This chapter underscores the importance for obtaining a proper understanding of the outcomes primary education system in Bangladesh produces. It also emphasises that the provision of primary education is an important institutional issue as it requires effective mechanisms for the recruitment, training, and retention of teachers; the construction and maintenance of schools and other infrastructure; the design and implementation of the curriculum; the monitoring of progress, through inspections and examinations; and the creation of a learning environment. This chapter analyses the challenges related to the coexistence of various actors in the primary education system, the inadequate allocation of resources, the lack of incentives to attract high-quality teachers, the shortage of trained teachers, the low quality of the educational infrastructure, the poor curriculum design, and the flawed examination system. This chapter relates some of these challenges to the public sector in general in Bangladesh. Finally, it recommends relevant measures to overcome the institutional challenges of public spending in primary education and to improve the quality of services.

In this chapter, the key findings and arguments of the previous chapters are combined into a synthesis. This ‘institutional diagnostic’ not only provides an account of the most important institutional issues facing Bangladesh but also seeks to identify the complex chains of causality which relate them both to the economic outcomes that they generate and to the proximate causes and deep factors from which they derive. It begins with a summary – firstly of the historical and political context and then of the more specific findings that have emerged from the thematic studies. From this, three basic institutional weaknesses are identified, each of which recur multiple times in the thematic studies – the supremacy of the ‘deals environment’, ineffective regulation, and weak state capacity. In each case, it is explained both how these institutional factors constrain economic development and how they derive from and indeed maintain the political economy context and other deep factors. Some key directions for reform are identified together with a discussion of where the political barriers to implementing them may lie. Some further reflections are made on impact of the COVID-19 pandemic.

This chapter identifies and evaluates the institutional causes of the failures of the tax system in Bangladesh. At less than 9%, Bangladesh is among the countries with the lowest overall average ratio of tax revenue to GDP. It follows that its fiscal space, that is the capacity to spend on public goods and correct rising income inequality, is extremely limited. The low average tax ratio results from both low nominal tax rates and a low rate of tax collection, itself due to pervasive tax evasion (often with the paid support of tax collection personnel) or to tax exemptions generously granted by the Government to its supporters. In addition, albeit in a limited way, taxation distorts economic incentives, either directly through non-uniform tax rates that favour some sectors or firms and penalise others, or indirectly through exemptions and evasion. This chapter also explores the reasons behind the difficulties that have surrounded previous attempts at tax reforms, and the underlying political economy factors. It, finally, lists the most attractive reforms in terms of increasing tax revenues, the effectiveness of tax collection, and the redistributive impact of the tax system.

The chapter concerns the various aspects of a capitalist market economy. The stages of development of capitalism are recalled: primitive accumulation, merchant capitalism, manufacturing capitalism. Managerial capitalism (Berle and Means, Marris) assigns a central role to managers in the (hierarchic) power structure of the firm. Oligopoly (analysed through Sylos Labinis notion of the barriers to entry) and not competition is the dominant market form in this stage. Interlocking shareholdings and interlocking directorship then connect banks and companies in widespread power structures. The financialization of the economy leads then to the dominance of money managers, with a shorter time horizon and different priorities.

A distinction between left and right policies is proposed, based on the opposition between the aim of a reduction of power inequalities in society and their acceptance as unavoidable if not useful. The objective of absolute equality is criticized. The complex nature of the notion of equality is illustrated recalling Sens notion of capabilities. Progress, interpreted as a reduction in power inequalities within society, is possible, but not a necessary historical outcome. It requires active policies, organized in a strategy of structural reform.

The scarcity of land and resulting high prices have important implications for the prospect of industrialisation in Bangladesh. The situation is yet more complicated due to the weak land management system, which perpetuates land grabbing, high rent generation, and ineffective property rights. This chapter analyses the importance of a well-functioning land management in Bangladesh. It elaborates on the history of the policy reforms and the evolution of rules and regulations related to land administrative and management in Bangladesh and analyses institutional complexities in the current system of land management. It also explores how the SEZs initiative has emerged as an alternative management system and the complexities related to the acquisition of land for SEZs. This chapter shows that the institutional mechanisms of land acquisition and compensation are subject to a range of corrupt practices, which in turn create vested interests that resist change and a bias towards politically connected purchasers, or towards those willing and able to pay bribes. Such an environment is inimical to a good business climate and undermines the strategic economic purpose of the SEZs.

This chapter provides a narrative analysis of the process through which involuntary land dispossession takes place in the particular socio-economic and historical context of Bangladesh, and the relative inability of the judiciary to resolve such cases. It also provides information about the way the judiciary works in general – another aspect of state capacity where Bangladesh appears relatively weak, for both logistical and institutional reasons. Logistical reasons relate to a lack of resources, whereas institutional reasons relate to the way the judiciary is influenced by both political and economic interests, as well as the fact that most actors in the judiciary extract rents from the system and act, almost collusively, to maintain its dysfunctionality. Consequently, this chapter scrutinises the interrelation between economic assets, human actions, and state institutions and its possible impact on the overall trajectory of long-term development. Finally, this chapter identifies potential reform measures and agendas in relation to land dispossession litigation in Bangladesh.

Bangladesh is widely seen as a ‘paradox’. Over the last quarter of a century, it has maintained economic growth and has outperformed many countries on social indicators while scoring very low on the quality of governance. Moreover, its economic progress does not seem to indicate significant improvement in comparative institutional indicators. Is the Bangladesh Paradox Sustainable? thus examines whether such a paradoxical combination can be sustained in the long run if growth continues with no improvement in the quality of institutions. It argues that although Bangladesh has become the second largest world exporter in the garments, export diversification is needed, both within and outside the garment sector, if it is to maintain its development pace. Based on a thorough account of the country’s economic, social, and political development, this companion volume analyses Bangladesh’s critical institutional issues in relation with development-sensitive areas such as the garment sector, banking, taxation, land management, the judiciary, and education. This title is also available as Open Access on Cambridge Core.

The chapter is devoted to the relationship between power and the cultural arena. The importance of public discourse, its requirements and limits, is illustrated. Gramscis notions of hegemony and dominance are applied, with modifications, to our analysis of power. The role of the masses is discussed, together with the notion of totalitarianism and the importance of culture in dictatorial regimes such as the fascist and Nazi ones. Different notions of civil society, as contrasted to the state, and its role are considered, then religion as a charismatic-traditional form of power. Technocratic knowledge leads to a discussion of the role of the elites. Specialization is counterposed to general culture, recalling the debate on the two cultures (literary culture and social culture, Snow) or the three cultures (also including the humanities) and the importance of interdisciplinary culture and research. Positive and negative aspects of the new social media (Blogs, Twitter, WhatsApp, etc.) are illustrated, with cautions against the risks of corruption of the social discourse.

This chapter explores the institutional challenges of export diversification in Bangladesh in the context of the dominant RMG sector. It evaluates the features of the ‘RMG model’ of export success, explores the dynamics of the institutional space around the RMG sector in Bangladesh, and analyses the sustainability of the ‘RMG-centric’ export model. The evidence suggests that the very same institutional features which enabled the growth of the RMG sector are missing in other sectors – that there is not the same organisational capacity for industry leaders to participate in collective bargaining with the state, whilst key policy instruments are biased in favour of RMG and against other sectors, which has not been used to help industrial diversification. However, as the RMG sector has been, and to a large extent still is, the strength of Bangladeshs development, it might become the country’s ‘Achilles hell’ in the future, if it weakens and prevents other manufacturing exports from developing. Therefore, there is a need for a well-designed and effective industrial policy targeting the emerging dynamic export sectors.