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’.