The UNDP, Development and Albania

Introduction

This paper will examine the work the United Nations Development Program (UNDP) performs in the state of Albania. As part of this analysis, the effectiveness of this organization's activities will be examined against criteria provided by writers on the subject of development. In addition, the legitimacy and accountability issues of the UNDP will be discussed with reference to key writers on this subject as well.This paper is divided into four sections. The first section will discuss the effectiveness of the UNDP with reference to the literature on development. The second section will examine issues of legitimacy and accountability in transnational organizations. The third section will review the work the UNDP is performing in Albania. This section will also provide some historical context for development issues in the country. The final section, will assess the UNDP's work in Albania. This will be determined using the effectiveness and legitimacy criteria presented earlier the paper.

Development Advice and Approaches

This section will examine the work of Fukuyama , Rodrik , and Acemoglu . The views of each of these writers will be discussed concerning the best approaches to development from a transnational perspective.Fukuyama arguesthat development proceeds along five mutually exclusive development paths. These five paths or dimensions are economic growth, social mobilization, state building, democracy, and the rule of law. The way Fukuyama defines each of these dimensions is discussed next. First, economic growth is defined by the author as simple per capita GDP increases over a particular time period.

Second, political development is said to include three different components. These are, first, state-building which involves establishing a state's legitimacy to a monopoly on coercive authority. The second is the state's capacity to define its territorial boundaries. A third state-building element is the state's administrative capacity. This capacity is defined as its ability to deliver public goods to its citizens, enforce rules and regulations, and collect taxes. In order to successfully manage these responsibilities a state will need an effective bureaucracy.

The second feature in political development is the rule of law. Where there is a clear rule of law the state's capacity to act is limited by certain statutory regulations which are known to all citizens. An effective rule of law is crucial because it forms the foundation for property rights, the settlement of commercial disputes, and to provide protections to civil society and individual rights.

The third feature in political development is the availability of regular competitive, multiparty elections. Fukuyama notes that a truly consolidated democracy has multiple methods to ensure government accountability. These include an active civil society, free press, and the use of separated powers. These methods create checks and balances. They also insure the government remains accountable to an array of different stakeholders.

The third component in the author's development paths concerns social development. Fukuyama defines social development as including a complex division of labor, and the supplanting of ascriptive identity with voluntary identity. It should be noted that, ascriptive identity refers to such categories as race, class, and gender. Whereas voluntary identity is one that is subject to change at any time based on an individual's preferences. The author argues that social development has an intermediate place on the development spectrum between economic and political development.

Fukuyama is careful to point out that economic growth can exist without democracy. In fact, he cites China and South Korea, up until the mid-1990s, as examples of such regimes. He also notes that democracies can experience low rates of growth and autocracies' high rates. There are also liberal autocracies and illiberal democracies. Therefore, the sometimes argued point that democracy works in tandem with economic development is not necessarily the case. Indeed, Fukuyama argues that development should not follow a "one-size fits all approach". That is, development agendas must be tailored to particular national contexts in order for them to achieve results. What worked in East Asia may not be adaptable to Latin America or sub-Saharan Africa.

To this point, he notes that democracy can have adverse results on economic growth if introduced to suddenly. Increased participation can also lead to an increase in redistributive policies which can slow growth. At the same time, in states with low levels of administrative capacity, high levels of corruption, and predatory governments, democratic consolidation may be the only effective path to effective development.

The focus in Rodrik is on the role of governance and institutions in development. The author makes the argument that economists place too much emphasis on the role of governance as a means to an end. Instead, governance must be viewed as an end in itself. He enumerates the elements of good governance as the rule of law, low incidence of corruption, transparency, participation, accountability, and effective institutions. A truly advanced society is one which has achieved the highest levels of political and economic development.

However, Rodrik agrees with Fukuyama, that good governance is not necessarily consistent with economic growth. The standard model that economic growth presages consolidated democracy by increasing the size of the middle class is not seen as a given in all development models. He cites China, Vietnam, and Cambodia as examples where poorly governed societies have achieved high rates of economic growth . However, a developmental agenda that consciously chooses poor governance as a prerequisite is likely to be heavily criticized. This is not to say that weak governance can't limit economic development. But the author argues that strong governance is not crucial to economic development agendas. That is, it is a separate developmental issue, as Fukuyama argues above.

Rodrik also agrees with Fukuyama when it comes to designing a development agenda. Such agendas must take local contexts into consideration when formulating agendas. He also cautions against using the best practices model of economic development without considering local contexts .

Rodrik thus considers the issue of binding constraint. Binding constraints are institutional conditions that act as an obstacle to economic growth. But the same constraints are not evident problems in all development contexts. In some contexts, bad governance may be the problem as in the case of Zimbabwe. The solution would be meaningful regime change. In other contexts, the constraint may be complex regulations are an obstacle to growth. In such contexts, simplifying regulations may be the best way to stimulate growth. In yet another context, lack of competition may be the factor and access to cheap credit may be the solution.

In sum, Rodrik argues that understanding local development contexts is crucial. It's also a mistake to impose external policy agendas on countries. One must first consider what would be the most appropriate strategy for each country.

Acemoglu's focus is somewhat similar to Rodrik in that he is centered on the role of institutions in development. Indeed, the author begins his essay by arguing that economic, political, social and legal institutions are critical to the developmental success or failure of states . The author defines relevant institutions important to governance similarly to Fukuyama. These include the type of political institutions where rule of law is respected. It's crucial for democratic participation and accountability exist. It's also important for an effective state or administrative capacity to exist. The final element for the author is the regulation of economic institutions. The author's thesis is how these different types of institutions interact to produce optimum contexts for development to proceed .

To further develop the author's point, institutions can create incentives or disincentives to development. Thus, in order to pursue an effective development agenda, one must look at the type of institutions that exist in a state. When examining these institutions it's crucial to determine the type of policy outputs that are being produced. If these outputs are producing a climate negative towards a development agenda then reform is necessary. As these organizations function in concert, any reform agenda will have to consider a range of institutions, rather than just one.

One example the author cites is the case of the import substitution model. This model can be a means to spur local manufacturing where foreign competition is particularly strong. However, where foreign competition is weak, import substitution can act as an institutional barrier to growth. It can also act as an inducement to corruption in states ruled by predatory regimes.

Thus each author is in agreement that local contexts must be understood first before designing a development agenda. It's not feasible to produce a single model of development and then impose it without modification in every context. At the same time, such approaches can sometimes produce more problems for development in addition to the existing ones . The next section will discuss issues of legitimacy and accountability in transnational organizations.

Transnational Organizations and Legitimacy

Buchanan and Keohane discuss the elements of a complex standard for determining legitimacy in global governance institutions. They argue for three subjective criteria for legitimacy. The criteria are minimal moral acceptability, comparative benefit, and integrity. Minimal moral acceptability refers to an institutional requirement to not violate the least controversial human rights . The authors understand this standard isn't particularly demanding. However, they argue that it may create opportunities for normalizing higher standards of moral acceptability. Comparative benefit refers to the reality that no other comparable institution exists that can fulfill the same need at a more satisfactory rate. The issue of integrity means that the institution is consistent and impartial in its application of the agreed upon rules and regulations.

In addition, the authors also offer effective epistemic measures to deal with uncertainty generated by external and internal asymmetries of information. A crucial basis for maintaining the legitimacy of institutions is the external watchdog organizations. Such groups or NGOs will monitor the activities of the institutions and call attention to areas they consider to be violations of the general trust. The authors argue that respect for democratic values is important to legitimacy. However, democratic procedures are not needed at the transnational level of organization. Nevertheless, it is important for transnational institutions to maintain the support of individual state members.

The authors define legitimacy, in the organizational context, as having the right to rule. The right to rule implies the ability to formulate regulations and to extract penalties for non-compliance. An example of legitimacy, in a global context, is the power of the World Trade Organization (WTO) to enforce trade rules and regulations via the WTO law. Member states that belong to the WTO acknowledge they are delegating a certain amount of transnational regulatory power and will abide by whatever policy outputs it creates. This also raises the issue of self-interest. The existence of self-interest does not obviate the legitimacy of an organization to act within its rules. Indeed, an institution may act against the self-interest of an individual actor and yet still maintain its legitimacy. Thus the existence of formally agreed upon rules and the consistency in which they are applied reinforces the legitimacy of the institutional actor. As this section has defined what is meant by legitimacy, in the institutional sense, the next section will discuss the work of the UNDP in Albania.

UNDP and Albania

Before proceeding to discuss the work the UNDP is doing in Albania, a brief historical background seems helpful. First, Albania was ruled for centuries by the Ottoman Empire. Then beginning with World War II it was controlled by a Communist dictatorship. This set the stage for a 50 year period of dictatorial rule. During this period, the state was heavily depended upon China and the now defunct Soviet Union for financial assistance. The fall of the Soviet bloc, in the early 1990s, set the stage for a new direction for the once insular country. However, as was the case with a number of post-Communist states, several decades of Communist rule left the nation impoverished due to a mismanaged economy.

Thus the challenge for Albania was how best to transition to a consolidated democratic, free-market system. Furthermore, in more recent years, the European Union (EU) has considered the nation's application to join. Albania, as a prerequisite for membership, must undertake a number of meaningful reforms in order to meet EU requirements for admission. It's notable that the UNDP, since 1991, has assisted Albania in meeting a number of its development goals.

Accordingly, Albania is meeting many of the development requirements that are crucial for admission into the EU. Indeed, it's success in these areas can be taken as a barometer that the nation's development agenda has been an effective one. The UNDP notes that Albania has undertaken reform of its political institutions. The nation now guarantees such crucial governance institutions as participatory democracy, the rule of law, respect for human rights, respect for minority rights, cooperation with neighbors, and good relations with EU member countries. Albania remains a candidate for admission into the EU and joined NATO in 2009. These are fairly positive indications of its long-term commitment to substantive political and economic development.

Economic growth has also been significant in the country and has led to an appreciable decline in poverty. It should be noted that poverty is still high in Albania at 12.4 percent. Also, economic growth has not been evenly distributed across the country. Rural areas and regions occupied by minorities are not yet experiencing many of the benefits of the still transitioning economy.

In terms of legitimacy, the UNDP appears to fill the requirements set down by the writers in the previous section. That is, the UNDP's record on the measures of minimal moral acceptability, comparative benefit, and integrity appear to be quite solid. The institution clearly advocates for minorities, such as gypsies, who are often victims of human rights violations. It's also not obvious what other organization could assist in building institutions at a cheaper cost in Albania than the UNDP. The UNDP has been professional, consistent and according to its website, achieving some important results. Finally, the organization is working with a number of NGOs. These NGOs suggest the UNDP's activities are being independently monitored. It also suggests the organization is being reasonably transparent in its operations. Its accountability is attested to by the continuing membership of 177 member states in which it has current operations.

Conclusion

This brief review of development strategies appears to vindicate Acemoglu's approach to begin with the reform of institutions. Albania is actually a great test case for such a strategy considering its long history as an insular Communist dictatorship. Upon the end of Communism, the nation was left with institutions that were inefficient and not suitable to the demands of a consolidated democracy with a free market economy. In order to accomplish its development objectives, the state's institutions required a massive reconstruction. To that end, the strategy appears to be working.

Bibliography

Acemoglu, D. 'Interactions Between Governance and Growth,' Governance, Growth, and Development Decision-Making, Washington, D.C., The IBRD/The World Bank, April 2008.

'Albania, UNDP.org’ http://www.al.undp.org/albania/en/home.html, 2012.

Buchanan, A. and Keohane, R.O. 'The Legitimacy of Global Governance Institutions,’ Conference on the Normative and Empirical Evaluation of Global Governance, Princeton University, February 16-18, 2006.

Fukuyama, F. 'What Do We Know About the Relationship Between the Political and Economic Dimensions of Development?' Governance, Growth, and Development Decision-Making, Washington, D.C., The IBRD/The World Bank, April 2008.

Rodrik, D. 'Thinking About Governance,' Governance, Growth, and Development Decision-Making, Washington, D.C., The IBRD/The World Bank, April 2008.