Is Myanmar in the process of a genuine democratisation or is it all just a scheme to consolidate power within the established elite and the military? This debate, between the optimists and the pessimists, has been going on ever since the reform process started, but could it be that it is not asking the right question?

Instead of asking whether Myanmar is really moving toward democracy or not, it might be more constructive to look at the changes happening right now from a different perspective, one that is more interested in power structures and informal institutions than in formal institutions such as elections.

Instead of a democratisation, Myanmar’s transition can be seen as a movement from an extremely closed to a slightly more open society. The Nobel peace prize winning economist Douglass North, who passed away in November last year, would have seen Myanmar’s reform process as a movement from a basic Limited Access Order (LAO) to a slightly more mature Limited Access Order (an introduction to the framework is available here).

The LAO framework takes its departure from the fact that all societies must somehow deal with the problem of violence. North and his colleagues define two basic forms of dealing with violence that human societies have used since we first began constructing states.

Open Access Orders are upper-income, advanced industrial countries characterised by open political and economic competition, multi-party democratic political systems, a secure government monopoly over violence and the rule of law. Limited Access Order societies – which includes all developing countries today – solve the problem of violence by dividing up resources and power between the main factions of the elite with capacity for large scale violence. This gives all the important actors an incentive to refrain from violence as instability would decrease their rents.

In LAOs, access to the economic and political systems are limited to the elites, who distribute resources to their supporters through patron-client networks. LAOs are organised around personal networks and connections rather than the rule of law. The advantage of adopting this perspective in analysing a country like Myanmar is that it doesn’t put undue emphasis on elections or other formal institutional changes, but instead focuses on the way power is actually distributed and exercised in the country.

It is clear that there are great differences within the two basic types. LAOs include everything from a wealthy democracy like present day Argentina to a poor dictatorship like North Korea, as well as countries like India and China. LAO societies can move back and forth along a continuum from a ‘basic’ LAO like Myanmar or North Korea, to a ‘mature’ LAO like India. North and his colleagues have described three parameters for analysing where a society lies on the continuum and which direction it is moving in:

1. The extent of rule of law. It will only be possible to establish rule of law when it is aligned with the way the elites distribute resources and power. At first, the rule of law will probably be established solely for the elite. A good example is India: as it is a mature LAO you are unlikely to see the Indian elite use tanks to solve disputes among themselves, but the poor majority of the population has no access to the justice system and anybody challenging local power holders is very likely to end up dead in a ditch. Cambodia is an example of a less mature LAO where the threat of violence is very real even for members of the elite.
2. The strength of organisations that are independent of the state, including private businesses, opposition parties, independent unions, media and civil society organisations.
3. The extent to which organisations with capacity for large scale violence have been brought into a relation with the state, thereby preventing them from exercising violence.

So what happens when we look at Myanmar’s transition in the light of the three parameters that characterize a movement towards a more mature Limited Access Order?

Is the rule of law being strengthened? For the broad population this is clearly not the case. Even for the elite, the use of force in the ‘internal coup’ that removed former lower house speaker Shwe Mann from power was a clear sign that elite relations are not governed by rules. It is telling that the removal of Shwe Mann caused ripples through the economy, as the fate of the numerous businesses tied to Shwe Mann’s personal network was suddenly uncertain. This shows how much the political and economic systems are intertwined and how both are governed according to personal status and connections rather than impersonal rules. This suggests that Myanmar is still best characterised as a very basic form of Limited Access Order.

Establishing the rule of law is likely to happen only in a very gradual manner. Even mature Limited Access Orders such as India have never established the rule of law for the entire population. In fact, establishing the rule of law for the entire population is one of the things that marks the transition from a Limited Access Order to an Open Access Order. This is only achievable at the end of a very long journey of political and economic development and there are few examples of countries that have done this in the last 50 years. The first step along the way is to establish rule of law for the elite, which can then be expanded gradually to other parts of the population.

What about the extent to which people outside of the elite are permitted to organise independently of the ruling coalition? The big test here is how far the military and the established elite is ready to accept a growing role for the NLD. So far, military opposition to constitutional changes points to a lack of willingness to accept an expanded role for the opposition, although the election results will inevitably lead to at least limited expansion.

At the time of writing, the NLD and the military are still trying to negotiate a new power sharing deal. This is obviously a very dangerous time for the country, because there is not necessarily agreement between the main actors about how much power they each possess. Combined with lack of trust on both sides this makes it difficult to come to an agreement. Examples from other countries have shown that elections in LAOs can be very dangerous because they risk disrupting the existing political bargain in an unpredictable way.

The military veto of proposals in parliament to change the constitution to make Chief Ministers accountable to the State and Region Parliaments instead of to the President is also not a good sign for moving the country along towards a more mature LAO. This is not just because it doesn’t bode well for the peace process, but, in light of the LAO framework, because allowing more autonomy to the States and Regions would be an important step towards a society with a more pluralistic distribution of power.

That being said, there is no doubt that Myanmar has already become a lot more open when it comes to the space available for independent political parties, civil society organisations and independent media. More than 90 political parties contested the elections last year, there are now independent trade unions, and an ever growing number of local CSOs and international NGOs are active in all parts of the country. While space for civil society is still restricted in many areas, civil society organisations, political parties and the independent media are constantly pushing to expand the political space and increase access to the political system.

Similarly, more investment will serve to expand access of independent private businesses to the economy. It seems almost inevitable that this will mainly serve to enrich the existing elite in the short term, but a more complex and developed economy is, all other things equal, more likely to also be an economy with more open access for other parts of society.

However, exactly which elites benefit from investment, what power they have and what their interests are, are likely to influence whether increased investment will lead to institutional and social progress. This can be thought of along the lines of Acemoglu and Robinson’s discussion, in their book ‘Why Nations Fail’, of the impact from gaining colonial empires on the institutional development in Spain and Portugal versus the different impact of the same on the Netherlands and Britain. Some of the constraints on Western investments might be useful in this regard, such as EU and US rules forbidding companies to engage in corruption abroad and the US blacklisting of certain ‘anti-reform’ individuals. The sector that investment is going to also matters, with, for example, investment in manufacturing more likely to generate positive change than investment in natural resource extraction.

What about progress towards bringing organisations with capacity for large scale violence into a relation with the state? Despite the signing of a so-called ‘nation-wide ceasefire’ last year, Myanmar’s peace process is in reality stalled. The continuing military campaigns against ethnic armed groups point to a lack of recognition of the legitimacy of these groups’ demands. There does not seem to be much hope for a true nationwide ceasefire anytime soon, not to speak of a political agreement about a federal state that could bring about sustainable peace in the country.

Perhaps even more problematically, the Myanmar ‘state’ is divided between one part controlled by civilian authorities, soon to be the NLD, and another, very substantial part, controlled by the military. It is hard to be optimistic about how well these two parts are going to work together in the future. Bringing the military under civilian control is not up for discussion at the moment and is very unlikely to happen for at least as long as there is still armed conflict in several parts of the country.

In sum, there are reasons for optimism in some areas, but less so in others. No matter what, it should be clear that there is no possibility that Myanmar will emerge as a liberal democracy anytime soon. Anybody wanting to work towards that long-term goal should focus on assisting in moving the country along towards a more mature Limited Access Order.