In this era of covid-19, it is proving difficult to make sensible predictions of the future trajectory of events and trends in Bangladesh, as for any country. Nevertheless, in this 50th anniversary year of the liberation of Bangladesh, there remains an imperative to try.
Many assumptions have recently had to be revised, especially those on growth rates and the incidence of poverty . Growth rates are a matter for political contestation – a clash between cold-hearted economic projections and policy-makers’ outlooks. This tension between science and politics is also evident in discussions on whether the country is on track to exit from least developed country (LDC) status any time soon. Exit from LDC status would enable ‘normal’ borrowing in global markets as a function of higher credit ratings but would also entail the risk of losing privileged access to subsidised international lending from the multilateral agencies and preferential access to some global markets for exports like garments.
With its recently acquired World Bank-categorised low-to-middle-income country (LMIC) status, Bangladesh has seemingly been enjoying progress on a number of development indicators, including per capita income, inflation (albeit with some hiccups on staples), labour absorption, export value, poverty reduction, maternal and new-born child health, population fertility, life expectancy, children at school and literacy.
At the same time, the country ranks high on the global corruption index, has an increasingly weak status on democracy indexes and is characterised by pervasive violence, one of the lowest per capita rates globally of public spending on health provision and, perhaps most importantly, one of the fastest-growing rates of socio-economic inequality of any recent entrant to LMIC status.
The ‘Bangladesh paradox’ in focus
The juxtapositions between development performance and governance have prompted a discourse about a paradox (McGillivray et al., 2005; Devine et al., 2018). Academics and policy-makers have a shared conviction that good governance promotes growth, reduces poverty and builds more inclusive societies. Conversely, impoverished governance is considered a barrier to prosperity, an incubator for corrupt and exploitative practices and a catalyst for violence and disorder.
For Bangladesh, the notion of paradox in this discourse is inspired by an observed weakness of public accountability, active citizenry and individual rights alongside other more positive indices of material development progress.
This governance research agenda is firmly anchored in strong normative concerns abstracted from a Western experience around individual rights and political accountability. Liberal democratic pluralist notions of governance and rights reside in the conditions of widespread literacy, ideas of national citizenship, freedom of voice, accountability exercised through elections, monitoring of performance, public shaming and legal redress. Such conditions have evolved in advanced bourgeois societies over long periods, far longer than the 50 years that have passed since the liberation of Bangladesh, a devastated and colonially oppressed country.
A joint paper presented by the authors at a conference at Yale University, USA, entitled ‘Qualified Progress in a Drifting State’ (Wood and Devine, 2019) argues that this discussion is framed within a neo-colonial discourse, which also includes a misrepresentation of the development paths that today’s richer countries have taken. Are these ideal myths of good governance being used out of context to judge Bangladesh?
For Bangladesh this has prompted the application of principles from what is an external history to a different political culture, albeit one that was colonially entwined with the Western experience, without regard for the subtleties of the country’s transition from a predominantly agrarian society to a thriving middle-income modernity, characterised by widespread rent-seeking in both public and private sectors.
At the heart of the so-called paradox, therefore, lies a substractivist assumption, i.e. that the quality of governance in Bangladesh lags behind cherished, and often mythical, Western ideals of democracy and public accountability (Devine, Basu and Wood 2018). The discourse fails to look at the logic that underpins the actual political settlement in Bangladesh, instead negatively comparing actual practices with an ideal type and crucially ignoring ‘deep structures’ (Wood, 2000).
Thus the notion of paradox in this discourse is invigorated by the observed weakness of public accountability, active citizenry, and individual rights alongside other more positive indices of material development progress. But what if governance is considered as good and improved paternalism or as the delivery of economic and social wellbeing or as a social contract that offers protection to dependent citizens? Then the paradox is no longer a paradox.
Imperfect development paths: stories from the West
Questioning the idea of a paradox seems appropriate, and to fit the reality of history much better. Let us consider Bangladesh’s metropolitan partner for almost 200 years: the UK. Governance in the UK today is a long way from perfect, with recent evidence of cronyism in the management of the covid-19 crisis and neo-liberal policy being paid for by a coterie of rich donors protecting their interests. But even today’s far from perfect picture is much better than what was going on in the heyday of the Industrial Revolution. Just read Trollope or Dickens.
Governments were embedded in highly imperfect markets, derived from a class-based sense of entitlement and exclusivity. The extension of the franchise was hard won, and was completed only in the 1920s. Workers struggled for union recognition before and for a long time after the Chartist movement in the mid-19th century. Social protection from the public purse started with punitive workhouses, under discretionary access managed by local elites, and did not become universal until after World War II. Laws in defence of property were draconian – think of the Tolpuddle Martyrs in the early 19th century – in the face of starvation. Child labour was widespread and hazardous in the extreme. The mills were ‘satanic’, according to William Blake. There were massacres by the local militia, such as the Peterloo Massacre in Manchester in 1819, and general strikes and hunger marches in 1926. Coal miners strikes took place as recently as 1983 and were brutally suppressed by the police. Local government, landowners, construction developers and the police were united through secret societies such as the freemasons and demonstrated continuous corruption.
And yet somehow the economy was transformed from agrarian deference via commodification, converting agricultural labour into an industrial and lumpen proletariat. Meanwhile, inequality as the instrument of progress has been sustained. Industrialisation was well underway before elites conceded the expansion of public goods (sanitation, transport infrastructure, health and education guarantees), with comprehensive and inclusive welfare provisions to offset organised threats to elite privilege beginning only later, in the 1940s. In other words, development occurred under conditions of poor governance, weak voice and biased justice, with very truncated rights for the populace.
We are not suggesting this history as a recipe for other countries, however! But in contrast to this UK example, Bangladesh can be seen to be doing rather well but with a very long way to go—so no grounds for complacency, but also few grounds for receiving lectures from the West and from bideshi friends. Meanwhile, if Bangladesh is compared to the US in 2021, with its claims to democracy, the Jatiyo Sangsad (Bangladesh Parliament) has not been stormed in response to bogus allegations of widespread electoral fraud and most people in Bangladesh do not carry guns. Meanwhile, there is less widespread evidence of racial discrimination in Bangladesh, although there is systemic discrimination against minorities. The development of the US occurred against a backdrop of robber barons, strong arm tactics over labour, organised crime and institutionalised corruption involving politicians and city halls. In other words, it did not occur through good governance, which is clearly yet to arrive.
The issues at stake
So where does this now absence of paradox in Bangladesh leave us? Certainly with pervasive rent-seeking– nationally and locally. Certainly with dangerous inequality and exclusion. Certainly with pervasive violence, which is not just urban. Certainly with under-educated youth, with nowhere to go – an estimated 2 million new entrants to the labour market annually in an economy that does not have the capacity to absorb them. Certainly with a continuing over-dependency on a single sector – garments – for its growth. Certainly with a labour-intensive, low-productivity model reliant on the extraction of absolute rather than relative surplus value. Certainly with a set of conditions favourable to the rise of millenarian movements, of which fundamentalist militancy is the most obvious. Certainly with the prospect of major transhuman disruption owing to climate change and cross border threats, for example from Myanmar. Certainly with persistent and pervasive poverty, aggravated now by covid-19, which is driving the vulnerable non-poor into poverty, and with significant hard-to-reach extreme poverty.
In discussions on inequality, the focus is usually and understandably on those ‘left behind.’ This is an unfortunate piece of contemporary development speak, unfortunate because it encourages an avoidance of core political economy questions. Inequality is not about strata (i.e. stratification), a contrast in capabilities and economic life chances, except as a symptom of what we obviously observe. This type of thinking leads to institutionalised philanthropy, affirmative action and Pareto optimum notions of trickle-down growth pulling everyone up, even if not equally – so, still ‘behind’, albeit enjoying a little more dependent security, a sort of positive Faustian Bargain (Wood, 2003).
Rather, we need to understand the actual causes of inequality and how it is reproduced. This is the necessary precondition for reducing inequality as the cause of poverty. This is the political economy question, and it has to be about relationships in which class plays the major part, class defined not by indicators such as wealth and income but in terms of access to and control over the means of production and the conditions of exchange between labour and capital – in other words surplus value. In this sense, real markets are asymmetrical exchanges in which one party accrues at the expense of or to the detriment of the other. In the past, this asymmetry was enforced through violence or the threat of it. To a great extent, this continues to be the case in Bangladesh but, as societies evolve, so the law of property substitutes for direct violence; this law of property in any society has been defined by those classes that dominate the prevailing mode of production and exchange. In other words it is not neutral law with respect to asymmetry.
Bangladesh is complicated because here colonialism has interfered with a simple Marxian proposition about transition through dialectical materialism
According to epoch, it is feudal law not peasant, bourgeois law not proletarian. Bangladesh is complicated because here colonialism has interfered with a simple Marxian proposition about transition through dialectical materialism – by trying to apply principles of bourgeois law to feudal conditions, while feudal conditions pervade the evolving capitalist market, rendering it imperfect and organised more by dynasty and paternalism than by merit, enforced by a state embedded in that imperfection with easy resort to violence.
So much for the distilled Marxian lecture. But let us use this as the platform for the next stage in the argument, with insights from North, Wallis and Weingast’s Violence and Social Order (2009). In their thesis about the limited-access ‘natural’ state, they maintain that societies move from narrow elites with a monopoly over violence towards a steady accommodation of newly challenging elites, thus becoming ever-widening coalitions of elites that still control and limit the access of the masses to rents and privileges.
A ‘natural’ state, in contrast to an open-access state, retains rule by persona (i.e. highly personalised forms of leadership) and inhibits the evolution of institutions and organisations independent of the personalised state (e.g. civil society). It thus scores low on any democracy index. This is not a linear process; there is no inevitability of progression towards an open-access society. And indeed such societies can reverse, as history has demonstrated even recently in the US.
This is a very strict summary of a longer, intriguing argument, but the crucial element relates to the expanding coalition of accommodated elites as a way of releasing pressure valves and managing potential conflict from well-resourced opponents. Can we see this happening in Bangladesh as a way to deal with all the threats to relative stability noted above?
Again, crucially, this requires some examination of the rapidly growing middle class in the country. This group represents a central part of the inequality story. But is its expansion occurring within a zero-sum, low-productivity economy heavily reliant on rent extraction, or in another language, raising the level of absolute surplus value, requiring loss by others? Or is its expansion a function of an economy transiting to higher levels of productivity, entailing the raising of relative surplus value consistent with Pareto optimum outcomes? And, either way, what is the evidence that this middle class cares about inequality and poverty and thereby the potential threats offered to its own security?
Bhattacharya (2019) argues that there is a need for Bangladesh to transform its economy to a higher level of productivity away from reliance on labour-intensive production if it wants to retain or improve its international competitiveness and move further into middle-income, non-LDC status. On this basis, this driver for middle class expansion is an imperative, not just a preferred choice, and the only route to offsetting threats from increasingly large, volatile, dispossessed and excluded classes from the under-educated in urban slums and rurbanised countryside who are experiencing a heightened sense of relative deprivation and thwarted aspirations.
Sharing the well
The solution to this political economy puzzle lies in abandoning the ‘leave no-one behind’ slogan in favour of ‘sharing the well’ (Ali and Wood, 2017; Wood and Devine, 2017). Any expansion of the middle class, supported by ‘developmental state’-type policy as in East Asia (e.g. South Korea, Malaysia, Vietnam, Taiwan, Indonesia), which is an increasingly relevant model for Bangladesh, has to come with ‘sharing the well’ conditions attached, if it is to not leave those ‘behind’ more ‘left’ than ever. Morally and ethically this is right, especially on this 50th anniversary of liberation, but it is also pragmatic for the middle class, if it is to defend its newfound status in a newly transformed economy.
Bangladesh faces many potential threats to its security, especially with its high rates of inequality and exclusion.
So what is meant by ‘sharing the well’? Essentially a redistribution of the benefits of economic activity and growth not just via reformed capital, labour and ecosystem markets but also via a social redistribution towards those denied access to those markets as a function of other aspects of the political economy: inadequate education, sudden and chronic ill health and morbidity, disabilities, socio-cultural forms of discrimination and marginalisation (gender, ethnic, sexual identity, religion and so on), age and life cycle (old or young) and exclusionary consequences of economic disruption entailing dramatic shifts in relative values of exchanged goods and services, including interest rates.
Together, these principles of redistribution amount to generic and comprehensive social policy, to a society rich enough to raise more public revenue and with a sufficiently legitimate government to redistribute that revenue away from middle class taxpayers (income and wealth) towards those deserving support. This would meet the moral standards of citizen-based, inclusive care. It would also reduce politically disruptive threats from otherwise excluded classes enduring second class citizenship. This entails a mind-set shift, as a function of exiting LDC status, away from external ‘cargo’ (in this case, free external aid) towards sovereign self-provision in which middle class rents and privileges are no longer subsidised by external remittances (including aid) and unaccountable market power.
In other words, Bangladesh is reaching a point (LMIC +) where the middle classes have to pay for their own security via contributing in a continuous manner to mass welfare and wellbeing needs, rather than expecting one-off, time-bound development projects, sometimes externally funded by aid, to do the job for them.
Revising the political settlement
A recent study, soon to be published, (Ali, Ahmed, Maitrot, Devine and Wood 2021), argues that:
…the mission is to help lead the society from a projectised development era towards a social policy perspective as part of a revised political settlement in which rights and entitlements to support the security of poor people’s agency are closely linked.
The authors go on to argue for a self-reflexive examination of fairness and justice in the society as the country continues its economic progress. There are several imperatives here, or drivers: moral priority; political stability and cohesion; and second stage capitalist efficiency. Bangladesh faces many potential threats to its security, especially with its high rates of inequality and exclusion. Other societies historically have faced these challenges of transformation and change, including ones that we see now as quite progressive and inclusive, such as Canada and the Scandinavian countries all of which score highly on the UNDP’s Human Development Index. Each of these societies went through painful transitions initially from agrarian conditions and then from first stage industrialisation when earlier forms of rural social management and control were collapsing through urbanisation.
Thus, these societies passed through periods of political turmoil and upheaval, eventually resolved through deliberate negotiations between competing class interests. Such deliberations include wringing concessions from the better-off, offering greater justice and fairness in return for political stability, putting in place protections for property and enabling rising labour productivity (see the comparative welfare regime literature: Esping-Andersen 1990, 1999; Gough and Wood, 2004; Wood and Gough, 2006). This is what we mean by the term ‘political settlement’. It refers to the redistribution of profits from capital via improved wages and conditions of work as well as of revenue from taxation to spend on the welfare, health and education of the excluded.
A new settlement worthy of the liberation
To address a holistic redistribution imperative, Bangladesh has to go through a similar process if it is not to break up or become captured by millenarian, regressive mobilisation. Poverty is not only an affront to Bangladeshi culture and values enunciated at its liberation, but also a threat to political cohesion and an obstacle to further economic transformation needed by all (Bhattacharya, 2019). Poverty eradication is therefore a political mission that crucially now relies on support from the middle classes in its society.
This entails the pursuit of an inclusive welfare regime in which the non-poor understand their collective role as duty-bearers and are brought into a deliberate discussion and debate about a political settlement that supports resilient livelihoods for all. Of course, this has many implications for taxation and redistribution. But the non-poor would also learn that the price of doing nothing about inequality and poverty is also a threat to their own security, especially under the cheek-by-jowl conditions of megacities, when perceptions of deprivation become acute as a basis for protest and disruption.
Such advocacy entails campaigning for appropriate resource mobilisation from domestic revenue sources within stronger traditions of governance and accountability. It also involves maintaining a high profile for poor people’s experience (graduation, coping and declining) in the public eye, using the full range of media resources: TV debates, documentaries, plays and dramas, podcasts and social media, as well as print media. It also requires the upkeep of well-maintained and informative websites, containing inventories of experience with hyperlinks to lives and programmes in different parts of the country, alongside scrutiny of programme performance.
Finally, Bangladesh has a history of annual pro-poor budget analysis. The general public do need to know facts about poverty, its trends, its causes, the agencies doing something about it and how the government is supporting these efforts through its Five Year Plan priorities and budgets.
Therein lies the route to a new political settlement worthy of the country’s liberation.
- Ali, Z. and Wood, G. (2017) ‘Conclusion: Sharing the Well’. In J. Devine, G. Wood, Z. Ali and S. Alam (eds) Extreme Poverty, Growth and Inequality in Bangladesh. Rugby: Practical Action.
- Ali, Z., Ahmed, B., Maitrot, M., Devine, J. and Wood, G. (2021 forthcoming) Extreme Poverty: The Challenges of Inclusion in Bangladesh: A Study for the Planning Commission. Dhaka: Turtle Printers.
- Bhattacharya, D. (ed.) (2019) Bangladesh’s Graduation from the Least Developed Countries Group: Pitfalls and Promises. Abingdon: Routledge.
- Devine J., Basu, I. and Wood, G. (2018) ‘Governance Challenges in Bangladesh: Old Wine in Not So New Bottles?’ In I. Basu, J. Devine and G. Wood (eds) Politics and Governance in Bangladesh: Uncertain Landscapes. Abingdon: Routledge.
- Esping-Andersen, G. (1990) The Three Worlds of Welfare Capitalism. Cambridge and Oxford: Polity Press.
- Esping-Andersen, G. (1999) Social Foundations of Postindustrial Economies. Oxford: Oxford University Press.
- Gough, I. and Wood, G. with A. Barrientos, P. Bevan, P. Davis and G. Room (2004) Insecurity and Welfare Regimes in Asia, Africa and Latin America. Cambridge: Cambridge University Press.
- McGillivray, M., Feeny, S., Hermes, N. and Lensink, R. (2005) ‘It Works; It Doesn’t; It Can but That Depends… 50 Years of Controversy over the Macroecnomic Impact of Development Aid’. Research Paper No. 2005/54. Helsinki: United Nations University – WIDER.
- North, D.,Wallis, J.J. and Weingast, B.R. (2009) Violence and Social Orders. Cambridge: Cambridge University Press.
- Wood, G. (2000) ‘Prisoners and Escapees: Improving the Institutional Responsibility Square in Bangladesh’. Journal of Public Administration and Development 20(3): 221–237.
- Wood, G. (2003) Staying Secure, Staying Poor: The Faustian Bargain’. World Development 31(3): 455–471.
- Wood, G. and Devine, J. (2017) ‘Sharing the Well: Towards Sustained Eradication of Extreme Poverty in Bangladesh. In J. Devine, G. Wood, Z. Ali and S. Alam (eds) Extreme Poverty, Growth and Inequality in Bangladesh. Rugby: Practical Action.
- Wood, G. and Devine, J. (2019) ‘Qualified Progress in a Drifting State: Is Bangladesh a Paradoxical Development Case?’ Prepared for Conference Panel “Perspectives on the Bangladesh Paradox”, New Haven, CT, 22–24 March.
- Wood, G. and Gough, I. (2006) ‘A Comparative Welfare Regime Approach to Global Social Policy’. World Development 34(10): 1696–1712
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