Time to Let Go of “Corruption”

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.

A taste:

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.

6 thoughts on “Time to Let Go of “Corruption””

  1. Hey, what are John Wallis and Barry Weingast, chopped liver?

    More seriously, though, thanks for blogging about this book, which is one of the most important works of comparative politics of the past 20 years, IMO.

  2. So when Capriles complains about the Venezuelan enchufados being corrupt, he’s actually importing categories from the imperio! Because, in a “legitimacy vacuum”, anything goes! Where do I get my legitimacy vacuum, please?

    1. Heh. Well!

      Actually, I bet you’d like North’s book, Jeffry – you should go on that rather than on my quick little gloss here.

      He has a whole typology of Limited Access Orders, from fragile ones like the ones you have in Afghanistan and Mali barely able to keep order to basic ones like you see in Kenya and Uganda that rely on coalitions of rent-seekers to keep it together (and sometimes don’t manage to) to more mature LAOs that, in time, start to institutionalize and create the doorstep conditions for transition to Open Access Order.

      None of that is pre-ordained, though. North, writing in 2007, specifically calls out Venezuela as a country that’s visibly going the wrong-way, from a mature LAO that had some of the institutional doorstep conditions in place to make the shift to OAO to something that looks much more like a basic LAO in the Kenyan mould, something much more directly reliant on personal contacts with key rent-seekers in the military, etc.

      Capriles is right that it’s scandalous that we’re marching against the current of history.

      But conditions in Africa are different. I’m talking about basic LAOs, places like Kenya – where the wheels fell off of the elite pact as recently as 2007 – or Uganda – where the cabinet is a carefully crafted coalition of people that could walk out and start armed rebellions at any time if they feel they’re not getting their due share of the spoils. These are places where the elite settlements that keep mass-scale violence at bay are clearly, palpably, demonstrably fragile.

      The hard fact is that “corruption” is adaptive in that kind of setting – if it wasn’t, it wouldn’t be universal.

  3. Ok, you have sold me, I should read the book. (And the report from yesterday, and some books by Easterly, and…) one thing that seems missing from your precis, and why I mentioned Capriles: I know for a fact that many mainland Chinese, and some Africans too, purport to hate the corruption in their countries. I hope it isn’t just because they aren’t in the loop.

    1. Oh yeah. And I’m sure a lot of farmers in 17th century France hated the guts of their feudal lords! That’s also normal…

      But I come at this from a South Sudanese angle, where we’ve just seen what happens when the elite settlement falls apart. You measure the outcome of that in buckets of blood.

      Too grim an outlook? Probably. (Hey, they don’t call it the dismal science for nothing.)

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