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7 Polity Qualities how governance affects poverty Mick Moore (with Jennifer Leavy and Howard White) This chapter employs some basic statistical analysis to address a question that has not been asked before. The question sounds complex and jargonistic: what explains the different ef‹ciencies with which national political economies convert national material resources into mass welfare (i.e., human development)? It is actually a way of throwing new light on an old and familiar question: how does the quality of governance affect poverty? At the highest level of generality, the answer seems obvious: well-being will spread when governments are able to enforce the rule of law, suppress banditry and crime, collect enough taxes to ‹nance a public education system, and do the other things that feature in any commonsense list of the functions of the state. Since public authorities in many poor countries currently fail to perform many of these tasks, it seems highly likely that improvements in governance will help reduce poverty. Serious disagreement begins when we ask more precisely how the very wide differences in the patterns of governance found in contemporary poor countries affect the welfare of their poorer people. There is no consensus on the answer but rather a diversity of views that in part re›ects deep-rooted philosophical and ideological differences about the nature and functions of government. It is the role of social scientists to confront these kinds of preconceptions with evidence. At present, evidence is especially important in the ‹eld of international development because most aid donors and international ‹nancial institutions have been propagating a set of ideas about governance and poverty that are rooted more in ideology than in evidence, are certainly too standardized and simpli‹ed, and may be substantially awry. The essence of the donor consensus has been that market-conforming economic policies and liberal democratic governance reforms are mutually supportive and jointly represent the best way to reduce poverty. The statistical analysis reported here, which is based on analyzing cross-sectional variations among con167 temporary developing countries (only),1 suggests that this consensus is wrong in important ways. Our statistical results are robust and signi‹cant. We have done nothing fancy but used only straightforward data sets and basic analytic techniques . The ‹rst conclusion is essentially methodological, but it is no less important for that. We demonstrate the usefulness of a new and relatively simple measure of the performance of national polities in relation to poverty. Relative income conversion ef‹ciency (RICE) is de‹ned as the relative ef‹ciency of national political economies in converting national material resources into human development. Crudely, how much education and good health is generated per dollar of gross national product (GDP)? This measure should have wider application, for it cuts through many of the complexities of statistically assessing how the quality of governance relates to poverty reduction. Our more substantive conclusions relate to the factors that explain, in a statistical sense, variations among countries in the RICE score. Two of these—population density and West African location—are incidental to our immediate interests. The three main political explanatory factors are, however, very germane to the broad concerns of this volume. They individually or jointly (1) throw serious doubt on the donor consensus on good governance summarized earlier and (2) support the meta-assumption behind this volume that nationally rooted differences in political institutions and state-society relations help explain differences in patterns of poverty and in the political possibilities for tackling it. The three ‹ndings, in ascending order of signi‹cance, are the following • In common with related inquiries, we ‹nd no evidence that electoral democracies do any better in reducing poverty than other regime types. • We ‹nd that governments that are heavily dependent on mineral resources for revenues tend to perform particularly badly in terms of poverty reduction. This ‹nding is consistent with a growing body of research ‹ndings on the malignant effects of mineral wealth on governance and contributes to an emerging understanding of the broad causes of poor governance in the developing world. • Our ‹ndings undermine the credibility of one of the most popular of‹cial measures of the quality of governance in poor countries : the ratings accorded governments for responsiveness to the needs of international investors and lenders—the International Country Risk Guide measures. Governments rated highly on these ICRG measures consistently perform badly in poverty reduction. If these ICRG measures do indeed gauge accurately 168 Changing Paths [18.221.239.148] Project MUSE (2024-04...

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