The Limited Access Order (LAO) conceptual framework is an excellent way to understand why developing countries work the way they do, analyze their political and economic dynamics, and formulate policy ideas appropriate to their context. Its focus on power, violence, rents, and elite bargains provides far greater explanatory and predictive power than the standard template that uses developed countries as a model for how countries ought to work. As such, everyone in the development field working in a policymaking role should make use of it.
Created by Nobel Prize winner Douglass North, John Wallis, Steven Webb, and Barry Weingast, the LAO framework argues that:
No one, including the state, has a monopoly on violence . . . An LAO reduces violence by forming a dominant coalition containing all individuals and groups with sufficient access to violence . . . The dominant coalition creates cooperation and order by limiting access to valuable resources – land, labor, and capital – or access [to] and control of valuable activities – such as contract enforcement, property right enforcement, trade, worship, and education – to elite groups . . . The creation and distribution of rents therefore secures elite loyalty to the system, which in turn protects rents, limits violence, and prevents disorder most of the time. Continue reading
The ability to nurture and manage a wide variety of large-scale organizations is essential to any country’s ability to promote economic development. In fact, in some ways economic development is simply a product of a society’s growing capacity to create strong organizations that serve an ever-enlarging number of purposes.
