Between state and society, there are public institutions, loci where state meets society, where government becomes a daily business and citizenship is fashioned by a sense of the shared interests of the people. Humble objects of study with no real field of their own, public institutions are yet the constituent parts of the state and at the same time the property of the people – of society. Fanatics of capitalism, in the United States in particular, thus call them socialist institutions, and quite rightly so, since they cater for human needs and social interests with no consideration (other than practical) for profit or pure economic efficiency. In the political-economic triptych of state-market-society, public institutions are squarely on the side of society and closer to state than to market. They encompass, for instance, public schools and universities, public hospitals, the courts of law, public credit institutions (such as development banks), public libraries, but also – and in accordance with levels of economic development – state-run water and energy supply companies, publicly-owned businesses (stores, transportation companies), publicly-supported cooperatives and credit systems, etc. In its drive to sever the links between state and society (which, according to one of its most famed exponents, did not exist anyway), neoliberal reform targeted, with unerring flair, public institutions. They were to be sidelined by private organizations, with the smithian justification that public interests are best served by the free play of private interests. A typical result of this would be, for instance, that doctors trained with public money in a poorer African country would prefer to work for private hospitals, or emigrate, or get hired by non governmental organizations – not necessarily or primarily (as (neo)liberal theory would have it) because of the better pay, but also, and more essentially, because of the fact that public hospitals, under the duress of reform, have fallen in disarray and national health policies have been scrapped, making high pays more meaningful than unfulfilling commitment.
The effect of neoliberal reform on public institutions varies extensively according to countries and world regions. In particular, the less advanced the process of state building, the more damaging the effect of reform. Very likely, in the Global South, graver damages were wrought in many more countries of Sub-Saharan Africa than in those of Latin America and developing Asia. Also, from a chronological perspective, neoliberal reform was started before the “third wave” of democratization. This would imply that when universal suffrage and representative institutions and procedures were set up to express the sovereignty of the people, this happened in a very uncongenial landscape for the enactment of that sovereignty. Historically, struggles for democracy have aimed at checking the excesses of capitalism and reform its political expression, liberalism, so as to protect and promote interests that extend beyond the marketplace. When, however, institutions of democracy are established in a context where all checks to capitalism are mandatorily lifted, the result is a paradox (“liberal democracy”) which dooms the intended transition to various kinds of failure.
Both democracy and capitalism are forms of organization (of political life for the one, and of economic life for the other) that transcend the contingencies of a specific historical moment, such as the one in which we have been living since the end of the Cold War. Historical evidence points toward the fact that democracy is older than capitalism, but modern democracy – i.e., the one which we practice today – came to life roughly at the same time as capitalism. This has been interpreted by many scholars to mean that democracy and capitalism are somehow connected and mutually supportive. However, here again, what the historical evidence allows us to say with confidence is simply that a certain form of liberalism – the one which promotes civil rights, property rights and rule of law – was indispensable to the kind of capitalist development which took shape in eighteenth century Western Europe. That (“classical”) liberalism could exist without democracy, as it did in the eighteenth century in England and the Netherlands, in France to some extent – and as it did more generally in Europe through the nineteenth century. What it needs is a minimal state, which was first secured – starting in England – by representative institutions opposing “absolutism,” i.e., the prerogatives of the royal state. Not wittingly (as is shown by the abhorrence the American founding fathers had for the very word “democracy” or the anguish and hatred aroused in their kindred spirit in Britain, Edmund Burke, by the French Revolution), such political arrangements opened the door for the struggles for democracy which so strongly shaped the history of nineteenth century Europe (starting precisely with the French Revolution). Much of these struggles were attempts at redefining the continent’s progressive ideologies – including liberalism – as meaning something radically different from a mere reform doctrine for the safe operations of capital. Democracy emerged as a regime of expanding suffrage, social rights and political participation which ultimately required interventions of the state to both regulate the creation of wealth and stimulate its redistribution.
This is not necessarily against capitalism as such, but the evolution certainly forced it to change somewhat – and not without much bloodshed, sufferings and upheavals. It is possible to summarize this history, which lasted for the best of the times leading up to the 1970s, as that of capitalism being compelled to cohabitate with democracy in the West. Indeed, it is perhaps the case – as a counterfactual – that if capitalism did not develop in the same time-space as modern democracy, it would have ended up creating a world more, or at least as terrible as the one created by Marxism-Leninism, one which would have produced similar bitterness, sorrow and revolt in its own different ways.
But is this a counterfactual really? Isn’t this what much of the Global South has known under colonialism? And more to the point, isn’t this what it is again experiencing today under neoliberalism? The question is of course only rhetoric, for the “neo” in neoliberalism refers us to the old liberalism of the eighteenth century, which is a necessary ingredient of capitalist development. Rather than spurring a progress in history, neoliberalism thus returns us to older and harsher times. And my contention is that modern democracy did not develop thanks to capitalism (neoliberal or not), but despite capitalism and more specifically, in order to check capitalism.
One could conclude then that: This lays bare my theoretical and personal assumptions, which could be summarized thusly:
- Capitalism is a problem for democracy, not something that is good for democracy.
- While some other form of economic organization is better suited to democracy, democracy can coexist with capitalism by taming it somewhat (as did the Westerners under Keynesianism, e.g.).
- Liberalism (old and new) is the political expression of capitalism, not of democracy.
- Liberal democracy (democracy modified by old or neoliberalism) is therefore an attempt to adjust democracy to capitalism, i.e., to create a compatibility where, fundamentally, there is none.
- And so in the end, “liberal democracy” is a problematic or paradoxical political regime.
From these assumptions, one can begin asking questions about what happens when neoliberal reform goes south and deals with public institutions there. First: did neoliberal reform destroy/downsize public institutions? How? To what extent? With which effects on democratization and the practice of democracy? And then, second: when thinking of alternatives to neoliberalism, what roles should public institutions play in democratic governance (with democracy restored to its assumed proper role of a social/political check to capitalism)?
The first set of problems requires empirical research while the second problématique is of a more normative nature, with advice being deduced from the results of the empirical research which would have been conducted on the first problems. Before exploring these research problems, however, it is important to look at some of the leads and “misleads” from the literature.
The Literature: Liberalism or Democracy?
The mainstream of the debate on democratization does not mark any preoccupation with neoliberalism. This is so because it assumes, in the words of Diamond, Linz and Lipset, that “all democracies… are to some degree capitalist; production and distribution of goods are determined mainly by competition in the market, rather than by the state, and there is significant private ownership of the means of production.” (Diamond et al., 1989, xxi). In a more recent text on the African case, Tony Leon bemoans the fact that African leaders (allegedly) refuse to focus on the increase of “economic freedom.” Fully thirty years after neoliberal reform has made large inroads in virtually all African countries, Leon attributes this failure to abide by the formalities of liberal democracy to the failure of African leaderships to undertake “far-reaching economic reforms.” “All liberal democracies are also market-oriented economies,” he avers, while, in his view “African countries are not only politically repressive but also economically dirigiste.”(2010:1) Neoliberal reform not only will usher in the hoped-for democratic regime, but it is seen as a precondition for democratization. That the recent historical records contradict this conclusion does nothing to weaken the energy with which it is argued or the confidence with which it is stated here as in many other papers. That is so because such views are supported by a historical narrative which retrospectively focuses (in the case of Sub-Saharan Africa) on the fact that the early independent political regimes (of the 1970s-1980s) were authoritarian in the era of the developmental state, while neoliberal reform coincided somewhat with (in fact started before) democratization. It therefore looks as if history did evolve true to theory: as the market was replacing the state, authoritarian leaderships were being challenged (sometimes successfully) by pro-democracy groups.
However, the story is much less tidy than this. Many countries that engaged in neoliberal reform did not democratize; some countries which democratized, or (in Latin America) re-democratized rejected neoliberal reform; some of the more economically successful countries in the three regions neither quite democratized nor really engaged in neoliberal reform (especially in Asia); certainly, there are also those which were economically successful, democratized and engaged in neoliberal reform, but these are by no means a majority or even a significant minority. Faced with these inconvenient data, most scholars in the mainstream debate simply ignore them, registering here only the facts that liberal democracy has not become universal and neoliberal reform has not generally produced the outcomes predicted by the theory. Moreover, most political scientists in this debate assume the normative superiority of liberal democracy without unpacking the meaning of that phrase (which would be something like “market-based democracy”), and the problem, for them, is: why aren’t countries outside of the West not living up to it? – or, alternatively: are those countries actually progressing toward it in some specific ways? In other words, the problem, for them, is that of the hurdles to democracy, and, additionally, that of the ways in which such hurdles may be transcended.
Since, in this view, democracy and neoliberal capitalism are the two faces of the same coin, the notion that neoliberalism may be one such hurdle is essentially meaningless. Moreover, since neoliberalism is bound up with globalization, there is a clear reluctance at stressing the role of external factors, such as the agendas of multilateral organizations or the strategic operations of Western powers. The hurdles to democratization are therefore necessarily or primarily internal to specific countries or regions. In this respect, the literature is a footnote – rather impoverished at that – to Lipset’s 1959 article on the “social requisites” of democratization. While the overall arguments seem to turn around the motive of culture – with some seeing in it the matrix of most hurdles, while others attempt showing that the practice of democracy can change culture – socio-economic-based correlations are also discussed, chiefly on account of the aspect of the theory of liberal democracy which assumes that the existence of a “middle class” is a requisite of democratization. The major hurdles are in any case internal and include “culture,” a “majority poor population,” as well as more contingent factors such as extractive natural riches.
Moreover, this literature fits in fundamental ways in the broader modernization theory framework, whereby, in the words of Gills and Rocamora, “the future of the peripheral countries is supposedly represented by the present modernity of the core countries, but change is determined by endogenous factors.” (1992: 502-503). In this respect, “democracy” has become the end point of a linear evolution of countries that are lagging behind, just as “development” or “high consumer society” was in the age of Rostow. While it is admitted that “development” still must be the end goal, democracy is implicitly or explicitly seen as closely tied to it, especially in terms of creating an enabling environment (e.g., “good governance”) for the purposes of development. The difficulties of the proposition – especially as to the direction of the causal arrow – and the blatant lack of success of neoliberal reform have created a mood in this part of the literature to the effect of hoping that countries will be content with liberal democracy even if it does not bring about economic wellbeing, for the sake of its formal virtues, i.e., the “bundle of [formal] freedoms” that are constitutive of political liberalism.
In a recent study, a group of distinguished scholars (Sandbrook, Edelman, Heller and Teichman) think that this won’t do. Democracy, they think, must rest on the ambition not only to guarantee freedoms and basic rights, but also to procure wellbeing to populations in poorer countries. Appropriately enough, they advance this notion using not the phrase “liberal democracy,” but “social democracy.” Sandbrook et al. explore here in four case studies how social democracy – based on development, equity and success both as democracy and in the engagement with the global market – managed to work against great odds in “the global periphery.” In truth, the proposition of the authors is misleading, since three out of the four cases they study (Mauritius, Costa Rica and Chile) are clearly not social democracies, but rather liberal democracies with some timid welfare state ambitions. The Indian state of Kerala seems to be a genuine social democracy, and it is the one case – with Costa Rica – which does not fit the authors’ belief in preconditions of social democracy that strikingly resemble those of liberal democracy: early market incorporation and the formation of a capitalist class, leading to market-led growth. Moreover, it is hard to draw from these “exceptionalisms of a general type” (p. 177) lessons on how to build social democracy, absent the traditional carriers (parties and unions) of this political project as it developed in Western Europe.
Indeed, the part of the literature which does look critically at the effects of neoliberal reform on democracy highlights the fact that by destroying and marginalizing organized citizenry, that reform also strips democracy of its meaning. There was much evidence in the 1990s in particular, from both Africa and Latin America, that “in general during adjustment [i.e., neoliberal reform] the presidential and executive branches of the state take over much of the decision-making which is bolstered by the repressive power of the military.”(Mohan 2000: 87). Roberts (1995) and Blokland (1996) argue that the devaluation of democracy by neoliberal reform leads to the rise of “neopopulist” leaderships thriving on “the deinstitutionalisation of political representation” (Roberts, p. 113) and the “high costs” imposed on “organized groups in civil society” by “neoliberal adjustment” (Blokland, p. 10). In other words, neoliberal reform destroys or undermines the very elements (political class and organized citizenry) which are the basic ingredients of democratic operation. The substitute offered by liberal democracy, i.e., “civil society” organizations, does not constitute a movement for social reform, but rather a non-governmental technocracy geared to promoting the formal freedoms seen as essential for liberalism operation (and which, though a necessary, are not a sufficient condition of democracy).
The literature in the 1980s had focused on the poor institutional capacities – i.e., the weakness, disorganization and incompetence of public institutions – of states such as those in Africa which attempted being the engines of development. Instead of strengthening and overhauling those institutions, neoliberal reform has mostly done away with them, as we noted. As a result, and since no state can operate without public institutions, the promoters of such reform have tended to develop “parallel governments” where public institutions are replaced by or subordinated to international institutions (be it the World Bank and IMF’s representatives in finance ministries or country representations of United Nations’ organizations), emptying democratic accountability of its meaning and fueling noxious processes in public administration (Hibou, 1999).
So while the mainstream literature generally assumes that neoliberal reform and democracy are mutually supporting, and that hurdles to democracy are to be found in country’s internal factors, another part of the literature demonstrates the incompatibility between neoliberal reform and the growth of democracy. In the wake of such reform, economic recession, political regression and administrative damage combine to undermine support for the political regime – either democracy or any other – by stalling the process of development and social change.
Because public institutions play key roles in all three dimensions, I think they are a strategic locus in which to examine the problems that arise from these developments, as well as being part of the response to be thought out about the related problems. Public institutions are either the executive arm of public policy, or the stage on which the state meets the citizenry in the carrying out of public policy. Because they are linked both to the state and to the citizenry (unlike political institutions which are exclusive to the state or civil society organizations which exclusively stem from the citizenry), they can also be used for social policy, such as, for instance, the allocation of opportunities to marginalized or underprivileged groups.And they are necessary for the development of a public spirit in administration, an ineffable quality without which states will be too weak to act, since, to paraphrase Thatcher, there is no such thing as government, only individuals with agency and goodwill (or the possible lack thereof).
This theory of public institutions therefore clearly undergirds a concept of democracy that is not predetermined by liberalism, and that cannot be guided by the orthodox assumptions of political science on democracy as they are relayed by the mainstream literature. In this regard, we need to construct something in the shape of heterodox political science.
A central claim of such a theory of public institutions would indeed, for instance, reverse a basic assumption of the theory of liberal democracy. The theory of liberal democracy claims that a vibrant private sector (not only economic but also in the form of “civil society”) is necessary for the growth of democracy. But one can hypothesize that substituting private organizations for public institutions undermines and impairs democracy – not least because, in fact, a private sector cannot be “vibrant” without public institutions. According to this hypothesis, if we research a range of cases, we should observe that as public institutions weaken or disappear, democracy becomes shallower; alternatively, the stronger the public institutions, the steadier democratic growth.
To test this, sub-hypotheses or observable implications include:
- The waning of public institutions is detrimental to the growth of the private sector (see above).
- The waning of public institutions is detrimental to political participation.
- The waning of public institutions increases corruption (or the privatization of the state – as per Mbembe, Hibou and others).
- The waning of public institutions leads to institutional monocropping and monotasking (as per Mkandawire).
These, and other (to be determined) observable implications, can serve to describe, measure or assess the correlations between the basic variables of a research project on public institutions and democratic growth. Ideally, such a project should be comparative across the Global South (Latin America, Africa, developing Asia)
Aribisala, F. 1994. “The Political Economy of Structural Adjustment in Côte d’Ivoire,” in A. O. Olukeshi et al. (eds), Structural Adjustment in West Africa, Lagos: Pumark.
Bayart, Jean-François. 1993. The State in Africa: the Politics of the Belly, London and New York: Longman.
Beckman, B. 1992. “Empowerment or Repression? The World Bank and the Politics of African Adjustment,” in P. Gibbon et al. (eds), Authoritarianism, Democracy and Adjustment: the Politics of Economic Reform in Africa, Uppsala: Nordiska Afrika Institutet.
Blokland, K. 1996. “Neoliberalism and the Central American Peasantry,” in A. Fernandez Jiberto and A. Mommen (eds), Liberalization in the Developing World: Institutional and Economic Changes in Latin America, Africa and Asia, London: Routledge.
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Ibhawoh, Bonny. 1999. “Structural Adjustment, Authoritarianism and Human Rights in Africa,” in Comparative Studies of South Asia, Africa and the Middle-East, XIX, 1: 158-167.
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Roberts, K. M. 1995. “Neoliberalism and the Transformation of Populism in Latin America: the Peruvian Case,” in World Politics, 48, 1: 82-116.
Sandbrook, R., M. Edelman, P. Heller and J. Teichman. 2007. Social Democracy in the Global Periphery: Origins, Challenges, Prospects, Cambridge: Cambridge University Press.
The late Margaret Thatcher, in 1987. She was expressing the classical-liberal belief that society was not different from the arithmetic sum of the individuals who make it up. By stressing that only “individuals and their families” actually existed, she rejected the need for public institutions, which only could give (concretely, as she liked to stress) to society, as a collection of individuals, larger and more permanent perspectives and interests than those of individuals.
But Adam Smith’s own position – as opposed to what the liberal ideologues who idolize him make of it – was not so radically against public institution, especially in the realm of education.
 This included the ability of the royal state to organize national economy along the lines of the “mercantile system” loathed by Adam Smith and the economists.
 And perhaps Marxism-Leninism failed because it did not initially develop in the lands where the democratic struggles were the most vibrant.
 It bears noting that papers such as Leon’s, which have as their objective to defend the connection between (neo)liberalism and democracy, are often marred by bad or hasty history (convenient inaccuracies or vagueness, mixed up chronologies, forced interpretations and such). That points to the fact that there is much ideology going on here.
In relation to the role of outside forces, the role of China in defeating the promotion of democracy, human rights and good governance is one exception in the more recent literature – for no obvious reason other than the fact that China is not a Western power, since the same behavior, or even worse, is observable in American or French foreign policy for instance.
Not that much to be sure, but the current literature is shorn of Lipset’s third category of “requisites,” “historical events,” by which he meant not the kind of political events – such as coups and uprisings – that may usher in a democratization process for instance, but the evolution of the political settlement of a given country through watershed events, social conflicts and enduring developments and cleavages in society. This requires a sophisticated acquaintance with the history of a given country that is in particular difficult to square with the large N quantitative studies that became quite common in the 1990s or even with the methodological focus on the process of democratization that often characterizes case or smaller N studies. This reluctance to delve into the history also has, I would argue, profound theoretical and methodological significances in terms of the normative standardization of political experience.
This is especially visible in the case of Sub-Saharan Africa where culture traps democratization into neopatrimonialism (sundry), “disorder” (Chabal and Daloz 1999) and the destructive networks of “the politics of the belly” (Bayart 1993), while more recent scholarship stresses the force of repetition and habit to changing cultural fatum (Gazibo 2003, Lindberg 2006).
This, despite the fact that empirical research in political science did not spawn a consensus on causality or even correlation between the two phenomena.
The historical evidence – which is the only one we could so far rely on with any confidence – persistently indicates that modern democracy follows development, not the other way round. This is understandable if we accept the argument, developed in the previous section, that modern democracy initially grew as a way to check the devastations wrought by capitalist development in nineteenth century Europe.
 Evidence has been documented from Senegal (Beckman, 1992), Côte d’Ivoire (Aribisala, 1994), Nigeria (Ihonvbere and Vaughan, 1995), Brazil (Green, 1995). Niger under presidentialist coup-maker General Baré Maïnassara may be added to these examples, while in Ghana the reform was carried out by a military government. An illuminating account of the economic and political mechanisms behind this, as they also tie into globalization in the African periphery, is given by Bonny Ibhawoh in his Structural Adjustment, Authoritarianism and Human Rights in Africa (1999).
 This need not be in the form of a long-haul affirmative action policy. In Niger, the geopolitical balance of the country is between “East,” “West” and “North.” Import-export trade – a major component of Niger’s overall economy – has long been very developed in the East, thanks to both that region’s proximity to the Nigerian market and colonial-era policy; in the 1980s, to balance things out, the ruling regime purposively promoted the development of import-export trade in both West and North and used to do so in the case of the latter, more marginalized part of the territory, the state trading company COPRO-Niger. Neoliberal adjustment reform later scrapped COPRO-Niger, meaning that the type of policy it enabled may now be led only through cronyism (since, given Niger’s political settlement, such type of policy is in fact inescapable at this stage of the country’s history).
 While critical theories challenge mainstream political science, the discipline does not have a real equivalent of heterodox economics, which would oppose to the orthodox frameworks positive alternatives.