The problem of economic and political development

The success of economic as well as political development depends mainly on the degree of perfection of institutions. This thesis has not been challenged in the last two decades, as we have witnessed many failures in economic development, despite significant capital, natural resources, and even an educated population that emigrates or becomes inert if institutions do not allow their abilities to be properly applied. The current question is: which institutions are "right"? It is sometimes argued that developing countries should focus on the institutions of the most successful OECD economies. However, we, along with some other researchers, are seeing evidence

North D. C., Wallis J. J., Webb S., Weingast B. R. In the Shadow of Violence: Lessons for Limited Access Societies. This article summarizes the results of the research project "Developing Institutions in Limited Access Orders", implemented by the authors with the support of the World Bank's Governance Partnership Facility in 2009-2011. The article is an abridged version of the report prepared by the authors for the XIII International Scientific Conference HSE on April 3-5, 2012. A. Diaz-Cayeros, K. Kaiser, M. Hahn, B. Levy, G. Montinola, P. Navia, P. Roy, S. Walters, and J. Yu participated in the analysis of restricted access patterns in specific countries.

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that most low-and middle-income countries are not prepared for the transplantation of many Western European or North American institutions, or that these institutions, even when transplanted, function very differently in the new environment.

Our goal is to develop and apply an alternative conceptual paradigm for understanding the dynamic interaction of political, economic, and social forces in developing countries1. The standard approach is based on the neoclassical assumption that if opportunities are available and there are no political or social obstacles to the functioning of the market, growth will always occur. From an alternative point of view, we assume that all societies must address the problem of violence in one way or another. In most developing countries, individuals and organizations actively use (or threaten to use) violence to concentrate their wealth and resources. Controlling violence is a necessary condition for economic development. In many societies, violence is latent: organizations generally refrain from using violence, but from time to time they realize that violence is useful for achieving their goals. These societies live in the shadow of violence, and they represent most of humanity in time and space. The use of violence is hindered by social arrangements, which create incentives for agents in power to negotiate with each other rather than fight. The dynamics of these social arrangements do not correspond to the dynamics described in neoclassical models, which reduces the value of neoclassical tools for understanding development problems.

Our paradigm is based on the results obtained in a number of works on the political economy of development. In particular, they focus on the contrasts in the historical experience of different countries through a detailed analysis of specific cases.2 We try to take into account the events described in these specific studies. Other authors for checking historical reasons institutional-

1 First described in: North D. C., Wallis J. J., Weingast B. R. Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. N.Y.: Cambridge University Press, 2009 (Russian translation see: North D., Wallis J., Weingast B. Violence and Social Orders. Conceptual Framework for Interpreting the Written History of Mankind, Moscow: Gaidar Institute Publishing House, 2011).

Abernethy D. B. 2 The Dynamics of Global Dominance: European Overseas Empires, 1415-1980. New Haven: Yale University Press, 2000; Bates R. H. Markets and States in Tropical Africa: The Political Basis of Agricultural Policies. Berkeley: University of California Press, 1981; Bates R. H. Prosperity and Violence: The Political Economy of Development. N. Y.: Norton 2001; Haber S. H., Razo A., Maurer N. The Politics of Property Rights: Political Instability, Credible Commitments, and Economic Growth in Mexico, 1876-1929. Cambridge: Cambridge University Press, 2003; Haber S. H., Klein H. S., Maurer N., Middlebrook K. J. The Second Mexican Revolution : Economic, Political, and Social Change in Mexico since 1980. Cambridge: Cambridge University Press, 2008; Herbst J. I. States and Power in Africa: Comparative Lessons in Authority and Control. Princeton: Princeton University Press, 2000; La Porta R., Lopez-de-Silanes F., Shleifer A., Vishny R. The Quality of Government // Journal of Law, Economics, and Organization. 1999. Vol. 15, No 1. P. 222-279; Landes D. S. The Wealth and Poverty of Nations: Why Some are so Rich and Some so Poor. N. Y.: Norton, 1998; Mokyr J. The Lever of Riches: Technological Creativity and Economic Progress. N Y: Oxford University Press, 1990; Spiller P. T., Tommasi M. The Institutional Foundations of Public Policy in Argentina. Cambridge: Cambridge University Press, 2007; Tilly Ch. Coercion, Capital, and European States, AD 990-1990. Oxford etc.: Blackwell, 1990.

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3. The goal of our paradigm is to provide a new institutional explanation for the sustainability of certain political and economic forms over the centuries. Another group of researchers is developing theoretical models of political interaction to explain the institutional dysfunctions that occur in developing countries4. In our paradigm, more attention is paid to issues of violence and organizational structures of elites. The studies closest to our approach not only provide an unbiased analysis of institutions in developing countries, but also show that there is no simple or linear relationship between institutional and economic development.5 Our approach provides a more systematic explanation of some of the nonlinear relations identified in them.

Other authors discuss how the institutions of developing countries differ qualitatively from those of developed economies. And while Marx described the differences between capitalist societies and their predecessors, today the importance of violence in these societies is also recognized, and it is suggested that they may not be prepared for some of the institutions that are widespread in economically more developed countries. 6 It became clear that developing countries should strive for "more or less effective public administration"good enough governance" means that the institutional needs in these regions are qualitatively different from those in developed countries.7 The researchers realized,

Acemoglu D., Johnson S. 3 Unbundling Institutions // Journal of Political Economy. 2008. Vol. 113, No 5. P. 949-995; Acemoglu D., Robinson J. A. Economic Backwardness in Political Perspective // American Political Science Review. 2006. Vol. 100, No 1. P. 115-131; Engerman S. E., Sokoloff K. L. Colonialism, Inequality, and Long-Run Paths of Development // NBER Working Paper. 2005. No 11057.

4 См., например: Buchanan J. M., Tollison R. D., Tullock G. Toward a Theory of the Rent-Seeking Society. College Station, TX: Texas A&M Press, 1980; Bueno de Mesquita B., Smith A., Silverson R. M., Morrow J. D. The Logic of Political Survival. Cambridge, MA: MIT Press, 2003; Cox G. W., McCubbins M. D. The Institutional Determiniants of Economic Policy Outcomes // Presidents, Parliaments, and Policy / S. Haggard, M. McCubbins (eds.). Cambridge: Cambridge University Press, 2000; Levi M. Of Rule and Revenue. Berkeley: University of California Press, 1988; North D. C. Structure and Change in Economic History. N. Y.: Norton, 1981; Olson M. Democracy, Dictatorship, and Development // American Political Science Review. 1993. Vol. 87, No 3. P. 567-575; Przeworski A., Alvarez M. E., Cheibub J. A., Limongi F. Democracy and Development: Political Institutions and Well-Being in the World, 1950-1990. Cambridge: Cambridge University Press, 2000.

Collier P. 5 Wars, Guns and Votes: Democracy in Dangerous Places. N. Y.: HarperCollins, 2009; Easterly W. The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. Cambridge, MA: MIT Press, 2001; Grindle M. S. Good Enough Governance Revisited // Development Policy Review. 2007. Vol. 25, No 5. P. 553-574; Khan M. H. State Failure in Developing Countries and Strategies of Institutional Reform // Toward Pro-Poor Policies: Aid Institutions, and Globalization: Proceedings of the Annual Bank Conference on Development Economics / B. Tungodden, N. Stern, I. Kolstad (eds.). Oxford: Oxford University Press and World Bank, 2004; Rents, Rent-Seeking, and Economic Development: Theory and Evidence in Asia / M. H. Khan, K. S. Jomo (eds.). Cambridge: Cambridge University Press, 2000; Rodrik D. One Economics, Many Recipes: Globalization, Institutions, and Economic Growth. Princeton: Princeton University Press, 2007; Shirley M. M. Institutions and Development. Cheltenham UK: Edward Elgar, 2009.

Huntington S. P. 6 Political Order in Changing Societies. New Haven: Yale University Press, 1968; Collier P. Wars, Guns and Votes: Democracy in Dangerous Places.

Grindle M. S. 7 Good Enough Governance revisited; Rodrik D. One Economics, Many Recipes: Globilization, Institutions, and Economic Growth.

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that an institutional program for developing countries is not the same as a linear and progressive assimilation of institutions in developed countries.8 In comparison with these earlier works, our holistic conceptual paradigm makes us think about the interaction of economic and political behavior, explicitly considering the problem of violence as a starting point.

The World Bank is increasingly concerned about violence. The key point of the 2011 World Development Report is: "Strengthening legitimate institutions and governance to promote citizen security, employment, and justice is a key way to break the cycle of violence."9. This report offers several dimensions of the problem within the general idea that building mass trust in institutions and public satisfaction with the results of their functioning - in the form of employment and improved living standards - are necessary to reduce the threat of violence. Our approach focuses on the nature of organizations and the relationships between their leaders - the elite in the broadest sense of the word. The report recognizes the importance of bargaining and negotiations between elites, but it sees this as a temporary solution to the problem of violence at best. On the contrary, we believe that haggling is the unalterable core of developing societies, and we try to understand which types of haggling contribute to positive economic and social development and which do not.

Understanding developing countries as limited-access societies with their own social dynamics, rather than as failed or imperfect open-access societies, allows us to take a fresh look at obstacles and inertia in development. This perspective distinguishes between two development tasks that are usually mixed. They usually start with the second task-moving from restricted access societies to open access orders, as described below. More often, this is what development specialists do: how to transform developing societies into modern capitalist democracies? However, before societies are able to transform, they face the first challenge: How can we improve social organization to ensure increased output, reduced violence, a stable political system, and improved individual well-being of citizens, while remaining in restricted access? World Bank borrowers usually face the first challenge: to develop with limited access institutions, while avoiding backtracking. The lessons we learn from case studies are primarily related to how to help countries like the Congo achieve results that are similar to what was achieved in Mexico.

Alston L., Melo M. A., Mueller B., Pereira C. 8 The Road to an Open Economic and Political Society: Brazil, 1964-2010. Manuscript. 2010; Khan M. H. State Failure in Developing Countries and Strategies of Institutional Reform // Rents, Rent-Seeking, and Economic Development; Moore M. An Upside Down View of Governance. Brighton, UK: The Centre for the Future State, 2010; Shirley M. M. Op. cit.

9 World Development Report 2011: Conflict, Security, and Development / World Bank. Washington DC, 2011. p. 2.

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In addition, there is instructive material regarding the transition to open access mode, but we focused on the first task as the highest priority. A better understanding of the logic of societies with limited access and their development patterns can help significantly reduce poverty and violence.

The research project, sponsored by the Development Partnership Division at the World Bank, included detailed studies of nine countries in order to understand exactly which ideas in the concept of access regimes are useful for understanding development challenges and proposed solutions. The studies were conducted in countries that had both successful and negative experiences: Bangladesh, Chile, the Democratic Republic of the Congo, India, Mexico, Mozambique, the Philippines, South Korea, and Zambia.

Logic of restricted access orders

According to the paradigm originally developed by D. North, J. Wallis, and B. Weingast, developing societies limit violence by manipulating the political system to create rents so that powerful groups and individuals understand why it is beneficial for them to refrain from using violence. We call this way of organizing a society the Restricted Access Order (AML), and the logic of building these societies is explained in this section.

Restricted access arrangements are social arrangements - both political and economic-that eliminate the motive for violence. Even in a world where violence is an acceptable choice that cannot be reliably prevented by a third party or a central authority( government), it is possible to eliminate the incentive to partially or fully engage in potential violence and thus prevent it from occurring, allowing individuals and organizations to interact productively with each other.

We reveal the underlying logic of our approach using a simple example of two groups and two leaders. (Real societies are much larger and much more complex.) The story begins with self-organizing groups that are small and have no way to build trust between individuals beyond the current personal relationships. Members of one group trust people within their own group, but they don't trust members of other groups. Since they are aware that the other group will destroy or enslave them as a result of "disarmament", the members of both groups will not lay down their weapons. To avoid an outcome of ongoing armed conflict, the leaders of these groups agree to divide the land, labor, capital, and opportunities in their world among themselves, and agree to legally enforce each leader's privileged access to their resources. Privileges generate rents, and if, under peaceful conditions, the value of the rents that leaders receive from their privileges exceeds the value of the rent that they receive from their privileges.-

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Figure 1

If one leader does not use it in the context of the use of force, then each leader can reliably believe that the other will not fight. Leaders remain armed and dangerous and can actually threaten others in order to guarantee individual privileges.

An important trait of consensus among leaders is their ability to call on each other for help in organizing and disciplining the members of each leader's group. Elite organizations limit the possibility of creating competing structures - political parties and corporations in the modern context. They can impose such restrictions in written laws, for example, by introducing a one-party system or state ownership of all large economic enterprises. However, these restrictions are often less formal - they include regulatory barriers to entry or expansion of new companies, arrests and physical pressure on reluctant individuals and organizations, or denial of access to media and financial resources.

This arrangement is graphically shown in Figure 1, where individuals A and B are two leaders, and a horizontal ellipse indicates the arrangement between the leaders. Vertical ellipses symbolize the leaders 'agreements about their controlled factors of production and resources through "client organizations" (a, b). The horizontal agreement between leaders becomes convincing due to vertical agreements. The rents that leaders receive from controlling their client organizations allow them to bind each other with reliable obligations, since in the event of a breakdown in cooperation and a struggle, their rents will immediately decrease. These rents from peaceful coexistence create incentives to limit violence, but they are lost in the case of the use of force.

There is also a reciprocity effect. The consensus between leaders allows each of them to structure their client organizations in the best possible way, as they can turn to each other for external support. In fact, the ability of leaders to call on each other for help can make their individual organizations more productive. Consequently, the rents that leaders enjoy come not only from their privileged access to resources and how they are implemented, but also from their ability to create and maintain more productive organizations.

We call the leadership coalition the dominant one. This coalition provides - as a third party-a mechanism for enforcing compliance with agreements for each of the participating organizations. Vertical organizations can be organized as political parties, ethnic groups, patron-client networks, the military, the police, or criminal families. An effective combination of multiple organizations mitigates the problem of violence among truly dangerous individuals.

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groups of people, creating credible commitments between violent organizations by structuring their interests, and providing some assurance that leaders and their clients have common interests as they share rents.

In Figure 1, the dominant coalition is depicted as a pair of individuals, but in reality, a coalition is usually an organization of organizations. According to the AML paradigm, it is necessary to pay attention to their activities as not only distributors of purchased public positions, but also key institutions of cooperation between organizations capable of using violence.

Individuals and organizations belonging to the dominant coalition usually have complex combinations of rents, and their interests in maximizing rents through the dominant coalition are often unpredictable. As a result, AMPS are not characterized by steadily increasing stability or steadily increasing performance. Rather, there are periods of rapid growth and periods of stagnation or collapse.10

Restricted access orders are not static. When a limited access society is hit by a crisis, the dynamics of the dominant coalition forces it to focus on rents - old or new-that support coordination and limit violence. This was the case in Mexico in the 1930s, Chile in the 1970s, Korea in the 1960s, or Zambia in the 1980s. Either the crisis can lead to general lawlessness, as in Mozambique in the 1980s, Congo since the 1990s, and Russia in the 1990s. In these critical times, much depends on the personality of the leaders 11. The impact of new rents on economic growth cannot be predicted. In some cases, it seems that new rents have caused social decline, as in the case of Marcos ' crony capitalism in the Philippines. In others, new rents move societies forward, as in the case of the privileges granted to conservatives in the Chilean Constitution of 1980. The ambiguous role of rents in AML explains why their economic performance varies greatly.

Thus, AMIS deter violence by limiting the ability of groups to form political, economic, social, military, and other organizations to participate in public life. The rents created from these access restrictions form the incentive structure that governs violence: powerful groups and individuals understand that in the event of violence, their rents will disappear, and therefore their peace-loving attitude is more likely. At the center of all but the most fragmented groups is the dominant coalition, an organization united by the intertwining interests of its members. The members of this coalition have a valuable privilege: It provides exclusive third-party services to monitor compliance with agreements between and within organizations in the coalition. The annuities created by these exclusive privileges are among the incentives that seal agreements between organizations and their employees.

10 См.: North D. C., Wallis J. J., Weingast B. R. Violence and Social Orders. Ch. 1.

Alston L., Melo M. A., Mueller B., Pereira C. 11 Op. cit.

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leaders. The coalition's restriction of access to enforcement mechanisms creates rents and shapes the interests of players in the coalition.

How can I improve the AML? First development task

How do AMPS improve or regress? Today, all low - and middle-income countries are sub-countries, but per capita income levels can vary 20-fold, reflecting wide divergences in the quality of institutions and the economic development they provide. This is clearly seen in Figure 2, which shows the development trajectories of the nine countries listed above.

GDP per capita in nine countries, 1960-2007 (2007 USD)

Source: Heston A., Summers R., Aten B. Penn World Table. Version 6.3 / Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania. August 2009.

Figure 2

But what does it mean to be a successful developing country, a more successful AML, to move forward from vulnerability to maturity? We consider three processes to be key to the maturation of AML; their identification means significant progress in the analysis, and they are the basis for most modern measures to reduce poverty.

First, some AMIS involve more national organizations capable of violence in relationships that successfully reduce actual violence. This, as a rule, does not involve subordinating all of them to the direct control of the government (in the Weberian sense, the state's monopoly on violence).12. Rather, it concerns the distribution of rent-generating activities in the AML,

12 The complete consolidation of violence under the control of the political system is an aspect in which AML reaches the threshold of transition to open access arrangements (see below). This means that only specialized organizations (troops and police) can use violence. These organizations are controlled by the government and are guided by explicit rules for the use of violence against citizens. Such consolidated control over violence represents a step in the separation of powers and personal interests, a distinctive feature of stable and effective democracies (Cox G. W., McCubbins M. D. The Institutional Determinants of Economic Policy Outcomes / / Presidents, Parliaments, and Policy / S. Haggard, M. McCubbins (eds.). Cambridge: Cambridge University Press, 2000).

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in which organizations that are capable of violence will refrain from actually using it. As the examples of Mexico and India show, it is not easy to make sustained progress in this direction.

Second, AMIS reach maturity by expanding the scope of relationships in which the rule of law is successfully and consistently implemented. The rule of law is sustainable if it is consistent with arrangements that generate adequate incentives to curb violence. Speaking about the rule of law, we are far from saying that laws are applied to all citizens without violations and distortions. Rather, we are talking about the fact that there are mechanisms to enforce certain laws (which can be applied differently to different people). Even on a limited scale, the rule of law seems to help reduce violence and promote economic growth. The rule of law, to which all social relations of elites are subordinated, appears late in the maturation process. Subsequently, this principle may be extended to a wider population, and some aspects of it may become universal before others.

Third, AML also matures over time as the credibility with which the State provides support to organizations and monitors compliance with agreements between them increases. Strengthening State organizations - the executive and legislative branches of government, the armed forces, the police, major political parties, and State trade unions-depends in part on strengthening organizations outside the State, such as private firms, opposition parties, and so on. State organizations achieve greater coherence and gain more credibility when organizations that are independent of the State work more confidently and smoothly. from the state , so that the state can be held accountable for its obligations to them, regardless of the persons who initially accepted these obligations.

At the population level, the key outcomes of this" growing up " are: reduced violence, more predictable enforcement measures, increased income, improved health, equality, and political participation. For organizations, the most important outcome is their strengthening in both the private and public sectors, more reliable state support, and, as a result, the ability of elite organizations to function outside the direct sphere of influence of the dominant coalition. At the elite level, the most important result will be confidence that the rule of law for elites will be implemented impartially and that institutions will eventually emerge where the treatment of elites will be more fair and personally neutral, meaning that an ever wider range of elites will live by the same rules.

Our research shows that the real steps towards the maturation of AML in these areas depend on the circumstances of each particular country. The actions that Mexico, Korea, and Bangladesh were capable of in developing their AMS in the 1990s are qualitatively different from each other and from what was done before during the twentieth century. However, there are some common features.

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In all the countries we selected, the first steps at the" fragile " end of the AML spectrum were primarily related to reaching rent-sharing agreements among violent organizations. Initially, these agreements were reached on a personal level, as in the Philippines and Bangladesh. In India, the level of development of institutions based on rules (rather than personal connections) varies significantly from state to state. Over time, in societies that evolve toward more progressive institutions, personal bargaining between elites is transformed into rule-based institutions - more consistently, for example, in Korea than in Mexico. The introduction of competitive elections in these countries was the next step, implemented at a later stage, and most of them still cannot provide open access or competition in politics and economics.

As AML matures, there is a two-way interaction between the increasing complexity and differentiation of government organizations, on the one hand, and the parallel development of (nonviolent) private organizations outside the state, on the other. In mature countries, the government's commitments to certain policies and institutions can be considered more reliable, since private organizations of elites are able to exert economic pressure on the government if it does not comply with its obligations. This ability occurs when private organizations act to protect their interests regarding the differentiation and autonomy of public institutions, such as the court and the central bank.13 In this sense, independent elite organizations not only become a source of economic development, but their presence also allows more complex institutions and organizations to mature within the state system. However, independent private organizations cannot succeed in the absence of more sophisticated and influential public sector institutions like the courts.

Open access rules and transition to them

To understand how restricted access orders work, you need to analyze open or free access orders (POAS). POI is supported by institutions that allow for free access and competition: political competition preserves open access in the economy, while economic competition preserves open access in politics. In the PSA, the State has a monopoly on potential and actual violence. Organized violence is concentrated in military and police structures; other organizations are not allowed to use violence. The political system, as an example of comprehensive and reliable commitments, controls organizations that have a monopoly on the legitimate use of violence (troops

13 This process plays a more prominent role in open access systems, where complex private organizations in a market economy act as a counterweight to government and other political organizations.

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and the police). In the PSA, politics is also associated with balancing the interests of influential parties, but there are no serious threats of violent changes in the state system.

POJA favors economic, political, and social groups that can organize and reorganize themselves as they see fit, in response to the Government's policies, to pursue their own interests and pressure it for change. With proper constitutional institutions in place, strong private organizations help monitor the Government's use of troops and police. Economic organizations-mainly corporations-are active innovators, and some firms, with or without the consent of the dominant coalition, have grown to such a size that they gain political weight.

Free access is stable in societies where integration into economic, political, religious, and educational activities is open to all citizens as long as they meet standard (depersonalized) requirements. The conditions of this access require that the State authorities support certain forms of organizations in these areas and open up free access to these forms to all citizens. The principle of the rule of law must be unquestioningly implemented for all citizens. To ensure free entry into the economic and political systems, it is not necessary that the proportion of the population enjoying free access should be 100%. Such access is important for a crucial category of citizens.

The transition from restricted to open access has two features. First, for mature AML, it is possible to develop institutional arrangements that allow for depersonalized exchange among elites. Second, the transition process begins when participants in the dominant coalition are interested in expanding impersonal exchange and, as a result, consistently increasing the scale of access. Changes appear in the system - from the logic of creating rents in conditions of limited access to the logic of open access.

In retrospect, societies that developed sustainable property rights and the rule of law began by making credible commitments to maintain these rights for elites. Later, as soon as the rights of elites began to be formulated on an impersonal level, it became possible to extend these rights to broader social circles. Legal rights were formulated and consolidated to the extent that societies developed complex public and private elite organizations (for example, during the maturation of AML) and the volume of credible commitments that the State could make increased 14. Historical examples suggest three threshold conditions for AML to move to open access: rule of law for elites; support of permanently existing organizations of elites, both public (including the state) and private; consolidation of public and private organizations.-

North D. C., Wallis J. J., Weingast B. R. 14 Violence and Social Orders.

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strong political control over organizations that are capable of violence (including the armed forces and police).

These conditions represent the highest form of manifestation of the three ways of improving AM that we discussed above. Historically, in the first societies, these threshold conditions positively affected each other, ensuring the transition to free access. Although it is not clear whether a historical sequence of development is necessary, in two of the transition cases we are considering (Chile and South Korea), these conditions were also met by 2000.

All three threshold conditions are consistent with the logic of AML, and they have historically occurred within some such orders. The establishment of laws and courts are the means by which the dominant coalition regulates relations among the elites. Perpetual organizations are a means to restrict market entry more systematically and create annuities. The consolidation of military force and other instruments of violence in the hands of the political system creates a monopoly on the use of violence, which significantly reduces the frequency of such use. Combined, these threshold conditions create the possibility of impersonal relationships within the elite.

Unlike the historical model in which limited access societies move back and forth between fragile, basic, and mature AML, transitions from AML to POJA occur fairly quickly, typically in 50 years or less. So far in history, there has not been a single return movement from the POI to the AML.

Diagnostic conclusions from case-specific analysis

Violence and rents

Attempts to reduce violence are crucial for all countries, and all the countries we examined (except Zambia) have experienced periods of violence on a scale that threatened to destroy the State. Such events persist in people's memories for a long time and are reflected in the institutions that were created to limit or prevent violence. AMIS use rents, restricted access, and privileges to deter violence by providing these rents and privileges to individuals and groups that are capable of violence, and creating incentives for them to cooperate rather than fight each other. Powerful groups receive valuable privileges, such as exclusive trade rights, a monopoly on cement production or access to telecommunications, an exclusive right to control the market in a particular region, or a monopoly right to import high-demand goods. The examples of Mexico in the 1930s, India and Bangladesh after their separation, and Mozambique at the end of the civil war after 1992 show how the distribution of rents among organizations capable of violence can be reduced.-

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It also helped create incentives to reduce the actual level of violence. Many countries in tropical Africa have used special state-owned companies with a monopoly right to sell domestic goods on the world market in order to extract rents from the activities of farmers who produce agricultural products for export.15 The rent generated by these state-owned enterprises was partly used to keep food prices low, thereby appeasing urban workers who might otherwise rebel and overthrow the government. Those who were able to use violence and organize riots received privileges - rents, while the rest were disenfranchised and often exploited.

Our approach to rent analysis is very different from that adopted in the literature, which focuses on the negative aspects of rent-oriented behavior16 and deliberately unproductive activities 17. From the point of view of the AML concept, these approaches ignore the problem of violence and implicitly assume that creating conditions for rent extraction is not related to the nature of the society in which it occurs. The concept of AML, which focuses on the analysis of violence and instability, shows a common alternative between improving hypothetical effectiveness and ensuring stability at a lower level of violence. This approach raises the question: in which cases, in order to maintain or strengthen stability, is it better to go to additional costs for the economy or, possibly, to limit civil or political rights? Our approach and the analysis of individual cases show that after the elimination of sources of rent, a competitive market economy does not always arise (as the theory of obviously unproductive activities suggests), but instead riots and violence often begin.

To the extent that the creation of AML rents is a means of ensuring stability, rents are a symptom, not a cause, of development problems. In trying to eliminate institutions and policies that generate economically unproductive rents and corruption, we must avoid further destabilization and violence that hinder development in societies with limited access. There are often mistakes here. For example, in Bangladesh in 2007-2009, under the state of emergency, or in the Philippines under President Marcos and then under Aquino, mistakes led to the degradation of AML. Other examples from our sample show how to meet the demands of the main violent organizations so that they remain part of the ruling coalition, but do not interfere with the development of dynamic areas of the economy. In Chile, for example, the army reserved 10% of the state's copper mining profits, but access to this industry was also allowed to private companies, which now provide

Bates R. H. 15 Markets And States In Tropical Africa.

Buchanan J. M., Tollison R. D., Tullock G. 16 Toward a Theory of the Rent-Seeking Society; Krueger A. The Political Economy of the Rent-Seeking Society // American Economic Review. 1974. Vol. 64, No 3. P. 291-303.

Bhagwati J. 17 Directly-Unproductive Profit-Seeking (DUP) Activities // Journal of Political Economy. 1982. Vol. 90, No 5. P. 988-1002.

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most of the products 18. In Mexico, in the 1990s, most trade unions survived and even strengthened their positions after the Zapatista agreements with the authorities, but the North American Free Trade Agreement (NAFTA) also opened up many opportunities for creating new firms.

Dynamics UNDER

Although the type of social dynamics in restricted access societies does not change, these societies are not static. When circumstances change, the important features of each POD also change, although the general logic remains in them for decades or even centuries. Changes occur due to both exogenous and endogenous factors. Price ratios are changing, the climate is changing, technology is changing, globalization is taking place, and violent actions on the part of neighboring States are all exogenous factors that go beyond the explanatory scheme of AML. Economic growth or decline in the country itself, changes in the nature of rent distribution, balance of power or imbalance in the dominant coalition (including potential for violent action) and the state policy strategy relate to endogenous factors. The concept of AML does not explain everything, but it helps to understand how these endogenous factors interact with each other and with exogenous factors.

In all the examples, there were significant changes in the States, but the CRISIS did not disappear. The type of state structure in these societies varied from the rule of military juntas (in some periods in South Korea, Chile, and Bangladesh) to formally one-party governments (Zambia in 1972-1990, Mozambique in 1975-1994, Bangladesh in 1971-1975), to governments of one dominant party (Mexico in 1930-1990, India in 1950-1970, Mozambique in 1970). post-1992), regimes of" competitive clientelism "that allow" grassroots " competition for state resources and privileges controlled by the ruling class (India, Zambia, and Bangladesh since the 1990s), and to proper two-party and multi-party electoral democracy (the Philippines in 1946-1972 and from 1986 to the present). When we look at the maturation of societies with limited access in terms of such parameters as control over violence, the extent of connections that are subject to reliable rules of the rule of law, and the duration of organizations and agreements after the departure of their founders, we see that the speed and direction of change in these parameters are not the same. Progress or failure on one parameter can strengthen others. Often, in one country, simultaneous movement on various parameters is multidirectional.

As the negative experience of the Philippines has shown, Marcos used the threat of violence to impose martial law in a country that was a limited access society and an electoral democracy. A few years later, the Marcos regime collapsed, in part because the decline in

Webb S. 18 Political Economy and Mineral Wealth in Latin America and the Caribbean / World Bank. 2010.

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The increase in the price of goods reduced the amount of rents that Marcos could distribute, and the coalition that supported him collapsed. Electoral democracy has returned, but as under Marcos, the new regime has replicated access restrictions in the economy and politics, and the Philippines remains a society with AML. Similarly, the Institutional Revolutionary Party dominated Mexican political life for a long time (from about 1930 to 1990). The party lost its monopoly on running the country in the 1990s and lost the presidential election in 2000. As a result of the regime change, the distribution of rents between political parties has changed, but to a lesser extent between economic organizations. Mexico remains a limited access society. The positive experience of South Korea and Chile shows that these countries have reached a threshold state, and South Korea is on the threshold of transition to an open access society. Mozambique has developed as a region, but since 1992 the range of socio-economic groups under FRELIMO's rule has expanded, and over the past 20 years it has been assumed that no influential group will be excluded from the list of rent recipients. By contrast, the Democratic Republic of the Congo has descended into chaos, as Mozambique did in the 1980s, and Bangladesh has struggled since an attempt to hold elections in 2007. India and Zambia have shown greater stability, although there are still outbreaks of extreme organized violence in India. In AML, there are often episodic crises and cases of regression and retrogression, as happened in Chile in the 1970s, in Bangladesh in 2007-2009, and in Venezuela and Russia since the 1990s. Crises and unrest in the Congo after the fall of Mobutu and in Mozambique in the 1980s pushed these societies back in the AML range from basic to unstable. In more fragile, less mature AMS, there are usually fewer internal self-regulatory mechanisms to adapt policy decisions to new challenges. Even when the AML changes leaders or parties in power, the need to support the dominant coalition with rents means that the new leadership often simply redistributes rents. The high probability of AML violence makes it difficult to form alliances and reach new political compromises to resolve crises. In the face of crises, many elites struggle to maintain their privileges, especially if the proposed ways to resolve the crisis lead to the reduction or abolition of these privileges.

In Russia, open access institutions function differently

Often, especially since the mid-20th century, AMS borrow institutions from the POI, but these institutions work differently in the context of restricted access and produce different results.19 International fi-

19 For the case of the historical AMS discussed earlier (North D.C., Wallis J. J., Weingast B. R. Violence and Social Orders), there was no POI world, richer and more powerful, from which institutions could be borrowed in the LATE 1800s-Great Britain, France, and the United States. However, now elites in AML are often educated in POI and bring home ideas and arguments for or against adapting institutional forms of POI in their homeland.

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nancial organizations encourage this as part of the reform agenda. For example, in most countries there are banks, in many countries there are securities markets, but these institutions are not able to accumulate the savings of the majority of citizens, invest money in enterprises and open up entrepreneurial opportunities for citizens. As the Mexican experience shows, capital markets banks, especially, are underdeveloped and usually lend to "their own people", elites, government officials, and do not finance new companies and entrepreneurs. On paper, banks and stock markets in these countries may look like institutions of open access societies, and some firms may even be subsidiaries of corporations from these societies, but they act as part of their own system that leaves access restricted.

This also applies to laws and other political institutions, especially legislation and elections, which we will discuss in more detail below. The wording of these laws, such as social insurance legislation or corporate law acts, looks like copies of the same rules in open access societies. But the application and enforcement of these laws and programs in corrupt courts turns them into an additional source of benefits "for their own". This is shown by the Mexican anti-poverty program adopted by the Government of Salinas (PRONASOL); however, the Progresa/Oportunidades program that replaced it is based on relatively objective, impersonal criteria.

Enforcement of rules by POI organizations

All societies with limited access have to deal with the problem of creating a reliable third party to enforce agreements, since the government itself is often a player, not an arbiter. In the countries that were the first to adopt POI, such as the United Kingdom, France,and the United States, this problem stimulated the development of the institutions that led them to such a transition. 20 Many modern AMS have often resorted to the help of open-access countries - international organizations, bilateral donor financial institutions, international banks, and other corporations. This practice seems to have become particularly widespread after 1950. Usually, such organizations come to the country as partners of one of the members of a coalition of local elites, and they share rents with each other. This can have an economic effect in the medium term, but it reduces the interest of local AML elites in creating their own institutional system for attracting third parties, which would ultimately give more advantages to local companies and citizens. 21 Our examples show a wide variety of such agreements, sometimes positive, sometimes not.

North D. C., Wallis J. J., Weingast B. R. 20 Op. cit.

21 For the role of a third party, see Handler S. P. Wolves in Sheep's Clothing: Understanding Modern State-Building (and Counterinsurgency). PhD. Dissertation. Stanford University, 2010.

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UN troops were deployed to three of the countries in our sample to preserve their territorial integrity or restore order. In South Korea, this intervention, after a hard war, stopped the military invasion from the North. The presence of international armed forces has protected the country's borders for 60 years. At home, the results are not obvious, as foreigners avoided openly interfering in South Korean political life, but the widespread presence of foreign (mainly American) troops had an indirect effect: it prevented the use of the South Korean army to suppress a democratic demonstration in 1987.

In Mozambique, the white minority regimes of Southern Rhodesia and the Union of South Africa supported the anti-Marxist RENAMO rebels who launched a decade-long civil war in the 1980s. (It is possible that international forces within the UN prevented direct intervention from Southern Rhodesia and South Africa.) In the early 1990s, the Vatican brokered a ceasefire agreement that led to a UN peacekeeping mission in Mozambique, which overseen elections in 1992. Since then, elections have been held regularly in this country. Although FRELIMO's Marxist party wins the election by a growing margin, the country has begun to receive more economic aid from the PSA countries (on which it has become dependent), pursuing its own goals within the framework of the Washington Consensus, which implies respect for property rights.

UN regulations and intervention have helped keep the borders of the Republic of Zaire (Democratic Republic of the Congo) on paper, but have not stopped domestic violence and armed attacks from outside. Had it not been for the UN's intervention, its neighbors would probably have torn the country apart to seize its precious mineral resources. Some parts of the country could benefit from this, but hardly the whole country.

The ability to use the international banking system and its guarantee of property rights provided to depositors has become an important advantage for the elites of many countries, with the possible exception of India and South Korea, which have created their own full-fledged banking sectors. The elites of the Congo, the Philippines, and to a lesser extent Zambia and Bangladesh have used the international banking system to transfer dubious assets abroad. In Mexico, since the 1920s, the banking sector has been repeatedly attacked for failing to find a way to protect itself through rent-sharing. 22 Since the mid-1990s, Mexico has established a small banking system that is almost entirely made up of foreign banks and does not serve customers outside the elite.

Foreign direct investment in mineral extraction has played a major role in the economies of many of the countries in the region, including the Congo and Zambia in our sample. In these countries, foreign investment was cyclical, with particularly favorable conditions created during the most favorable phase of the cycles, when some of the profits fell into the hands of some members of the local elites.

Mining enterprises were mostly enclaves, and international organizations that somehow helped enforce the order and agreements in the industry as a third party did not extend these advantages to the rest of the economy. Mexico acted in a special way, expelling foreign oil companies in the early twentieth century (in the 1930s), and has maintained a monopoly ever since.

Haber S. H., Razo A., Maurer N. 22 The Politics of Property Rights.

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the position of a state-owned company in this industry. PEMEX and its union have become major players in Mexico's economy and politics, with mixed consequences for the rest of the 23 industries.

An example of a successful targeted international intervention in our sample is provided by the Textile Fibers Agreement (MFA)24, which introduced time-bound and export-oriented subsidies to the textile and clothing industry in Bangladesh. Most governments do a poor job of limiting subsidies to new industries in terms of time, as powerful lobbying groups appear along with such programs, demanding that subsidies continue. But the international community included norms in the MFA agreement that local lobbyists could not influence, and the industry knew that it needed to quickly become competitive.

Policy implications for development

Rents and restrictions on competition

As we pointed out above, the creation of rents and the restriction of competition can have both positive and negative consequences for a particular country, depending on its level of development. Therefore, practical policy recommendations should be more subtle than simple advice to lower barriers to entry and reduce restrictions on competition. In general, the main goal should be to reduce the level of violence, which is a necessary condition for economic development in any case. After the abolition of rents, often instead of a competitive market economy, a society with mass riots and violence appears. For the long-term development of AML, it is important whether rents can stimulate education and increase productive capacity. We find a positive impact of rents on production (in addition to preventing violence) in many countries in our sample: Chile, South Korea, and at times Mexico, Bangladesh, and India.

In these countries, cost-effective rents have two characteristics: they are not perpetual and are somehow related to the profitability of the firms that receive them-in addition to the benefits realized on the market. 25 When competition for rents turns into a zero-sum or negative-sum game, as was the case in the Philippines and the Republic of the Congo, a reduction in the total supply of rents held by the Government increases tensions within the ruling coalition. Access restrictions (rent creation) that have the most negative effects on efficiency, such as foreign trade barriers and the state monopoly on telephone communications in Mexico and Chile in the 1970s, should be considered in the light of

23 For more information about the mining industry in other Latin American countries, see Webb S. Political Economy and Mineral Wealth in Latin America and the Caribbean.

24 is also known as the WTO Agreement on Textiles and Clothing. - Note. per.

25 See also: Rents, Rent-Seeking, and Economic Development.

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how rents can be reduced without upsetting the balance of political power that ensures peace. However, in South Korea, rents to the largest firms (chaebols) were gradually transferred from the patronage regime that operated in the 1950s and 1960s to the incentive regime based on success in expanding exports. In Mexico and other countries, rent recipients can still thrive, although foreign trade has become much more open and its volume has grown significantly, since small percentage rents can be collected from much larger turnover. Moreover, the development of the economy can open up new areas for rent collection. Although foreign trade tariffs have been reduced in India, there is no evidence of a reduction in the overall rate of rent collected; corruption has increased significantly in areas of government activity where more money can be made (for example, auctions of licenses for communication frequencies).

As societies move with limited access to higher levels, rents are increasingly distributed according to impersonal rules. For example, in South Korea in the 1960s and 1970s, import licenses and preferential loan rates were distributed among firms based on their export success. But if society regresses, the solid system of rent distribution is gradually replaced by a more personalized and less stable system, as happened in the Philippines, Bangladesh, and in extreme form in the Congo.

These examples show that the reallocation of ownership and control over productive assets - and related rents - has an important impact on growth and on the transition from privilege to more objective and equal civil rights. The probability of a positive effect is greater where redistribution encourages entrepreneurial activity and the creation of real assets. Negative results are more likely to occur where redistribution reproduces relations of political dependence. In the countries under consideration, this can be seen in the example of agrarian reforms.

In South Korea and Taiwan, agricultural reforms have given low-income people access to economic activity. There was no agrarian reform in the Philippines, as previous forms of land ownership provided rents to a large number of powerful stakeholders, including American-owned plantations. In Mexico, the post-revolution reform did not give poor peasants a chance, but led to inefficient use of land. The peasants found themselves tied to the land and dependent on the generous handouts distributed by the Institutional Revolutionary Party during the election campaigns.

Rent distribution in trade and industry plays a key role in maintaining political stability. However, the importance of trade and industrial rents for ensuring economic development is ambiguous.

Where the state places the most important sectors of the economy-mining and banking - in the hands of international corporations, these corporations need protection from the populist demands of the electorate and other local groups (and sometimes from the military), and in return they provide economic advantages to those in power. This is evident in the Republic of the Congo, Zambia and the Philippines.

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Organizations, parties, and individuals

Closer to the" fragile " end of the range, sub-organizations are closely tied to the personalities of their leaders, and the latter are directly embedded in the dominant coalition. The examples of Congo, Bangladesh, the Philippines under Marcos, and Zambia in 1964-1991 showed the importance of organizations that were based on specific personalities and tried to balance the influence of different interest groups in the face of uncertainty. In other cases, such as in West Bengal under the rule of the (Marxist) Communist Party of India and in Mexico under the rule of the Institutional Revolutionary Party, the main political organizations were less personality-oriented, which seems to have given stability to these AML societies.

What should be the development policy for organizations? Which organizations should be supported and what rules should be followed to interact with them? As with the issue of rent, our examples show that the importance of organizations for improving the political and economic situation in AML depends on the state of affairs in each country. When countries in our sample struggled to limit violence, the result was usually consolidation of political power and limited access to economic power. This was done for greater reliability and reliability of agreements on the distribution of rents. Military governments operated as temporary regimes, and the effectiveness of development policies depended on their discipline as organizations: they performed well in Chile and South Korea, slightly worse in Bangladesh and the Philippines, and worst of all in the Congo. Minimizing the role of the military in managing the economy seems to have had a positive effect.

Fully one-party Governments (Zambia in 1972-1991, Mozambique in 1980-1990, Zambia and the Democratic Republic of the Congo in 1965-1990, and Bangladesh in 1971-1975) performed poorly and had difficulty maintaining stability and promoting development. However, the success of China and Vietnam over the past 30 years shows that one-party government can be successful. The examples of Bangladesh and Zambia in the 1970s and 1980s reveal two reasons why a single party in power may not be able to restore order: 1) if not all organizations capable of violence participate in the dominant coalition (party), and / or 2) if too many organizations in this party claim too large a share with the same amount of rent (and they do not generate any income from production activities). The dominant (but not legally the only) parties in Mexico and Mozambique have from time to time successfully maintained order in their countries and created favorable conditions for economic growth. But the sole or dominant party becomes an obstacle to making the complex and impersonal commitments necessary for further economic development.

As the AML moves from weak to basic, organizations become stronger, and eventually some even end up being long-lived.-

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more eternal than their leaders. Organizations themselves are gradually taking on an important role in balancing interests, although some retain links with individual personalities. The organization becomes a structure that builds long-term connections and relationships, and long-term relationships develop between the organizations themselves. South Korean chaebols at an early stage of their development, the army (in many cases) , and public-private organizations in Mexico (Pemex, Telmex, and the Institutional Revolutionary Party) are strong organizations that provide a stable basis for inter-interest groups to interact in politics and economics, although they themselves declare limited access and rent creation. These organizations are closely linked to the government and to the balance of power in society, but they are more durable than their leaders.

With the further maturation of AML, organizations arise that are essentially independent of the state. In Chile, the Pinochet regime added amendments to the 1989 constitution before it left the scene, which were intended to strengthen and secure the position of conservatives. Based on the development of events in Chile in the previous 20 years, it was expected that, once in power, the alliance of centrist and leftist forces would have to rewrite the constitution and change the structure of the main state institutions - for example, the legislative authorities. Instead, when the coalition came to power, the conservative provisions of the constitution, including those guaranteeing the independence of political organizations, remained in force for a while. Chile has not yet become an open-access society, but it is a mature, limited-access society that is clearly on the verge of transformation.

For specific policies, it is usually much more useful to help societies with limited access so that their organizations become stronger and obey the rules, rather than trying to establish fully open economic and political competition in societies where the threat of violence permanently preserves the AML system.

Research in recent years has provided a better understanding of organizations, their scale in different societies, and some features of their structure. 26 Attempts have been made to assess how difficult it is to set up a business enterprise, obtain a license, or accept a corporate charter. Generally, the World Bank and donor organizations from open-access countries have focused on the ease of starting a new enterprise from scratch, but from the point of view of countries with limited access, more attention should be paid to institutions that help or hinder the enterprise from reaching a size that gives it political influence and economic weight. In addition, we have long known that in many countries with limited access, corrupt courts do not provide basic services to organizations, such as:

26 World Development Report: Sustainable Development in a Dynamic World: Transforming Institutions, Growth and Quality of Life / World Bank. Washington, DC, 2003; De Soto H. The Other Path. The Invisible Revolution in the Third World. N.Y.: Harpercollins, 1989 Another way. Invisible Revolution in the Third World, Moscow: Catallaxy, 1995).

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securing the execution of contracts or collateral agreements for obtaining loans from banks 27.

The countries studied provide good examples of progress in the range from instability to maturity. South Korea has moved away from a personalized approach to powerful chaebol organizations, although the latter have retained important positions in the dominant coalition. Over time, they have been treated more impersonally in South Korea - as one type of organization, and in recent years even as one type in the general class of organizations (although chaebols still have enormous market power). On the contrary, organizations in the Philippines have moved to more personal and exclusive privileges. A. Montinola, President of the Bank of the Philippines, cites documentary evidence of the close personal ties of the Marcos regime with the leaders of economic organizations. For countries that achieved stability 20 years ago or even earlier, our examples show that it is important to expand the range of organizations that receive support not only at first, but also to help organizations achieve the complex agreements and commitments within and among themselves that firms need to achieve elite status.

Democracy and elections

Within the framework of the Washington Consensus, elections became the main institution of the PSA, which was to be exported to the United States. If we look at the nine countries through the prism of our approach, we can draw two conclusions: first, the AML electoral institution differs significantly from the democratic regime in the PSA, and second, elections in AML countries sometimes (but not always) play a positive role, even if they are not free and fair.

According to the traditional consensus of the donor community, the virtue of democracy is that it is the main means to guarantee political freedom. This consensus suggests that countries should move faster towards elections and democratic reforms. After all, who is opposed to strengthening freedom and civilian control of government? Many examples from our sample show that this program of actions often does not correspond to reality. Too rapid a transition to democracy can undermine the country's social stability. In other cases, elections can be useful as a stabilizing ritual, even if they do not reflect the people's desire for an accountable Government. In weak societies with limited access that have only recently emerged from coups and civil wars, the choice between stabilization and moving towards democracy is particularly difficult.28

27 See, for example, the work of historians comparing the structure of corporations in Great Britain, France, Germany, and the United States: Guinnane T., Harris R., Lamoreaux N. R., Rosenthal J.-L. Putting the Corporation in its Place // Enterprise and Society. 2007. Vol. 8, No 3. P. 687-729.

Collier P. 28 Wars, Guns and Votes: Democracy in Dangerous Places.

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In societies where political organizations are built as a network relationship between the patron and his clients, that is, in societies with highly personal forms of organizing political life, elections often lead to the patron using voting as another means of exchange with clients who cast their votes for privileges and other services.29 In such circumstances, elections can help stabilize AML, as they provide everyone with a reasonable and generally accepted way to assess the balance of power between different factions. In this sense, elections increase the likelihood that violent organizations will peacefully agree on who gets power, increasing stability in society and preventing further violence. However, elections of this kind cannot lead to the kind of democracy that exists in open access societies; rather, they preserve a restricted access regime. However, based on the principles of our analysis, we can assume that such an outcome is inevitable and, apparently, represents a stage on the path of such societies to maturity.

The relevant question is: can elections in certain situations facilitate economic and political development within the AML range? The analysis shows mixed results of elections in specific cases: they destabilize the political system (Chile in 1973 and Bangladesh in 2007-2009), help to strengthen political control (Mexico in the 1930s and 1990s, the Philippines in 1946-1972 and from 1986 to the present, and Zambia in 1972-1992 under formally one-party rule), authorizing a peaceful transition to power-sharing (Zambia in 1992, Mozambique in 1994, Mexico in 2000, India in 1977, Chile in 1989-1990) or providing a genuine choice between distinct alternatives (Chile after 1990). South Korea's progress towards democracy was relatively slow, and Chile in 1970There was a movement back to dictatorship in the 1990s, but now both countries are examples of success on the path of long-term economic and political development.

Elections, even non-free and unfair ones, can be useful for stabilizing political rituals in the region. Our sample contains examples of this type: elections in Mexico in the twentieth century under the rule of the Institutional Revolutionary Party, national and state elections in India, elections in Zambia in 1972-1990, and in the Philippines after Marcos left. Sometimes these are notable steps in the movement of a country with limited access to political progress - such as the 1990 elections in Chile and 1987 in South Korea, which restored civilian rule; 1994 in Mozambique, when the peace agreement was ratified; 1977 elections in India, which ended the years of Indira Gandhi's undemocratic rule. The 1991 Zambian election, after which Kaunda peacefully conceded defeat.

A strong commitment to free and fair elections on Western terms can undermine the role of elections in a society with limited access to public services.-

+++ 29 Keefer Ph., Vlaicu R. Democracy, Credibility and Clientelism // Journal of Law, Economics and Organization. 2008. Vol. 24, No 2. P. 371-406.

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unlimited access. Elections held under properly institutionalized rules for recognizing results (when a party that was in power voluntarily leaves) or that produce unacceptable results in terms of the current balance of power in the economy often end in severe periods of instability and violence. This was the case in Chile in 1973, in Pakistan-Bangladesh in 1970, and in Kenya in 2007-2008. The lessons of such situations in Bangladesh, the Democratic Republic of the Congo, and South Korea around 1960 are that a program to restore order in government should not always require immediate elections, but should recognize the need to first put in place adequate institutions to conduct elections and recognize their results, even if unfair by the standards of open-access societies.

In some countries, politicians become dependent on donations from economic organizations (large companies, etc.) as a result of competitive elections, which weakens the desire and willingness of governments to curb monopolistic practices and open up wider access to economic activities. These electoral consequences are evident in Mexico since the early 1990s and in South Korea since 1987, where the level of concentration of economic activity has not decreased or even increased. In India and Bangladesh, the situation is more complex: politicians are openly protecting the interests of the big business that supports them, but the growth of the number of players makes the economy as a whole more open. The same thing is happening in the political life of South Asia, where new organizations are emerging more freely.

Managing violent potential

In most cases, the armed forces and the police are only elements of a broader set of organizations with the potential for violence. Through the prism of the AML concept, it can be seen that the" Weber state", which has a monopoly on violence, is not in itself a desired consequence of a certain political course, but rather a consequence of a historical process that is not on the agenda in most AMLs. Helping a weak IMD state build a strong army and police force will not solve development problems; in many cases, it leads to even greater suppression of opponents and extraction of rents. In other cases, this is a completely failed path. In open-access societies, strengthening the armed forces as a threat of violence serves as a deterrent to crime, but this cannot be transferred to countries where Governments are usually unable to deter the army and police from engaging in rent-seeking behavior.

The key to understanding the problem is that successful AMLs limit riots by creating incentives for organizations not to resort to violence; to do this, the state rarely needs to use its monopoly on violence. In the Congo, the most obvious situation was when the strengthening of one group and the designation of it as "the government" did not lead to the fact that other groups became less active.-

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call for violence. The examples of Bangladesh, the Philippines, and Mozambique also show how intertwined the relationships of the official army, police, and other violent organizations are.

Although violence is a central element in the internal dynamics of every society, the World Bank has only recently highlighted violence as a politically important topic. It is generally accepted that the problems of crime and violence are located outside the State; societies in which violence is widespread are considered incapacitated or post-conflict States. The World Bank's assistance has traditionally focused on supporting their recovery and, to a lesser extent, on the causes and elimination of current armed conflicts. The World Development Report 2011 and our study reflect the Bank's attempts to analyze violence in more depth. Our examples, with the possible exception of the Democratic Republic of the Congo, show how countries have significantly reduced violence, although not permanently eliminated it. The AML concept will help you determine how much one country's experience in this sample is relevant to the specific situation in another country.

In open-access societies, control over the army and police is embedded in a responsible political system that is effectively constrained by political and economic competition. But in AML, the Government is rarely able to keep under control all organizations that can or do resort to violence. In most of the countries in our sample, with the exception of Zambia, India, and Mexico, the official army and police have been actively involved in the political process since the 1930s. In South Korea, Chile, Bangladesh, the Philippines, and the Congo, the army (or armies) has at some point been, or still are, the main actor in both government and economy. In these countries, the army is not so much an organization under government control as one of the organizations competing for control or influence over the government. In Mozambique, since independence in 1974, there has been no clear division between the military and the ruling FRELIMO Party.

The role of the military is only one aspect of the complex balance of power between powerful organizations, on the interaction of which stability or instability in society depends." Creating rents by restricting access is associated with maintaining a balance of forces and influences. In AML, power is inseparable from the continuous balancing of the interests of influential groups, when these groups are able to overthrow the formally existing government or make economic life difficult with the threat of violence or its actual use. All countries (except Chile) have had or currently have non-military organizations (some of them are legal, others are not). with serious potential for violence, which have played a role in the distribution of political power and economic wealth.

In European history, the army and police have established a monopoly on violence after many years of developing other social, political, and economic organizations capable of reliably controlling violence.

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and reliably limit the military to 30. At first, monopoly control was formed as part of a more general development process that brought these countries to the threshold of transformation, which helped organizations and the state itself to always be resilient and able to enforce impersonal rules, including the rules of control over the army and police. In addition, and this is an important feature of monopoly in these historical examples, it allowed the authorities to combine control over the army with the ability to protect the country well enough from external enemies and at the same time remove the army from the internal distribution of rents. This was repeated in South Korea after 1950, although the Korean intelligence service was more actively involved in establishing a military dictatorship in that country. In Chile, the army has had a good professional (non-political) reputation since the 19th century, only partially lost during the Pinochet years, as the military refrained from interfering in the day-to-day administration of the country. The failure of civilian authorities to keep the military under control has also been evident in Bangladesh, the Philippines, and the Congo, but not in Mexico, Zambia, or India.

Further research program

The lessons we have learned from the analysis of our sample countries make our concept more universal and refine it. However, much remains to be done to improve both the concept and the policy recommendations.

So, the main task of development is to understand how to achieve improvements in the framework of AML. This is more likely to improve people's living standards than switching to open access, as their incomes are growing proportionally and violence is becoming less frequent. An attempt to skip these stages and focus on moving from restricted to open access is likely to be unsuccessful. If you try to take some elements of open access societies - open market access, a new legal system, democracy - and transfer them to a restricted access society, it probably won't work. Our concept explains why such measures do not work; however, we have only just begun to identify combinations of policies that are truly effective, and these combinations are necessarily linked to the situation-dependent combinations of strengthened AML institutions and modified POJA institutions.

Another major conceptual problem is rent. There is a particular need to better understand the differences between rents that facilitate and hinder development, and between rents that are essentially incentives for maintaining peace and those that can be changed without the risk of escalating violence.

Our concept emphasizes the role of organizations in the development process. You can increase your strength and efficiency in different ways-

North D. C., Wallis J. J., Weingast B. R. 30 Violence and Social Orders.

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the role of organizations: to make them more accessible, improve the legal and other tools used by organizations for their own reproduction and for establishing relationships/entering into contracts with each other. We know too little about the relationship between making life easier for organizations and eliminating the rent they generate and providing stability to societies with limited access.

The role of third-party organizations, including the UN, multilateral and bilateral humanitarian organizations, and non-State institutions, requires further study. Such organizations can reduce the threat of violence, help implement agreements, covenants, and even constitutional norms, but in many cases they must work differently than they currently do. To make it easier to gradually improve their work, we need to know more about the work of these organizations under AML 31.

Since violence occupies a central place in the structure of AML, the problem of limiting violence is important. It is clear that people in these societies will have a better life if violence and the difficulties associated with it can be prevented. Looking through the lens of POD helps to see how violence can be limited and how it is done in reality. However, we need to know more, especially about how Governments are able to prevent violence in various circumstances, perhaps without having to exercise monopoly control over it and by taking steps to reduce threats and violations of citizens ' rights. Giving the Government a monopoly on violence can give it even more rights to restrict access and create rents.

The analysis of the countries studied in the framework of our project provides an opportunity to consider other examples. The French Development Agency (AFD) has already started working on China, Vietnam, Burkina Faso, Ivory Coast, Ghana, Kenya, Turkey, Pakistan, Tamil Nadu and Gujarat (Indian states). Currently, the World Bank has more than 50 political and economic assessment projects funded by the Intergovernmental Partnership Fund. This will provide a better understanding of how our conceptual frameworks work in countries that remain societies with limited access, despite major changes.

Most of the countries that have made the transition to open access, or at least met the threshold conditions, are located in Europe or were founded by Europeans. The countries of Scandinavia and the Netherlands seem to have passed this way before the First World War. Germany, Austria, Italy, and Spain experienced this transformation in the second half of the twentieth century within the EU, avoiding a significant regression to the level of basic AML during the interwar period. The case of Japan is also important. The European Union has provided Eastern European countries with common conditions and rules of the game to move towards the threshold and possibly transition to an open access society, although recent events increase the likelihood of regression. Learning

31 For a game-theoretic analysis of the role of third-party organizations, see Handler S. P. Wolvesin Sheep's Clothing.

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A sample of these countries will help to better understand what conditions are necessary for the development of societies with limited access in the rest of the world and how the international development community can help them accordingly.

The concept of AML can be useful for studying the countries of Eastern Europe and Central Asia that have not joined the EU and seem to be developing according to the AML model with strong centralized control - some more successfully and at a more stable level, some less successfully. In the short term, the key factor for most of them is likely to be the amount of funds received as income and rents from the export of mineral raw materials. However, in the medium term, each of these States will face the challenge of maintaining order in parallel with opening up their economies, if not their political systems, and achieving a level of openness sufficient for growth in non-mineral resource sectors.

Recent developments in the Arab world also suggest that the research perspective proposed in the AML framework is relevant. A wave of popular uprisings that first emerged in Tunisia in January 2011 led to changes of Government in Tunisia, Egypt, and Libya, and unrest that has yet to be determined in Syria, Yemen, and other countries. At first, these revolutionary movements were greeted with enthusiasm as popular uprisings that would lead to democracy and development, but the real consequences cannot be clearly assessed. Arab societies are societies that are usually dominated by a coalition of military, political, economic, and religious organizations. Revolutionary changes are taking place in Egypt and Tunisia, but AML requires reorganizing coalitions, not removing all influential players. Open access will not be achieved overnight, and modern democracy and economic development are unlikely to be the result of these revolutionary battles. In Libya and Syria, the situation is even less clear, and the AML paradigm is not able to predict its possible outcome, but in any case it will be associated with another AML option.

The natural response to increased violence within SUB-groups is to create agreements that are even more personal, and more closely correlate agreements that link powerful individuals with rents whose existence is threatened by violence and lack of coordination within the coalition. Unrealistic expectations of change from Arab and other leaders will not help solve the first task of development-to increase the productivity of youth.

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