Bangladesh

The 'Bangladesh paradox'

Feb 22, 2017
Despite the so-called bad governance, how has the economy of Bangladesh been growing at rates higher than those of most South Asian countries? Is this a black box whose mysteries cannot be known? Is this really a 'paradox' or 'development surprise' as perceived by some economists at the World Bank? Is it possible to have the economy growing for an indefinite period of time despite a “governance deficit”? Can development and even progress come about in the absence of contested democracy and transparent and accountable institutions? 
 
These are some of the questions that were analysed, dissected and inspected by a group of scholars and academicians at a workshop titled 'Politics and Development, Democracy and Growth: Bangladesh and Beyond' by BRAC Institute of Governance and Development and Effective States and Inclusive Development on February 16 at the BRAC Centre Inn. Dr Mirza M Hassan, a political economist and an Adjunct Fellow at BIGD said, “The growth of the economy is a mystery to the economists of the World Bank because they are thinking in terms of liberal democracy and good governance where rule of law is ensured. But Bangladesh does not run on law, it runs on deals both open and closed.  In some domains of the economy such as the RMG and the banking sectors deals are open while in the power sector and the transport sector deals are closed. The economy has been operating on ordered deals since 1975. The deals are ordered as opposed to disordered because the deal makers honour them once they are made. That is the explanation for Bangladesh's growth despite the so-called bad governance.”
 
What seems to be the snag then as long as the economy keeps growing? The trouble, of course, is that rules are permanent while deals are not. “When you have a rule it is for everyone, and when you enforce it, it becomes a public good. It is permanent and has a universal application. But deals—we call it one shot games—benefit individuals or groups and not everyone,” Dr Mirza said.
 

 

The Daily Star, February 22, 2017

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