Chapter 2: Political Survival of Ruling Elites

Assumptions of LAO Framework (for the African State Type)

In Violence and Social Orders, North et al. (2009, 1) defined societies in which political order is achieved through the above process of bargaining as ‘LAO societies’. The conception of political order in developing countries as a process of elite bargaining raises the question of the outcome of such bargaining. North and his co-researchers posited that the outcome of such an agreement is mirrored in clientelistic institutions (mostly informal) that distribute privileges to elites and groups, such as power sharing and zoning; the resulting privileges by their very nature limit economic and political competition (North et al., 2008, 19; 2013, 8). The ‘limited’ component of the term ‘LAO’ conveys the impossibility of economic and political competition in such societies: powerful elites receive privileges that by their very nature preclude the development of institutions promoting political and economic competition.

As North et al. (2009) argued, social scientists concerned with how the state interacts with wider society have modeled the state as a rent-/revenue-maximizing monarch. However, when the state is revealed to be a coalition of diverse groups, neopatrimonialism and clientelism (common in Africa, and conceptualized as political systems in which leaders use state resources to secure the allegiance of certain groups in the general population; Bach 2011; Pitcher et al., 2009) are, according to this framework, a means of solving the problem of violence. “Systematic rent-creation through limited access,” wrote North et al., “is not simply a method of lining the pockets of the dominant coalition; it is the essential means of controlling violence” (North et al., 2009, 17). Accordingly, LAO societies must have a source of rent extraction to prevent the disintegration of the coalition that creates political order (Sen, 2015, 47).

The political realities of African countries conform to theoretical explications of LAO. Several writers have already submitted that the general conception of the state in the IR literature does not fit with the African reality (see Clapham, 1996; Harman and Brown, 2013). The African political reality, as theorized by Douglas Lamke (2011), is one in which sub-state groups such as ethnic groups fight for power on the center stage. According to the LAO theory, the African state type is the product of negotiation between sub-state political organizations represented by elites, regardless of the formal political system. For North et al., all developing countries are characterized as LAO, but the distinction is made between ‘fragile’ LAO societies with high levels of violence and rebellious activities, ‘basic’ LAO societies in which governance is fairly well established and violence is often latent and managed, and ‘advanced’ LAO societies featuring long-lasting coalitions and a high level of organization.

Broadly speaking, North distinguished between LAO and open access order (OAO) societies; the latter are common in developed countries. “All open access societies satisfy the Weberian assumption: their states possess a monopoly on the legitimate use of violence” (North et al., 2008, 22). In OAO states, political order is not the outcome of negotiation between different powerful groups; therefore, ‘impersonality’ is possible alongside political and economic competition because there is no distribution of privileges for the sake of political order. Naturally, therefore, OAO societies are more peaceful than their LAO counterparts, and experience greater and more stable growth due to economic competition. As most Western countries are OAO states, the political logic is completely different in developed and developing countries. Although North and his co-researchers proposed that the transition from a limited-access to an open-access system involves the attainment of a set of ‘doorstep conditions’ (the rule of law for elites, perpetually lived organizations in the public and private spheres, and consolidated control over the military), the question of transition is open to further research. However, this question is somewhat extraneous to the current research.

More specifically, it is worth noting that the theoretical language of North’s access orders is similar to that of the theory of political settlement proposed by Mushtaq Khan (Gray, 2015). Like the access-order framework, the political-settlement framework begins with an understanding of the underlying political logic and distribution of power between social groups in the political systems on which states are based in developing countries. In other words, a political settlement is a form of social order based on agreements between groups that set the context, both formal and informal, for government policy and institutions (Di John and Putzel, 2009; Khan, 2011). This is essentially a restatement of North’s position. Institutions are defined by both Khan and North as the rules that guide social and economic interaction; but they also determine the flow of resources to different groups and thereby create winners and losers. The distributional logic of dominant political and economic institutions in LAO states must reflect the underlying distribution of power. For Khan (2010, 40), institutions that deviate from the underlying distribution of power will be either sabotaged or overturned by the political context. Like North et al., Khan characterized political settlements in developed countries as fundamentally different from those in developing countries. Khan used the term ‘clientelist political settlements’ (which form a broad category in modern developing countries), in which underlying power structures create preferential institutions that reflect the bargaining of ruling elites, to restate the LAO framework. Clientelist political settlements have a broad range of political arrangements, from military dictatorship to competitive clientelism and a one-party state. It is not the political system but the underlying bargaining of ruling elites that leads to the “settlement” or order (Khan, 2011, 30). Whereas North used the term ‘OAO’ to characterize the political systems of developed countries, Khan used that of ‘capitalist political settlements’, arguing that formal institutions in developed countries reflect the dominant economic power of capitalists.³