2 November 2012

Stronger Institutions Needed to Eliminate Exclusion

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Leaders who pursue exclusionary policies have themselves to blame for their countries' stagnation and may, after all, be stoking fires that eventually consume them, economists studying the political economy of social inclusion have warned.

Their studies are based on a wave of mass uprisings that swept much of North Africa last year causing regime change in Tunisia, Egypt and Libya even as they inspired waves of public protests in many other countries across Africa.

"There is a link between social exclusion and political action," Sylvain Dessy, a professor of economics at Laval University in Quebec City, told a seminar focused on the importance of institutions in development on Day 3 of the African Economic Conference in Kigali, Rwanda.

"Social exclusion is not an accident. It is provoked by deliberate actions and it happens when one group in society is disenfranchised and another is privileged," he added.

Exclusion, Dessy noted, is primarily driven by the competition for power where the political leader channels jobs, favours and public goods disproportionately to those who back him on the basis of ethnicity, religion, culture, age or gender.

"Inclusive policies can be politically costly in an environment where ethnicity, culture or religion play a central role in the political process, as if often the case in many African countries," Dessy notes in a paper he has co-authored with Stephane Pallage, from the University of Montreal, and Desire Vencatachellum, from the African Development Bank.

Ironically, they observe, far from achieving democracy and equality, political pluralism and fair elections, which have been vigorously advocated as remedies to exclusion and bad governance, have so far led to the entrenchment of ethnic, cultural or religious loyalty in politics.

Incumbent political leaders whose social group is large enough to win on its own find exclusion an easier choice as it secures their base even as it keeps political opponents weaker and less able to challenge their power. To turn this around requires very hard work, notes Dessy.

"Clearly, breaking barriers to inclusive policies is not an easy task. The fight over exclusive policies must be undertaken both inside and outside. The international community needs to make access to international money laundering difficult."

Much more importantly, however, there must be a continuous emphasis on establishing and strengthening institutions because these outlive even the strongest, most effective and beloved leader.

According to their paper, "Institutions need to provide for checks and balances and prevent political competition from becoming a winner-take-all political game in addition to preventing culture, religion or ethnicity to permeate party politics."

Dessy argues that, "stability is important and that's one of the reasons why institutions have to take centre stage - to be the underlying environment for economic growth to take place. If you don't have sound institutions it is not clear that your growth will be inclusive. It is not even clear that it will be sustainable."

Countries that have eliminated or minimized exclusion have not done it any differently. They have relied on building stronger institutions rather than relying on their present or potential leaders.

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