THE POLITICAL ECONOMY OF SUSTAINABLE DEVELOPMENT: THE GOVERNANCE PERSPECTIVE

THE POLITICAL ECONOMY OF SUSTAINABLE
DEVELOPMENT: THE GOVERNANCE PERSPECTIVE
ANTHONY BARCLAY
ACBF WORKING PAPER
NO. 1, OCTOBER 2004
THE AFRICAN CAPACITY BUILDING FOUNDATION

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ACBF WORKING PAPER
ACBFWP/01/2004
The Political Economy of Sustainable
Development: The Governance Perspective
1
Anthony Barclay
ACBF Working Papers should not be reported as reflecting the views and position of the
African Capacity Building Foundation. The perspectives presented in the Working
Papers are those of the author(s) and do not necessarily represent the views of the
Foundation or ACBF operational policy. Working Papers are seminal ideas or work-in-
progress and are published to generate discussion, elicit comments and further debate.
© 2004 The African Capacity Building Foundation
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7 & 15 Floors, Intermarket Life Towers, Harare, Zimbabwe
Produced by the Knowledge Management and Program Support Department
The African Capacity Building Foundation
First printing December 2004
All rights reserved
ACBFWP/01/2004
1 Dr. Anthony Barclay is a Program Officer in Eastern and Southern Africa Operations Zone at the African
Capacity Building Foundation

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THE POLITICAL ECONOMY OF SUSTAINABLE
DEVELOPMENT: THE GOVERNANCE PERSPECTIVE


ANTHONY BARCLAY
Program Officer
Eastern and Southern Africa Operations Zone
The African Capacity Building Foundation







ABSTRACT


The concept of sustainable development has increasingly stimulated interest among development
practitioners, scholars and politicians regarding its relevance to addressing development
problems. It has been referred to as a development paradigm and a moral imperative as well as a
“utopian” concept. Along with these perceptions there are varied definitions and interpretations,
where there appears to be a common theme that relates to a concern for improving people’s
quality of life, generally referred to as human development. The paper is intended to contribute to
the dialogue on the relevance of the sustainable development concept to improving human
development. It discusses sustainable development in the context of governance within a political
economy framework with reference to African countries in general and Liberia in particular. It
provides an operational definition and explores the concept’s relevance and applicability to
improving human development as a dynamic process. From this perspective, the premise of the
paper is that institutional failures contribute immensely to the current state of many African
countries socio-economic malaise. Recognizing the inherent interplay of power politics and the
personal dynamics of the African political economy, the paper provides brief preliminary insights
for the development of an institutional sustainable development framework that includes several
traditional organizational reform measures and institutional performance mechanisms
characterized as best practices. The paper argues that these measures should be buttressed by
more innovative pursuit of institutional viability through the effective implementation of
appropriate strategies. The objective of the strategies should be to inculcate a value system
ingrained in civic responsibility, undertake constitutional reforms and institutionalize robust
capacity building programs geared towards the transformation of institutions into productive and
sustainable organizational entities. It further suggests that capacity building should place a
special focus on personal development. This is considered important so that progress and
achievement may be realized not by the personalization of the issues or a resort to violence but
rather by individual and groups’ exemplary character of integrity, competence and genuine
commitment. The paper views this as a people-centered approach to institutional development.

Key words: sustainable development framework, governance, political economy, institutional
development

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I. INTRODUCTION


In little over a decade, sustainable development has increasingly stimulated interest
among development practitioners, scholars and politicians. The concept has been
referred to as a development paradigm, an anthropocentric moral imperative and a vision.
Several others see it merely as “buzz words” and a “utopian” concept that is inherently
limited in its applicability to poverty-stricken countries. Along with these perceptions
there are a plethora of varied definitions and interpretations. Notwithstanding, there
appears to be a common theme among them that relates to a concern for improving
people’s present and future quality of life. In this paper the quality of life is referred to as
human development, which is defined as the ability for people to lead a long and healthy
life, to acquire knowledge and skills and the opportunity to utilize them, as well as to
have access to productive resources needed for a decent standard of living (UNDP,
1996). Implicitly, it involves the production, distribution and utility of goods, services
and social capital with a value system embedded in the entire process.

The focus on sustainable development began to emerge when intellectual momentum
shifted from the perception that development was simply an economic process
measurable in economic aggregates such as gross domestic product and gross national
product. This shift engendered a new view of development as a holistic process
comprising socio-economic, financial and ecological policies, effective governance and
an enabling socio-political environment having the requisite human and institutional
capacity to perform appropriate tasks effectively and efficiently with a view to improving
the quality of life. Development, so defined, should be people-centered, equitably
distributed and environmentally and socially sustainable (UNDP 1996).

In most less developed countries, the pursuit of human development has been and
remains exceedingly challenging due to the complexity of the issues, the peculiarities of
contexts and the enormity of the constraints. Considering the situation in these countries,
and if sustainable development is to have any substantive operational significance, it
must be defined more concretely to reflect contextual and spatial specificity. Otherwise it
would serve only as an abstraction of limited pertinence to comprehending the dynamics
and profound complexities of the issues concerning the improvement of human
development. Consequently, its relevance to developing strategic actions to address these
issues may be of little or no essence to the process.

This paper is intended to contribute to the dialogue on the relevance of the sustainable
development concept to improving human development. The paper accepts the notion
that seeking for such relevance is best facilitated when it is considered within a specific
context. Thus, the paper discusses sustainable development in the context of governance
with reference to African countries in general and Liberia in particular within a political
economy framework.


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The rationale for discussing sustainable development in a governance context is
predicated on the pivotal role of governance in the sustainable development process.
According to the World Summit on Sustainable Development’s Plan of Implementation,
the basis of sustainable development are sound environmental, social and economic
policies, democratic institutions responsive to the needs of the people, the rule of law,
anti-corruption measures, gender equality and an enabling environment for investment
(WSSD, 2003:1). Governance is a fundamental part and parcel of this basis.

The paper is organized into six sections. Following this introduction, section two seeks to
provide an effective operational meaning of sustainable development. It also discusses
governance and political economy as its contextual feature and framework for discussion
with a focus on the institutional aspect of sustainable development. Section three presents
an overview of the sustainable development challenges faced by most African countries.
Section four discusses the Liberian situation, as a case study to provide an empirical
content. This section is based largely on secondary information and the author’s
experience. It is limited in terms of statistical techniques for determining causal
relationship. Nevertheless, it provides a credible indication through which one may be
able to understand the dramatic downward spiral of Liberia’s socio-economic conditions
and the imperative for recovery along a path of sustainable development. Section five
provides brief preliminary insights of an evolving institutional framework in which
sustainable development, defined and placed in a specific context, may be relevant to this
imperative. Section six provides concluding remarks.


II.
CONCEPTUAL CLARIFICATION AND CONTEXT

The recent popular usage of the concept and its proliferation originated in the 1980 World
Conservation Strategy document of the World Conservation Union. In the document, the
conditions for development to be sustainable are articulated in the following statement.

For development to be sustainable it must first take account of social and ecological
factors, as well as economic ones; of the living and non-living resource base and of the
long-term as well as the short-term advantages and disadvantages of alternative actions
(IUCN, cited in Dalal-Clayton, 2000: 7).

Later, the use of the concept became more prominent after the publication of the
Brundtland Report in 1987. In this report, sustainable development is defined as
“development that meets the needs of the present without compromising the ability of
future generations to meet their own needs” (WCED, 1987: 8). The Report notes that it
involves “a process of change in which the exploitation of resources, the direction of
investment, the orientation of technological development and institutional change are all
in harmony and enhance both current and future potential to meet human needs and
aspirations”(WCED: 46). From these definitions, it would seem that the essentials for
achieving sustainable development are fluid and fraught with generalities so much so that

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it is not easily amenable to defining policy prescriptions, investment criteria and
operational mechanisms.

A review of the literature suggests that sustainable development in less developed
countries requires effective governance, a dynamic and enabling international
environment supportive of international cooperation particularly in the areas of finance,
technology transfer, debt and trade and full participation of these countries in global
decision-making. It is said to also require peace, security, stability and respect for human
rights (WSSD), respect for cultural diversity (Maser, 1999; UNESCO, 2003), an
ecologically balanced system (Urbanska and Webb, 2000) and ethics (Newton, 2002).

With such wide array of requirements for achieving sustainable development, it is
therefore understandable that the meaning and interpretation of sustainable development
have also been expanding. Daly (1996), observes that the way to render any concept
innocuous is to expand its meaning to include virtually everything. He further states that
by 1991 the phrase had acquired such cachet that everything had to be sustainable.
Nevertheless, he argues that most important concepts are not subject to analytically
precise definitions and contends that they are largely dialectical. From this view, in the
case of sustainable development, he feels that one could still give content to and enhance
the analytics of the concept. His clarification of the concept integrates sustainability,
sufficiency, equity, and efficiency. Implicitly, he suggests that sustainable development
involves activities that strive for “sufficient per capita wealth that is efficiently
maintained and allocated, and equitably distributed for the maximum number of people
that can be sustained over time under these conditions” (Daly, 1996:220). In his
clarification of this definition, he provides an interesting analysis on the issues of the
inherent limitations of growth, the meaning of development and the criteria for
sustainability. An in-depth discussion of these issues however falls beyond the scope of
this paper.

A review of other perceptions of sustainable development is insightful. Guimaraes (2003)
suggests that what determines the quality of life in any given community and hence its
sustainability is the synergy of the relationships among population, organization,
environment and technology. He explains each of these factors as follows. The
population factor includes size, composition, density and demographic dynamics.
Organizational factor involves social organizations, aspirations, values, culture,
production and consumption patterns, social stratification and pattern of conflict
resolution. Environmental factor involves the physical and built environment,
environmental process and services and natural resources. Technological factor involves
innovation, technical progress and energy use.

The concept is also defined by the Indian and Northern Affairs Canada (INAC, 2003)
organization as a long term focus that seeks to preserve and enhance economic, social
and natural capital to improve the quality of people’s lives and ensure a continuing legacy
for the future; a coordinated and integrated approach to decision making, incorporating

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social, economic and environmental considerations; and recognition of the
interdependence of domestic and global activities. Barbier (1987) interprets sustainable
development as a process, whose objective is to reduce the absolute poverty of the
world’s poor through providing lasting and secured livelihoods that minimize resource
depletion, environmental degradation, cultural disruption and social instability.

Other scholars and organizations have advanced additional definitions that they believe
are more operational. Warhurst (1998:3) citing Serageldin (1996) states that as a working
concept, sustainable development may be defined as “a process whereby future
generations receive as much capital per capita as, or more than the current generation has
available”. He explains that capital includes natural capital, physical (or produced)
capital, and social (including human) capital, the measurement of which, together may be
considered as forming the basis of sustainable economic development and growth. He
further indicates that in this process, a transformation occurs in which some natural
capital would be depleted and changed into physical capital, which in-turn would
depreciate, but that with technology, more efficient replacements would be generated.

UNDP (1994) describes sustainable development as a process for realizing human
development “…in an inclusive, connected, equitable, prudent and secured manner”
(cited in Bansal and Howard, 1997: 16). In essence, slightly expanding on what
Warhurst adapted from Bansal and Howard by including the inclusive factor, one may
deduce that the key elements of sustainable development are: (a) inclusiveness, -
involving and encouraging the participation of the people; (b) connectivity, - embracing
ecological, social, and economic interdependence; (c) equity - ensuring fairness within
and across generations and species; (d) prudence - exercising duties of care and
prevention, technologically, scientifically and politically; and (e) security - ensuring
safety from chronic threats and protection from harmful disruption.

Ohiorhenuan and Ohiorhenuan (1998:31) define sustainable development from an
institutionalist perspective by focusing on the key words “sustainability” and
“development” and by integrating the preservation of the ecosystem and social capital.
They indicate that sustainability is “the attribute of enduring without giving way and that
the sustainability of a thing or process lies in its continuity through time”. Utilizing
Pearce, Barbier and Markandya’s (1990) portrayal of development as a vector of
desirable social objectives and explicitly factoring in the requirement that the ecosystem
be preserved, they define sustainable development as a process in which the development
vector increases monotonically over time.

From a further review of their discussion, one may argue that irrespective of sustainable
development being a process or an outcome, it must endure over time. From an
institutionalist perspective, whatever causes the process or outcome to endure must be
appropriate, and effectively managed and maintained. In addition, they argue that
external conditions that impact on sustainable development must remain favorable “…not
as an absence of change, but rather the maintenance of (relative) stability in the presence

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(of these) conditions and/or continuous throughout”. The authors further point out that
the applicability of the concept is contingent on the specific domain of intervention such
as the global domain, the national domain and the sub-national domain.

The perceptions above provide only a snapshot of the varied interpretations of the
sustainable development concept. A more detailed review of the literature suggests that
these perceptions are intended to suit specific purposes like social aspirations and
political consensus. Others reflect specific domains of certain sectors and disciplines like
economics, environment and sociology. In the economics realm, definitions are mixed in
terms of the central or integral role of growth in the process with divergent views on the
“limits” or “no limits” of growth. A few attempt to describe it in two components – the
meaning of development and the conditions necessary for sustainability. In general, the
definitions reflect a concern with the integration of social, economic and environmental
factors in decision-making. The concept is also viewed as a process and as an outcome.

The thrust of this paper is concerned most with the process dimension. The essence of
achieving an outcome is through a process. Moreover, the outcome, in the context of
sustainable development, should not be viewed as static but rather as a dynamic
phenomenon. Given the evolving needs of human development, there can be no end point
or final state of sustainable development. What is important is achieving meaningful
progress in creating and sustaining a positive impact on human development in the
sustainable development process. From this perspective, and based on the integration of
three factors - economy, society and environment – emphasis is placed on identifying
strategic actions through which the process could be expedited.

It must be recognized, as Dalal-Clayton and Bass (2000:9) observe, that in situations
where integration of the three factors is not possible, the process should involve “making
alternative choices and negotiating tradeoffs”. They correctly assert that such factors as
peace and security, prevailing economic interests, political systems, institutional
arrangements and cultural norms will undeniably influence policy decision-making and
negotiations. The governance of this process, with particular emphasis on the institutional
aspects, is critical.
The term “institution” according to Ohiorhenuan and Ohiorhenuan (1998:30) may refer
to “a socially recognized human organization providing a valued service” as well as “a
matrix of socially sanctioned norms and rules of conduct governing individual and group
behavior – ‘the rules of the game’”. The “rules of the game” include not only regulations,
laws, policies and legal decisions from a court of law, but also the rules and policies
governing the behavior and practices of those who make and apply those rules. The latter
is particularly relevant to administrative law and procedure, electoral laws and civil
service regulations. In addition there is the constitution, the rules that guide all rule
making and establish the legitimacy of individuals and organizations’ actions (Williams
et al, 2003). Utilizing institution as conceived above, serves as a mechanism through
which results-oriented strategic actions may be taken to realize objective sustainable
development outcomes.

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Moreover, there is an inherent political dimension in the process that goes beyond formal
political systems, which should not be ignored. This is generally referred to as the
“political will” or “political commitment”. These terms refer to both the psychological
attributes of politicians as well as an outcome of objective reality determined by a
political playing field (Kelegama and Parikh). The psychological attributes would explain
why politicians act differently to similar situations. The outcome perspective would
explain why irrespective of which politician is in power they act virtually the same. The
recognition of these realities justifies the governance context and political economy
approach for this paper.

Considering the issues discussed above and utilizing Ohiorhenuan and Ohiorhenuan’s
explanation of sustainability we may derive a perception of sustainable development that
reflects an action and results orientation. From this perspective, sustainable development
may be defined as a continuous process of preserving and enhancing the production,
distribution and utility of economic, social and natural capital to improve the status of the
current and future human development. The process involves multiple mechanisms and
domains of intervention in which political and institutional factors are critical for policy
decision-making, implementation, evaluation and follow-up actions. To ensure its
enduring element, the political and institutional factors must be managed to appropriately
adjust to possible changes for the maintenance of stability and an enabling operating
environment. Thus, this will require appropriate institutions, effective leadership and a
results-oriented management capacity. A long-standing debate is on determining what is
required to achieve this desired state of affairs.


III.
GOVERNANCE AND POLITICAL ECONOMY

To explore answers to the issue above, one must first consider that the factors mentioned
- appropriate institutions, effective leadership and results-oriented management capacity -
are attributes of governance. Like sustainable development, governance is also a concept
that is widely used in the development literature with a variety of meanings and
interpretations. An in-depth discussion of these definitions is beyond the limitation of this
paper. However, since it is an issue of concern, a brief discussion of the concept is
necessary for contextual clarity.

The increasing use of the concept began when it was diagnosed that barriers to structural
adjustment were due not only to the substance of policies, but also to the policy
environment. Thus governance became associated with democracy, culture and
institutional characteristics that cover several issues. Frischtak (1994:1) explains this
further in her statement that:

Institutional building and design; the nature and transparency of decision-making
procedures; interest representation and conflict resolution mechanisms; the limits of

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authority and leadership accountability – all of which ultimately concern the very essence
of the polity—are frequently identified as governance issues and fill the expanding
agenda of what can be called the political economy of structural adjustment.
Depending on a particular definition of governance, the use of the concept has been
criticized as being overly prescriptive to a particular political system, insensitive to
African culture and beclouded with subjectivity when used as “good” governance. To
avoid these criticisms, Shihata (1990) views governance as the provision of universal and
abstract rules, the institutions that enforce them and the predictable mechanisms to
regulate conflicts over both rules and their enforcement. In her discussion of governance
deficiencies, Frischtak describes governance as a process of coordinating the aggregation
of diverging interest to promote policy that can credibly be taken to represent the public
interest. It appears that, as Kruiter (1996) observes, the definition, usefulness, ethnical
connotation and political dimensions of the concept are still evolving.
Generally, as indicated above, governance involves institutions, laws, rules, regulations,
policies and enforcement mechanisms in pursuit of specified objectives. To derive a
working definition of governance for this paper Landell-Mills’ (1991) definition of
governance is useful. Explicitly incorporating the institutional dimension, governance
refers to the legitimate and calculated use of authority and power in the exercise of
control over society and the management of its resources intended to achieve shared or
agreed development goals through appropriate institutional mechanisms. In the process, it
is expected to promote accountability, transparency, and rule of law, participation and
other factors that engender and nurtur