Bangladesh has in recent decadesachieved reasonably rapid economic growth and significantprogress in social development indicators despite manyimpediments: the desperate initial conditions after gainingindependence, lack of resources, natural disasters,widespread corruption, and a record of systemic governancefailure. By identifying the sources of growth stimulus andthe drivers of social transformation, the paper addresseswhat it calls Bangladesh's development surprise. Thepolicy-making process is analyzed as the outcome ofincentives created by patronage politics as opposed to thecompulsion for the government to play an effectivedevelopmental role. The paper examines the governance-growthnexus as affecting the pace and quality of growth and itsinclusiveness. If the governance environment has been barelyadequate to cope with an economy breaking out of stagnationand extreme poverty, it increasingly may prove a barrier toputting the economy firmly on a path of modernization andglobal integration. Bangladesh's experience also showsthat it is possible to make rapid initial progress in manysocial development indicators by creating awareness throughsuccessful social mobilization campaigns and by reaping thegains from affordable low-cost solutions. Further progress,however, will require increased public social spending andimproved quality of public service delivery.
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