What can political economists tell us about Africa, aid and development?
June 13, 2012
There’s a clutch of different research initiatives trying to understand Africa’s political economy and its impact on development and aid. Often, the tone of the political economists can be quite discouraging. There are few practical ‘take aways’ for aid agencies other than ‘give up and become a researcher’.
A ‘joint statement’ from 5 research programmes says: “African countries badly need to embark on processes of economic transformation, not just growth, and they are not helped to do so by insistence on prior achievement of Good Governance, meaning adoption of the institutional ‘best practices’ that have emerged in much richer countries.”
The ‘big idea’ is that the ability of policy to drive economic transformation depends on the relationships between the main actors: mutual, cooperative and synergistic – or antagonistic, exploitative and perverse. The key to improving aid practice is an understanding of the local situation and the lessons of history.
Aid needs to become far less supply-driven and more focused on supporting processes that show real promise. In particular, there should be no implication that donors know best what institutions poor countries need.
There’s a clutch of different research initiatives trying to understand Africa’s political economy and its impact on development and aid. Often, the tone of the political economists can be quite discouraging – Alex Duncan gives a tongue-in-cheek definition of a political economist as ‘someone coming to explain why your aid programme doesn’t work’. There are few practical ‘take aways’ either for large bilateral aid agencies, or NGOs other than ‘give up and become a researcher’.
And that’s pretty much the tone of a logotastic ‘joint statement’1 from 5 research programmes based (loosely) in the UK, Denmark, and the Netherlands. Here’s some highlights:
From the summary:
“African countries badly need to embark on processes of economic transformation, not just growth, and they are not helped to do so by insistence on prior achievement of Good Governance, meaning adoption of the institutional ‘best practices’ that have emerged in much richer countries.”
From the full statement:
“Our single most important message is that development outcomes in poor countries depend fundamentally on the political incentives facing political elites and leaders….. Because of the way democratisation affects politicians’ incentives in poor developing countries, the introduction of competitive elections is a mixed blessing for achieving the economic transformation that Africa needs.”
“The reasons [a number of South-east Asian countries] achieved sustained, pro-poor growth [and Africa has not] over the 50 years since 1960 are mostly about policy differences. During the early decades of the period, Indonesia, Malaysia and Vietnam invested heavily in rural development, driven by urgency, outreach and expediency. They did so under a variety of political regime types, none of which were free of major corruption. They made some progress towards democratisation only after achieving substantial economic transformation.”
The paper’s ‘big idea’ is that “What shapes the ability of policy to drive economic transformation is the extent to which mutual interests, cooperative relations
and synergies emerge between three large groups of actors. [see diagram] [Usually] the relationships are not mutual, cooperative and synergistic, but antagonistic, exploitative and perverse. [But the key to improving aid practice is] understanding exactly how and why exceptions occur.”
“Because politicians are typically constrained to generate and use rents to cement their alliances, ‘good politics’ can result in ‘bad economics’” Elites need cash to funnel to their supporters and so have to milk the state for short-term rents, rather than investing in the future, as the Southeast Asian elites did, (supporting pioneer firms, building roads, providing health and education etc). The trouble is that in such a system “the introduction of formal multi-party competition into such an environment does not alter the basic logic. Clientelism in Africa is to a greater or lesser extent competitive under both authoritarian and more democratic regimes…. Typically, multi-party elections formalise and sharpen this competition with often mixed results for development.”
The paper identifies two broad kinds of exceptions to the clientilist rule:
Big-picture exceptions: In a somewhat desperate search for developmental states in Africa, the paper comes up with “the early-independence regimes of Houphouët-Boigny (Côte d’Ivoire), Kenyatta (Kenya) and Banda (Malawi) [and today,] Ethiopia and Rwanda.” These have all “achieved centralised rent-management [thus freeing them from the distractions of competitive clientilism] and this led to significant economic transformation and social advance for a period.” Ah, so the best way to improve on competitive clientilism is to eliminate the competition, not the clientilism. Oh dear.
Small-picture exceptions: successes in Asia were in many instances the result of breakthroughs in particular sectors or commodity chains which only later became generalised… [African examples include] sugar in Mozambique and dairy in Uganda.”
What does all this mean for aid donors (the authors are basically talking to the big money donors, not relative minnows like Oxfam)?
“The central message that needs to be got across is that the conditions which keep the African masses in poverty are the result of decisions by politicians who are responding to incentives that change slowly and are not in the short term very favourable to development. More immediately, they stem from the inability of sector actors to overcome their collective action problems in the face of unsupportive if not predatory state behaviour. They cannot, therefore, be addressed by merely transferring economic resources from the global rich to the global poor. Indeed, such attempts can make matters worse, by further weakening those political incentives that work in favour of domestically driven economic transformation.
If this is true, aid needs to become far less supply-driven and more focused on supporting processes that show real promise, based on an informed assessment of the local situation and the lessons of history. In particular, there should be no implication that donors know best what institutions poor countries need.”
1 See the previous article at NAI Forum by two leading researchers behind the ‘joint statement’.
This article first appeared on the author’s blog ‘From Poverty to Power’.
Great review Duncan – the absence of takeaways is hugely frustrating for those of us engaged with policy-makers.
What, for instance, would the above mentioned research have to say – to inform – to the UK Government’s enthusiasm for “the golden thread” of “good governance”? How might the research help to shape a constructive policy agenda that builds on the UK Governnment’s enthusiasm for governance, but which avoids a one-size fits-all we-know-best approach?
These are important conversations. It’s not clear to me that they’re happening.
Duncan summarises very well some of the main messages of ”The political economy of development in Africa” – the joint statement of which I am one of several authors. As he rightly concludes, we argue that outsiders should stop trying to impose blueprints for what institutions poor countries need, and instead concentrate on spotting and supporting positive developments as they emerge.
But there is not enough punch in that conclusion according to Duncan: “… the lack of genuine ‘so what’ .. is a real problem.”
We cannot satisfy the hunger for simple solutions, however. Our conclusion is a logical consequence of our insistence that the watchword has to be ‘good fit,’ not ‘best practice.’ How external actors may influence for the better the institutional architecture and political settlement of poor African countries at the national level is therefore an issue on which we cannot be very specific at a general level.
This is not a copout. While there is little new in stating that ‘context matters,’ we argue that the political incentives facing political leaders is the key to open the black box of ‘context.’ These political incentives vary significantly across countries and time periods. They even vary between sectors within a country.
Any external intervention needs to be realistic about such political incentives. This implies targeting activities where the political interest is high and development-oriented, and avoiding those which are particularly subject to competitive and predatory rent-seeking. Much will depend on a sector-specific assessment of the feasibility of brokering more constructive relationships among sector actors including those elements of the state bureaucracy with the potential to acquire the relevant capabilities and construct the needed networks.
Where are citizens, social movements and organised groups in all this, Duncan and Andy rightly ask. The detailed case studies from each of the five research programmes do show examples of how upwards pressure on power holders can sometimes influence policy-decisions and implementation. But we also conclude that this is not a typical event in poor African countries (the Arab Spring takes place in a very different context). This does not mean that downwards accountability is not important, does not exist and should not be supported. We are simply pointing out that the donor rhetoric on this important issue does not correspond to the realities on the ground.
Thanks Ole, very helpful clarification. Going a bit further on the ’so what’ issue, is your advice to donors to stay away altogether from countries characterized by predatory governments or take a different approach to try and create the conditions for some future transformation? The challenge is surely that, as successful states grow, tax, and reduce their aid dependence, aid agencies will either be forced to find a way to engage in precisely those fragile and predatory states that you say they should avoid, or they become redundant. The idea of trying to identify islands of non-predation, eg sectors, ministries etc, is one way forward, as is investing in tertiary education/forming the next generation. As for supporting the growing strength of non-government actors, that is definitely what Oxfam is doing, but I’m not sure how far official donors can get involved there without getting into political hot water or doing damage to the very actors they are trying to help, either by the distorting effect of over-funding small organizations, or by laying them open to accusations of being foreign-funded (as is happening in Egypt right now). Any other suggestions?
Duncan makes two good points.
One is that donors must find a way to engage in fragile and predatory states – but we advice to stay away from such places. Duncan is not quite right but a clarification is needed here. Although the geographical coverage of the five research programmes is wide, we have worked exclusively in countries at peace and not in any of the most fragile states of sub-Saharan Africa. It is to the former type of countries that our advice applies. What donors may do in war-torn conflictual countries is obviously a very relevant question to ask, but it is a bit outside what the five programmes have dealt with.
The other point is about how donors can engage with non-governmental actors. Richard Crook, one of the researchers involved in the five research programmes, has written an interesting article on this topic: “The influence of transnational NGPAs on policy processes and policy outcomes: rethinking North-South relations,” (NGPAs are Transnational non-governmental public actors). It will be published this fall in “Global Matters for Non-governmental Public Action,” a book edited by Jude Howell. Richard’s argument is that “in fact a credible Southern base is a crucial factor in achieving any degree of successful influence over development policy processes at either international or Southern national levels… the willingness of local regimes to work with NGPAs is a determining factor, …. it is not necessarily democratic regimes which are the most conducive to success. In practice, what is most important at the national level are the political skills and strategies which can enable NGPAs to penetrate and work inside relevant policy communities, and to engage with subsequent implementations and their feedback.” If you substitute ‘donor’ for NGPA, Richard’s argument provides important insights about how donors may engage with governments.