The polítical economy of state reform - political to the core

Abstract

The reform of governmental institutions is presently quite salient as many countries
struggle with transitions to democracy. It is a constant preoccupation of developing
countries as well as of highly developed democracies like Great Britain. International organizations
like the World Bank are especially interested in the prospects of political reform
for jump-starting national economies currently languishing in poverty and slow growth. For
many commentators on these issues, at the Bank and elsewhere, politics is the source of problems.
Politics (and politicians) are held in disdain and reformers are encouraged to design
schemes insulating economic policies from politics. This is wrong-headed. The present paper
provides a political-economy framework in which political ambition figures prominently
and yet a constructive attitude toward politics is accommodated.

JEL Classification: H50; D72.