Political Power and Regional Economic Performance

Who is the boss here? Regional power and participation of the Caribbean coast in the ministerial cabinets, 1900-2000.
(Original title: ¿Quién manda aquí? Poder regional y participación de la costa Caribe en los gabinetes ministeriales, 1900-2000)

by Adolfo Meisel Roca (ameisero@banrep.gov.co)

URL: http://econpapers.repec.org/paper/col000101/009424.htm

Abstract (Translated from Spanish by the reviewer)

It is well known that regional identities are very strong in Colombia and that they have had an influence in the politics of the country. One of the dimensions that Presidents of the Republic take into account for the composition of their cabinet is regional origin. In this paper we analyse the regional origins of Colombian ministers at cabinet level during the twentieth century. This to identify whether particular regions dominate the number of ministers in the cabinet and whether individuals from a particular region were overwhelmingly appointed to a specific ministry. To analyze the regional participation in the cabinet, we constructed a database with the names of the 702 persons that served as ministers during the twentieth century. The paper focuses on the Caribeann region, because we wanted to study its participation in the national political scene, during a century in which its economy lagged behind in comparison to the central region of the country. However, to articulate a comparative regional perspective, we have also widely discussed the cases of Antioquia and Bogotá and, to a lesser extent, of other regions of the country. The results show the strong influence of Antioquia and the departments of the coffee-growing region on the cabinets of the first part of the twentieth century, as well as the rise of Bogotá in the last decades of the century.

Review by Sebastián Fleitas

This paper was distributed by NEP-HIS on 2012-04-17. It addresses the role of the Caribbean region in the executive branch of the Colombian government, given that it was a region that fell behind in terms of economic development, human capital and political power throughout the twentieth century. The regional inequality in Colombia is well-know. It is an issue of economic and political policies to the extent that each president of Colombia has had to take into account while aiming for a balanced regional composition of his cabinet. To describe and interpret the links between political power and economic development at the regional level, Adolfo Meisel constructs a database with the information about regional origin for all the 702 persons that were ministers during the twentieth century in Colombia.

Colombian Regions (number two is Caribbean Region)

Colombian Regions (number two is Caribbean Region)

I think that this paper makes two important contributions. The first one is that the article describes in a very precise way that the Caribbean region had a low participation in the executive branch during the twentieth century and that in fact this low participation contrasts with the increased influence of the capital city (Bogotá) and the coffee-growing region. This trends can be seen in the fact that no president was born in the Caribbean region; in the participation of the Caribbean region in the total number of ministers during the century (about 12%); and also in the fact that the participation of ministers born in the Caribbean region in key areas (like the Treasury, Trade, Defense, Education or Economic Development) was lower than than the average participation of individuals from other regions. Meisel also advances some possible explanations regading the change in regional political power in Colombia: the backwardness of the Caribbean region, the rise of the coffee-growing region and the consolidation of Bogotá as the most important economic center.

Second, this paper addresses the important issue of political power and economic development, making focus in the regional dimension in a country with strong regional inequalities. The literature on the linkages between political power and economic development has a long tradition. More recently it has had a big impulse with the work of Acemoglu and some of his co-authors (see Acemoglu, et. al., 2005, the recent book by Acemoglu and Robinson´s Why Nations Fail as well as Anna Missiaia’s entry to NEP-HIS entitled Acemoglu on Past, Present, Future and Beyond). However, similar efforts to understand the institutional factors and the role of political power in economic development in Latin America are few and far apart (such as the work of Roderic A. Camp for Mexico). This issue is of great importance in Latin America due to the persistence of institutions that have been blamed of deterring economic development. Moreover, Latin America exhibits significant levels of inequality that could lead to worse economic performance if the elites use their political power to perpetuate themselves using these extracting institutions.

Cartagena de Indias (The most famous Caribbean region city)

There are, however, two major concerns that limit the scope of the contributions in this paper and in particular, regarding the linkages proposed between regional political power and economic development. The first one relates to the fact that the author uses the place where the minister was born in order to assess the regional origin, which in turn is used to assess the political power of the regions during the twentieth century.

It is not straightforward that the origin of the minister is a good indicator of the political power of a region and even more that this type of political power could be transformed into a better economic performance of that region. At least two reasons can be argued. First, the region where the minister was born might not be a good indicator of his commitment with that region, either because this commitment is not strong before being elected or because after being elected his preferences can change. For instance, whether President Obama was born in Kenya or Hawaii is somewhat besides the point as he took office as Senator from Illinois.

As a cabinet minister rather than an elected official, a politician might wish to maximize, among other things, their continuity in the Executive branch, which depends more on the President’s decisions than on the regional support for a particular individual. On the other hand, there is not a direct relationship between this kind of political power and the economic performance of a region, because even when if a minister wants to favor a region, policies enter in a political process in which the other ministers take part, and also a complex process of negotiation in the legislative branch (were possible lobbyists can take action). For these reasons, I think that the paper would benefit if the author discussed a little bit more the relationship between the executive and legislative branch, the role of regional lobbyists and the existence of regional development policies, in order to try to isolate the effect of the regional composition of the cabinet on the performance of the Caribbean region.

Casa de Nariño (Colombian Government House)

A second important issue that Meisel could address is the existence of endogeneity between political power and economic development. It is key to address this endogeneity in order to make conclusions and to determine the causality in the relationship. An example may help to make this point more clear. Assume that a region that has better performance over time due to different commodity endowments and invests some of the proceeds to improve its educational system. Assume that eventually the more educated people serve in the cabinet. In this example, the composition of the cabinet will show that people from more developed regions have a greater participation in cabinet, but note that the causality goes from a better performance to increased participation.

But the things can be the other way around. Assume now that exogenously a president born in the central region decides to appoint only ministers from his region for the Cabinet. Assume also that these people decide to allocate the resources for education in a very unequal way, favoring this region. Assume that eventually by this process the people from this region get more educated than the people from other regions and that this increase in human capital boosts economic growth. Under the assumption that the more educated people have better opportunities to be in the Cabinet, then the data will again show that people from more developed regions have a greater participation in cabinet, but note that this time the causality goes from the political power to economic development.

These two very simplified examples predict the result that the author finds for the composition of the Colombian Cabinet during the twentieth century. However, the reasons for this are very different in each example. In the first example economic development generates political power while in the second political power causes a better economic performance. Overall, I find that the discussion of the linkages between political power and economic development are really important to economic development. This is particularly true for Latin American countries, where the existence of a huge inequality could be seen as a hint of the presence of an economic elite that reproduces its privileges over time. However, in order to advance in the understanding of the linkage between political power and economic development, the big challenge is to find exogenous shocks that allow to draw conclusions about the direction of the causality.

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