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The Constitution of Development

2005, Palgrave Macmillan US eBooks

The Constitution of Development This page intentionally left blank The Constitution of Development Crafting Capabilities for Self-Governance Sujai Shivakumar THE CONSTITUTION OF DEVELOPMENT © Sujai Shivakumar, 2005. Softcover reprint of the hardcover 1st edition 2005 978-1-4039-6985-9 All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles or reviews. First published in 2005 by PALGRAVE MACMILLAN™ 175 Fifth Avenue, New York, N.Y. 10010 and Houndmills, Basingstoke, Hampshire, England RG21 6XS Companies and representatives throughout the world. PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 978-1-4039-6986-6 ISBN 978-1-4039-8211-7 (eBook) DOI 10.1057/9781403982117 Library of Congress Cataloging-in-Publication Data Shivakumar, Sujai. The constitution of development : crafting capabilities for self-governance / Sujai Shivakumar. p. cm. Includes bibliographical references and index. 1. Political science. 2. State, The. 3. Political development—Case studies. 4. Economic development—Case studies. I. Title. JA66.S46 2005 320—dc22 2005046427 A catalogue record for this book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: October 2005 10 9 8 7 6 5 4 3 2 1 In memory of my grandmother, Mrs. Parvati Jayasankar This page intentionally left blank Contents Preface ix Foreword xi 1 Constituting Development 1 Part 1 11 State Governance and Development 2 Postwar Interpretations of Development 13 3 The Aid Effectiveness Puzzle With Krister Andersson, Clark Gibson, and Elinor Ostrom 21 4 The State as a Concept in Development 39 5 The State as the Means to Development 53 Part 2 Institutions and Development 63 6 The Constitutional Foundations of Development 65 7 Adaptive Development and Institutional Problem-Solving 81 8 Institutions, Market Exchange, and Development 93 Part 3 Crafting Constitutional Governance 103 9 Crafting the Institutions for a Problem-Solving Society 105 10 Crafting New Institutions on Indigenous Foundations 121 11 Toward a Democratic Civilization for the Twenty-First Century 131 Notes 135 Bibliography 157 Index 177 This page intentionally left blank Preface W hat constitutes development? And how can the institutional basis for development be constituted? These puzzles emerged while assessing projects in Good Governance at the United Nations Development Programme’s Regional Bureau for Asia and the Pacific in 1997. Having recently completed doctoral studies in Constitutional Political Economy from George Mason University, and believing that institutions matter, I wondered if the UNDP’s initiatives in Good Governance could be effective. I wrote of these puzzles to Vincent Ostrom, who invited me to pursue them as a visiting scholar at the Workshop in Political Theory and Policy Analysis at Indiana University. The following four years were spent attempting to understand the nature of development and—with an evaluation of aid, incentives, and sustainability for Sida—the political economy of development cooperation. This book is an attempt to draw together these understandings. This book would not have been realized without Vincent Ostrom’s guiding vision; his wisdom and steady encouragement resonate deeply. Colleagues and visitors to the Workshop in Political Theory and Policy Analysis also offered valued advice, and friendship. My thanks go to Krister Andersson, John Brown, Clark Gibson, Sam Joseph, Elinor Ostrom, Margaret Polski, and Amos Sawyer, among many others. The book has benefited enormously from two formal manuscript review sessions. The first, held at the Workshop in November 2003 included Barbara Allen, Sheldon Gellar, Marilyn Hoskins, Minoti Chakravarty-Kaul, Michael McGinnis, Elinor Ostrom, Vincent Ostrom, Filippo Sabetti, Amos Sawyer, and James Wunsch. The second session, held at the Mercatus Center in March 2004, included Paul Aligica, Peter Boettke, Ken Borghese, Karol Boudreaux, S. Ramachandran, Gordon Tullock, Richard Wagner, and Fred Witthans, among others. My thanks to all for helping me improve this book, though its errors and shortcomings remain my responsibility. x ● Preface Financial support for work on this book from the Workshop in Political Theory and Policy Analysis, Indiana University, and the Earhart Foundation is acknowledged with gratitude. Finally, my family, especially my wife Ramā, has provided enormous moral support and encouragement, enabling me to persevere from initial drafts to the final publication of this volume. Foreword Some Contemporary Puzzles to Be Resolved Sujai Shivakumar’s The Constitution of Development is deserving of careful study and critical reflection. If we are to have a warrantable knowledge relative to the constitution of human societies, we need to understand the relationship of ideas to the thoughts and deeds that follow. The era of European imperialism came to a close after the Second World War with independent nation-states being created in much of the third world. Instead of achieving freedom for the colonial peoples, the new nation-states have frequently been the object of coups d’état by elements in the military who have engaged in pillage and plunder of their subjects. Somewhat similar patterns occurred in the Marxist–Leninist revolutionary struggles to achieve the liberation of the working peoples of the world. The dictatorship of the proletariat yielded repression accompanied by profound tragedies, including mass starvation of millions of people. Concepts like capitalism versus socialism have failed to address the nature of exchange relationships and patterns of entrepreneurship in creating complementary orders in market and public economies. A critical question that needs to be addressed in the twenty-first century was raised by Alexander Hamilton in the first paragraph of the first essay of The Federalist written in 1788: Whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force. Like the authors of The Federalist papers, Sujai Shivakumar in The Constitution of Development engages in a diagnostic assessment of the failure of unitary nation-states, explores alternatives, and conceptualizes the conditions necessary for the constitution of development confronting the peoples of the xii ● Foreword twenty-first century. This is why The Constitution of Development is deserving of careful study and critical scrutiny. The future of human civilization is likely to turn on the question of whether societies of men are really capable or not of establishing good government by reflection and choice, or whether they will continue to depend on accident and force. These are puzzles that you, I, and others must resolve. Vincent Ostrom Workshop in Political Theory and Policy Analysis Indiana University, Bloomington