Understanding Authoritarian Liberal Regimes: Governing
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UNDERSTANDING AUTHORITARIAN LIBERAL REGIMES: GOVERNING RATIONALES, INDUSTRIALIZATION PATTERNS AND RESISTANCE By ASSEL RUSTEMOVA A Dissertation submitted to the Graduate School-Newark Rutgers, The State University of New Jersey in partial fulfillment of the requirements for the degree of Doctor of Philosophy Graduate Program in Global Affairs Written under the direction of Philip Cerny _______________________________ And approved by _______________________________ _______________________________ _______________________________ Newark, New Jersey May 2012 ©2012 Assel Rustemova ALL RIGHTS RESERVED ABSTRACT OF THE DISSERTATION Understanding Authoritarian Liberal Regimes: Governing Rationales, Industrialization Patterns and Resistance By ASSEL RUSTEMOVA Dissertation Director: Philip Cerny This project aims to answer two primary research questions. First, why some authoritarian regimes that export commodities decide to conduct advanced liberal industrialization (ALI) in order to create intensive-growth firms that produce internationally competitive finished goods at home? Second, what explains the success of such industrialization patterns? An original analytical framework is developed. It shows that export of commodities facilitates creation of patrimonial capitalism that is based on commodity and bureaucratic rents. Commodity rents are vulnerable to the Dutch Disease, internal economies of scale and international price and demand fluctuations. Lopsided economic structure is unsustainable, because it losses manufacturing industries and creates budget gaps. Intensive-growth firms are more reliable, because they produce high value-added internationally competitive goods and diversify the export structure offsetting negative trends of commodity production. But these industries require rule of law and competition to survive. Patrimonial capitalism cannot create both requirements. The contradiction between the long-term necessity for ALI and short-term incentives for patrimonial capitalism create a split between the ruler and bureaucracy, because the rulers are ii interested in ALI to keep the power and stability of the existing regime, whereas bureaucrats are interested in keeping control over rents. The rulers design implementation paths for ALI, called governing rationales, to discipline bureaucracy into sharing the vision. However, bureaucrats resist and subvert the proposed reforms by developing a) personality cults that transfer responsibility for ALI upon the ruler and shift responsibilities for the specific reforms away from their offices; b) depoliticize significance of economic and political problems in order to keep the impression of progress and compliance with higher regulations; c) subversive patrimonial activities that help affiliated companies to win the best bids, subsidies and contracts. The hypothesis is that ALI is impossible with bureaucratic resistance, because rulers‘ oversight mechanisms cannot cope with the subversive practices. To prove it, a new analytical framework is applied on two countries that rely on mineral rent (Kazakhstan) and cotton rent (Uzbekistan). iii PREFACE This dissertation is about industrialization patterns in authoritarian regimes that want to shift its commodity-based economy towards technologically-advanced competitive market structure. You may ask why another book on this subject? The relevance of the topic is determined by the recent praise of China as the next model for development. Authoritarian China was able to lift 400 million people out of poverty by forcibly transferring labor and resources across the country, by suppressing calls for more consumption and distribution of profits, and by subsidizing its domestic producers. However, the author of this dissertation is not optimistic, because bureaucratic resistance undermines introduction of two main pillars of market economy: competition and the rule of law. Competition, as the main mechanism of resource allocation, ensures efficiency and quality of production. As firms compete for customers they seek to produce goods of the highest quality at cheapest price. The second component, the rule of law, refers to the ability of the state to enforce law equally to all actors, regardless of status, power, and authority of each individual actor. Technologically-advanced production requires competition and the rule of law, because firms need to determine the quality and quantity of goods to produce in order to occupy larger market share. Commodity-based production suffers from international competition, because its goods are in demand, but in order to expand, states have to constantly seek new fields for crops, new mineral deposits and new labor reserves to grow. Volume, rather than productivity rate is the driving force of production. Under these circumstances, competition and the rule of law are detrimental to patrimonial capitalism, because they undermine extensive growth firms. As pillars of economic liberalism are undermined, industrialization through market mechanisms remains unviable. iv This relatively simple argument took eight long years. Exploration of the political differences between relatively similar primary commodity-oriented countries, such as Kazakhstan and Uzbekistan, inspired me to join Ph.D. program in Politics at the New School for Social Research. Its specialization on the theories of justice and deconstruction of liberalism honed my theoretical skills. I adopted Foucault‘s framework of governmentality as a way of ‗reading‘ liberal practices in authoritarian regimes. As my research shifted towards more comparative politics I transferred to the Division of Global Affairs, which provided incredible support for my ideas. Equipped with the support of Philip Cerny, Frank Fischer, Peter Rutland and Carlos Seiglie I ventured into field research meeting amazing people and collecting information about bureaucratic resistance strategies in both states. The work proved to be truly investigative, challenging, but fulfilling. This dissertation was possible with the generous support of many people and grants. Specifically, I would like to thank my parents who provided extremely supportive and nurturing environment. Michele Heymann, the reader and a dear friend, who spent long hours with me going through every sentence of this dissertation. Certainly, my committee members were my inspiring and extremely patient angels that stood by my side every time. Most importantly, I thank them for the conversations that refined the argument, asked frustratingly difficult questions and nourished my thought. This communication is truly precious and I tremendously value it. I want to express my sincere gratitude to Laura Adams, Sally Cummings, David Bosold, Michael Alleprete and members of the editorial board of the Journal of Eurasian Studies for publishing my work, which is partially reflected in this dissertation. I am also sending much v appreciation to the staff of the Global Affairs program at Rutgers University. Its former Associate Director Alex Motyl, Ann Martin, Desiree Gordon and the Office of International Student Services surrounded me with utmost support and care. My classmates gave me their generous time and ideas. They are brilliant people and I am blessed to have friends like them. Lastly, I also want to thank foundations and grants that helped me to write this dissertation: E. Muskie Fellowship from the US Department of State, Division of Global Affairs at Rutgers University-Newark, Social Science Research Council, Princeton University, Institute for Global Law and Policy at Harvard University, Global Supplementary Grant Program from Open Society Institute, French Academy of Sciences Po, University of Bremen and Volkswagen Foundation. With much appreciation to all of you, Assel Rustemova. 25 April, 2012 vi This dissertation is dedicated to my parents, Svetlana Rustemova and Ilyas Rustemov vii TABLE OF CONTENTS INTRODUCTION Theoretical Contribution ............................................................................................... - 24 - Methodology ................................................................................................................. - 40 - Case Selection ............................................................................................................... - 43 - Data Collection ............................................................................................................. - 44 - Chapter Outline ............................................................................................................. - 46 - CHAPTER 2 LITERATURE REVIEW Macro-Level Pessimists: The Washington Consensus ................................................. - 52 - The Macro-Optimists: Beijing Consensus .................................................................... - 62 - Micro-Optimists, Varieties of Capitalism ..................................................................... - 68 - Micro-Pessimists: Bureaucratic Choice ....................................................................... - 76 - CHAPTER 3 A NEW ANALYTICAL FRAMEWORK FOR ALI IN THE AL REGIMES The Theory of Choice: Explaining Trajectories of Advanced Liberal Industrialization- 84 - The Ethos ...................................................................................................................... - 88 - The Episteme ................................................................................................................ - 94 - The Techne.................................................................................................................