Session 4 Nicolas van de Walle, African Economies and the Politics of Permanent Crisis, 1979-1999



Download 78.87 Kb.
Date conversion15.05.2016
Size78.87 Kb.

Session 4

Nicolas van de Walle, African Economies and the Politics of Permanent Crisis, 1979-1999




INTRODUCTION

Although some countries (Botswana, Mauritius) are prospering, most sub-Saharan African economies have not recovered from the crisis of stability resulting from the first oil crisis. Severity of crisis has waxed/waned, but never left. In the meantime, most Africans are poorer today than 20 years ago. Recent growth spurt may bring better prospects, past spurts have petered out and the bottom line is that the African region is more marginalized and poorer than anywhere else in the world.


Couple facts on Africa:

  • 10% of world population, 1.1% of world GDP

  • includes 15 of world’s 20 poorest countries

  • foreign debt=>$84 billion in 1980 to $227 billion in 1996

  • even in Ghana, a “success story”, debt went from $1.4 to $4.2 billion and is still poorer in real GDP terms than it was in 1970

Why? Book answers questions with political explanation for persistence of crisis and failure of reform through an emphasis on several salient political features of most African economies.


In his cursory review of the structural adjustment policies, van de Walle notes that sub-Saharan Africa is replete with International Finance Institutions (IFI- which generally means the IMF and the World Bank) and bilateral aid packages. In 1996, average African country (excluding Nigeria and SA) received approximately 12.3% of its GDP in ODA (Overseas Development Assistance). Why have these failed to engender reform, especially when 1/3 to ½ of the money was specifically targeted towards reform?
Different views:

  • mainstream economists blame economic policies of African governments and sought structural adjustment programs

  • African governments stressed the international crises

  • Certain critics argues for unfair burden of adjustment on poor

All agree that good macro policies are a pre-requisite for growth . Thus, locus of debate is less what is good policy than how to achieve good policy.


Though predictable variables such as trade, inflation, deficit, physical capital and human capital can explain much of variation, a dummy variable (which means a binary variable, 0 for yes and 1 for no) for African economies (as opposed to non-African) is highly significant, suggesting that specific African characteristics are not captured by the cookie-cutter list of variables. Some of the dummy variable may capture factors such as geography or initial income levels, politics also helps explain the growth differential.
Debate over structural adjustment is unhelpful because 1) structural adjustment programs have rarely been fully implemented and reform has been manipulated for political advantage 2)this debate is atemporal and does not account for path dependency (i.e. history matters) 3) fails to account for political or managerial issues and assumes that Africa has the same capacity as other states to implement reform.
Van de Walle sets the tone for the rest of the book by asserting that political institutions explain African crisis and contends that successful reform will not be an African reality until regional politics are reformed. Urgent need to incorporate political economy approach in IFI approach – one ambition of book is to demonstrate how this may be done.
Outline of Book:

  • Chapter 1 contends African states combine high levels of autonomy w/ low levels of capacity in a context where non-state actors are poorly organized and weak.

  • Chapter 2 focuses on poor record of partial reform implementation between 1979 and 1999 and suggests need for new, state-centered framework to understand African crisis

  • Chapter 3 provides framework suggested in Ch 2 – policy outcomes result from clientelistic needs of patrimonial states

  • Chapter 4 shows how these dynamics conditioned state response to emergence of 1970’s crisis

  • Chapter 5 examines role of aid and holds that donor support for policy sustained and extended post-colonial order. 1990s were different because structural adjustment had corrosive effect on state capacity, aid flows are declining, and civil society in Africa is reawakening.

  • Chapter 6 reviews the post-1989 democratization wave in Africa and speculates that the change may serve to make governments more accountable and improve economies

  • Chapter 7 examines stability of status quo and speculates as to which factors may induce a positive change.

Van de Walle posits two caveats – the book is not a public policy but a political economy book. Thus, it is not a comprehensive review of African problems. Second, there are clear sub regional variations in SS-Africa. But similarities are too striking to ignore.




CHAPTER 1 Approaches to Africa’s Permanent Crisis



Summary: Ch. 1 summarizes theories of economic reform in Africa; most literature has had a “societal focus” asserting that organized interest groups are generally the primary obstacles to implementing economic reform. The author argues that in Africa nonstate actors are too weak to play this role and that gov’t institutions themselves have impeded reform.
Rationale for theory of social opposition to reform: When challenged by interest groups, governments will choose political stability over economic growth in order to stay in power.

Challenges to this theory:

  • Empirical evidence doesn’t show that groups are able to block reform w/organized activism.

  • Societal groups in Africa are LESS organized than in other developing countries, but there has been less progress on economic reform in Africa.

  • Not enough attention paid to interest groups’ organizational capacities, ability to influence policy, and resources (all of which are much lower in Africa).

  • Many African gov’ts have coopted or outlawed economic interest groups.

Exceptions: Kenya, Namibia, Zimbabwe

  • Many African households have multiple economic interests so are not committed to specific policy regimes.

When relying on interest group arguments, how do you explain when reform DOES occur? Acceptable reform theories should explain how change takes place.


Strategies used to defuse public opposition to economic reform (“reform mongering”):

  • Manipulate speed, timing and sequencing of reforms

  • Maintain viable coalition of support – avoid injuring all coalition members at once

  • Compensatory payments

  • Public education campaigns

  • Obfuscation/ambiguity (to confuse opponents)


Role of state autonomy in success of reform:

  • Empowerment of effective technocrats (tradition of professionalism)

  • Institutional circumstances; tradition of independence and degree of “insulation” from popular pressures

  • Constitutionally based independence of central bank

Questioning commitment to reform of African leaders:

May just undertake reform programs to please creditors – no intention to carry them out.

Reformist technocrats have emerged less frequently in Africa than in L America or E Europe


Crisis Politics: Leaders will favor reform when status quo leads to a major crisis.

Challenges to this theory:

  • Political survival of leaders may be tied to previous policies

  • When political implications of new policy are uncertain, approach is often incrementalism

  • Economic crisis not necessarily political crisis – leaders may not feel threatened by economic failure (esp in Africa)



State Autonomy in Africa


  • Limited capacity of African states

  • But – African states have been remarkably durable, even those w/disastrous economic records. Why? Poorly developed civil society, weak “political nonstate actors” (i.e. political parties)

  • Author argues that state autonomy in Africa does not imply capacity or strength.

In Africa, impediments to implementing reform are found within state itself. 3 domestic factors: clientelism, low state capacity, and ideological preferences of decision makers.

Aid relationship w/Western donors has exacerbated obstacles to reform and propped up weak states.


Neopatrimonialism Political authority based on granting favors. Clientelist regimes produce interventionist economic policies and result in fiscal crisis. (cronyism depletes national revenue). States are more likely to eliminate “low-level” rent-seeking than combat corruption at high levels of gov’t. Autonomous state elite can manipulate reform process for enrichment.


State Capacity: Ineffective civil services – weak tax/tariff collection & rule of law. Rent seeking. Low levels of capacity can be preferred by state actors – ease of manipulation.

Elite Beliefs: No policy consensus has emerged in Africa around structural adjustment (econ reform)

Foreign aid = largest employer in most African economies. Aid lessens incentives of African gov’ts to undertake policy reform – sustains state institutions but strips them of decision-making power.

CHAPTER 2 Patterns in Reform Implementation



Summary: Author addresses the question: How much policy reform has actually occurred in Africa in the last 20 yrs? His conclusion: Pattern of partial reform, progress in some areas not in others; overall government “consumption” has increased (bigger states).

Section 1: Empirical record – policy outcomes in Africa


Conclusion: Policy environment has changed LESS than commonly argued.

Section 2: Record of policy reform implementation


Conclusion: More progress on stabilization policies, less on institutional reforms. Most progress vulnerable to reversal and manipulation.

Author considers stabilization policies (restore macroeconomic balance) vs. structural adjustment policies (alter basic economic institutions to foster growth).



Stabilization Policies – progress on:

  • Cutting fiscal and current account deficits

  • Sustained exchange rate reform

BUT – progress is too recent (1990s) to tell if it will be sustainable – if so, will need significant external support (foreign aid in African countries can total 1/10 of GDP). Also, budgetary manipulations distort numbers.

Author includes data showing that gov’t revenues have NOT increased in Africa through stabilization process (still only 19 – 20% of GDP)


Structural Adjustment Policies


Progress on:

  • Price liberalization

  • Liberalization of bank credit and interest rates

  • Privatization transactions completed in a number of countries

Again, positive trends are recent and MORE ambiguous than for stabilization policies.

(-) Factors:



  • Policy changes often only on paper – “virtual reform.”

  • Gov’ts continue to intervene, even after deregulation.

  • Gov’ts have retained monopoly on marketing of imported foods.

  • Even less progress on trade reform; higher levels of protectionism than in other parts of developing world.

  • Gov’ts resist privatizing biggest public enterprises.

  • Little progress on civil service reform.

Neglected Issues: (areas neglected by donors) judicial sector reform, health sector reform, inadequate investment – poor infrastructure, declining agricultural productivity,

Section 3: Political interpretation of the evolution of public spending


Summary: Reform process has been manipulated by gov’t leaders to protect expenditures that serve elite interests.

Author uses data on public expenditures from African countries – but many missing values so difficult to interpret. General trends:



  • Although states are of proportional size, they provide relatively fewer services; disproportionate amt spent on salaries.

  • Some evidence indicates African gov’ts spend smaller percentage on improving citizens’ welfare.

  • BUT – when you factor in foreign aid, public expenditures have grown despite economic crisis.

  • Common response to economic crisis was to protect position of state – cut investment and developmental activities more than overall expenditures (i.e. salaries).

  • Growing donor role in development activity – 1/3 to 2/3 of education/health services now bypass the state.

  • Shift from spending on lower civil servants to spending on “sovereignty” – i.e. defense spending, diplomacy, gov’t offices etc. Author gives examples like increase in cabinet sizes and continued large presidential expenses.

Conclusion: Patterns of reform implementation are best explained by desire of state to protect itself, particularly state elites, from fiscal austerity.

CHAPTER 3: Decision Making in Post-Colonial Africa



Summary of the summary:
This chapter begins to explain the patterns in reform implementation observed in the last chapter, by focusing on the domestic origins of economic policies in Africa over the course of the last twenty years.
This chapter argues there are three sets of related obstacles to policy reform within the state apparatus itself: first, the state’s neo-patrimonial tendencies, second, its low capacities and third, its ideological biases. Van de Walle specifically pointed out the negative synergies between these three factors.

Body




NEO-PATRIMONIALISM

THE EXIGENCIES OF NEO-PATRIMONIALISM


The post-colonialism regimes lacked popular legitimacy. To establish political order and sustain their hold on power, the new rulers established a system which combined the authoritarian legacy of the colonial administration and village traditions of patrimonialism. These structures were varied through time and regions.
THE CHARACTERISTIC OF NEOPATRIMONIAL REGIMES
Africa’s neo-patrimonialism regimes had four characteristics.


  1. Clientelism: The first characteristic was the resort of the regime to clientelism to gain and maintain political support. It was argued that, clientelism helps to redistribute income and assets through out the economy. But tentative data about patterns of inequality in Africa suggest that clientelist political systems exacerbate income inequality and in no way not redistribution mechanism.

2. Access to State Resources: Clentelistic practices were largely based on privileged access to state resources. One inevitable consequence was prevailing corruption that weakened the economy and developmental effectiveness.




  1. The Centralization of Power: The third attribute is the centralization of power around the president. Powers were highly centralized around the president in African states after independence.




  1. Hybrid Regimes: In neo-patrimonial states, informal institutions-namely, the above three characters-coexist with the formal dimensions of a modern state. The exact relative power of each tendency varies through different countries and time period. The structure of incentives that individuals face within decision-making institutions often determines which will dominate.



II. STATE CAPACITY

There is a central paradox in post-colonial Africa: the paradox of a dramatic improvement in individual capacity accompanied by an equally dramatic decline in institutional capacity.


This should be perceived as the direct consequences of the formal policies and informal practices of governments for which a developmental state apparatus is not a high priority. Examples are excessive africanization of the administration soon after independence; non-merit-based hiring and promotion policies and low wages of the civil servants. All these undermined the quality of the civil service.
Van de Walle emphasized that in post-colonial Africa, there has often been a negative synergy between capacity and neo-patrimonial tendencies. In other words, low state capacity has facilitated various rent-seeking and corrupt practices pursued by leaders.

III. THE IDEOLOGICAL CONTEXT

By the late 1980s, there was broad agreement on some basic principles of sound development policy often referred as the New Liberal Orthodoxy (NLO). Van de Walle generalized three principles as the core of the NLO based on Williamson’s study.




  1. Fiscal discipline: Government should pursue stable macro-economic policy.

  2. Outward orientation: African economies will benefit from a long-term reduction in protection and an increase in competitiveness to increase exports.

  3. Reliance on Markets: Government intervention should be limited where markets function well.

But the Africa of 1980 was largely hostile to the NLO. Policy elites instead favored the principles of import substitution industrialization and systematic state intervention.


There are several premises seeming to underlie this hostility. First, the NLO is assumed to imply increases in income inequalities and poverty. Second, the NLO is argued not to apply well to Africa’s specific case. Third, it is feared that the NLO serves the interests of international capital and will enhance Africa’s economic dependence on the west.
Conclusion:
The above three factors which are internal to the state combined to determine the Africa’s economic performance in the post-colonial era and also largely explain the reaction of African decision-makers toward the economic crisis fully emerged in the late 1970s.

CHAPTER 4 State Responses to the Permanent Crisis



Summary of the Summary:
This chapter explains how state officials responded to the crisis. It seeks to explain the patterns of partial and failed reform that were described in Chapter 2.
This chapter is divided into three sections. First section deals with the political adjustments that state elites have made to the evolving crisis. Second section exams the evolution of impact of the economic crisis and of failed adjustment efforts on African attitudes to the crisis. The last one focuses on the political consequences of two decades of partial reform.

Section I




The Adjustment of Neopatrimonialism

Fiscal austerity, donor calls for liberalization and the donor efforts to bring about economic liberalization and real institutional reform pose challenge to state elites.


Having understood that partial reform and the actual implementation process would provide them with new opportunities of rent seeking, policy elites begin to use structural adjustment programs to strengthen neopatrimonilism.
First, they attempt to redesign to recentralize power in order to more carefully manage the reform process.
Second, they attempt to redesign rent-seeking networks to make them more compatible with the new fiscal and economic realities.
Third, the state withdraws from development activities, focusing on sovereignty expenditures while at the same time allows the donors to largely play the developmental role by producing the public goods. There are two reasons for this withdrawal. On the one hand, government can keep their elite coalition together by concentrating resources on sovereignty issues, which benefit the policy elites most. On the other hand, once a development project is privatized, state elites can undertake it and make profits.
Section II

The Viability of Reform

Van de Walle argued that economic idea have limited autonomous power over material interests in terms of economic policy making.

Decision makers assess the viability of new policies on three levels: the political, the economic and the administrative.



Political Viability

Political viability refers to the political appeal of the proposed policy changes. The adjustment programs are unpopular with the population in Africa. But available data do suggest that the unpopularity of those programs has more to do with the perception that they are implemented to benefit elites than with their inherent merit.



Economic Viability

Economic viability refers to the perception that a set of economic ideas will provide solutions to an economic problem. In Africa, people generally believe that the reform will bring little good, if at all. Underlying reasons are: 1. Pessimism about Africa’s economic potential; 2. Absence of policy learning in Africa; 3. Lack of outside inputs into economic decision making.



Administrative Viability

Administrative viability refers to the sense that the state apparatus is capable of implementing the new set of policies. The dominant understanding here is that the state capacity will be weakened by the economic reform.



Section III




The Consequences of Partial Reform

Van De Walle believes that the process of partial reform weakens state capacity further and thereby strengthens neopatrimonial tendencies within the state. In the long run, this makes real reform less likely and in some cases, can lead to substantial state decay.



Liberalization and Rent seeking

Economic liberalization reform programs in Africa have resulted in an increase in rent seeking. Possible answers are 1: the political culture and attitudes in the region; 2. Liberalization programs can result in increases in corruption, if liberalization in one market creates new opportunities for rent seeking in another, which remains regulated.



The Decline of Capacity

The extended austerity and the way in which the adjustment processes has been implemented together weaken bureaucratic rationality and reinforce the patrimonial tendencies of these regimes.


CHAPTER 5 The Crisis and Foreign Aid.
In this chapter the author argues that the nature of foreign aid regimes to Africa actually slowed down the pace of economic reforms and helped sustain the neopatrimonial governments. Two distinct aid regimes are described – the postcolonial aid regime (immediate period after independence) and the adjustment regime (1980s-1990s), as well as the their impact on the decision making processes in the region and the resulting policy outcomes.

Features of the postcolonial aid regime:


  • After decolonization the inflow of foreign development assistance rises dramatically. By the early 1980s, almost every developed OECD country has a foreign aid program in place targeting the African countries.

  • The African countries adopt policies of economic planning (3- to 5-year terms) in which the capital gap needed for the desired rate of economic growth is filled by foreign aid. Ultimately, the countries are expected to replace the foreign capital with domestic funding as the economic growth in the region increases.

  • All in all, the postcolonial aid regime is characterized by a great number of international agencies providing foreign aid to the African countries almost at random, with minimal coordination and evaluation of the resulting outcomes. The inflow of foreign aid does not seem to be dependent on the performance of the African economies or on the African governments’ policies. The international community is committed to increase the supply of capital to Africa or to maintain existing levels of it in the foreseeable future regardless of the outcomes. The African governments develop a sense to entitlement to foreign aid.


The impact of postcolonial aid regime:


  • The practices on economic planning are soon deemed disappointing as no move is made towards replacing foreign aid with capital generated from domestic growth.

  • As a result, the international donors establish their own monitoring and evaluating agencies in order to escape the growing corruption and ineffectiveness of local governments. However:

    • These new structures undermine the authority of local governments,

    • Drain trained staff from the governmental institutions.

While some African governments try to establish domestic ministries to oversee and coordinate the inflow of foreign aid, they lack the skills and institutional capacity to effectively manage the enormous inflow of foreign assistance. Regardless, the foreign aid continues to arrive and the governments ultimately have no incentive to invest in more effective aid management systems.

  • Exception: Botswana. Aid is carefully integrated into the process of economic planning and development. The government demonstrates a sincere commitment to economic development (it is the least corrupt government in the region).

  • Overall, in the 1960s-1970s the foreign aid mainly fuels government consumption and arguably leads to a higher level of corruption among the African governments. “Voracity effect” – as the amount of incoming resources increases, so does the level of corruption. The domestic fiscal resources are exhausted and the motivation to seek donor support for the purposes of self-enrichment becomes more important than the pursuit of economic growth and development in the region.

Features of the adjustment regime:


  • Reasons for reforms:

    • Early 1980s – emerging economic crisis in Africa (due to international economic volatility of the late 1970’s), it is feared that Africa might default on its debt obligations.

    • Growing critique of the existing aid regime – the internal rate of return to development projects in Africa is lower than elsewhere in the world.

  • The African governments are blamed for the failure to successfully implement reforms. A program of structural adjustment is proposed that would involve a domestic policy reform and would focus on longer-term goals rather than merely short-term stabilization. The consensus among the international community is that structural adjustment is typically very destabilizing to the local governments. Therefore, increased inflows of foreign aid will be required.

  • The donors introduce conditionality into the process of foreign aid: the governments agree to implement specific sets of reforms in exchange for the foreign aid. Donor management of the reform process became more intensive and increasingly invasive of government decision making. However, the rhetoric of conditionality leads to little action on the part of the donors when the conditions are not fulfilled. Regular rescheduling exercises became an almost annual ritual for many African countries and funds continue to come in regardless of the African governments’ actions. Once again, the governments have no incentive to change their policies since there are no repercussions or rewards forthcoming.

The impact of the adjustment regime:


  • Partial reforms are achieved with this new approach as well as relative political stability.

  • The emergence of aid dependency syndrome in the region – foreign aid constitutes a large share of GDP, the budget is largely financed by donors, many countries depend on the physical presence of donor organizations in the country for foreign exchange. Aid substitutes itself for core government tasks and the key government functions dealing with economic development and growth are dominated by foreign organizations dispersing the funds.

  • The adjustment regime is not a transparent process, it encourages closed style of decision making.

  • The regime leads to further decline of economic planning.

  • Ultimately, weak neopatrimonial governments remain in power.


Concluding remarks:

  • The mid-1990s are marked by the gradual breakdown in the adjustment regime since

    • The policy objectives have changed,

    • The end of the Cold War leads to a wave of democratization in Africa,

    • The amount of aid flowing into the region cannot increase indefinitely,

    • The criticism mounts due to the lack of clear success stories.

  • New development / funding policies by the international community emphasize institution building and the role of state, as well as local ownership and governance building. It is too soon to comment on the results of this new approach. The bottom line – for successful reforms to materialize the push ought to come from within the countries rather that be imposed by donors. The current wave of democratization represents that window of opportunity.



CHAPTER 6 Democratization and the Prospects for Change

Summary: Spread of the “third wave” of democratization in Africa in the early 1990’s was the most significant political change since the independence period. The region witnessed significant political liberalization through movements towards the establishment of free press, opposition parties, independent unions, and civic organizations autonomous from the state. By the end of 1990s’, almost all states were officially multiparty democracies, even if democratic politics were far from exemplary.


How has democratization affected economic reform?
In early 90s’, people theorized that democratization and economic reform could NOT go hand in hand. It was claimed that economic growth would be sacrificed under democratization because:

  1. democracy would increase pressures on decision-making.

  2. democracy would weaken the autonomy of executive to design and implement policy, undermining prospects for macroeconomic stabilization

The author concludes, however, that democratization in Africa had very little effect – negative or positive – on economic performance.



The Causes of Democratization

Democratization resulted in part from a crisis in the postcolonial neopatrimonial order described in Chapter 3. Causes:



  1. By late 1980’s, many African regimes underwent a crisis of legitimacy because of worsening economic conditions.

  2. Harder for governments to repress political protests due to pressures from human rights groups and donor nations.

  3. In each country, a class of excluded politicians typically emerged to take control of new governments following multiparty elections.

  4. The emergence of protest was correlated with the number of adjustment and stabilization loans signed with international financial institutions.

  1. High number of loans weakened the central states and undermined their legitimacy.

  2. While much has been said about the role of international donors in aiding the process of democratization, the author believes this is unfounded.



The Rise of Illiberal Democracies





  1. The political change during the period of the late 1980s to mid1990s was unprecedented. Part of this improvement was a widespread movement towards multiparty elections.

  1. From 1985-1989, only 7 nations had multiparty elections. Between 1990-1998, 42 of the 48 sub-Saharan African nations had multiparty elections.

  2. However, these were highly imperfect democracies. While regular, competitive elections were held, day-to-day practices by the state were abusive.

  1. How democratic were these regimes?

  1. Democracy took divergent forms in all of these nations. They can be categorized as “free,” “partly free,” and “not free” nations.

  2. Definition of illiberal democracy: a country with a combination of competitive elections and a relatively poor level of political and civil rights. 30 of Africa’s multi-party systems are illiberal. These are democracies in which the transition to multiparty competition proved to be seriously flawed.




  1. Evidence suggests that most democratic transitions in the region were sustained. The author shows that even illiberal regimes are most likely freer today than they were before democratization.



Comparing Economic Performance

The author compares the economic performance of the following groups to analyze links between economic growth and democratization:




  1. Old Democracies: Botswana, Gambia, Senegal, Mauritius, Zimbabwe. These countries had democratic institutions before 1989 and witnessed more pluralism than “new” democracies.

  2. New Democracies: 29 countries that convened founding elections between 1989 and 1994. 28 of these can be studied to analyze the impact of democratization.

  1. 13 of these 29 claim to pass a more stringent test of democratization: they witnessed a transition election widely viewed as “free and fair” by international observers, and the loser of this election publicly accepted the result.

  1. Non-democratic states: also witnessed relatively significant political liberalization.

  2. Liberal democracies: Benin, Botswana, Cape Verde, Malawi, Mali Mauritius, Namibia, Sao Tome, South Africa. (Author does not define why they are liberal!)



Comparing the Samples

The author compares annual GDP growth, average inflation rate and average terms of trade between the four groups listed above.


Conclusion: From this small set of observations, it is not possible to say either that there were significant differences in growth performance before and after the transition period or that the sample of new democracies performed better or worse than non-democracies.
Findings are surprising: Actual process of regime transition is highly disruptive. Expect worse economic performance from countries undergoing significant political reform, notably nations with incumbents losing power because

  1. real transitions generate uncertainty and presumably discourage investors.

  2. incumbent governments in the process of losing power are unlikely to be cautious stewards of the economy and are instead likely to strip assets as they lose power.

  3. transitions usually entail an interregnum period when no gov’t is effectively in power.

Perhaps these negative factors were offset by exogenous factors.



Comparing Government Performance

The author analyzes data on fiscal deficits of governments to examine government policy and performance.


Data shows larger deficits among new democracies, both before and after their transitions, and for liberal democracies in the 1990s. BUT, these differentials not statistically significant given large variation within each group of states.
Evidence suggests that democratization has not had the dramatic effect on economic performance and government policy making predicted by observers in early 1990s. If there is any trend in the data, it is toward economic improvement. However, this trend is faint so far and does not appear to be solely related to regime type.

The Political Impact of Democratization

Has democratization caused…




  1. a participatory explosion? No.

African political systems continue to be characterized by low levels of political participation, even though business groups became more active in supporting democratization as a tactic to increase their own competitiveness. Civil society is still poorly organized and non-representative. The radio remains safely in government hands.


  1. A weakened executive? No.

While checks on executive power did result from transition debates, the continuation of executive dominance of the political system remained (with small exceptions). It is striking that not a single democratizing state chose to move to a system that allowed for parliamentary dominance over the executive. The state apparatus continues to support executive dominance.




  1. In sum, the evidence suggests that democratization has not altered long-standing patterns in African politics; instead, institutional continuities like the following persist:

  1. presidential dominance

  2. low participation.

  3. cabinet size

  4. policy continuity

  5. weak civil service




  1. The aid regime also favored continuity. Besides the US, no donor nation rewarded nations for political liberalization. There was virtually no difference between the evolution in aid levels between the new democracies and the non-democracies. Changes in aid actually seem to reflect the willingness of leading donors to reward countries that followed their policy prescriptions.



Concluding Remarks

Analysis points to a degree of continuity in African politics. Domestic and international institutions and the interests upon which they rest can only change slowly.


Neopatrimonial politics and democracy are almost certainly not compatible. By itself, the introduction of multiparty electoral politics does not create democracy overnight.


CHAPTER 7 Conclusion

The author admits he is pessimistic about Africa’s progress since the independence period of the 1960s. He maintains that the optimism expressed during that decade was misplaced and based on an overemphasis on the capacity of foreign aid to promote economic growth and build effective public institutions, and a lack of consideration of the regions “manpower” constraints.


However, he does acknowledge that Africa has come a long way:

  1. More skilled professionals

  2. Urbanization -- potential change agent

  3. Neopatrimonialism may also hold within itself the potential for change. (not explained well)

  4. Interests of political elites may shift in favor of policies promoting capitalist accumulation

SUMMARY OF THE BOOK’S ARGUMENT:


Analysis of Africa from 1979-1999 reveals 6 broad trends:


  1. Leaders evolved towards more sophisticated management of the reform process. They allowed for some significant progress without lessening their hold on power. Thus, there has been progress on key elements of the stabilization component of reform.




  1. The flow of international aid to the region has greatly conditioned the process of reform. Donors have been increasingly intrusive, for example by insisting on economic liberalization despite the protest of local Africans. However, their large, historically unprecedented gifts of aid money have lessened the urgency of reform and have strengthened the status quo.




  1. To manage and survive this period of austerity and uncertainty, African presidents have sought to recentralize power. The reform process has been a motive for and the mechanism by which African leaders have intensified the presidential tendencies of their regimes.




  1. The period under study witnessed further deterioration of state capacity, invigorating patrimonial tendencies throughout the region. There were noted increases in corruption and rent seeking, and a weakening of mechanisms promoting accountability and transparency to limit such abuses.




  1. The reform process has motivated a progressive withdrawal of governments from key developmental functions (like social services) that they espoused in an earlier era.




  1. The wave of democratization that swept through the region in the early 1990s did not impact any of these patterns.

There is a striking uniformity of these results across the continent.


On average, African nations experienced negative growth between 1970 and 1998. While there are differences between countries, Botswana is the only country to have avoided the patterns described in this book enough to have sustained consistently rapid growth.
Thus there is an African model of economic policy making that is robust.

COMPARATIVE IMPLICATIONS


The author maintains that two main lessons of this book can be applied to other regions:


  1. The literature on economic policy is currently too focused on societal actors and needs to pay greater attention to the state and to the interests, economic ides, and capacity to be found within the state apparatus. Ex. Latin America and Eastern Europe. Current literature overstates the pressures of interest groups and underestimates the impact of factors within the state decision-making elite.




  1. The survival and extension of rent seeking activities during periods of economic liberalization. Phases of liberalization have resulted in dramatic instances of corruption and rent seeking in Latin America, Asia and Eastern Europe, just as described in this book in relation to Africa.


The database is protected by copyright ©essaydocs.org 2016
send message

    Main page