Political Settlements and Private Sector Actors

Political Settlements and Private Sector Actors

The Political Settlements Research Programme examines how to achieve inclusive political settlements, focused around three core questions.  Political Settlements can be defined as ‘the forging of a common understanding usually between political elites that their best interests or beliefs are served through acquiescence to a framework for administering political power’ (di John & Putzel 2009: 4).

This blog by PSRP member Sean Molloy, outlines a number of ways in which private sector actors may influence how political settlements emerge, and act as internal and external interveners with respect to issues of inclusion.  The blog examines both positive and negative contributions to processes of political settlement formation and inclusion with reference to the PSRP’s three core questions, outlining the potential for further research.

  1. How do different types of political settlement emerge, and what are the actors, institutions, resources, and practices that shape them?

Private sector actors can be relevant to the forging of political settlements in a number of ways, some of which challenge in certain respects the very concept of ‘political elites’ and all of which may provide opportunities for increasing inclusivity. Private sector actors, for example, are often simultaneously both economic and political elites with participants in the formulation of political settlements reflecting this conflation. In El Salvador, Alfredo Cristiani, was both president and a businessman and primary architect of the 1992 peace accord (Banfield et al. 2006).

They can also influence the political settlement as negotiators acting on behalf of government. In Colombia, for example, the government of Andrés Pastrana (1998-2002) appointed high-ranking business leaders as members of its negotiating team when attempting to reach a political settlement with the leftist Fuerzas Armadas Revolucionarias de Colombia (Ibid).

In other less direct ways, private sector actors have also been influential in contributing to the broader environments in which a political settlement can be formed. For example, businesses have been crucial in providing good offices and financial and logistical support during the South Africa peace process; mobilising wider business support for reaching a political settlement to the conflict in Nepal, and galvanising societal support for the peace process in Northern Ireland by lobbying in favour of peace and producing research papers on the economic costs of conflict (Tripathi and Gündüz 2008).

  1. How can political settlements be improved by internally-driven initiatives, including the impact of gender-inclusive processes and rule of law institutions?

The definition of political settlements suggests that a degree of elite acquiescence is necessary when forming political settlements. Intuitively then, altering pre-existing political orders also requires a level of compromise – political elites must be willing to dilute their particular standing within the pre-existing political dispensation in order to give way to additional participants. As suggested above, while private sector actors may be influential in forming these agreements, they can also potentially facilitate more inclusive representation within existing political orders. They may be able, in the name of peace, for example, to convince elite actors that negotiations must take place and that these mediated processes must be inclusive. As an illustration, businesses have been crucial in helping to build trust between conflict participants in Mozambique where executives of Lonrho, the Africa-based mining conglomerate, shuttled between, and socialised with, representatives of the warring RENAMO and FRELIMO groups (Ibid). Private sector actors often possess a degree of influence which could be better utilised when pursuing the goal of inclusiveness.

The extent to which businesses can (and are willing to) push for more inclusive political settlements may vary. Local businesses, for example, may be more able to alter the distribution of power at the municipal level but less capable of doing so at the level of central government. Similarly, the nature of this leverage may derive from nepotistic relationships or societal influence of prominent local businessmen rather than derived from economic standing and potential revenue streams that they might generate. Conversely, in other circumstances multinational companies (MNCs) may be more effective in lobbying change at the level of central government but less concerned with local political arrangements. The ability to influence in these instances may derive more from financial leverage rather than local ties and systems of patronage. However, little systematic research exists on the actual influences of different sizes of companies, thus, while businesses may be potential actors through which to alter political settlements internally, further research is required on the particular nature of these roles in relation to specific contexts and actors.

On the other side, however, and less optimistically, one of the implications of the leverage of PSA is that inclusivity may be impeded through the same processes of political influence. In Guatemala, for example, years after the peace accords were signed between the Guatemalan government and the Guatemalan National Revolutionary Unit, the private sector continued to resist paying higher taxes or to meet donor demands for greater domestic responsibility in peace implementation. Political elites, in this setting, where relatively powerless to effect change- a set of dynamics which are readily identifiable in discussions pertaining to, for example, regulating business actors in less-developed economies. While not focused on the question of inclusivity per se, the case highlights that political actors can be restrained by business in ways that impact on the political settlement and its potential inclusiveness.  This example underlines the importance of understanding the dynamics of the political settlement and the economic forces which affect the degree to which altering the political order is in fact a choice which can easily be influenced.

Similarly, quite distinct from helping to improve the political settlement, private sector actors may also help entrench political elites by forming relationships which impede inclusivity through systems of patronage, clientelism, and rent seeking. Indeed, understanding the nature of economic leverage and its relevance to increasing inclusivity requires understanding the connections between economic and political elites and the potential for the latter to benefit from the presence of the former. These systems of corruption are perhaps one of the most significant barriers facing progressions towards more inclusive societies and have been easily identified in the past in contexts such as Sierra Leone, Liberia, and Angola. Again, understanding the interconnections between business and political order is important in order to understand the more economically oriented barriers facing inclusion.

  1. How, and with what interventions, can external actors change political settlements?

Finally, private sector actors can also influence the political dispensation through direct foreign investment. In other words, they themselves can be external interveners in the political settlement.  Similar to development organisations which intervene in conflict-affected contexts, businesses often face the same risks of entrenching rather than eradicating corrupt practices, or deepening rather addressing horizontal inequalities.

In this light, policy and practitioner based developments of conflict sensitive businesses approaches are beginning to acknowledge and address how the manner in which businesses interventions in conflict-affected contexts can have serious implications on social justice in these settings (Macintosh and Buckley 2015). These developments highlight again not only the risks of conflict insensitive business, but also the potential opportunities of businesses to build peace when they are sensitive to the conflicts. How business interventions affect political settlements, whether for good or bad, requires more research but arguably find a resource and means of working in the development of conflict sensitivity as a concept and a practice.

  1. A Space for further research?

This short blog has only touched on a number of potential implications, further research into the relationship of private sector actors is needed to elucidate the potential impediments facing inclusivity which private sector actors might cause, but also to begin to outline the potential ways in which they may help facilitate inclusion. Research may require a focus on the differences which exist across types and size of business and the differing frameworks and regulatory models for businesses attempt to guide business post-conflict.

Private sector actors have for many years and for good reasons been viewed as anathemas to human rights, development and even peace. Yet in contexts where the post-conflict state may be very weak, the potential role of these actors as agents rather than beneficiaries of peacebuilding, is being increasingly explored. Perhaps now is the time to better understand the implications of these actors as themselves internal and external intervenors and part-creators of political settlements, in order to work to better utilising their capacities to affect change while at the same time curtailing their proclivity to do harm, whether intentionally or not, in the contexts in which they operate or seek to invest.

Photo: *USB* – Creative Commons