Socio-economic and political development
are interconnected
Contact: Marc Saxer, [email protected]
(Crisis of) economic development
(Crisis of) political development
Philippines: 2000/01; Estrada, elected, ousted
Venezuela: 2001/02; Chavez, elected, government survived
Taiwan: 2004, 2006; Chen, elected, govt. survived, later convicted
Kyrgyzstan: 2005; Akayev, elected, ousted; 2010; Bakiyev, elected, ousted
Bangladesh: 2006/07; Zia, elected, govt. survived
Kenya: 2007; Kibaki, elected, govt. survived (intern. mediation)
Bolivia: 2008; Morales, elected, govt. survived
Georgia: 2007; Saakashvili, elected, govt. survived
Ukraine: 2004, 2013; Yunukovych, elected; ousted
Egypt: 2013; Morsi, elected, ousted
Turkey: 2013; Erdogan, elected, govt. survived
Brazil: 2014; Rouseff, elected, govt. survived
Thailand: 2006, 2008, 2013/14; Shinawatra I-III, elected, ousted
Transformation crises around the world…
Contact: [email protected]
…show similar patterns
The “script” of transformation conflicts
Contact: [email protected]
1. Socio-economic development transforms societies. Emerging classes demand equal participation in political and social life, leading to a crisis of the political order and a crisis of social justice.
2. Clever political entrepreneurs realize that by catering to the hopes and needs of the majority, they can build an electoral power base beyond traditional elite networks
3. Once elected, these leader become “elected autocrats”. Following the zero sum winner-takes-it-all logic of patrimonial culture, they reward supporters, protect clients, distribute spoils, favor kin, cut out non-supporters and crush their opponents.
4. From the perspective of the middle class in the capital, the patrimonial practices of elected representatives from the provinces is seen as a fall-back into darker times of vulgar corruption. The disregard for the rule of law (etc) is perceived as a threat. The middle class fears that “corrupt politicians use our tax money to buy votes from the greedy poor with populist policies”.
5. Desperate and angry, elites and middle class in the capital turn to extra-constitutional means to topple the elected autocrat. Hundreds of thousands of middle class men and women are marching in the streets, calling for interventions by the judiciary and the military.
6. Despite military coups & judiciary interventions, “elected autocrats” manage to come back with the support of the loyal majority.
Historically, patterns of transformation processes look remarkably similar in societies around the world…
…opening up creates economic, political and cultural conflicts, which can only be resolved by a new social contract.
Stability
openclosed
Instability
Contact: [email protected]
In order to resolve Thailand’s conflict, the nature of the transformation crisis needs to be better understood…
TRANSFORMATION CRISIS
POLITICAL CONFLICT
Contact: [email protected]
Driver 1: Complexity A modern and globalized economy needs efficient
service, management and steering…
…A political order based on personal relationships does not have the institutions necessary to satisfy the needs of a complex economy
TRADITIONAL ECONOMY
TRUST BUILT BY PERSONAL RELATIONSHIPS
HIGHLY COMPLEX ECONOMY
TRUST BUILT BY INSTITUTIONS
Contact: [email protected]
Driver 2: Diversity On the cultural level, the pluralisation of lifestyles,
values and identities …
…creates the “noise” of permanent debate typical for a modern society
Contact: [email protected]
…triggering permanent conflict between social classes
Contact: [email protected]
Driver 3: CONFLICT Economic development creates winners and losers…
Structurally, development erodes the traditional vertical society...
Contact: [email protected]
…but a new political process does not emerge by itself
To tackle the challenges of a modernizing society...
…an upgrade of the “operating system” is needed.
Universally accepted rules who gets mandate to make decisions, and what are the powers of those controlling decision makers
Mediation mechanisms for permanent conflict
Management capacity of complex economy
Impartial institutions to fight corruption
Merit-based education system
Responsive policies to address crisis of social justice
Contact: [email protected]
“Short-cuts” and “quick fixes” are counterproductive…
…because they delay or derail the process of political transformation.
Stability
openclosed
Instability
Contact: [email protected]
Traditional governance mechanisms…
Policy maker
…lack the capacity to manage a complex economy and pluralist society
How to satisfy the growing demands for public goods if the middle class does not accept to be taxed?
How to deal with demands for greater participation in decision making if traditional elites do not accept all citizens as equal ?
How to process the large amounts of information needed to stir a globalized economy when only a few people have the authority to make decisions?
How to mediate permanent conflict between social classes or identity groups if political culture fears debate as divisive and conflict as decay?
How to tackle politicized problems as corruption if institutions lack the legitimacy of impartiality?
Contact: [email protected]
To overcome the transformation conflict...
…society needs to renegotiate the social contract.Contact: [email protected]
SOCIAL CONTRACT
Elites accept democracy as the only game in town… and learn how to win majority with political platforms responsive to the needs of the society
Middle class accepts to finance responsive state… and get meritocracy and protection by rule of law
Majority population offers social peace and accepts anti-majoritarian safeguards … in return for full capabilities for all
Cont
act:
Mar
c Sa
xer,
mar
c@fe
s-th
aila
nd.o
rg
To continue economic development, many challenges must be addressed
Industrialization
Export Low Wage
Third Industrial Revolution/New global division of labor
Finite Resources/ Energy security
Climate Change/ Natural Disasters
Japanese Tsunami
Vulnerabilityto external
shocks
LoomingGlobal Recession= Lack of external
demandFinancial Crisis
Influx of “hot money”/ Currency volatility AEC: Low Wage competition
GROWTH ENGINES
STRATEGIC AIMS
Socially Just
Growth
Resilient Growth
Green Dynamic Growth
GOOD SOCIETY with FULL
CAPABILITIESFOR ALL
• Collective Bargaining• Minimum Wages/ Wage
Policy• Short Term Employment• Vocational Training• Lifelong Learning Programs• Decent Work
• Fair Income For All(consumption demand)
• Include all Talent (innovation & labor productivity)
• Financial Market Regulation
• International Monetary Regime
• Capital Controls• Administrative Capacity
(Oversight and Control)
• Curbing of speculation
• Anti-cyclical macro-economic guidance
• Market introduction schemes
• Standard Setting• Emission Trading• R&D in (green)
technologies
• Setting Incentives for• Productivity and
Innovation• Long-term investment &
management strategies• De-Coupling
• (Green) Innovation
• “Greening the Old Economy”
(resource efficiency)
GOVERNANCE TOOLS
To Achieve To Fire Up To drive GROWTH COMPASS
To Produce
• Income Equality• Inclusive Institutions• Public Goods
(Education, Health, Social Security)
• Stable financial markets
• Balanced Trade (balanced current accounts)
• Balanced Budgets (fiscal sustainability)
• Stable natural, social environment
Contact: [email protected]
A new development model is needed
NORMATIVE VISION
GOVERNANCE TOOLS
Status quo Coalition
SOCIALLY JUST, RESILIENT AND
GREEN DYNAMIC DEVELOPMENT
MODEL
TRADITIONAL DEVELOPMENT
MODEL
Progressive Change Coalition
Rainbow Coalition
EXCLUSIVE SOCIETY WITH
PRIVILEGES FOR THE ELITES
GOOD SOCIETY WITH FULL
CAPABILITIES FOR ALL
The new order will be the outcome of the political struggle …
Contact: [email protected]
… between those who benefit from the status quo and those who seek change.
Vicious Circle of Transformation
Contact: Marc Saxer, [email protected]
Political and economicINNOVATION ability crippled
Change is feared as decay
Conflict paralyses political system
Society cannot adapt to change
yellow extreme
Feudal Elites
Contact: [email protected]
red extremeModerate
Capitalist Tycoons
Bangkok middle-class
Southern “Political Peasants”
North – Eastern “Political Peasants”
North- Eastern middle-class
“Red Urbanized Villagers”
Thailand lacks a democratic center
Democratic center
Southernmiddle-class
Yellow workers Red workers
Yellow Urbanized Villagers
extremeselites
extremes
Majority is not enough…
…democracy needs a solid social foundation in the center.
Contact: [email protected]
Peripheral middle class
Majority of voters
BKK middle
classmarginalize marginalize
emancipate from patronage
limit abuse of power
Only a social contract based on social compromise…
Contact: Marc Saxer, [email protected]
Elites
Full Capabilities
Middle Class
Majority Population
Social Peace
legitimate mandate to govern
Tax burden
... works as a stable foundation for a political and economic development
Social Contracts based on social compromise
Contact: Marc Saxer, [email protected]
USA: Roosevelt’s “New Deal” (1933, cancelled 1981)
Canada, Australia, New Zealand
Western Europe after WW IIo Germanyo Netherlands, Belgium, Luxemburgo Franceo UK (cancelled 1980)o Italyo Switzerland, Austriao Scandinavia (Sweden, Norway, Finland, Denmark)
Latin Americao Brazilo Chileo Uruguayo Costa Rica
Political Field
Discourse
Society
Political Economy
Discourse World Meta DiscourseParadigm discourse
Interests, Agendas, Leverage, Strategies, Actions, Coalitions, Alliances, Deals, Networks….
Values, Lifestyles, Norms, Narratives, Myths, Agenda, Historical Experiences, Public Opinion…
Classes, Milieus, Ethnic Groups, Religious Communities, Hierarchies, Winners and Losers….
Division of Labor, Distribution of Resources, Functional Logic, Means of Productivity….
Narrative Policy Discourse
Coalition
Many challenges and obstacles have to be tackled…
Production Base
Income Distribution Diversity
Contact: [email protected]
Individual Actors
Elite
Middle Class
Rural population
Complexity
Actions
Strategic Interests
Discourse Alliance
Topos
Contact: [email protected]
Policy Discourse
Paradigm Discourse
Narrative Discourse
Metaphysical Discourse
Old Discourse New Discourse
Political battles over policies are likely to be lost if they go against the grain of hegemonic paradigms…
From competiveness by …to investing in human capital for cheap labor … productivity and innovation led growth From diversification…. …to Moving up the value chain
From patronage… ...to empowerment/ capabilities
Cheap Labor Minimum Wages, Social Security, Redistribution
From “markets are rational” … … to “markets are flawed”From “inequality is morally just” …“inequality is injustice”
...major policy shifts need to be prepared by discourse shifts on the deeper levels of paradigm and narratives