The price of non-governmental growth

It is well known that since the 1980s, Bangladesh has made astonishing progress on a wide variety of development indicators such as reducing the prevalence of extreme hunger and poverty, increasing primary education enrolment rates, and reducing child and maternal mortality. This progress has been mirrored by an impressive record of sustained GDP growth, spanning decades. In contrast to these successes, the quality of our democratic institutions has languished to the point where they now threaten to undermine all these hard-won gains. This article argues that the provision of public goods and services by non-governmental organisations (NGOs) has not only contributed to these successes, but also to this failure.

Much, if not most, of Bangladesh's development has happened outside the purview of its successive governments. The vibrant community of NGOs and civil society organisations working across the spectrum of development issues have been the principal drivers of progress, and undoubtedly, things like reduced infant mortality are progress. But by satisfying the immediate needs of Bangladesh's citizens, the NGO movement has severed a critical link between us and our government. It has decoupled our access to services that would otherwise be provided by the state, and our ability to effectively demand these services from the state.

The delivery of public goods and services by non-state actors has crowded out not only the capacity of the state to serve its people, but also the capacity of the people to hold the state accountable. And whenever a people have failed to hold their government to account, state policy has followed a predictable trajectory. Unconstrained by the will of the people, the powers that be adopt policies that are designed to extract the nation's wealth for their own enrichment.

It is not hard to list examples of extractive institutions in Bangladesh: overly complicated clearing and forwarding procedures at our ports, a lack of transparency in public procurement, bribes that must be paid before the receipt of most public services – the list is long, and growing. That is because over time, the extractive institutions tend to reinforce themselves. As the political elite divert more and more state's resources under their control, they amass ever increasing means to consolidate their own power. 

For the beneficiaries of an extractive system to continue enriching themselves without effective resistance, it becomes necessary for them to attack people's freedom of speech and expression. This is because extractive policies cannot hope to stand up to the scrutiny of open, public debate. 

The filling of key positions by loyalists rather than by the meritorious is also part of the process of extraction. This helps seal off institutions where we citizens might have sought redress from the influence of the will of the people, which becomes increasingly opposed to the incentives of their rulers. This gradual but deliberate erosion of the responsiveness of political institutions to the will of the people makes the prospect of organising any effective countervailing power within the existing system more and more grim.

So far, however, robust economic growth and the widespread provision of social services by NGOs meant that we, the people, were quite satisfied to pay the dues demanded of us by the extractive system, because we could still get on with the business of bettering our own lives. But robust economic growth and extractive institutions cannot coexist in the long term.

Institutions that are designed to extract wealth are very bad at creating it. At the most basic level, if anything of value can be expropriated by the state, nobody has an incentive to invest in creating anything valuable. If we continue on this path towards ever more extractive institutions, growth will stagnate. 

Once this is understood, our right to free speech, our right to be free of state coercion, and our right to an independent judiciary cease to be the idealised luxuries that our leaders would have us believe. Rather, these things are the fundamental building blocks of sustainable economic growth. And without growth, none of the progress that Bangladesh has made in alleviating the human suffering that is symptomatic of poverty can be maintained.

The ability of citizens to effectively make demands of their government and to constrain the power of those who govern them is the key to long term growth and the sustainable eradication of poverty. The NGO movement in Bangladesh has temporarily circumvented, but ultimately failed to address this necessary condition for sustainable development. In the meantime, we the people, having our basic needs met, allowed the system to pervert the nation's institutions; to silence all dissenting voices; and to coerce our fellow citizens who attempted to organise any countervailing power. Such is the price for decades of non-governmental growth.

The writer is a PhD. student in the Economics Department of the University of Sussex, UK.