Book Review: The Institutional Imperative: The Politics of Equitable Development in Southeast Asia

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The Institutional Imperative: The Politics of Equitable Development in Southeast Asia . Erik Martinez Kuhonta . Stanford : Stanford University Press , 2011, 342, CCCXLII.

Reviews/Recensions

Erik Kuhonta's "The Institutional Imperative: The Politics of Equitable Development in Southeast Asia" is empirically rich, analytically thoughtful, and normatively unsettling. Kuhonta moves beyond the standard literature on the causes of growth to ask why some countries successfully achieve equitable development, defined as "economic growth rooted in a pro-poor orientation" (3). The book's thesis underlines the importance of institutions; namely, institutionalized political parties. A combination of institutionalized parties, state interventionism, and pragmatic ideologies provides favorable conditions for equitable growth policies. A dash of authoritarianism helps smooth over potential opposition.

Kuhonta begins with an intriguing empirical puzzle: strong economic growth in Thailand occurred in tandem with increased levels of income inequality, while similar growth rates in Malaysia led to a decline in inequality. What explains the variation? The author dismisses explanations based on class structure or regime type as they both assume the existence of a pro-poor political organization that can effectively push for redistributive policies. For Kuhonta, the political organization itself serves as the key institutional variable. Strong parties channel and aggregate the demands of the poor, providing the institutional infrastructure required for long-term implementation of social policies. Only through the strength of institutionalized parties can the corrosive effects of clientelism and the erratic appeals of populism be contained. Parties, in other words, de-personalize political life and create an opportunity for programmatic competition. When strong parties with pragmatic ideologies gain power over an effective, interventionist state the stage is set for pro-poor policies. Even if these stars all align, however, it may still take a systemic crisis to prompt action on behalf of the underprivileged.

The primary cases of Malaysia and Thailand are examined separately in distinct sets of chapters. In Malaysia, colonial era protest by the economically disadvantaged ethnic Malays resulted in the formation of the United Malays National Organization (UMNO). Led by the Malay elite, this cross-class ethnic party adopted a pragmatic political position, creating an electoral alliance with the business elites of the commercially oriented Chinese community while pushing for moderate social reforms to benefit the party's poor constituency. It was not until after the racial riots of 1969 that modest reform attempts gave way to the more extensive set of policies embodied by the New Economic Policy. Not coincidentally, this was also the period in which UMNO effectively shut down the free-wheeling democratic process. Kuhonta's convincingly draws the links between UMNO, policy formation, and social outcomes. His analysis of the post-1969 social reforms includes the volume's most impressive primary research efforts.

In contrast to Malaysia, Thailand did not develop stable parties capable of implementing pro-poor policies. With no occupying power to rally against and recent memories of a reformist monarchy, the Thai context offered little "national space" for political parties to fill. Consequently, no stable organizations arose to articulate and implement social reforms on behalf of the poor. Instead, political parties have been either loose confederations of local patrons or mere vehicles for populist politicians (or both). Short lived democratic openings gave way to multiple coups, which invariably empowered technocrats "steeped in classical macroeconomic precepts" and influenced by World Bank development strategies (147-8). The result has been inequitable development. Kuhonta explores an array of half-hearted Thai social programs, from rural debt relief to the provision of health care services. Chapter 6 also includes an exploration of contemporary dam politics (no "n") that remain difficult to interpret because they have no point for comparison in the Malaysian case. The Thai section concludes with a mixed assessment of Thaksin's reform efforts.

Kuhonta's insightful theory and case work comes with a challenging sub-text: good things do not always go together. Importantly, it is not until UMNO restricts democratic competition and asserts more direct control of the coercive capacitates of the state that it actually goes forward with substantial social reforms. As if to drive the point home, the extensions of the theory contrast Vietnam, a single-party regime, with Philippines, which but for the Marcos years has been democratic since World War II. Again, Kuhonta finds that Vietnam's strong party has chartered a course of equitable development while the clientelistic pattern of Filipino politics has only reinforced the country's economic inequality. In Kuhonta's story, the heroes of equitable development are both autocratic while the unequal developers have some of Southeast Asia's more democratic regimes.

Unfortunately, the book's treatment of ethnicity is side tracked by the peculiarities of the Malaysian literature. In a curious Appendix, Kuhonta uses Fiji, Guyana, and Sri Lanka to demonstrate that equitable development is not inevitable in diverse societies where the larger group is economically weaker. In making this case, Kuhonta challenges the idea that Malaysia's demographic character explains its policy outcomes. The starting assumption, however, is at odds with a large literature that finds that public goods provision tends to decline in diverse political systems. In dismissing ethnic diversity as an explanatory variable the book misses an opportunity to engage a broader debate about public goods provision and diversity which the Malaysian case can surely speak to.

This mild oversight aside, Kuhunta's book makes a solid contribution and deserves to be widely read. The book offers a check to democratization optimists who hope the removal of dictators will naturally lead to serious economic reform. Instead, we are encouraged to look for sub-regime level factors like parties. And we are left to wonder if democracy itself is a hindrance to equitable development.