Political Order and Political Decay (15 page)

The patronage-dispensing Big Man and his followers has never been fully displaced as a form of political organization up through the present. This is not just because it comes naturally to people, but also because it is often the most efficient route to political power. Today, authority is mostly exercised through control of formal organizations such as states, corporations, and nongovernmental organizations. In their modern forms, they are structured to operate by impersonal and transparent rules. But these organizations are often rigid and hard to direct; leaders typically rely on smaller networks of supporters they have cultivated on their rise to the top. Joseph Stalin and Saddam Hussein based their power not just on their control of a state apparatus of army and police. They also commanded the loyalty of a much smaller group of followers—in Stalin's case, a group of fellow Georgians led by Lavrenty Beria, head of the secret police; in Saddam Hussein's, a network of kinsmen from Tikrit in central Iraq. These patronage networks were in turn used to control the state itself. Similarly, both Japan's Liberal Democratic Party and the Chinese Communist Party are riven with leadership factions based on patronage networks. Many weaker and less politically developed societies are more overtly dominated by patronage organizations, such as the militias that have terrorized Libya, the Democratic Republic of Congo, Somalia, Sierra Leone, and Liberia.

Clientelism is a form of reciprocal altruism that is typically found in democratic political systems where leaders must contest elections to come to power. Compared to an elite patronage network, clientelistic networks need to be much larger because they are frequently used to get hundreds of thousands of voters to the polls. As a result, these networks dispense favors not based on a direct face-to-face relationship between the patron and his or her clients but rather through a series of intermediaries who are enlisted to recruit followers. It is these campaign workers—the ward heelers and precinct captains in traditional American municipal politics—who develop personal relationships with individual clients on behalf of the political boss.

Today, virtually every democracy makes overt vote buying illegal and discourages it through mechanisms like the secret ballot.
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The problem, then, for the politicians is how to monitor the behavior of the clients to ensure that they are delivering their end of the bargain. The patrons must, furthermore, persuasively signal that they will deliver on their promises of individualized benefits. One of the reasons that ethnic voting is so common in democracies from urban America in the nineteenth century to India or Kenya today is that ethnicity serves as a credible indication that a particular political boss will deliver the goods to a targeted audience.
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Patronage and clientelism constitute substantial normative deviations from good democratic practice for all of the reasons outlined above, and are therefore illegal and frowned upon in virtually all contemporary democracies. As such, they are often considered another form of political corruption. There are a number of reasons, however, why clientelism should be considered an early form of democratic accountability and be distinguished from other types of corruption—or, indeed, not considered a form of corruption at all. The first reason is that it is based on a relationship of reciprocity and creates a degree of democratic accountability between the politician and those who vote for him or her. Even though the benefit given is individual rather than programmatic, the politician still needs to deliver something in return for support, and the client is free to vote for someone else if the benefit is not forthcoming. Moreover, clientelism is designed to generate mass political participation at election time, something we regard as desirable.
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In this respect clientelism is very different from a purer form of corruption where an official steals from the public treasury and sends the money to a Swiss bank account for the benefit of himself and his family alone. This type of corruption is sometimes labeled, following Weber, prebendalism, based on the feudal prebend where a lord simply granted a vassal a territory that he could exploit for his own benefit.
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While there is plenty of clientelism in sub-Saharan Africa, political scientist Nicolas van de Walle argues that the region suffers from the much more serious disease of widespread prebendalism that has deprived citizens of control over their elected officials.
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As the successive wars in Afghanistan with the Soviets and NATO progressed, the traditional tribal relationships based on patronage and clientelism began to break down and were replaced by far more predatory forms of prebendalism in which individual governors or ministers simply appropriated vast sums of money without returning much in the way of services. The fact that a lot of these resources came from foreign assistance facilitated this process and served to deeply delegitimate the central government. In such a situation, a return to traditional patronage would constitute a huge improvement in the functioning of the political system.

A second reason for thinking that clientelism should be viewed as an early form of democracy rather than a form of corruption is that we see it taking hold in very many young democracies where voting and the franchise are new and politicians face the problem of how to mobilize voters. In societies where incomes and educational levels are low, it is often far easier to get supporters to the polls based on a promise of an individual benefit rather than a broad programmatic agenda. This was nowhere more true than in the first country to establish the principle of universal male suffrage, the United States, which in a certain sense invented clientelism and practiced it in various forms for more than a century.
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Clientelism should be broadly related to the level of economic development. This is a simple matter of economics: poor voters can be more easily bought than rich ones, with relatively small individual benefits like a cash gift or a promise of a low-skill job. As countries become wealthier, the benefits politicians need to offer to bribe voters increase, and the cost of clientelism rises dramatically. In the 1993 election, Taiwan's ruling Guomindang (KMT) bought enough votes to steal the election from the opposition Democratic People's Party, at the cost of around $300 Taiwanese (US$10) per vote, compared to $3 per vote in a 1998 election in the neighboring but poorer Philippines. Due to the fact that 45 percent of the bribed voters nonetheless failed to vote for the KMT, and that the opposition party made vote buying itself a campaign issue, this practice has largely faded from Taiwanese elections.
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Clientelism tends to retreat at higher income levels for reasons having to do with development of a robust market economy. Most poor countries lack a strong private sector and opportunities for entrepreneurship: indeed, this is why they are poor in the first place. Under such circumstances, politics is a much surer route to wealth for both patrons and clients. India today has a small but rapidly growing private sector; for the vast majority of Indians, however, participation in politics, either as a patron or a client, remains the main ladder of upward social mobility.
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As a stronger market economy develops, the opportunities for privately generated wealth increase, both absolutely and relative to the level of rents than can be extracted by entering politics. Ambitious young people who want to make large fortunes in today's America don't go into government. They go to Wall Street or corporate America, or start their own companies in places like Silicon Valley. Indeed, persuading people who've made private fortunes to go into government is often difficult given the reduction in income this entails. Moreover, for many voters in rich countries, programmatic issues like regulation, the environment, immigration policy, and the ability of unions to organize become much more important to their lives and well-being than the small bribes that could be offered by a clientelistic politician.
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Martin Shefter, whose framework forms the basis for much of the contemporary understanding of patronage and bureaucratic quality, argues that the supply of patronage is much more important than the demand for it. That is, patronage can exist only when politicians have access to state resources that they can distribute. This explains why what he labels “externally organized” parties like revolutionary Communist parties in Russia and China initially displayed much lower levels of patronage and corruption; they needed to be tightly disciplined and had no benefits to distribute before they came to power.
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There is no automatic process by which the demand for clientelistic favors drops as countries become richer. There are wealthy countries that still practice clientelism, such as Italy, Greece, and Japan. Why this is so requires a more detailed account of their specific historical paths and other factors that explain why reform coalitions failed to materialize.

 

6

THE BIRTHPLACE OF DEMOCRACY

How Greece and Italy came to be at the center of the European financial crisis; Greece and southern Italy as low-trust societies; the consequences of early democratization in Greece; how clientelism deepened in Greece despite modernization

Beginning in late 2009 and steadily intensifying thereafter, the European Union was shaken by a financial crisis that has threatened the future of the euro as a currency and the EU as an institutional framework for promoting peace and economic growth. At the center of the crisis lay the inability of certain EU countries, in particular Greece and Italy, to repay the sizable sovereign debt they had accumulated in the previous decade. The sovereign debt crisis quickly evolved into a banking crisis for Europe as a whole, as the viability of the financial institutions holding this debt was called into question.

I will return to an analysis of the problems of democratic government in Europe in Part IV of this book, and the failures of institutions at both a national and an EU-wide level to deal with economic management. The EU financial crisis, like the crisis that hit the United States in 2008–2009, is a complex one that has many contributing causes. But clearly one of the precipitating factors was the accumulation of public debt in Greece and Italy. As many observers have pointed out, the Maastricht Treaty creating the euro provided for a common currency and monetary policy without a corresponding common fiscal policy. This permitted countries with poor public finances to borrow during the boom times of the 2000s at low interest rates that did not reflect their underlying risk.

This problem was nowhere more true than in Greece, where public debt as a proportion of GDP reached 140 percent by 2010. As
Figure 7
indicates, debt levels for Italy as well had reached unsustainable levels; both countries were well above the average for the eurozone as a whole. This led to the fall of incumbent governments in both countries, and to leadership by technocratic caretaker administrations that sought to impose dramatic austerity programs to get public spending more in line with revenues. Within the eurozone, Greece and Italy also have the largest estimated “shadow economies,” economic activity that is not regularly reported to the tax authorities.
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FIGURE 7.
Central Government Debt as a Percentage of GDP

SOURCE
: Eurostat

The ongoing euro crisis exposed a large rift between Northern and Southern Europe. There is no generic “crisis of the welfare state” in Europe: Germany, the Netherlands, and Scandinavia all have very large public sectors when compared to, say, the United States or Japan, yet these countries managed to weather the 2008–2009 Wall Street crisis better than the United States. Germany in particular put its public finances in order during the 2000s under Gerhard Schröder's Agenda 2010, trimming labor costs and controlling overall levels of debt. The countries that got into trouble—Greece, Italy, Portugal, Ireland, and Spain—also differed from one another. Ireland and Spain were relatively responsible fiscally in the run-up to the crisis; the problem started only when housing bubbles burst, leading to bank failures and the subsequent need for huge taxpayer bailouts, which in turn threw public finances into chaos. Unsustainably high levels of public debt based on excessive spending were problems primarily in Greece and Italy.

The differences between Northern and Southern Europe have led various observers to portray the problem as a cultural one, pitting a hardworking, Protestant, disciplined Northern Europe (Germany, Holland, and Scandinavia) against a lazy, profligate Catholic-Orthodox south. Although, as I will argue below, culture did play a role in the crisis, these large religious divisions were not the issue: Protestant Britain and Iceland suffered major banking crises and public deficits as well, while Catholic Spain actually ran a primary budget surplus in the run-up to the collapse of the housing bubble in the late 2000s. The real division is not a cultural one, at least if we define culture by religious heritage; it is between a clientelistic and nonclientelistic Europe.