Home > Uncategorized > The World Bank’s annual report and the reemergence of elite theory

The World Bank’s annual report and the reemergence of elite theory

from Jorge Buzaglo and the current issue of the RWER

The World Development Report (WDR) is the World Bank’s annual report on the state of the world economy and crucial economic development topics. However, the 2017 version was atypical because the WDR (World Bank 2017) focused on politics, not the economy. The report, “Governance and the Law,” is symptomatic, not only because of its defection from economics but also for the type of political theory it utilizes.

The WDR straying from economics is not too regrettable because the economic theory that characterized this document was mainstream neoclassicism, and the type of economic policy advice was the associated neoliberal set of recipes labelled the “Washington Consensus.” This change in topic could be interpreted as the result of the growing recognition that mainstream economic theory and neoliberal economic policies have not delivered what they promised; in contrast, they induced increased income stagnation and growing inequality.

The realization of the failure of neoliberalism may even have reached the IMF, that is, the central stronghold of global economic orthodoxy. However, it does not seem as if the increasing doubts about and abandonment of the neoclassical–neoliberal paradigm will find a prospective resolution and replacement any time soon. The present uncertainty about the ruling economic model and policy paradigm reflects an uncertainty about the current global geopolitical evolution, a process of hegemonic transition that may take years or decades to settle. Meanwhile, and characteristically, massive state interventionism (particularly in monetary policy) coexists with orthodox laissez-faire and radical “market reforms” (particularly in labor and social affairs).  

 From Paretian economics to Paretian politics 

The type of political theory found in the WDR 2017 is regrettable and symptomatic of the deeply disturbing changes in the overall ideological and political climate. The sociopolitical theory that is the basis for the report’s analyses and conclusions was “elite theory,” that is, not abstract political theory or democratic theory, but “elite theory.”

The WDR refers to the three, great canonical “elite theorists”: Vilfredo Pareto (1848–1923), Gaetano Mosca (1858–1941), and Robert Michels (1876–1936). Common to these authors, and for elite theorists in general, is the belief – which they take as an objective and unchangeable sociopolitical and historical fact – that a small minority of elites rules all societies and social organizations.

In the advanced lingo of the WDR, “the distribution of elites maps onto the national structure of bargaining power and the formulation and implementation of laws governing the exercise of power” (World Bank 2017, p. 22). The study “reveals that the identity of the influential actors within a ruling elite coalition that decides policy at the national level differs greatly over space, time, and issue area” (Ibid.).

The idea that all societies are governed by elites and can only be governed by elites (i.e., that democracy is simply impossible) is one the central tenets of fascist ideology. At the basis of elite theory is a profound pessimism about the capacity of ordinary people (“the masses”) to understand their own interests and to collectively act in consequence. As we will show, it is not a too bold hypothesis to propound that elite theory emerged as a counterideology at a time and place of intense social struggle by the masses for democratic and social reforms; that is, Italy at the turn of the 20th century. Pareto accepted a senatorship offered to him by Mussolini in 1922, after declining the same appointment from Italy’s postwar government. Michels was awarded a chair at Perugia by Mussolini in 1928. Mosca did not support fascism, but still considered a proletariat dictatorship to be a far greater danger and remained a fervent critic of democracy. We will explore their ideas in the following sections.

To get an introductory idea of social pessimism, consider this quote from Thomas Malthus (1766–1834). Similar to Pareto, Malthus was an economist of aristocratic gloom and a clear contributor to the reputation of our science as a distressing, “dismal science.”

“I would by no means suppose that the mass of mankind has reached its term of improvement, but the principal argument of this essay [On the Principle of Population] tends to place in a strong point of view the improbability that the lower classes of people in any country should ever be sufficiently free from want and labour to obtain any high degree of intellectual improvement” (Malthus 1798, p. 68).  read more

  1. October 31, 2018 at 4:55 pm

    Why is it that the elites always consider themselves highly intellectual but feel that others cannot attain that same goal. We know of a lot of elites who are just as stupid as some of the rest of us. We are unfortunate enough to have a few of these “elites” that are now in politics and attempting to lead the rest of us. The highest shared trait of the elite is that they all went to the same school, they all were given whatever they desired and they all felt that they deserved all the good things that they happened to be born into. Just give everyone a decent public education and the elites will not be needed or missed.

  2. Helge Nome
    October 31, 2018 at 6:59 pm

    The so called “elites” are are really just gangs who look after the interests of their members at the personal interests of same. It is amazing what a few people can get away with by simply colluding amongst themselves. Like creating OUR money.
    That is THE central lever of power and needs to be wrestled away from the crooks.

    • Craig
      November 1, 2018 at 7:48 am


      You’re quite right there, it is about the money and its intelligent economic distribution, and when you realize that the way to accomplish that is realizing what the concept of the new paradigm is…..clarity breaks out all over. Douglas had the right policies, but he didn’t have the advantage of being a contemporary of Kuhn or of having a study of the signatures of paradigm changes. Hence it took my extensions and innovations of his policies to accomplish the change.

  3. November 14, 2018 at 1:24 pm

    Jorge, the views of evolution included in your paper are a bit cockeyed. But first a few observations. First, Malthus was a political economist and demographer. Certainly not an economist as that term is used today. Second, Herbert Spencer invented the notion of evolution, both biological and cultural before Darwin. But Spencer didn’t have the data to get a clear understanding of evolution. Plus, his political prejudices make his evolutionary theory absurd. Which destroyed Spencer’s reputation, but only after his death. Sort of the perfect way to be destroyed. Darwin’s evolutionary theory postulates that species evolve (change) over time. For example, humans. Variations in human genetics and physiology occur randomly. Some improve chances of human (species) survival. Those with these variations thus tend to live long enough to pass them along to their offspring. With each new generation, then the species improves its chances for survival. The theory has been modified somewhat since Darwin. For example, we accept now that evolution is not based on competition, either individual or species. Evolution is unplanned. But neither is it based on cooperation. Culture change is, however, based on cooperation within communities. With cultures being constructed to enhance cooperation within communities, within a species. We also know that biological evolution is an “average effects” process. That is within the species some members do not possess all the biological traits created by random variations favor survival. Thus, aberrant species members do exist.

    Spencer’s Social Darwinism is a different kettle of fish. Engels is correct in his assessment of Social Darwinism. Industrial capitalism (not the capitalism of Adam Smith) adopted Social Darwinism both as a justification for the oppression and violence of capitalism, and as an explanation of why capitalists are well off in terms of wealth while workers and consumers are not. It was simply the result of the “cream” rising to the top. The members of the species who rise to the top, win the competition win because they are smarter, quicker, more coordinated, more aggressive, fitter in all respects than their fellows. There is nothing unfair or wrong about this situation. It is the result of the working of the “law” of “survival of the fittest.” This is nonsense. But a very useful nonsense for would be tyrants and oligarchs of all sorts. And it remains useful today. You hear it from the lips of folks like the Koch brothers, Warren Buffett, CEO’s of financial companies, etc. Some use it harshly, showing no sympathy for those who obviously don’t deserve to survive. Others, like Warren Buffett use it sympathetically, to lament the fate to which evolution has condemned some humans. Whichever version is used, the result if the same. It absolves the rich, the powerful, the just lucky from feeling any empathy for those condemned by evolution. As they say, it’s just how the cookie crumbles. Social Darwinism is one form of elite theory, as you note, but it is not the only one. Elite theories infect and destroy humankind as severely as any biological plague. In terms of societal improvement elite theories are, as you note a dead end. Which means, for me at least that if we don’t rid ourselves of them, when they eventually completely self-destruct, they will take down not only so-called elites but also all of us who are not members of any elite.

    • November 14, 2018 at 5:01 pm

      Ken, I don’t suppose you realise this, but J H Newman’s “An Essay on the Development of Christian Doctrine” was first published in 1845, i.e. written about the time Darwin set out in the Beagle and fifteen years before Herbert Spencer’s “First Principles” were even announced. It is about the survival of truth despite changes in its linguistic form.

      • November 15, 2018 at 12:33 pm

        Dave, correct on all counts. I do have a copy of the book and I’ve tried to read it a few times. But the subject matter seems a bit too heavy.

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