Paper short abstract:

Because unequal distributions of power shape interactions, institutions, and developmental prospects, functional development requires resolving collective-action problems of creating credible limits on exercises of power. A theory of power dynamics, thus informs developmental analysis and policy.

Paper long abstract:

This paper presents a conceptual framework regarding how unequal distributions of power condition economic and political interactions, rules, and development. It opens by defining power, with attention to its three dimensions (or faces), before proceeding to key sources—access to resources, institutionally designated positions, and ability to resolve organizational collective-action problems—and then its manifestations (de facto and de jure). Underlying theory merges a game-theoretic approach to triadic power, whereby one party exerts power by influencing relationships between two (or more) others, and gatekeeping (invisible) power—whereby a hidden party influences interactions among others by limiting access to desired transactions. Two developmental hypotheses follow: (1) Unequal distributions of power shape the creation, evolution, and demise of economic and political institutions. Moreover, because power’s third dimension involves shaping others’ conceptions of the nature or even existence of conflict, narratives and discourse shape exercises of power—especially triadic and gatekeeping power—for those in positions to do so. (2) Powerful parties, left to themselves, cannot credibly commit to refrain from using their power for their own future benefit. Myriad variations of holdup problems follow. Elites and powerful organizations may not only block potentially beneficial economic innovations or political reforms, they can maintain their positions by doing so. Jointly, these hypotheses imply an additional set of developmental collective-action problems related to establishing social mechanisms for credibly limiting exercises of power, so that the less powerful encounter reasonable prospects for investing time and resources into economic and political activity. Analysis and policy implications follow from this logic.