DEMOCRACY AND DEVELOPMENT
IW91-5 October 1991
INTERNATIONAL WORKING PAPER SERIES
FOOD AND RESOURCE ECONOMICS DEPARTMENT
Institute of Food and Agricultural Sciences
University of Florida
Gainesville, Florida 32611
DEMOCRACY AND DEVELOPMENT IN AFRICA
Interaction Between Politics and Economic Development:
In a recent paper on three paradoxes of democracy, Larry Diamond observed,
"Democracy requires consent. Consent requires legitimacy.
Legitimacy requires effective performance. But effectiveness
may be sacrificed by consent. Elected leaders will always be
reluctant to pursue unpopular policies, no matter how wise or
necessary they may be."'
Diamond's analysis is sobering given the widespread demand for transition to
democratic governments throughout the Eastern block countries and the developing world,
including Africa. It suggests that democracies may not necessarily achieve rapid and broad
based economic growth due to their inability to make hard decisions. However, Gunnar
Myrdal2 in his magnamopic Asian Drama had argued in 1968 that countries in Asia lacked
the ability to male hard decisions precisely because their leaders were not accountable to
the populations at large in any meaningful sense. Even when the countries proclaimed to
be democratic as in India, these "soft states" lacked an effective democracy, meaning a
balance of power between the legislative, executive and the judicial branches of the
government, a functioning local government that represented grassroot interests, or the
"Graduate Research Professor, Food & Resource Economics Dept., University of Florida, Gainesville, FL
institutional capability to make decisions based on objective, rather than sectarian, ethnic,
communal or religious grounds. In a recent review, therefore, Ruttan finds no agreement
in the literature about the nature of interaction or the causality between political and
economic development, except perhaps that some degree of authoritarianism seems essential
at early stages of development when governments need to play a strong role in
implementing effective economic policies, at the expense of strong sectional political
interests.3 Several East Asian countries (i.e., Korea, Singapore, Taiwan, Malaysia, Thailand,
and Indonesia) support Ruttan's observation. They have proven Myrdal incorrect by
achieving rapid, sustained and broad-based economic growth. Their authoritarian
governments have been technocratic in the nature of their civil administrations, well versed
in the business of economic management, free of political pressures faced by the democratic
countries such as India and Sri Lanka, but committed to an employment-oriented pattern
of economic growth. However, whereas a brisk and steady pace of economic growth seems
essential to maintain political legitimacy, growth itself leads to new problems including
demands for political and human rights, as in mainland China or Korea.
The reverse seems also to be true. A lack of economic development is not only the
product of ineffective governments, but it tends to encourage such governments to remain
in power. Their presence, including widespread corruption geared to non-productive
pursuits, hampers prospects for growth. It is clear that the nature of the state is
fundamental to achieving broad-based and sustained economic development. Yet our
understanding of the relationship between economic performance and the character of the
state is far from perfect. The time is opportune to explore these relationships in light of the
increased interest in the international development community in the issues of governance.
While the term governance is often not clarified in much of the current debate, dictionaries
typically define it as a system of government, or a method of exercising state control or
This paper explores the issues of development and nature of the state with a
particular reference to Africa. Its observations are based largely, but not exclusively, on the
results of a comparative study called "Managing Agricultural Development in Africa"
(MADIA), which was carried out in the World Bank under the author's direction. The
MADIA study was jointly undertaken by the World Bank and seven other donors (USAID,
UKODA, DANIDA, SIDA, France, Germany and the EEC). Governments of six African
countries (Kenya, Tanzania, Malawi, Nigeria, Cameroon and Senegal) participated in the
study, which covered a period of 25 years. It analyzed macroeconomic and sectoral policies
with a particular emphasis on the way historical and political factors had influenced the
nature of the states via the economic, political and commercial relationships which had
evolved among the important interest groups prior and subsequent to independence in each
of the countries. The state had, in turn, influenced the content of policies and institutions.
Six political analysts knowledgeable about each of the MADIA countries analyzed the
interest groups which determined the nature of the state. Furthermore, the study analyzed
the way policies and institutions interacted with resource endowments to influence the pace
and pattern of economic and agricultural performance. Finally, the study gave particular
attention to the influences of donors' policy advice and investment choices on resource
endowments and ultimately on the economic and distributional outcomes.
The paper first outlines the justification for a broad-based agriculturally led economic
growth in Africa. Then it explores the reasons for the failure to pursue such a strategy in
most African countries and the success in a few MADIA countries, including in particular
the relationship between the content of economic policies and the nature of the state.
Finally, the paper explores the implications of the analysis for governments and donors.
Donors are and will continue to be an important part of the equation in Africa. External
aid constitutes between $30 to $60 per capital in several African countries. Nearly 50 to 70
percent of public expenditures in many African countries are funded by donors.
The fifty-odd countries in Sub Saharan Africa had formed a model of economic
development in the 1960's for the then fledgling Asia. However with one or two notable
exceptions, e.g. Botswana or Mauritius, Africa has neither enjoyed democratic systems of
government, nor experienced much economic growth. On the contrary, there has been
economic decline in the 1970's and 1980's, notwithstanding the massive increase and high
levels of external assistance. Africa's population growth continues to be well over three
percent, and the MADIA study documents that much of the growth in food production has
been a result of area expansion. There has been a decline in factor productivity. Food
imports and food aid have been on the rise and are expected to increase further, together
with a decline or stagnation in export volumes. If trends in Africa's economic performance
continue, the World Bank's 1990 World Development Report projects a substantial increase
in poverty in the continent by the year 2000. Simply to maintain the present per capital real
income, the World Bank's long-term perspective study on Africa estimates that a minimum
four percent growth rate of food and agricultural production is essential.5
To achieve transformation from a predominantly agricultural to an industry and
service sector oriented economy, which also enjoys high per capital incomes, a broad-based
and rapid development of the smallholder agricultural sector is critical. In countries at an
early stage of development which must achieve such transformation, government needs to
play a critical role through a conducive macroeconomic and sector policy framework which
continually responds to a rapidly changing international economic situation. Governments
also need to pursue a long-term economic development strategy involving the provision of
public goods, i.e. investment in transport, communications and information, education,
village water supply, agricultural research and extension, etc. Public investment is necessary
to develop factor and product markets and to establish the necessary institutional, human
capital and physical infrastructures to enable private individuals to respond to economic
incentives provided through a conducive macro and sectoral policy framework.
Results of the MADIA study presented later in the paper show that countries with
quite similar resource endowments followed very different economic paths and achieved
quite different outcomes in terms of growth and equity. Furthermore, the extent to which
agricultural interests were represented in the governments determined the extent to which
countries pursued proagricultural policies. Most African governments have been driven by
urban and other interests and by personality rule. They have not had conducive
macroeconomic policies or an effective development strategy. They have not given attention
to the development of the agriculture and the rural sectors despite the fact that a large
proportion of the population lives in the rural areas, where there is also the greatest
incidence of poverty.6 Macroeconomic difficulties in the 1980's and a decade of structural
adjustment have convinced some Africans of the importance of economic decentralization,
export promotion and the role of the marketplace. However, African countries lack the
internal political environment or the necessary administrative and personnel capacity to
achieve sustained and broad-based economic growth. They lack the essential long-term view
of the developmental process to develop high quality economic management and
implementation. Africa still depends heavily on external technical and financial assistance,
the former to the tune of $4 billion (US) annually. Recognizing the fundamental
importance of human resources in development, a joint World Bank, African Development
Bank and UNDP effort has recently created a capacity building fund. How it will operate
could make a significant difference to Africa's administrative and managerial response to
its own economic problems. The political environment will nevertheless determine the
extent to which this capacity is utilized effectively.
Role of Agriculture in Economic Development
Agriculture-- defined in the broadest sense to include, in addition to cropping,
livestock, forestry and fisheries-- provides the most important source of income and
employment for a large proportion of the population in Africa. The rate of urbanization
has been much more rapid, especially in west Africa, relative to many other parts of the
developing world in the last three decades,7 in part a symptom of Africa's pro-urban
economic policies and political systems which have tended to create both a pull in favor of
urbanization, and a push away from the rural sector, where few amenities are available to
the rural population.
Given the nearly 25% to 35% of GNP originating in agriculture, overall economic
growth is closely related to the growth of the agricultural sector. Trade plays an important
role in many African economies, and in virtually all countries, agriculture and agro-based
products form an important share of trade, amounting to as much as 80% in some countries
such as Malawi. Agricultural exports have traditionally been an important source of
government revenues through implicit (e.g. via the overvaluation of the exchange rate) or
explicit taxation. Agricultural households have provided a major portion of the public and
private savings in the economy, and constitute an important market for consumer goods (e.g.
textiles, shoes, umbrellas, hurricane lamps, and building materials for homes), investment
goods (e.g. seed, fertilizers, and agricultural implements) and services (transport) produced
in the nonagricultural sector. Increased incomes of a large number of rural households
therefore generate productive employment in the nonagricultural sectors through a strong
stimulus to nonagricultural growth.
The size and distribution of agricultural exports are thus a better barometer of the
health of African economies than their mineral exports (e.g. the petroleum which has been
important in Nigeria and Cameroon or phosphate in Senegal) which have also constituted
an important source of export earnings, especially in the west African MADIA countries.
Mineral exports tend to originate in a small enclave sector. Agricultural exports, on the
other hand, have traditionally been derived from a large number of small farmers.
Production, transport, processing and exports from agriculture are highly labor intensive.
Thriving agricultural exports require a sophisticated organizational and management
structure that serves the interests of a large number of small rural households and increases
their productivity. Productivity growth not only creates employment and incomes in the
nonagricultural sector, but reduces poverty, arrests urban migration and population growth,
while simultaneously increasing the quality of the population.
The link between the size and quality of the population on the one hand and the
development of the agricultural and rural sector on the other is brought about through the
investment in health, education, rural water supply, food and nutrition of rural households.
Lack of investment in these activities affects health and nutrition, in turn affecting infant
and child mortality and increasing the desire for large families as a cushion against social
insecurity and old age. A low level of investment in social services also affects cognitive
ability of infants and children which in turn adversely affects their school performance and
limits labor productivity. Low labor productivity is, however, also determined by a low level
of technology, including an extreme reliance on the handhoe cultivation which is prevalent
in Africa. Whereas in Asia only about half the value added in agriculture comes from labor,
as much as 80% comes from labor in Africa, reflecting the low level of capitalization of the
smallholder agricultural sectors. Low labor productivity reinforces the demand for children
as a means of increasing labor input into farming, fetching water and fuel wood, for minding
cattle and transporting farm surplus to the market. Thus, the benefits of raising children
to the rural households are large, but costs tend to be low in a situation of few schools and
other social amenities. In contrast, in the more advanced countries the cost of schooling,
health care and other activities often outweighs the benefits of additional children.
The environmental consequences of the rapidly growing population exceeding well
over 3 percent and often 3.5 percent are also well-known. Growing population pressure on
limited land in countries such as Kenya, Malawi or Senegal where land shortage is getting
intense, is causing reduction in fallow, deforestation, and a decline in soil fertility associated
with increased frequency of cultivation of the land. The decline in the average and marginal
product of labor caused by a rapid population growth and a movement of population to
marginal lands increases incentive to have additional children to maintain living standards.
The downward spiral of poverty this causes can only be broken by the development of the
agricultural and the rural sectors.
The emphasis placed on the development of export crops previously noted should not
be interpreted to mean that export agriculture should be promoted at the cost of food crops.
Evidence suggests that food and export corp production are highly complementary. Farmers
concerned with food security devote a significant portion of their resources to nonfood
activities as a diversification strategy to spread risks of food crop failures, and to increase
incomes. An increase in the productivity of either food crops or other productive rural
activities, i.e. export cropping, livestocking, fisheries or forestry thus releases land and labor
for the production of the other. Most importantly, increasing incomes of rural households
increases their command over food. This is an important consideration in Africa. With
increased poverty, a larger proportion of the rural households in countries such as Malawi
and Kenya are becoming reliant on the market for food. Since low income households
spend a major share of their income on food, increased food prices (often being encouraged
in the course of structural adjustment as an incentive to increase food production) have an
adverse effect on a large portion of the urban as well as rural households.8 Greater
reliance needs to be placed on productivity-enhancing nonprice factors relative to the
emphasis placed on price incentives alone. Many of the nonprice factors needed to increase
the productivity of food crop production, e.g. access to technology, a transportation and
information network, credit, inputs and assured markets are similar, however, to those
needed for other productive activities including export cropping. The discrimination against
the export crop sector in Africa thus often has reflected the more general discrimination by
African governments against smallholder agriculture, livestocking, etc.
Policies Explaining Agricultural and Overall Economic Stagnation:
In the post-colonial period, African countries such as Nigeria, Senegal or Tanzania
pursued import substitution policies and neglected their agriculture. The reasons included
the desire of African elite to move away from the colonial dependency relationships
associated with trade, a concern for stabilizing export earnings given the volatility of
international prices of primary commodities relative to that of the manufactured goods, a
desire to avert the expected decline in real international prices of primary commodities by
shifting to industrialization, and not the least important, to meet the expectations of the
largely urban and socialistically-dominated independence movements that considered
smallholder agriculture as backward and primitive. The ideas of export pessimism and
import substituting industrialization were reinforced by the intellectual support lent to
Africa's industrialization policies by western economic advisors in countries such as Tanzania
where their role in policy advice increased with the rise of external assistance in the 1970's.
Much debate ensued in the early 1980's about the extent to which internal policies,
rather than the adverse external environment (i.e., terms of trade shocks, stagnant demand
for exports, instability in commodity prices, wars or famines), were the cause of Africa's
economic problems. The question of the behavior of the external terms of trade is of course
complex as answers depend on the choice of the base and end periods, and commodities
under consideration. Thus the extent of decline in real terms, as well as the volatility of the
terms of trade varies by countries. The MADIA study shows, however, that the same
international price environment was interpreted differently by African countries and Africa's
main competitors. While most countries lost shares in the world market, others gained
shares rapidly. However, the MADIA study further shows that even in Africa, countries
such as Kenya and Malawi performed better in GNP and export growth, although they
experienced substantial losses in terms of trade, dependent as they were on agricultural
exports. In contrast, their oil producing counterparts, e.g. Nigeria that experienced positive
external shocks performed poorly.9 Nigeria's agriculture declined rapidly in the wake of the
oil boom, in part due to the high degree of implicit taxation of the agricultural sector, and
due to ever-changing thrusts in the policy initiatives encouraged by the oil boom. In
Senegal, despite favorable prices for phosphates in the 70's, neglect of the critical groundnut
sector and the import substitution of rice through high-cost irrigation resulted in the failure
to diversify the economy.
Second, and relatedly, while primary commodity exporters experienced more volatile
terms of trade, Nigeria, Senegal and Tanzania expanded their public expenditures as if the
peaks in the terms of trade and government revenues, resulting from a price rise, were
permanent rather than temporary. Nigeria's public expenditures increased sevenfold in less
than a decade in the 1970's. The IMF estimates that the proportion of African government
expenditures to GNP increased from a fifth in the early 1970's to a quarter in the mid
1980's, and the African budget deficits increased from four percent to six percent of the
GNPs in the same period, at a time when external aid also rose sharply. Other oil exporting
countries, such as Indonesia, pursued a more cautious policy and performed better.
The primary problem in Africa has, however, not been so much the high share of
government expenditures in GNP-- several European countries have much larger shares--
but their quality and allocation. A rising and a high share of public expenditures went to
salaries and wages leaving little for operating expenditures and maintenance. The high wage
component was a result of a tendency of governments to use public and parapublic entities
as the source of assured employment to the school and university-leaving graduates. Also,
the lion's share of public expenditures went for the benefit of the urban populations, leaving
few resources for rural health, education, farm to market roads, etc. According to the 1990
World Development Report, subsidies on education increased sharply in Africa from $48
per primary pupil to $233 per secondary student, and to $2710 at the university level.
Similarly, expenditures on hospitals in the capital cities expanded rapidly relative to those
on rural clinics. Even Tanzania, which has had a strong rhetorical commitment to broad-
based development, allocated only six percent of the 1988-89 budget to preventive health
services. It must be stressed in the context of the growing debate on the adverse impact of
structural adjustment on the poor, that the pro-urban expenditure bias in countries such as
Tanzania or Senegal existed well before the process of structural adjustment began. It
reflected the political base and preferences of governments. Integrated agricultural and
rural development aimed at redressing rural poverty in the 1970's was largely an external
initiative of donors. Since governments showed a strong bias in favor of urban sectors, both
in public expenditures as well as in the exchange rate policies, it is not surprising that with
a shift of external aid from project lending to the balance of payments support in the 1980's,
the rural poor have suffered.
It is clear that African governments need to maintain an overall level of public
expenditures which are consistent with the level of domestic resources and external aid and
capital which they can realistically expect to receive on a consistent, long-term basis. They
also need to improve the balance of expenditures:
1. away from the urban to the rural sectors,
2. away from salaries and wages towards operating and
maintenance expenses, and
3. away from a protected industrial sector towards social sectors.
The Industrialization Policies:
The MADIA study showed that, quite paradoxically, countries that pursued acute
import substituting industrialization policies were the least successful in reducing the share
of agriculture in GNP, in contrast to countries that pursued their comparative advantage in
agriculture, achieved rapid increase in exports, and simultaneously diversified their overall
economies, thereby reducing the share of agriculture in GNP.'1 The contrasting cases of
Tanzania that tried to industrialize rapidly and Kenya that encouraged its agriculture are
worth exploring. By the end of the 1970's, Tanzania's export volumes had stagnated and the
share of agriculture in GNP, exports, etc. had increased. In Kenya, in contrast, the share
of agriculture in GNP had declined sharply mainly because agricultural export volumes had
increased rapidly, leading to a pattern of industrialization that was closely linked to
agriculture as outlined below. Ghana, Nigeria, Senegal, and Zambia all achieved poor GNP
growth as in Tanzania.
Diverging somewhat from the results of the MADIA study, the contrasting cases of
Zambia and Chile are particularly worth noting from this perspective. Both confronted a
high degree of volatility from their dependence on the export of copper. However through
the pursuit of comparative advantage and by avoiding the overvaluation of the exchange rate
and other symptoms of the Dutch disease, Chile rapidly modernized its economy, including
diversifying its export base to agricultural and manufacturing commodities. Zambia, in
contrast, has experienced a continuous decline in its per capital income throughout the 1970's
and 1980's. It allowed its mining sector to degenerate into a chronic case of the Dutch
disease by letting the strong labor unions build a base of high wages, food subsidies,
government deficits, rapid inflation and an overvaluation of the exchange rate. While
Zambia has achieved a structural transformation of sorts-- the share of agriculture in GNP
has declined and that of the manufacturing and the service sectors has increased-- this has
not been accompanied by an increase in per capital incomes.
The cases of Kenya and Malawi also provide a contrast as regards the achievement
.f growth with and without equity. Both had similar initial endowments at independence,
although Kenya was relatively more advanced. Both followed export led growth. They
avoided overvaluation of the exchange rate and provided price incentives to agricultural
exporters. However, in Kenya increased export volumes of tea and coffee as well as other
high value crops were accompanied by an increased share of small farmers in the production
process, whereas large European farmers had dominated production in the colonial period.
Small farmers were given title to land through a land registration program in high potential
areas of Kenya. They were also paid international parity prices for their tea and coffee by
enabling them to sell their produce in the same markets in which large estates sold theirs.
Together with development of feeder roads, agricultural research, extension, credit and
marketing facilities, small farmer production took off in Kenya." In contrast, in Malawi
much of the increase in export volumes came from large farms and estates owned and
operated by Malawi's new African elite. Malawi reserved the right to grow certain high
value crops such as barley and flue cured tobacco, sugar, tea and coffee, to the estate sector,
and allowed the estates to sell their produce in auctions at close to international parity
prices. Small farmers on the other hand are required in Malawi to sell the produce they are
allowed to grow to the marketing board ADMARC at half to a third of the prices received
by estates. The term "estate" is misleading in Malawi as it is defined in terms of the right
to grow certain crops and to sell them in the auction, rather than in terms of the farm size.
While estates were initially large and confined to the political elite, the size of the estates
had declined considerably in the last decade as the demand for estates had increased.
Malawi is reluctant to further liberalize licensing of export crop production to small farmers
due to a concern about likely deterioration in export quality of small farmer output which
may hurt its international competitiveness. In Kenya, however, the quality of smallholder
tea and coffee is consistently above that of large estates, due to a relatively more labor and
management intensive mode of tea and coffee picking extended to small farmers through
effective extension program. Indeed, reflecting the sophisticated management of its
smallholder export industries, Kenya's smallholder tea and coffee have consistently earned
a premium in world markets due to their high quality.12
Kenya's approach has resulted in rapid growth in income and employment both in
the agricultural as well as the nonagricultural sectors by increasing savings, investment and
consumption by a large number of rural households. This has led to growth linkages from
the development of agriculture with the rest of the economy; such as the growth of small
towns and investment by entrepreneurs in small scale manufacturing and the service sectors,
including transport. Despite the highest rates of growth of population in the world, the real
wage for unskilled workers in Kenya has not declined as much as had been predicted earlier,
including by the World Bank's various economic missions to Kenya and by the ILO's
employment mission in 1972. In comparison, the real wage in Malawi has declined
significantly notwithstanding a rapid growth in employment on the estates. The return of
Malawian labor from South African mines in the late 1970's and the influx of Mozambican
refugees in Malawi in the 1980's have compounded Malawi's poverty problem for low
income laborers and small farms. But they have also stressed the need for reform in the
structure of Malawi's production that increases employment opportunities."
The rate of investment in primary and secondary education is part of the explanation
for the differences in the behavior of the real wage in the two countries. Education has
expanded much more rapidly in Kenya than in Malawi. Increased educational access has
resulted in keeping young children in the school and increasing the reservation price of
labor. In contrast in Malawi, the low access to primary schooling and lack of employment
opportunities in the smallholder sector has increased the supply of labor, including children,
to the estates thereby depressing the real wage. Since labor constitutes the most important
source of income in African agriculture and economies, clearly changes in wage rates and
employment are a major determinant of living standards.
A word of caution is called for in interpreting Kenya's economic performance. Its
relatively greater success in smallholder agriculture does not mean that there is no growth
in the absolute number of the poor, nor that there is freedom of the press, full political
participation by all ethnic groups, etc. The Kikuyu and other (related) ethnic groups (e.g.,
the Nandis) have benefitted more than others from Kenya's export led policies. Due to the
demand pull from labor that thriving agriculture in high potential areas has generated,
potential incomes have increased even in the areas of relatively limited agriculture.
However, relative regional income disparities have increased in Kenya. In contrast to
Kenya, redistributive policies of the government of Tanzania in the 1970's entailed
discrimination against the relatively more resource-rich regions, i.e. Arusha, Kilimanjaro
which produced coffee, the Sukumaland which produced cotton, and Tobora that produced
tobacco, relative to poorer regions such as Dodoma or Mara which produced cereals and
root crops. This policy equalized incomes among regions, but dampened the overall role
of economic growth. A continued decline in per capital incomes in Tanzania made
continuation of redistributive policies unsustainable.14 Thus, whereas Malawi achieved
growth but little equity, and Tanzania achieved neither growth nor equity, Kenya performed
better on both grounds. Kenya's policies caused the incidence of poverty to be lesser than
it would have been without the growth strategy it pursued.
The lessons from Kenya for development are similar to those from several other
successful cases of agricultural development, including Japan, Taiwan and India, namely that
public policy including government investment in the support of smallholder agriculture and
the rural sector in such things as transport and communications, agricultural research and
education, village water supply, etc., are crucial to achieve broad-based growth.
The Role of the State: How does the pursuit of a development strategy relate to
the nature of the state?
What kind of a state allows individual initiative, and broad-based and sustained
development? Since the importance of price incentives and private initiative have been
emphasized in recent years by donors through emphasis on structural adjustment, an
appropriate role of the government is of considerable interest. The broad-based
proagricultural policies of Kenya and the contrasting ones of Malawi, Tanzania, Senegal or
Nigeria are in part a result of the politics of pre-independence, and the evolution of the
state in i' e post colonial period. Both played out differently in each of the countries. The
Ken\ government has been more grassroot oriented relative to other countries. This is
beca.- )f the nature of Kenya's independence movement, grounded as it was in an intense
struggle for land and the right of Africans to grow crops previously restricted to European
farmers, as well as in their right to earn international prices for those crops." The struggle
for scarce land and the stake in a modern agriculture prompted by the desire of African
farmers to emulate modern agricultural practices of their European counterparts on whose
farms many received apprenticeship, meant that grassroot, agricultural interests were more
strongly represented in national legislature as well as the civil service in Kenya at
independence than in other African countries. Bates has shown that producer interests play
an active role in Kenyan agricultural policy.16 Similarly, the civil service has been relatively
more technocratic and professional than in several other African countries, as reflected in
Kenya's macroeconomic policies. It may have been fortuitous that at independence in
Kenya power fell in the hands of ethnic groups that had a stake in smallholder agriculture--
under President Kenyata economic and political power was concentrated in the hands of the
Kikuyu who controlled some of the best agricultural land. This monopoly was broken when
political power changed hands in 1979 to President Moi, of the Kalinjan ethnic group, which
controls few of the best agricultural resources and hails from a medium potential area.
Whereas President Kenyata pursued a policy of redistribution through growth, mainly in the
high potential areas, President Moi has pursued politics of redistribution of resources to
poorer areas, with a dampening effect on overall economic growth and employment
opportunities. Reduced growth has led to dissatisfaction among Kenya's growing and
increasingly more articulate urban middle class which has shown impatience about
inadequate human rights. Nonetheless, these growing demands in Kenya are a result of
relatively greatersuccess in economic and political development. The challenge to Kenya
is to maintain the quality of its macroeconomic and sectoral management to sustain growth,
while broadening political and economic participation. This entails reducing the role of the
government in areas where rents have become rampant, e.g. internal and external trade, but
increasing it in areas where greater public investment through a reduction in several current
unproductive public expenditures will increase private investment and accelerate growth, e.g.
investment in physical and social infrastructure, agricultural technology, etc.
Ellen Hanak has shown that the independence movement in Tanzania was not rooted
in agricultural interests.17 President Nyerere was a school teacher who came from a
agriculturally poor region. Agricultural interests from the relatively more powerful
traditional export producing regions lost the small amount of power they wielded with the
ascendancy of the party (then called TANU). This explains the redistribution of resources
away from the resource-rich regions. In Malawi too, Christiansen and Kydd have shown that
the so-called "cabinet crisis" led to the loss of political power by smallholders. They had
been active in the independence movement but President Banda consolidated power after
the cabinet crisis.18 It is not by accident that Malawi has pursued an estate strategy in its
agriculture. President Banda is one of the major estate lease-holders.
Differences in the structure of political power in the MADIA countries raises a
question as to the precise location of the state and the way it influences policy. As Myrdal
had observed earlier in Asia, the state may not reside in the normal institutions of the
government. This can result in the concentration of political power at the center, and the
associated decline of the already limited state capacity. At independence, Africa inherited
limited capacity to plan and implement economic policy and investment programs that
address problems of the rural masses. Notwithstanding the limitations indicated above of
the Kenyan state, it is one of the few African countries in which the "state" has by and large
resided in the normal institutions of the government, i.e. the legislature, the civil service, the
judiciary, the local government, etc. In Tanzania by contrast, despite the rhetoric of
decentralization and local participation articulated through the Ujama policy, Hanak has
shown that throughout the 1970ss and the early 1980's, the central civil service and the local
and regional governments relinquished their power to the increasingly authoritarian,
ideological, and topdown political party, TANU (later called the CCM). It acted as the
defacto government. As the macroeconomic crisis deepened by the late 1970's, donors on
the other hand continued to conduct policy dialogue and to discuss investment priorities with
a weak and ineffective civil service as if it could represent the real interests of the people.
In Malawi, power has centered in the life President, Mr. Banda. The Malawian civil service
has, however, been one of the best in implementing state policies. In Nigeria, with six
military coups and only a few years of civilian rule, Bienen has shown that the military has
been the defacto government. The oil boom reinforced centralization of political power
caused by the military, as fiscal resources shifted away from the states that produced export
crops to the federal government which controlled the oil revenues.19 In Senegal, Waterbury
has shown that the Party influenced by socialists ideas, the bureaucracy and the Marabouts
have shared power.20 In Zambia, a non-MADIA country, the trade unions have dominated
the party, and the policies.
The lack of representation of the rural people in the political, administrative,
commercial, and the economic processes in much of Africa is in part a result of the
systematic uprooting by governments of the grassroot movements, since the emergence of
an alternative local leadership through such means was perceived to be a threat to central
power. Tanzania, Senegal and Cameroon provide examples of the discouragement of the
participative cooperatives which had begun to emerge.21 Malawi did not even permit the
formation of cooperatives until recently. It is no accident, then, that Kenya has had a
number of viable coffee and dairy co-operatives, as well as a vigilant smallholder tea
authority. It is also no accident that most topdown bureaucratically operated co-operative
movements in the rest of Africa show signs of numerous weaknesses.
The erosion of the already weak local governments explains the lack of capacity of
most governments to maintain rural feeder roads, or other infrastructure. Gavira et al have
documented the disrepair of rural roads, financed by the World Bank in Nigeria under its
Agricultural Development Program.22
The tendency of governments not to encourage institutional pluralism is also reflected
in the unnecessary restrictions imposed on the private sector, with governments exercising
monopoly control on many enterprises. The initial commanding role of the public sector
was a justified response of African governments to the recognized weaknesses of the
indigenous private sector. However, the continued weakness of the indigenous private sector
now is itself a result of the reluctance of African governments to permit alternative centers
of economic and political power.
Reflecting the personality rule of governments, even at the center, the office of the
President has become important in virtually all countries. The role of the functional
ministries such as agriculture, health or education have declined. Under structural
adjustment, the World Bank and other donors have strengthened the role of the finance
ministries. Nevertheless, many of the structural adjustment programs do not address the
fundamental problems posed by the weak planning and implementing capacity of African
governments. The programs are largely designed by donor officials and implemented by
donor-provided technical assistance. This approach has been expedient in ensuring that
African governments obtain the critical balance of payments support they need from donors
reasonably quickly. However, it has postponed the more difficult and long-term problems
of helping African governments to help themselves.
Donors have contributed to the increased role of the government and the
centralization of political power in several ways. Foreign aid has tended to be channeled
almost exclusively through central governments. Aid has financed growth of the public
enterprises which are currently under attack." While it has been easy under the structural
adjustment programs to dismantle the public and para-public structures created in the
1970's, there still exists a major institutional void that in turn is frequently reinforced by the
very nature and size of external assistance. Recently, donors have encouraged the increased
role of private and grassroot institutions. They have also proposed channeling some aid
directly to private voluntary agencies. However, most countries are institutionally too weak
to absorb the large sums of resources donors typically provide, to minimize their own
administrative costs. To summarize, which interest groups wield economic and political
power and how external assistance reinforces them, are issues which need greater empirical
attention and discussion than they have received so far.
This then brings us to the question: Have structural adjustment programs effectively
commenced the process of economic and political decentralization? And, what effect have
they had on the pace and pattern of economic growth in Africa? The need for belt
tightening has been accepted by well over 30 Sub Saharan countries that have been under
structural adjustment since the early 1980's. Adjustment has involved reductions in public
expenditures and devaluations of the exchange rates and other price adjustments as a way
of reducing overall demand and to increase the supply of tradeable goods vis-a-vis
nontradeables. Price incentives are complemented by non-price measures to provide
incentives to private enterprise, including such measures as divestiture of the public sector
activities. The structural adjustment process has certainly challenged the basic premises on
which governments and donors operated in Africa in the past. A certain resistance to the
proposed measures is understandable, given that most governments do not represent, nor
are they accountable to the majority of their populations. Moreover, so pervasive have been
the controls in African economies, that even under the best of circumstances in which
governments undertake all the necessary reforms, considerable lag in supply response should
be expected. The depleted physical and social infrastructure needs to be restored and
developed further for individuals to be able to respond to new economic opportunities. But
institutional and human weaknesses prevent this from occurring.
The World Bank has amassed evidence which shows that adjusting countries are
performing better than non-adjusting countries, in terms of agricultural production, exports
and GNP growth.24 Critics of the World Bank have argued, however, that the poor have
suffered as a result of the decline in the supply of public services resulting from
retrenchment of government expenditures, loss of employment in the public sector, and
increase in prices resulting from a combination of the removal of subsidies, and adjustment
of the exchange rates.
It is difficult to judge the extent to which the increases in production and exports
observed by the World Bank studies in the short run are a result of general improvement
in policies and institutions, as distinct from additional finance, since donor assistance has
been directed exclusively towards the adjusting counties. External assistance has made
increased imports possible. Improved economic indicators may also simply reflect a shift
of volumes from informal (or parallel) to official markets encouraged by the removal of
controls and price adjustments rather than reflecting any real increase in production.
Exogenous factors such as the weather have also played a role. Part of the recovery in
agricultural production in the later half of the 1980's in the Sahelian countries was a result
of improved rainfall rather than any noticeable increase in the use of fertilizers and other
inputs needed to intensify production. Indeed, in many countries abolition of public sector
monopoly distribution systems has resulted in the collapse of the input distribution and
output marketing systems. Lacking finance, accessible roads or market information, and
experiencing a continued harassment from government on such matters as movement of
goods across administrative boundaries, the weak private sector has often been unable to
respond to the reforms at the speed expected earlier.
Increased cost of imported inputs and transport as a result of the devaluations has
also eroded the benefits of devaluations and removal of taxes enjoyed by exporters. Cost
of food imports has also increased. Moreover, while liberalization of internal food markets
has made marketing of food more open, the reduced role of governments in grain purchases
has reduced an assurance of market for some of the cereals, causing collapse in market
prices with even a modest increase in production.
Finally, the private sector has not only faced physical and institutional constraints, but
it has at times been less than competitive, dominated as it tends to be by a handful of
individuals with disproportionate political influence. They tend to replace the operations
of the public and parapublic agencies, essentially transferring the rents previously accruing
to public sector employees to themselves. Reforms thus do not necessarily benefit the
consumers or the producers, as intended.
To gauge the net effect of these various economic and political factors, objective and
empirically-based assessment of adjustment programs is needed on a country-by-country
basis. To date, too few resources have been committed by donors and governments to
What does the future hold for Africa's economic and political prospects? It is clear
from the analysis presented in this paper that Africa's problems are deep rooted and wide-
ranging. Political histories and the nature of interest groups emerging in the post-colonial
period have determined the character of the states and the extent to which participatory
political systems, in which rural people play an active role have emerged. The political and
economic conditions vary substantially from country to country, but require fundamental
changes. Adjustment programs have made an important beginning in stimulating such
changes, but the programs are unable to address the deep-rooted political problems of
African states and the way they influence the content of economic policy. Africa urgently
needs to build its public administrative capacity which can formulate and implement
effective economic policies. This means giving high priority to utilizing the large number
of educated Africans who are currently underutilized for political and ethnic reasons. It also
means a systematic reduction in the dependence on external technical assistance. There is
also a need in Africa for donors to assign the highest priority to the education and training
of African personnel and to the development of private as well as governmental, social and
political institutions. Far too much of the external assistance in the past has been directed
to achieve short-term, visible results through the deployment of inappropriate and physical
and technical assistance, and far too little to improve the fundamental characteristics of the
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