The Introduction provides a brief summary of the various approaches to the relationship between institutions and development in the literature, the originality of the institutional diagnostic approach, a presentation of the Institutional Diagnostic Project, and an outline of the volume

The same kind of backward institutional diagnostic as for South Korea was applied to Taiwan in its take-off days. An early diagnostic conducted just after the KMT settled on the island would have been rather negative in view of the very unfavourable initial conditions of Taiwan’s development, but it would have been strongly positive a few years later. This chapter explains why, while presenting an account of the development strategy deployeda nd the institutional setting developed by the newcomers. This second diagnostic would have been different from the one drawn for South Korea, even though in both cases development was strongly directed by a military authority headed by an authoritarian leader and ended up focusing on labour-intensive manufacturing exports. But the initial strategies and institutional structure of the two economies were quite different. On the one hand, Taiwan’s development was initially anchored in the modernisation of smallholder agriculture and the development of rural industries. On the other hand, an important role was paradoxically given to central planning, but combined strict market incentives for most economic agents.

This is the first chapter of the synthesis of the various institutional diagnostics undertaken in IDP, including those of South Korea and Taiwan. It compares the main economic development challenges, or advantages faced by the various countries, and the major institutional causes behind them. Development is seen as the structural transformation of the economy through the absorption of traditional low-productivity activities by the modern high-productivity sectors of the economy, rather than merely GDP growth rates. The comparative analysis is conducted with systematic reference to the well-known framework proposed by Arthur Lewis to represent this progressive diminution of ‘dualism’. If South Korea and Taiwan fit this framework rather well, the structural transformation is shown not to rely on growth engines sufficiently strong and labour-intensive to proceed satisfactorily in the IDP countries, except maybe in Bangladesh where the domestic engine is supplemented by massive outmigration of workers. It turns out that the cause for such a situation most often lies in the political economy context of the design, decision, and implementation of the appropriate development strategies.

This chapter examines a first set of generic institutional issues common to some or all IDP countries as well as South Korea and Taiwan, after taking stock of significant differences in initial conditions between these two countries and others, which necessarily affect the comparison of their development achievements. The generic institutional issues considered in this chapter are those that involve politics, more specifically the role of political leadership and state autonomy in development. That a full chapter is devoted to the role of politics reflects the huge importance of political forces in shaping or constraining development. This is probably the most salient lesson to draw from the six case studies, even though this dimension is largely under-estimated by many institutional analyses. Especially worthy of attention, but certainly not the only issue, is the type of relationships which exists between state authority and business interests, with the possibility that the latter capture the former. The discussion in the chapter occasionally draws on a broader set of experiences than that of the six countries considered in this volume.

This chapter summarises the institutional diagnostic studies in Benin and Mozambique. Benin’s past development performances are modest. A cotton exporter, its activity fluctuated widely due to a continuously changing organisation of the sector. Illegal cross-border trade with neighbouring Nigeria is another major activity. It generates income, but has limited domestic economic impact while raising informality and corruption. The oligarchs who run the two sectors had practically captured the state, pre-empting alternative development strategies. The situation may now have changed with one of them becoming president. Mozambique entered a civil war shortly after gaining independence. When peace was back, in 1992, development was triggered by the recovery from the war period, and the transition to a modern market economy monitored by Western donors. The country has now started exploiting its abundant natural resources (coal, oil, and huge gas fields). This strategy revealed a highly corrupt institutional setting and the neglect of the great mass of population in rural and often isolated areas, despite clear potential comparative advantages in agriculture.

This chapter summarises the institutional diagnostic studies on Bangladesh and Tanzania. Each summary starts with a short account of the recent political history of the country, its economics performances and challenges, and the perceived quality of institutions. It then lists the diagnosed institutional weaknesses and discusses their likely causes and the potential for reforms given the political economy context. The dominant theme in the case of Bangladesh is the sustainability of the development strategy based on Ready-Made Garment exports. Although impressive up to now, development is likely to slow down if exports do not diversify within the RMG sector and without. Among others, a key institutional challenge is how to incentivise such a diversification and overcome the monopolising of public support by the RMG sector. Industrialisation and export diversification is also an issue in Tanzania, whose recent growth seems more demand-driven, thanks to a favourable international context, than supply-driven. There too, a critical institutional challenge is the design and implementation of a meaningful industrial policy, and the effective regulation of the private sector.

Following Peters’ typology, we describe patronage appointments in Mongolia as political agents. We trace the development of Mongolia’s civil service from ancient into contemporary times. We emphasize the importance of political factions within the two dominant parties and the lack of a programmatic focus of the parties as the basis for the important role that patronage plays in the Mongolian hybrid presidential-parliamentary political system. We use patronage appointments in the diplomatic service as a case study of practices. Since factions within the two dominant parties are defined by personal ties rather than ideological orientation, we conclude that patronage appointments primarily act as political agents of these factions.

This chapter will provide the clarification of the origin, nature, and identify forms of political patronage in Vietnam. First, the authors present the origin of patronage in the context of Vietnamese culture and history; emphasizing the element of feudalism, Confucianism and culture-villageoise. After that, the authors analyze patronage appointments in contemporary Vietnamese politics, in light of its specific institutional dynamics. Finally, the chapter provides various typical case studies for the classification of patronage according to the models of Peters (2021).

Generally and ideally, recruitment and appointment to the Civil Service or public sector in the Philippines should be based on merit and fitness. However, political appointments by the Executive, particularly by the President of the Republic, for positions that are policy determining, primarily confidential, or highly technical in nature are ‘allowed’. This political appointment is construed as patronage appointment and perceived to be abused. Recent reports point to the growing politicization of this appointment process, with no meaningful means for vetting presidential appointees to ensure they meet the criteria and have the required qualifications for the positions to which they are appointed. We investigate patronage appointment at the third tier of the Philippine civil service and describe the policy-patronage dynamics over historical period. It also attempts to conceptualize a typology of roles and relationships between the patron and the appointees based on Peters typology. This challenging research could provide the bases for future studies on patronage politics in the public sector, their implications and effects on the bureaucracy, public policy, and development.

Historical contextualization is vital to comparative historical analysis in social science. The meaning of important concepts such as rights, popular sovereignty, and the state differs across diverse historical contexts even within a single case such as England. Neglect of such differences makes state formation appear to occur along a linear trajectory and the state–society relationship seem simply confrontational. A comparative historical analysis based upon deep and solid examination of historical contexts reveals hitherto unobserved similarities in state formation between Western Europe and East Asia. It provides a new account of how domestic governance was attained through state–society collaboration when the state's capacity to directly provide public goods remained quite limited. Moreover, it casts new light on understanding the political “great divergence” in the transition from early modern to modern states, as well as offering a novel explanation of the resilience of contemporary authoritarian regimes that legitimate their power mainly through care for domestic welfare.