The Political Economy of Repression

“Instead of merely demanding that business and government use their leverage to bring about a set of morally desirable results (an agenda and a lexicon that often seem foreign to both), we in the human rights community should make our case in economic terms as well. If we want business and government to be allies in the struggle for human rights, we should treat them as allies until they prove they are not. That means talking in language they understand and advocating interests we share.” William F. Schultz, Executive Director Amnesty International USA, 1994-2006

There is a general idea in the West that political repression causes slowed, stalled, or led to negative growth. Therefore, by introducing ideal human rights practices, greater economic ties could be forged with both businesses and other governments. Yet I will argue that this relationship is not linear. Other factors (or variables) must be taken into account, including resources, state infrastructure, breadth and depth of state institutions and state control, among others.

So how does one examine the economic effects of political repression? Different states use different strategies to persuade or coerce, and control their populations, with varying rates of success, ultimately for the purpose of controlling the allocation of resources. With that in mind, I will examine the World Bank structural adjustment loans issued between 1975 and 1995, and growth patterns both before and after implementation of structural adjustment programs that were tied to the loans. By looking exclusively at these criteria, a temporal and spatial boundary is created that provides a good look at possible correlations between repression and growth.

The Authoritarian Model

For some time the common argument in favor of using repression as a tool for stability and economic growth pointed to China’s growth model as an exemplary paradigm for growth. The model is based on the idea that an authoritarian regime, using repression, controls the spending/saving habits of its citizens, limits or outlaws unions or guilds (thereby limiting wage costs and increasing profits), thereby providing political stability, essential for growth. ¹ The outcome of these controls, then, is remarkable growth allegedly improving the lives of all. Rowan Callick describes the China Model as follows:

“It has two components. The first is to copy successful elements of liberal economic policy by opening up much of the economy to foreign and domestic investment, allowing labor flexibility, keeping the tax and regulatory burden low, and creating a first-class infrastructure through a combination of private sector and state spending. The second part is to permit the ruling party to retain a firm grip on government, the courts, the army, the internal security apparatus, and the free flow of information. A shorthand way to describe the model is: economic freedom plus political repression.” ²

This is a similar model used by authoritarian regimes implementing structural adjustment programs in the 1980’s and 90’s. However, Asa Laurell writes that SAPs (Structural Adjustment Programs) in Latin America caused deeper poverty because the rapid application of economic austerity did not provide for a reasonable transitional period, resulting in destruction of industrial and agricultural enterprises and jobs. Laurell, and Kawewe and Dime argue that SAPs actually caused higher unemployment rates, which destabilized growth due to reduction in consumption and deepened poverty. ³ So the structural adjustment programs, purported to reduce poverty by increasing growth, failed.

What many proponents of the China model seem to miss is that unlike these other states, China maintained, and continues to maintain, firm control over both the depth and speed by which it privatizes state industry and opens its markets to foreign investment and imports, and has only allowed a gradual opening and integration. Also, China did not receive any funds from the World Bank or IMF and therefore was not under the same pressures as states who received structural adjustment loans. China’s economic success is as much a result of the strategies employed to open its economy as those used to maintain social and political control over its citizens. Authoritarian regimes dominated by fiscal responsibilities to the World Bank and IMF were unable to control the speed and depth of their market reforms, and may be why on average many countries who went through structural adjustment programs experienced little change in economic growth. ⁴

Understanding State Repression

Christian Davenport contends that repression is an unreliable tool for social control and that it actually breeds further and stronger opposition. ⁵ Populations were usually coerced into accepting SAPs. ⁶ Yet in the 80s and 90s implementation of these programs were accompanied by high levels of violent repression, with varying results, and of course important human rights issues. Yet is repression in the name of progress worth it?

First we need to clarify what repression is. Davenport states that repression consists of “the actual or threatened use of physical sanctions against an individual or organization, within the territorial jurisdiction of the state for the purpose of imposing a cost on the target as well as deterring specific activities and/or beliefs perceived to be challenging government personnel, practices or institutions.” ⁷ It compels certain types of behavior and, in the case of violent state repression, threatens personal integrity rights to survival and security in order for the state to retain power. Davenport states that repression is consistently influenced by political conflict. When “challenges to the status quo take place, authorities generally employ some form of repressive action to counter or eliminate the behavioral threat.”

In “Precarious Regimes and Matchup Problems in the Explanation of Repressive Policy,” Vince Boudreau identifies various methods of repression as having short and long term goals.⁸ In the short term, repression is used in response to immediate threats against power. The State sets out over the long term to stabilize its power, “deepening state influence…to establish more extensive social control, expanding the state’s reach where it has been overly short.” This way the State can either extend its reach of power to the territorial borders or deepen existing power that encompasses the territory.

Boudreau also asserts that how a state perceives a social challenge depends upon the state’s power resources and the relationship of the challenger to the state’s program of domination. In other words, their threat level will be evaluated by the extent to which “their power resources undermine state actors.” Political power in this regard is in how deeply the state controls social relations. It is not the threat to public order that makes a social organization a threat, but the challenge to state control. This may not mean a challenge through direct action but more a perceived threat “based on what activists believe or want.” He also discusses “match-up” problems. In other words, the state may be weak in certain areas where the opposition is strong (i.e. civil society groups like community or labor organizations). This relationship could define a state’s repressive strategies, wherein one group is systematically terrorized and another, seemingly stronger group, ignored. He says state repression should be understood in terms of the logic of its strategic use of coercion rather than the magnitude of violence. This theory could better explain the success of China in establishing social control while at the same time liberalizing its economy.

So the specific motivation of repression may be best understood as exerting social and political control in order to control national resources. Conway Henderson suggests that economic dissatisfaction becomes a political variable in that in a society with limited resources, the government seeks “workable strategies to allocate scarce goods and to further develop its economy.” ⁹ He says less- or non-democratic governments unable to cope with socioeconomic problems resort to repression to stay in power and manage the scarce resources. “The greater the scarcity, the greater the repression.” The motivation for violence is controlling the allocation of scarce state resources. ¹⁰

Henderson goes even further stating the greater the disparity between rich and poor, the greater is repression. He states that in the spirit of Adam Smith’s principle of the government’s role in protecting the rich from the poor, “elites use the state to guarantee that their economic interests are served.” In the case of SAPs, privatization and distribution of states’ natural resources directly benefited the entrepreneurial classes because they were best positioned to manage and exploit the formerly state-owned assets. In light of the fact that the purpose of SAPs was to stimulate economic growth through immediate, drastic changes, it logically follows that the state would maximize return on its newly privatized resources through dispensation to existing internal business structures and relationships. Less optimistically, and perhaps more realistically, the state’s allocation of resources intensified existing economic disparity, causing rebellion by those underserved, and in turn repression and instability.

External Pressures: World Bank SALs and Repression

Abouharb and Cingranelli discuss how and why World Bank structural adjustment loans (SALs) affect human rights conditions. ¹¹ They say that “austerity measures required by the implementation of structural adjustment conditions lead to worse human rights practices.” This is because structural adjustment conditions required that decision-makers implement policies that cause hardships, caused by resource allocation and, at times, community dislocation, and these hardships often caused protest (at times violent) to which governments responded with repression (usually violent). In developing countries the majority of the population is often poor and reliant on government services, and therefore the most likely to be abused (such as torture, disappearance, political imprisonment or state-sanctioned murder). Abouharb’s and Cingranelli’s analysis notes that in many cases human rights improved the year in which the SALs were received but in the two years following receipt of the loan violent repression ¹² increased significantly. This is likely because any changes by implementing SAPs would not be immediate apparent. It would take a period of time before any effects could be felt and responded to by the population. ¹³ Therefore, it could be said that these SAPs served as a catalyst for further repression by authoritarian regimes.

In “Macroeconomic Conditions and Political Instability,” Mark Gasiorowski writes that political instability causes inflation to increase and growth rates to decline. Through his causal model, Gasiorowski shows that there is a strong relationship between political unrest and macroeconomic conditions. He further states that though “the direction of causality is not clear,” his study shows that political conditions, e.g. instability, have more of an effect on macroeconomic conditions than the reverse (i.e. growth affecting political conditions). This is because instability “adversely affects inflation, growth, and other macroeconomic trends…political instability scares investors.” So the causal relationship is likely to originate with the political condition of a state, and it follows that state efforts to implement economic policy—as opposed to economic fluctuations—may well trigger instability.

Conclusion

The structural adjustment loans of the 1980s and 90s provide a template that helps understand state repression as it relates to economic growth. Already these states faced scarcity of resources or else they would not have needed to agree to conditions that would harm the most vulnerable of their population, the poor. It is unreasonable to expect that states exercise repression to control just for the sake of being in power, this is too simplistic and in a cost/benefit analysis the cost (economic and social) would be too high for the benefit. It makes more sense to look at political power as control over resources, and with scarcity of resources comes the need for tighter controls. The poor suffer because they have the fewest resources of all.

With the austerity measures accompanying SALs, states reduced government spending, privatized industry and natural resources (reallocating them to private businesses, not social interests), and opened up trade to the “free market”, forcing them to compete with more developed nations who were not completely open to the free market — all of this caused increased unemployment and social unrest. Add to this a reduction in social programs meant to cushion those with least access to resources and the need for control becomes more acute. Therefore, once committed to the SAP, states had to implement unpopular reforms while at the same time maintaining social and political control as well as control over resources, and in many cases repression was used to gain and maintain these controls, even though repression is a short-term solution which cannot be proven to encourage economic growth.

So is it possible to package human rights in a way that appeals to the Smithian fulfillment of self-interest, as applied to the entire population and not only to the rich? A more complex analysis of the data used for this study could explore patterns and relationships between a more diverse set of variables, for example types of industry (extractive, manufacturing, agricultural), a comparison of levels of economic success between developing states that strive toward growth while respecting human rights and their authoritarian counterparts. Historically, SAPs do not seem to provide a clear solution to questions of economic development, so perhaps the solution to solving the problem of repressive economies may lie in a softer approach.

Bibliography

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