Political Economy Of Reform Research Articles

The political context of REDD+ in Indonesia: Constituencies for change

► Implementing REDD+ in Indonesia requires significant political-economic reform. ► Presidential backing is strong but curtailed by the political system and politics. ► Ownership and engagement by Parliament and the bureaucracy is important. ► Building constituencies for national ownership of the reforms is a key challenge. ► A consensus over Indonesia's economic future and relevance of REDD+ is needed. The political context in Indonesia will affect the success of any reform process aimed at reducing emissions from deforestation and forest degradation (REDD+). Such reforms require strong political support because of their potentially significant medium-term impact on winners and losers in the Indonesian economy. Although REDD+ in Indonesia has strong rhetorical presidential backing, analysis of the political system suggests that such support may not be sufficient without the engagement and ownership of key players such as the parliament and the bureaucracy. Not only is the president's official power curtailed by the formal political system, but the nature of coalition politics in Indonesia further weakens his ability to implement reforms. Securing the support of a coalition of parties within parliament and the bureaucracy at both national and decentralised levels may be crucial to ensuring implementation. Politicisation of the bureaucracy and increasing business–government relationships are important features of the parliamentary dynamic at the national level and are reportedly intensifying at the local level. Although public support has proved influential for other reforms in Indonesia, the public is less informed or motivated by the issues related to REDD+. In addition, the REDD+ debate is tainted by concerns about sovereignty and lack of national ownership. Building domestic constituencies for the reforms and associated institutions is therefore a key challenge. REDD+ reforms will require a stronger consensus among political elites and the broader public over the implications of a transition to a ‘low carbon’ economy in Indonesia.

FEUDAL HERITAGE : SOURCE OF CORRUPTION, COLLUSION, AND NEPOTISM

The political development in Indonesia at the present time has been marked by a terminology of change, namely reformation which includes three main causes of the failure of the New Order led by President Soeharto . This phenomenon signifies that the New Order has been involved in practices of corruption, collusion, and nepotism (CCN). These practices have brought about instability in all sectors, and the most important is a sharp decrease in public welfare. During the New Order nobody would express their opinions frankly on Soeharto's involvement in CCN. He held the office of president for 32 years with an opresive bureaucracy that tended to perpetuate a system created by an absolute ruler . Student activists in several universities in Indonesia demanded reduction of soaring prices and asked Soeharto to step down . Their incessant demands for political economic reforms, were endorsed by university students of most universities in Indonesia . This was followed by mass demonstrations until the downfall of Soeharto in May 21, 1998 .

Risk, Social Protection and the World Market

This paper sees market building in Asia as part of the larger project of constructing a global market economy – a project which can be traced back to Adam Smith and, more recently, to the founding of a set of global liberal institutions in the post-World War II period. In the last two decades the global liberal impulse behind the creation of these institutions has gained momentum, in step with the emergence of a “world market” of genuinely global scale. The issue of risk is central to the project of building a world market. Following an introduction to the global liberal project, the first section of this paper addresses the question of risk through a critical analysis of the difference between negative risks (both external and internal) that pose a threat to the global liberal project, and the positive risks that the project seeks to embed and incentivise. The second section outlines the treatment of risk in the literature on the “political economy of reform,” and the third provides a detailed analysis of Social Risk Management at the World Bank and the Asian Development Bank over the last decade. The final section reflects on the implications for “building markets in Asia.”

The Political Economy of Reforms in Kenya: The Post-2007 Election Violence and a New Constitution

Abstract:This article explores the package of “Agenda item 4” reforms undertaken by the Kenyan government in the mediation process following the 2007–8 postelection violence, including those relating to long-standing issues over constitutional revision. It situates the previous lack of reforms within Kenya's political economy and demonstrates how political and economic interests thwarted progress and produced the postelection crisis. It also examines the more recent attempts to address reforms following the signing of the National Accord and the creation of a power-sharing government, and finds strong public support for constitutional revision. It concludes that these pressures from below, along with a realignment of political interests and institutional change from power-sharing, helped support reform.

Political Economy of Reform in Mexico

The 2011 Richard Snape lecture (the ninth in memory of Prof Snape), by Dr Roberto Newell, outlines the factors constraining Mexico’s current economic performance, and the reform challenges it faces to ensure future economic and social prosperity. The views expressed in this paper are those of the author and do not reflect those of the Productivity Commission.

Risk and the World Market

This paper sees ‘new’ market-building in Asia as part of a larger project of the construction of a global market economy, which can be traced back to Adam Smith, and more recently to the founding of a set of global liberal institutions in the post-World War Two period. In the last two decades the global liberal impulse behind the creation of these institutions has gained momentum, in step with the emergence of a ‘world market’ of genuinely global scale. The issue of risk is central to the project of building a world market. Following an introduction to the global liberal project, the first section addresses the question of risk through a critical analysis of the difference between negative risks (both external and internal) that pose a threat to the global liberal project, and the positive risks that the project seeks to embed and incentivize. The second section outlines the treatment of risk in the literature on the ‘political economy of reform’ developed by a number of organic intellectuals who shuttled between leading US universities and the international organizations from the mid 1980s on, and the third provides a detailed analysis of Social Risk Management at the World Bank over the last decade. The conclusion briefly surveys the field of risk management across the wider range of global institutions, and reflects on the implications for ‘building markets in Asia’.

The Political Economy of Maize Production and Poverty Reduction in Zambia: Analysis of the Last 50 Years

Poverty and food security are endemic issues in much of sub-Saharan Africa. To eradicate extreme poverty and hunger in the region remains a key Millennium Development Goal. Many African governments have pursued economic reforms and agricultural policy interventions in order to accelerate economic growth that reduces poverty faster. Agricultural policy regimes in Zambia in the last 50 years (1964–2008) are examined here to better understand their likely impact on food security and poverty, with an emphasis on the political economy of maize subsidy policies. The empirical work draws on secondary sources and an evaluation of farm household data from three villages in the Kasama District of Zambia from 1986/87 and 1992/93 to estimate a two-period econometric model to examine the impact on household welfare in a pre- and post-reform period. The analysis shows that past interventions had mixed effects on enhancing the production of food crops such as maize. While such reforms were politically popular, it did not necessarily translate into household-level productivity or welfare gains in the short term. The political economy of reforms needs to respond to the inherent diversity among the poor rural and urban households. The potential of agriculture to generate a more pro-poor growth process depends on the creation of new market opportunities that most benefit the rural poor. The state should encourage private sector investments for addressing infrastructure constraints to improve market access and accelerate more pro-poor growth through renewed investments in agriculture, rural infrastructure, gender inclusion, smarter subsidies and regional food trade. However, the financing of such investments poses significant challenges. There is a need to address impediments to the effective participation of public private investors to generate more effective poverty reduction and hunger eradication programmes. This article also explores the opportunities for new public–private investments through South–South cooperation and Asia-driven growth for reducing poverty in Zambia.

Macroeconomic and Operational Challenges in Countries in Fragile Situations

There is broad recognition that countries in fragile situations face unique challenges. While fragility may afflict countries at different levels of income and capacity, common features of fragile states are institutions that are seen to be weak and lack legitimacy, as well as a fractious political setting, which in turn elevates the risk of violence. Fragilities impose large costs and hardships on local populations that can spill over to neighboring countries—directly through conflict, crime, and disease, but also through economic linkages. Considering these unique challenges, the international community is developing forms of engagement that stress peacebuilding, social cohesion, and statebuilding. They incorporate recognition of the need for sustained engagement, a willingness to take calculated risks in uncertain environments, fuller attention to the political economy of reforms and capacity constraints, and coordination of donor efforts.

The stewardship of European workers’ capital in times of crisis

The global financial and economic crisis has reinforced the need for a broader regulatory and policy approach to responsible investment. This article looks at the interplay between pension policy and responsible investment practices which, it is argued, has been made more complicated and uncertain as a result of the crisis. The article looks first at the impact of the crisis on pension funds, the regulatory measures taken by regulators in reaction and the changing political economy of reform across Europe as a result of the crisis. From there the article outlines the broad features of a trade union perspective on pension fund responsible investment — known as workers’ capital strategies — and focuses on the post-crisis regulatory discussion in Europe on corporate governance and shareholder activism. The article concludes on the need for a comprehensive approach to responsible investment including by making the link with benefit security and solvency regulations.

M. Hadi Soesastro: Indonesian public intellectual, Asia Pacific visionary

This note commemorates and celebrates the life and contribution of M. Hadi Soesastro, a Bulletin board member who passed away on 4 May 2010. Hadi was arguably Indonesia's leading public intellectual in the fields of international economic policy and political economy, ASEAN economic cooperation, and East Asian economic integration. He made seminal contributions in these fields, and on the political economy of reform in Indonesia, the economic development of East Timor, and energy economics. He also played a major role in institutional development, most notably at the Centre for Strategic and International Studies, and in many other official, academic and research endeavours in Indonesia and East Asia.

Endogenous Indoctrination: Occupational Choices, the Evolution of Beliefs and the Political Economy of Reforms

I analyse a model where workers self‐select in the educational occupation in a way which is correlated with their beliefs about the working of the market economy. Teachers have a disproportionate effect on the transmission of beliefs. Therefore, they generate a bias which makes it harder for the population to learn the true parameters of the economy if these are favourable to the market economy. Two parameters determine this bias. Social entropy defines how predictable one’s occupation is as a function of one’s beliefs. Heritability is the weight of the family’s beliefs in the determination of the priors of a new generation. Both heritability and social entropy reduce the bias and make it easier to learn that the market economy is “good”, under the assumption that it is.

The Political Economy of Reform in Latin America: Politics, Institutions, Ideas, and Context

The Politics of Labor Reform in Latin America: Between Flexibility and Rights. By Maria Lorena Cook. University Park: Pennsylvania State University Press, 2007. Pp. xv + 231. $45.00 cloth. Good Intentions, Bad Outcomes: Social Policy, Informality, and Economic Growth in Mexico. By Santiago Levy. Washington, D.C.: Brookings Institution Press, 2007. Pp. xiii + 357. $27.95 paper. The State of State Reform in Latin America. Edited by Eduardo Lora. Palo Alto, CA: Stanford University Press; Washington, D.C.: InterAmerican Development Bank, 2007. Pp. xxi + 446. $29.95 paper. Democracies in Development: Politics and Reform in Latin America. Revised edition. Edited by J. Mark Payne, Daniel Zovatto G., and Mercedes Mateo Diaz. Washington, D.C.: Inter-American Development Bank; David Rockefeller Center for Latin American Studies, Harvard University, 2007. Pp. xvi + 332. $27.95 paper. Bounded Rationality and Policy Diffusion: Social Sector Reform in Latin America. By Kurt Weyland. Princeton, NJ: Princeton University Press, 2007. Pp. xii + 297. $24.95 paper.

Reform from Below: Behavioral and Institutional Change in North Korea

The state is often conceptualized as playing an enabling role in a country's economic development-providing public goods, such as the legal protection of property rights, while the political economy of reform is conceived in terms of bargaining over policy among elites or special interest groups. We document a case that turns this perspective on its head: Efficiency-enhancing institutional and behavioral changes arising not out of a conscious, top-down program of reform, but rather as unintended (and in some respects, unwanted) by-products of state failure. Responses from a survey of North Korean refugees demonstrate that the North Korean economy marketized in response to state failure with the onset of famine in the 1990's, and subsequent reforms and retrenchments appear to have had remarkably little impact on some significant share of the population. There is strong evidence of powerful social changes, including increasing inequality, corruption, and changed attitudes about the most effective pathways to higher social status and income. These assessments appear to be remarkably uniform across demographic groups. While the survey sample marginally overweights demographic groups with less favorable assessments of the regime, even counterfactually recalibrating the sample to match the underlying resident population suggests widespread dissatisfaction with the North Korean regime.

The political economy of reform in Central Asia: Uzbekistan under authoritarianism

1. Geographical and Historical Introduction - From the Beginnings of Turkic Settlement to Russian Conquest. Religious and Language Background Explored 2. The Soviet Legacy - Uzbekistan's Social Progress under a Colonial, Communist Regime, 1917-91 3. The Uzbek Road to Economic Reforms 4. Growth, Income, and Social Consumption 5. Human Rights in Uzbekistan and its Central Asian Neighbors 6. Comparisons with Central Asian Neighboring States [Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan] 7. Energy in Central Asia 8. International Economic Relations in Central Asia 9. Conclusion

The Commission on Legal Empowerment of the Poor: An Opportunity Missed

With a constellation of high profile global thinkers and leaders, the Commission on Legal Empowerment of the Poor promised to reposition law and justice concerns at the centre of thinking on poverty alleviation. The Commission has succeeded in generating greater interest in the nexus between poverty, injustice and legal exclusion and is a welcome addition to the battle of ideas and concomitant battle over resources over how to raise the living standards of the poor and disadvantaged. However, this article, which analyzes the Commission’s final report from the perspective of a legal empowerment practitioner, concludes that the Commission is an opportunity missed. The Commission’s failure to properly tackle the political economy of reform and to justify its policy agenda with empirical data limits its value to the practitioner and will curtail its impact with policymakers.

All Power to Global Capital!

It is one of the key precepts of the 'political economy of reform' that every crisis is an opportunity to be exploited to drive reform forward. True to form, the international organisations and their G-20 allies have used the current crisis to their advantage. They have greatly reinforced the power of the IMF in particular, with the intention of tightening further the disciplinary power of capital, in line with a project under way for two decades. In this context, proposals to introduce an unconditional IMF Flexible Credit Line and to democratise the Bretton Woods institutions are traps for the unwary. Rather than empowering the poor in the developing world they legitimise and intensify mechanisms that subject them to closer control and exploitation by capital. The response of the IFIs to the global crisis – highly successful so far – has taken the form of a carefully staged illusion dependent on the magician's art of misdirection. However, their own recent publications, analysed here, give their secrets away. As a general rule, the more progressive these proposals for reform seem to be, the more dangerous they are.

Endogenous Indoctrination: Occupational Choice, the Evolution of Beliefs, and the Political Economy of Reform

Much of the political economy analysis of reform focuses on the conflict of interest between groups that stand to gain or lose from the competing policy proposals. In reality, there is also a lot of disagreement about the working of the policy: in addition to conflicting interests, conflicting views play an important role. Those views are shaped in part by an educational bureaucracy. It is documented that the beliefs of that bureaucracy differ substantially from those of the broader constituency. I analyse a model where this effect originates in the self-selection of workers in the educational occupation, and is partly reinforced by the insulation of the educational profession from the real economy (an effect which had been discussed by Hayek). The bias makes it harder for the population to learn the true parameters of the economy if these are favourable to the market economy. Two parameters that govern this capacity to learn are social entropy and heritability. Social entropy defines how predictable one’s occupation is as a function of one’s beliefs. Heritability is the weight of the family’s beliefs in the determination of the priors of a new generation. Both heritability and social entropy reduce the bias and makes it easier to learn that the market economy is good, under the assumption that it is. Finally I argue that the capacity to learn from experience is itself affected by economic institutions. A society which does not trust markets is more likely to favour labour market rigidities that in turn reduces the exposure of individuals to the market economy, and thus their ability to learn from experience. This in turn reinforces the weight of the educational system in the formation of beliefs, thus validating the initial presumption against the market economy. This sustains an equilibrium where beliefs and institutions reinforce each other in slowing or preventing people from learning the correct underlying parameters.

The Political Economy of Reform in Central Asia: Uzbekistan under Authoritarianism. By Martin C. Spechler. Central Asia Research Forum. New York: Routledge, 2008. viii, 172 pp. Notes. Index. Figures. Tables. Maps. $160.00, hard bound.

The Political Economy of Reform in Central Asia: Uzbekistan under Authoritarianism. By Martin C. Spechler. Central Asia Research Forum. New York: Routledge, 2008. viii, 172 pp. Notes. Index. Figures. Tables. Maps. $160.00, hard bound. - Volume 68 Issue 3

From Stabilization to Marketization: The Political Economy of Reforms in Azerbaijan

(ProQuest: ... denotes formulae omitted.)IntroductionSince gaining its independence in 1991, Azerbaijan has started implement marketoriented policies. The transition the new political-economic order has not been smooth, but instead accompanied by political cataclysms and military conflicts. The World Bank classified Azerbaijan as a war-torn country with a semidemocratic political regime.1The literature on the political economy of transition has grown considerably in the last decade because of the reality of the problem and uncertainty about the future of reforms throughout the former Soviet states. Various concepts of interconnection between politics and economic reforms have been developed and regional and country explanations of the transition of post-Communist countries.The first question I discuss in this article is: What does market reform mean? Because of Shafiqul Islam's clear explanation of the market-reform process, I will follow his theory, which claims there are four in the transition vehicle: macroeconomic stabilization, liberalization, privatization of the economy, and development of marketsupporting institutional infrastructure.2 The last he grouped together under the label of marketization. He also discusses other concepts and theories of political economy of post-Communist transition.However, I focus on how political changes have affected the process in Azerbaijan during The trajectory of the post-Communist transition in Azerbaijan can be roughly divided into stages: (1) first years of independence (1991-94), the state of nature; (2) powerful autocratic regime and stabilization (1994-2003), the state of Heydar Aliyev; and (3) Heydar Aliyev's death and the election of his son Ýlham Aliyev as the new president (post-2003), the post-Heydar Aliyev state. I review all stages of political development in Azerbaijan and their effects on reforms, particularly the marketization process. Measures of nominal political stability and reforms are obtained using the mix of qualitative and quantitative methods and then analyzed. In the end, I show how the centralization of power was helpful in one dimension of reforms-stabilization-but has been an impediment for the other dimension-marketization. Moreover, this article claims that once centralized, it is extremely difficult for a political-economic system in transition undergo decentralization.Finally, I propose and discuss further public policy steps and examine the three I's approach addressing issues of a post-Communist transition.The Political Economy of Post-Communist TransitionFirst, we must define market reform and transition. According Adam Przeworski, market-oriented reforms are reforms that aim to organize an economy that rationally allocates resources and in which the state is financially solvent.3 Islam highlights four interlocking wheels of market-oriented reforms: macroeconomic stabilization, liberalization, privatization, and institutional reforms.4Joan Nelson has examined an unprecedented case of simultaneous economic and political transformation that has characterized transitional reforms.5 All newborn countries have had pass through this dual transformation, but each has chosen various policies and has had different results. In short, economic reforms progressed successfully in countries where wealth was distributed more or less equally and there was political consolidation within the society.6These issues have do with the role of ex ante and ex post political constraints in the transition experience. If the former deals with the feasibility and acceptability of reforms, the latter refers the danger of backlash and reversal after decisions are made and outcomes are observed.7 Joel Hellman argues that although post-Communist countries have not suffered from the standard ex ante and ex post constraints reform, they have faced an equally difficult set of challenges from an unexpected source; the political obstacles were the most challenging. …

Peri-Urban Land Reform, Political-Economic Reform, and Urban Political Ecology in Zanzibar

The rapid urbanization of land in the peri-urban West District surrounding Zanzibar city in Tanzania has occurred during a 20-year period of political and economic reform, with related reforms in the land sector. Utilizing 2006 and 2007 interviews with officials and residents alongside document and archival research, this study examines two themes in relation to Zanzibar's most prominent program of contemporary land reform, a Finnish-funded project for the Sustainable Management of Lands and Environment (SMOLE). These themes entail: (1) the importance of the historical-cultural geography of peri-urban land dynamics for dual reform (simultaneous political and economic reform) processes in Africa; and (2) the critique of pro-poor, neoliberal land reform for the disjunctures between its rhetoric, actual planning practice, and the beliefs and practices of the peri-urban poor, wherein we discover a lack of participation, transparency, or democracy in the land sector. The article's broader aim is to contribute a detailed African case study to urban political ecology's efforts to argue for democratization of the construction of social environments.