Power Networks in the Making of Rich in a Poor Country : Strong Ties, Weak Institutions and the Pattern of Development in Bangladesh

In contemporary development studies there is a shift of focus from the state and the market to civil society and interpersonal networks. The claim is that macro institutional success depends on micro institutional foundations. Such a claim is based upon the assumption that informal norms of civil society and networks make people productive. While significance of network relations for economic activities and resource mobilisation is recognized, the positive effects on institutional performance remain conditional. Through a brief review of the dominating approaches to study development and interpretation of the findings of two earlier studies of network influences on economic activities in Bangladesh, this paper argues that positive network effects depend on the pattern of interaction. The interaction pattern recalls the notion of embeddedness, which implies economic activities and goals including access to economic resources and political power are coordinated by networks of relations. Its focus is on various elite networks In Bangladesh. There, like many developing countries, political leaders, top bureaucrats and rich business families have always tended to come together to form power triangles through creation of mutual cooperation and reciprocal dependence. They use their alliances for access to resources and for the exercise of power. They also compete for resources and power, which may take pervasive forms and have negative impacts on institutional performances. This can be viewed as an instance of constraints placed on various state institutions and development as bureaucratic state organisations are hollowed out by elite networks. The concentration of resources and power coincides with a parallel erosion of institutions