Given his stature, it’s a little disappointing that Douglass North’s recent work, along with John Wallis and Barry Weingast, on “Limited Access Orders” hasn’t had more of an impact on the development world. Probably, a lot of mistakes would be avoided if practitioners took the time to really digest the lessons there.
For one thing, we’d have a more nuanced, less moralistic, more realistic understanding of corruption, or to put it in language North would recognize, the role personalized exchange plays in maintaining political order in developing countries.
The Limited Access Order approach is nothing if not ambitious. In a single, slim volume, North and his collaborators put forward the kind of Grand Theory of History more usually associated with multi-volume 19th-century door-stoppers. Writing well into his 80s, North seems to have been in no mood to write about anything short of everything.
Systematic consideration of violence, and the role it plays in shaping societies, is fundamental to the problem of economic, political, and social development. All societies possess institutions, organizations, and beliefs that enable them to deal with violence with varying degrees of success. These social structures embody a fundamental logic, captured in the concept of a social order. Standard development advice fails all too frequently because it conflicts with the social logic that maintains order.
It’s not really possible to conceive of a brush broader than that, and yet I think there would be a lot less confusion and wasted effort in the development enterprise if practitioners would just take the effort to grasp even just that much.
For North, the vast majority of societies for the vast majority of human history have been Limited Access Orders: systems that keep violence at bay by limiting competition – both political and economic – while allowing elites to carve up the rents between them.
This, when you think about it, isn’t actually a controversial point at all: until 250 years ago or so, no settled society had operated in any other way. And, in North’s view, it’s how most of the world still operates today.
Both in historical and comparative perspective, “Open Access Orders” that limit rent-seeking while allowing open political and economic competition are the exception, not the rule. In the context of an Open Access Order, working to limit competition and extract rents is deviant behaviour. Criminal behaviour. Behaviour so reprehensible we describe it with a word that doubles as a moral judgment.
It’s corruption, plain and simple. In societies organized around the principles of Open Access, it’s intolerable.
But, of course, in the 17th century, nobody thought of Europe’s extractive elite as “corrupt.” When, as Braudel meticulously documents, French manufacturing guilds went to extreme lengths to prohibit technological innovation and colluded to limit entry into the textile sector, nobody thought of them as corrupt.
In the context of a Limited Access Order, leveraging personal contacts into political power for the purpose of limiting competition and extracting rents isn’t deviant. It’s how things work. It’s the way society preserves order.
What’s peculiar about the situation in today’s Least Developed Countries is that donor countries have exported the category of “corrupt” to describe behaviours that are deviant in the donor countries, but essential to preserving political order and preventing generalized violence in the recipient countries.
Of course, this doesn’t make LDC elites any less extractive: it just means that their extractiveness happens in a legitimacy vacuum. Politicians in today’s LDCs grasp realities about the nature of politics in their countries that seem nearly impossible for observers in Washington or Geneva to grasp – but that decision-makers in Beijing understand instinctively. They grasp the role rent-seeking plays in maintaining the viability of the basic political settlement. They grasp that, given the economic and social structures of their society, the alternative to rent-seeking isn’t squeaky-clean technocracy but generalized chaos.
They grasp, in other words, the progressive potential of corruption, its role in strategies of state formation that offer some kind of reprieve from generalized violence and some sort of potential for stability and growth.
You can see why development practitioners have a hard time taking on this kind of message: the kind of hard-bitten realism baked into North’s late work on social orders might run with the grain of African Power and Politics, but it runs directly against the grain of the narratives that dominate Western development discourses.
It’s a hard sell, back when you’re writing that grant proposal back in Brussels, or Ottawa: “yes, we’ll be working with a completely corrupt government, but that’s inevitable, and actually it could be a feature, not a bug.”
You’re way out beyond the development Overton Window there, out on your own. And when you’re that far out at sea, Douglass North probably can’t help you.