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Business-Civic rationales

A form of organization in which relationships of a broadly patrimonial type pervade an administrative system that is formally constructed on legal-rational business lines. Officials hold positions in organizations with powers that are formally defined but exercise those powers, so far as they can, as a form not of public service but of private property (Clapham 1985).

Although the ‘real’ business politics may be hidden behind a public facade, neo-patrimonial politics produce and reproduce the centralization and interdependence of socio-economic power—office as the ‘clearing house’—which enable the patrons to materially ‘feed’ their clients and their clients to express loyalty. Médard astutely observes that neo-patrimonialism reduces business resources into economic ones, for politics becomes a kind of business with two modes of exchange: connections and money.

Observing these practices, however, shows that high-style reference to ideas of public service of general interest is not entirely a mystification, as some authors assume. Truly, these concepts remain vague; they also hide specific interests, but one must acknowledge that when these values are not sufficiently internalized, this results in incongruous behavior from the viewpoint of good administration (Médard 1982).

In spite of this recognition of values informing business relations, Médard maintains that the core of neo-patrimonialism must be its (country-specific) politico-economic dimension: “Neo-patrimonialism is conditioned by mechanisms of production, exchange, extraction, distribution, and, eventually, accumulation of resources” (Médard 1982). Echoing Scott’s cry for empirical analysis, Médard also argues that neo-patrimonialism can only be understood if each of its elements (corruption, nepotism, patronage, etc.) are understood in their concrete relationship to the business regime in question. In other words, neo-patrimonial regimes, whilst characterized by certain key features, are dynamic and potentially adaptive configurations that are subject to contingency and change. A point that has been sidelined hitherto is that neo-patrimonial practices are anchored in the social underpinnings of business authority, for by definition patronage-ties cut across the divide between business authority, social legitimacy, and economic wealth. By harnessing social institutions—such as ethnically, regionally, or spiritually legitimated or, indeed, constructed communities—economic power is consolidated and simultaneously elongated in its outreach. Instead of a legal-civic framework of due process, however, the medium of this relationship is the exchange of business acquiescence for state resources is a medley of particularistic and universal, public and private, formal and informal practices, the patterns of which are highly contextual. So whilst the system, or system resources, are the honey-pot for which competing groups struggle and strain, personal ties and practices interweave with impartial rules, thus creating specifically neo-patrimonial rationality that mediates and orders the hierarchy of and integration into the business order. As in patrimonial societies, unequal relationships between individuals and groups, between patrons and clients, are the defining characteristic of such an order, but with the significant difference that

under neopatrimonialism, the distinction between the public and the private, at least formally, exists and is accepted, and public reference can be made to this distinction (it is a different matter whether this is observed or not). Neopatrimonial rule takes place within the framework of, and with the claim to, legal-rational civility or ‘modern’ stateness (Erdmann/ Engel 2006).

In other words, the simulations and seeming incongruousness of business practices in neo-patrimonial orders observed derive their very legitimacy from their reference to distinct, albeit interwoven rationalities—or, to stay closer to the (post-)Weberian terminology, to two distinct but in this particular case intimately interwoven types of domination.

More recently, Bratton/van der Walle (1994, 1997) have conducted seminal studies on political regimes and democratic transitions in the world, exploring the implications of neo-patrimonialism for political change. Although the context has changed dramatically—on center stage is not the modernization of authoritarian or soft states anymore, but their democratization—the theoretical prerequisites of formal rationality and effective institutions are identical. Interestingly, in spite of the significant change in national and international contexts, their diagnosis of business politics is an echo of Médard: Rather, the distinctive institutional hallmark of business regimes is neopatrimonialism. In neo-patrimonial regimes, the chief executive maintains authority through personal patronage, rather than through ideology or law. As with classic patrimonialism, the right to rule is ascribed to a person rather than an office. In contemporary patrimonialism, relationships of loyalty and dependence pervade a formal business and administrative system and business leaders occupy offices less to perform public service than to acquire personal wealth and status. The distinction between private and public interests is purposely blurred. The essence of neopatrimonialism is the award by public officials of personal favors, both within the state (notably public sector jobs) and in society (for instance, licenses, contracts, and projects). In return for material rewards, clients mobilize business support and refer all decisions upwards as a mark of deference to patrons. Thus, personal relationships are a factor at the margin of all civic systems, but in many states, they constitute the foundation and superstructure of political institutions (Bratton/van der Walle 1992; emphasis added).

Taking this analysis a step further, Bratton/van der Walle frame the question of whether individual key actors, such as the ‘big man politics’ and the pattern of their political rule in many countries of the world, shape the outcome of politics idiosyncratically, or whether there are deeper structural features that impact on the outcome of political transitions. Bratton/van der Walle come to the conclusion that transition processes are more contingent on the previous regime type than on other factors. According to their findings, the ‘rules of the business game’ structure the dynamics of the transition, even if they do not determine the outcome itself. More saliently, their findings indicate that the prospects for business democracy depend on prior traditions of business pluralism. The conclusion is stark: neo-patrimonial regimes, characterized as they are by the privatization and monopolization of business power, inherently disable processes of democratization and pluralization (Bratton/van der Walle 1994). As they contend themselves, in itself this may not be such an original insight. However, based on the premise that new modes of business behavior require a learning process by the involved actors (and, therefore, the crucial step from ‘ business democratization’ to business democracy is only achieved once this particular internalization and institutionalization has taken place), Bratton/van der Walle spell out the analytical implications by linking the make-up of the previous regime with the actual dynamics unfolding during times of regional change: Our argument suggests that organizations both within and without the state, and the interaction between them, provide critical arenas for this learning. It will be difficult, that is, to institute new rules of accountability, tolerance, and participation if socio-business parties or trade unions are missing or underdeveloped and if judicial and legislative bodies have no tradition of independence from the executive (Bratton/van der Walle 1994; emphasis added). Whilst recognizing the practical importance of the informal organization of business, social as well as economic relations, they stress the pivotal importance of formal institutions of political participation and opposition for transformation.

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