This chapter contrasts the rapid growth of Singapore through manufacturing for export and the Philippines, which went from crisis to crisis. The chapter investigates why Singapore succeeded.

This chapter examines why Latin America, despite vast resources and reform attempts, remains trapped in economic stagnation. It attributes persistent underdevelopment to cycles of excessive state control, political instability, and weak institutions. Drawing on decades of data, it argues that rent-seeking and bureaucratic inertia undermine innovation and growth. The result is a recurring pattern of short-lived booms followed by deep crises.

The means by which factions persist are many, including political parties, lobbying, partisan media, passion and prejudice, rent-seeking, the permanent campaign, the politics of identity and principle, and today’s high-tech political campaigns.

Coase or Pigou? Economic property rights and decentralized bargaining or centralized regulation and potential rent-seeking in the political arena in confronting externalities? What are the tradeoffs if rent-seeking, not efficiency determine environmental regulation. That is the question for this volume.

I demonstrate the analytical value of socially and historically embedding corruption through a case study of corruption in the Cambodian land market. I proceed by taking three types of corruption commonly associated with the formal process of land registration by scholars and civil society groups – the violation of regulations and procedures (a corruption of the rules), patronage practices (a corruption of politics), and rent-seeking (a corruption of bureaucracy) – and embed these practices in the processes and situations in which they take shape. I then discuss the difference embedding makes compared to a utilitarian account of corruption (the one that scholars and civil society groups writing about the case tend to deploy). Embedding changes how we understand corruption: We see corruption as an emergent practice as opposed to being a universal one. We see that, in Cambodia, corruption is systemic as opposed to being isolated to certain individuals or agencies. We see that corruption can be a way of building bureaucratic capacity as opposed to being purely self-interested and anti-organizational.

Whereas goods and services can be exchanged through bilateral transactions, political outcomes typically require collective agreement. For example, legislation typically requires the approval of a majority of the legislature. Rent-seeking models often depict rent-seeking as a contest in which the rent goes to the highest bidder. In the actual political marketplace, there are not rents that are available to bidders, and rarely is there a single contact point through which rent-seekers can bid for and be awarded rents. Government activity is initiated by some demand for access to government power. This chapter explains the interactions between suppliers and demanders for access to government power and analyzes the institutions within which the negotiating process produces public policies.

Chapter 11 examines the role of institutions. Specifically, it explores how institutions can be undermined by rent-seeking activities that bias decision-making toward suboptimal alternatives and consume valuable resources. Furthermore, this erosion of institutions leads to a decline, or at best stagnation, in the standard of living of the society by diverting a significant portion of productive forces. The chapter presents two models of war in which the armed conflict is produced by resource inequality (the book also acknowledges other types of causes of war like ethnic, religious, etc.) and offers recommendations on how to prevent them. Specifically, a one-sided transfer of resources from wealthy to less developed countries may provide incentives for peace even in the absence of enforceable agreements.

In Chapter 10, contest models are utilized to illuminate crucial elements of traditional economic problems. These include competition for surplus within divisionalized firms, where inefficient divisions often dominate efficient ones; the significant expenses required to attain a monopoly position, including potentially bribing public officials for the allocation of monopoly rights; and the expenses incurred in obtaining property rights that, once secured (sometimes by violent and costly means), will be efficiently exchanged in the marketplace. In the last two cases, these expenses are so substantial that they might leave no social surplus. Additionally, the cost of political campaigns, in which factions compete for the vote to control a portion or entirety of the public sector through convincing voters of the correct choice, is also examined. Overall, it is shown that contests introduce a substantial and previously unnoticed welfare cost to the traditional issues studied, thereby complementing the existing literature on the subject.

This chapter discusses the difference in allocation of entrepreneurial talents in government and in commerce as well as its impact on the economy and society. The capabilities of those who engage in business activities determine not only the economic growth of a country, but also the size of enterprises, workers’ wages, and society’s morality. The chapter also discusses the type of system that is most favorable to entrepreneurial talents choosing to engage in entrepreneurial activities. Property rights protection is the primary determinant of the allocation of entrepreneurial talents between government and business. This chapter also uses the evolutionary game methodology to analyze the evolutionary equilibrium of entrepreneurial talent allocation and briefly analyzes the rise of China’s contingent of entrepreneurs over the last 40 years.

As scholars and activists seek to define and promote greater corporate political responsibility (CPR), they will benefit from understanding practitioner perspectives and how executives are responding to rising scrutiny of their political influences, reputational risk and pressure from employees, customers and investors to get involved in civic, political, and societal issues. This chapter draws on firsthand conversations with practitioners, including executives in government affairs; sustainability; senior leadership; and diversity, equity and inclusion, during the launch of a university-based CPR initiative. I summarize practitioner motivations, interests, barriers and challenges related to engaging in conversations about CPR, as well as committing or acting to improve CPR. Following the summary, I present implications for further research and several possible paths forward, including leveraging practitioners’ value on accountability, sustaining external calls for transparency, strengthening awareness of systems, and reframing CPR as part of a larger dialogue around society’s “social contract.”

Despite the dominant role it plays in the Beninese economy, the cotton sector has not succeeded in accelerating the country’s economic growth. Yields have been volatile, and production practically stagnated from the mid-1990s to 2016. This poor performance mainly relates to the sector’s unstable management, which has oscillated between public and private monopolies. In its turn, this unstable management relates to several institutional factors including changes in ideology of the donors supporting the sector and the country’s political leader, elite bargaining, and clientelist contracts motivated by rent-seeking. These factors gave way to institutional instability, with the government abruptly overturning policies and planned actions by the previous government or re-assigning the mandates of management organisations in the cotton sector, which caused uncertainty in the sector and increased the cost of agriculture services in the sector.

This chapter focuses on state coordination brought about by the relationship between central and local governments, using local tax collection as a practical example. The dominant fact discussed in this chapter is the vacillation of the Tanzanian government between deconcentration, with centrally appointed civil servants in charge of local affairs, and full devolution to local governments. An ambitious local government reform was voted through in 1998, but never fully implemented. Responsibility for the collection of the property tax has changed three times in the last decade. As capacity is clearly missing at a local level, tax collection should optimally be under the central government for the time being. It is suggested that oscillating responsibilities in the recent past reflect hidden rent-seeking competition between local politicians, central government tax collectors, and ruling party members. In effect, corruption has been observed with both central and local tax collection. An important conclusion that comes out of the chapter and the discussion by Jan Willem Gunning is the role of capacity in the design of institutional structures in developing countries.

Living standards in Benin have remained low over the last decades because of sustained demographic pressures and the absence of a growth-enhancing structural transformation. Its two leading sectors have not been engines of sustained growth. The cotton sector has been constrained by institutional instability and political interference. Cross-border trade with Nigeria has nurtured informality but also corruption, tax evasion, and political capture. Adjustment to the decline of the agricultural sector has been passive, its labour migrating to informal activities and low-productivity sectors. Capital deepening is absent, and misallocation of resources has resulted in efficiency losses and slow technological change. Weaknesses in domestic resource mobilisation and inefficiencies in expenditure management have prevented the government from addressing key challenges of economic and social development, like providing good-quality physical infrastructure, significantly improving the performance of the education and healthcare systems, or fighting persistent poverty and inequality. Benin needs to reorient its development strategy and deal with its specific institutional weaknesses.

This chapter concludes with thoughts about how democratic activists might be able to remove crony capitalism from institutions. The chapter argues that transparency about the depth of corruption is a necessary first step, especially in terms of understanding who controls rents in the regime. Only when these networks of influence are mapped can democratic accountability start to lead to lasting change.

This chapter puts forward a theory to explain how businesses engage in politics following democratic transitions in countries with significant issues with corruption. The most important variable is the centralization of the networks of brokers who supply companies with needed government privileges. If these rent networks are narrow, then businesspeople must work through a single gatekeeper. If they are broad, then business can engage with multiple brokers and obtain rent more easily.