This chapter analyses the major development achievements of the Bangladeshi economy until today and seeks to identify the major challenges it will have to address in the future. Whether these challenges can be overcome, and which reforms can be undertaken for this to happen, depends in turn on the institutional context of the country. Focusing exclusively on economic and social issues, this chapter first analyses the sources of growth and possible limitations of the present development regime. It then evaluates the financing constraints faced by the economy in general, and by the public sector in particular. It also focuses on sources of concern in social and environmental areas and economic crisis related to COVID-19.

In this chapter, the key findings and arguments of the previous chapters are combined into a synthesis. This ‘institutional diagnostic’ not only provides an account of the most important institutional issues facing Bangladesh but also seeks to identify the complex chains of causality which relate them both to the economic outcomes that they generate and to the proximate causes and deep factors from which they derive. It begins with a summary – firstly of the historical and political context and then of the more specific findings that have emerged from the thematic studies. From this, three basic institutional weaknesses are identified, each of which recur multiple times in the thematic studies – the supremacy of the ‘deals environment’, ineffective regulation, and weak state capacity. In each case, it is explained both how these institutional factors constrain economic development and how they derive from and indeed maintain the political economy context and other deep factors. Some key directions for reform are identified together with a discussion of where the political barriers to implementing them may lie. Some further reflections are made on impact of the COVID-19 pandemic.

Bangladesh is widely seen as a ‘paradox’. Over the last quarter of a century, it has maintained economic growth and has outperformed many countries on social indicators while scoring very low on the quality of governance. Moreover, its economic progress does not seem to indicate significant improvement in comparative institutional indicators. Is the Bangladesh Paradox Sustainable? thus examines whether such a paradoxical combination can be sustained in the long run if growth continues with no improvement in the quality of institutions. It argues that although Bangladesh has become the second largest world exporter in the garments, export diversification is needed, both within and outside the garment sector, if it is to maintain its development pace. Based on a thorough account of the country’s economic, social, and political development, this companion volume analyses Bangladesh’s critical institutional issues in relation with development-sensitive areas such as the garment sector, banking, taxation, land management, the judiciary, and education. This title is also available as Open Access on Cambridge Core.

This chapter elaborates on the general approach pursued in this volume to identify institutional weaknesses that may be preventing growth in Bangladesh from being faster and more inclusive today and that may cause it to slow down in the future. It also provides a brief overview of the political history of the country, without which it is difficult to understand its development achievement, as well as the present political economy context. Finally, in the light of that historical sketch, some reflections are offered on the specificity of the institutional link between business and politics in Bangladesh, a link that very much frames its development and that are often referred to throughout this volume.

In Benin, top businesspeople not only capture the economy but also the executive, and possibly legislative power. This book develops a comprehensive analysis aimed at identifying and reducing the institutional constraints that impede Benins rapid, sustainable, and inclusive development. The research reveals a chain of causality between four main categories of institutional weaknesses in Benin, namely corruption, inefficiencies in governance, opacity in public decision-making, and excessive informality in the Beninese economy. These institutional weaknesses are traced back to proximate and ultimate causes. The immediate causes include political instability, elite capture of key state functions, weakness of the state, and the possibility of easy but illegal rents. In turn, these causes are linked to deep-rooted underlying factors such as the nature of the political game, essentially neo-patrimonialism with multiple economic and/or political Big Men, but also geographical or ethnic factors. We elaborate on policy reforms aiming at overcoming or circumventing these institutional problems.