Capital and Collusion: The Political Logic of Global Economic Development.

Author:Prelog, Andrew J.
Position::Book review
 
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Capital and Collusion: The Political Logic of Global Economic Development, by Hilton L. Root. Princeton and Oxford: Princeton University Press. 2006. Cloth: ISBN 0691124078, $35.00. 335 pages.

In Capital and Collusion, Hilton Root asks, "Why does economic development often fail in developing countries?" His answer involves a historical case-comparison of economic development in Eastern Asia, Pakistan, India, China and Latin America (Chapters 5-9) and makes general comparisons to the "best practice" of development strategies. He shows that economic policy and political environments often interact in unpredictable ways that lead to the propagation of "crony capitalism" or stable economic risk management. At the heart of the matter is the role of trust in the management of risk and uncertainty in early capitalist development. Root shows that methods that work for some regions often fail in others due to cultural contingencies. The book is informative to a reader interested in corruption and competition and the role they play in capital accumulation at the global level. Understanding the relationship between corruption and competition is intrinsic to this approach, as agents seek to maximize benefit for both themselves and their societies.

Root begins the book with an analytical framework focused on the social value of diffusing risk among social actors. By highlighting the origins of economic, social, and political uncertainty, he traces the sufficient causes of slowed growth. Social progress is founded on relationships between economic policy formation, policy enforcement, social welfare and cohesion, productivity, transparency, and political organization. These factors are important in the early stages of development where initial inequality precipitates patronage in developmental progress. Additionally, ill-formed social consensus and organizational infrastructure perpetuate uncertainty that leads to the discouragement of capital investment and the diffusion of capital risk.

Highlighting these origins of uncertainty, Root develops his thesis citing the role of social agents who behave rationally within an immature political and economic environment and how rational action limits the effectiveness in autocratic governance systems leading to heightened polarization of social arrangements. Noncompliance with contractual obligations threatens the market economy when such arrangements are present. Social inequality limits growth by "baring...

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