic political systems and a secure government monopoly over violence. In general, OAOs allow all citizens to enter into economic, political, religious and educational activities, form organisations and enjoy an impartially-enforced rule of law. OAOs have developed institutional forms and mechanisms that allow the delivery of public goods and services based on relatively objective, impersonal and impartial criteria. All OAOs have sophisticated public and private organisations. The OAO state uses specialised institutions and division of labour.
In LAO states, however, elite factions divide up control of the economy, each getting some share of the rents. Elite access to rents creates incentives for them to control violence most of the time.
- LAOs limit to elites access to land, labour, capital resources and the right to organise. LAOs have state-controlled industries, problematic business licensing regimes and ‘corrupt’ patron-client networks.
- LAO delivery of services depends on to whom the recipient is connected. LAO bureaucracies have difficulty delivering services according to impersonal criteria.
- LAOs range from fragile to basic to mature, according to the state’s durability, its capacity to control violence and whether private organisations are allowed to exist.
- Movement from LAO to OAO begins with establishing a rule of law for elites based on impersonally-defined requirements. Private organisations are allowed. Control of violence is centralised.
- Private OAO corporations operating in LAOs use OAO for institutional support and do not rely on LAO institutions. As a result, many LAOs have dualistic economies.
LAOs take any institutional form or mechanism and bend it to the purpose of rent-creation to sustain the existing dominant coalition. The standard development approach aims to introduce elements of property rights, rule of law and democratic governance in unmodified OAO form into developing societies. These elements can fail in LAOs if the distribution of the potential for violence is not addressed. Increased competition, open access and market freedom can weaken the rent-creation system that holds the LAO together. Attempts to remove corruption, create the rule of law and institute democracy with competitive parties can destabilise an LAO. Such reforms threaten the basis of order and risk generating violence.
- Groups that benefit directly from LAO economic arrangements will resist such reforms. Even those exploited will prefer to remain exploited rather than to risk disorder and violence.
- LAOs can adopt institutional forms proposed by an international donor without fundamentally changing the way they operate. Doing so often helps to sustain and strengthen the LAO.
- Development practitioners can help an LAO state to ‘mature’ by helping it to improve its control over violence and to create a legal framework for non-state organisations.
- Creating peace in violence-torn societies involves creating a basic LAO, not in creating a fully-fledged OAO, as laudable as this is as a long-term goal.
