Balsekar Ameya GOVT 685 Memo Tuesday, October 18, 2005 Andrew MacIntyre The Power of Institutions: Political Architecture and Governance Andrew MacIntyre is trying to understand the effects of dispersal or concentration of decision-making power in government institutions on governance. He begins by identifying a "power concentration paradox" in previous work on institutions whereby both the concentration and dispersal of power in government decision-making have been understood by theorists to have significant disadvantages for governance, particularly in developing countries. A large part of MacIntyre's concern is to reconcile the two divergent strands of the literature on institutions that have given rise to this apparent paradox. He finds that underlying both strands is the common assumption that the fragmentation of power promotes policy stability while the concentration of power promotes policy flexibility. He goes on to argue that extremes of either concentration or dispersal of decision-making power (measured by the number of veto-players) tend to have negative effects on governance in the form of policy volatility or rigidity respectively. He then suggests that the relationship between power dispersal and governance is a U-shaped curve with a minimum. The lowest point of the curve is, in theory, the ideal point where power is neither too concentrated nor too dispersed and, consequently, where the potential for governance problems are likely to be minimized. MacIntyre then does a brief veto-player analysis for his four cases: Thailand, the Philippines, Malaysia and Indonesia, finding that the regimes range from highly dispersed (Thailand with at least 6 veto players) to highly concentrated (Indonesia with only 1 individual veto player). While MacIntyre is careful to add that not all veto players are equivalent (a political party can hardly be considered to be the same as a dictator) he suggests that what they do have in common is the ability to kill policy change by withholding their consent, making this type of analysis useful. Significantly, MacIntyre explicitly leaves business tycoons, labor leaders and other interest groups out of his analysis, suggesting that although these actors are "remarkable and potentially consequential," they all work through a political framework of vetoplayers in order to achieve their objectives (pp 51). He understands political architecture to be an intervening variable between various interest groups and powerful individuals and policy outcomes.
1
Natasha Hamilton-Hart Asian States, Asian Bankers: Central Banking in Southeast Asia Hamilton-Hart's book attempts to demonstrate the path dependent way in which different Southeast Asian states developed different institutional structures and capacities, which in turn impacted both, the way that the Asian financial crisis affected these countries, as well as the governments' responses to the crisis. Hamilton-Hart is concerned with the question of how the "governing capacity" of state organizations defined as "the ability to implement policy in a consistent and ruleabiding way" (pg 9) influences both, a government's policy options in the face of a crisis, as well as the implementation of any particular policy. Hart trains her sights specifically on internal structures, routines and norms of state organizations, and the degree to which these organizations deviate from the Weberian ideal of a rational-legal bureaucracy. MacIntyre and Hart are essentially asking similar questions about the effect of institutions on government policy-making. Both authors note the value of a combination of flexibility and stability for effective governance, and both see these as having their root in institutional factors. However, the fundamental difference between MacIntyre and Hamilton-Hart is that, although they both agree on the fact that both policy volatility as well as policy rigidity pose serious problems for governance, they see these problems as having very different sources. While MacIntyre understands and volatility rigidity to be a function of the concentration and dispersal of decision-making power within institutions, Hart sees them as being the outcome of the historically contingent institutional nature of the state. As a result, Hart appears to be fairly agnostic about the advantages or disadvantages of power concentration or dispersal in institutions. Instead, the interaction between societal actors and institutions, which MacIntyre leaves out of his analysis, is given center stage in her book. For example, unlike MacIntyre, she doesn't see Thailand's policy gridlock and resistance to change as being caused by the dispersal of decision-making power. Instead, she looks specifically at the high incidence of corruption and the ensuing lack of governing capacity as leading to the government's inability to enforce policy reforms after the crisis. Although Malaysia is very close to one extreme in MacIntyre's scheme (basically seen as a disadvantage), being at this extreme certainly had its advantages when the crisis came (pg 167). In fact, Hart's analysis suggests the need to add a lot of detail to MacIntyre's scheme. Where Malaysia and Indonesia (and presumably also Singapore) all have highly concentrated decision-making power in terms of veto players, their responses to the financial crisis were not only different, but also had fundamentally different outcomes. This suggests the importance of bringing the working of institutions and organizations into an analysis.
2
Interestingly, Hamilton-Hart does explicitly suggest that the degree of power dispersal plays a "critical role in state formation and rationalization" (pg 20), arguing that depersonalized state structures are more likely when power is moderately dispersed and least likely when power centers are widely dispersed. This, in turn, suggests that instead of looking at dispersal and concentration of power within institutions as an intervening variable (as MacIntyre does), it may, in fact, be the case that power dispersal is an underlying cause. The qualification, at least according to Hart, would probably be that one needs a broader understanding of power dispersal within society at large at the time of state creation, rather than decision-making power in particular institutions. However, if it could be argued that the number of veto players in current institutions reflects dispersal of power in society at the time of state creation, th...