CIPE and RTI: Exploring the Links between Economic Growth and Democratic Governance

05.12.2009

Perhaps the greatest obstacle for development agencies and non-governmental organizations (NGOs) working in developing countries lies not in those countries’ corrupt politicians or poor infrastructure, but rather in their own habits and thinking about development work. The turf line between economic growth projects and democratic governance projects is a hard and fast division between development workers that softens and slows each side’s impact. Lifting this paper curtain and exploring the real-world linkages between economic growth and democratic governance was the subject of CIPE and RTI‘s joint-event at the Newseum on May 11, 2009.

Gathering about 100 program managers, agency administrators, academic experts and others interested in development, CIPE and RTI presented two case studies to move forward the evolving dialogue about lifting the paper curtain. RTI International’s Vice President for International Development, Aaron Williams, opened the discussion with an overview of lessons RTI has learned over its years in development, culminating in RTI’s brand new Emerge to Compete model fostering effective engagement between government, business, and other stakeholders at the local level. “Economic growth and democratic governance are mutually reinforcing,” Williams said. “RTI’s greatest impact came in cases where they were linked, particularly at the local level.”

Consultant Cynthia Rozell, formerly of RTI, presented a case study from RTI’s work in Uganda highlighting the success of local government engagement. Emerging from Uganda’s post-independence conflicts based on regional ethnicities, RTI worked through Uganda’s uniquely strong sub-national government structure, funding local reconstruction projects contracted through local construction firms. Involving local actors helped build a democratic mechanism for participation and assured credibility for the public sector after a long period of disillusionment by a persecuted social group. In turn, RTI supported not only the local administrators and businesses but also a transparent process itself through which future projects could originate locally and take place with local oversight.

Supporting a transparent and democratic process can take place even in the face of authoritarian regimes, as evidenced by the second case study, presented by Jaroslav Romanchuk, president of the Scientific Research Mises Center and director of the Think-Tank Analytical Center Strategy, both CIPE partner organizations in Minsk, Belarus. Romanchuk detailed the annual drafting of the National Business Agenda (NBA) for Belarus, now in its third year. As outlined in CIPE’s NBA Guidebook, an NBA lists and prioritizes problems facing the business community at large, with concrete measures proposed to resolve each problem.

With over 30,000 active participants in its drafting, the NBA for Belarus has become a platform for broad-based participation in the legislative process, in a country facing the dictatorship of President Alexander Lukashenko. By providing concrete solutions to nationwide problems, an NBA allows businesses of all sizes and sectors to be constructively engaged in the political process. Constructive engagement provides positive exposure for the private sector, improving the environment for entrepreneurship as well as developing the role of civil society as a component of governance, Romanchuk argued.

Results speak to the success and potential of the NBA to further democratic governance alongside economic growth. In 2007, eight of 51 propositions were adopted fully or partially; in 2008, 51 of 112 propositions received full or partial adoption. The 2009 NBA for Belarus contains 145 propositions, and Romanchuk expects an even higher percentage of adopted propositions than last year.

Before opening the discussion to audience questions and comments, CIPE Executive Director John D. Sullivan summarized the institutional linkages between economic growth and democratic governance by paraphrasing Nobel Laureate Douglass North’s observation that the whole history of development can be thought of as the movement from personal exchange based on trust to impersonal exchange based on formal institutions. Building those institutions locally is vital to the democratic decision-making process that characterizes democracy, Sullivan noted, bringing the concept beyond leadership selection and into the realm of broad-based participation in the day-to-day workings of democratic governance.

The paper curtain between economic growth and democratic governance remains a prominent obstacle to development, one that CIPE has come to know intimately after 25 years and counting. After myriad successes helping to lift that curtain, sometimes it seems that institutional change moves faster for CIPE’s partners in developing countries than for its peers in development.