The business environment consists of several interrelated components; namely, the economic, political, legal, social, and cultural environments which, when taken together, gives an investor an overall picture of the nature of the jurisdiction in which he intends to invest his financial resources.
As economists and financial analysts we often focus on the economic environment because getting economic fundamentals right is a prerequisite for attracting much needed resources to boost economic growth and development irrespective of the size, structure or resource endowments of a country.
In this column, I depart from tradition and zero in instead on the political environment because, at the end of the day, politics does play an important role in determining economic outcomes and hence in influencing how successful or not a country’s bid to attract domestic as well as foreign investment will be in the short, medium and long terms.
The troubling and prevailing economic situation in Barbados is to me a shining case of how politics or the political environment has and continues to influence the performance and prospects of the local economy in the past few years and going forward into 2014 and beyond.
Having just held general elections and taking everything said about the economy of Barbados leading up to, during and in the immediate aftermath of the polls, one cannot fail to wonder what has gone wrong in the domestic economy in such a short space of time.
To me, the answer to that critical question lies within the body politic. Despite all the evidence pointing to a weak economy, a majority of citizens on election day decided to throw their support behind the Democratic Labour Party (DLP) and hence elected that party to a second, consecutive term in office knowing full well that whichever party is chosen to manage the affairs of the country over the next five years would have to do so against turbulent financial and economic waters.
I will be the very first to admit that I have no concrete answer to this question. Nonetheless, I can theorize, following along the lines argued by Simeon Nichter in an exciting article entitled Vote Buying Or Turnout Buying? Machine Politics And The Secret Ballot, published in The American Political Science Review; February 2008.
In the article, Nichter clearly distinguishes between vote buying and turnout buying, concluding that “. . . parties distribute particularistic benefits especially to the poor to influence vote choices . . . . Turnout buying involves a much less stringent monitoring requirement than vote buying – the ability to observe turnout instead of voting decisions – and thus helps to explain why parties might offer rewards even with ballot secrecy . . . . Evidence of turnout buying in Argentina . . . . forces us to consider whether it might be even more prevalent in other contexts . . . . Turnout buying would be expected to be a more significant potential factor in electoral campaigns in countries where voting is voluntary, or where compulsory voting laws are even more weakly enforced than in Argentina.”
Whether sufficient evidence will ever surface to allow us to determine if vote buying or turnout buying had anything to do with the outcome of the 2013 general elections in Barbados, the fact that the DLP was able to win the battle over the main challenger – the Barbados Labour Party – against a now admitted weak economy – simply raises lots more questions than we the ordinary people will be able to answer any time soon.
And that situation is a real shame because now thousands of public servants will soon have to pay a heavy price for the decision made by the majority of those who voted in the February 2013 general elections that left the management of the local economy in the hands of the DLP.
