The road to nowhere: the rise of a neo-patrimonialist state in East Timor

Over the last 9 years preceding 2016, the small half-island state of East Timor has embarked on a massive public spending program, with an emphasis on infrastructure. Over the same period, clientelist and neo-patrimonialist modes of distribution and governance have become increasingly entrenched. Drawing on his personal authority and status as a former guerilla commander, Kay Rala ‘Xanana’ Gusmão has centralized power and decision-making under his executive, bypassing ministerial and parliamentary structures in favor of a parallel set of informal personal networks. As a consequence, development outcomes have been poor at best, while a raft of highly ambitious white elephant projects, in the face of declining government revenues, threatens to bankrupt the state. This chapter analyzes the political economy of public expenditure in East Timor, and the implications and prospects for future development and the rule of law.