ppt booth iob seminar 27 apr 12

02/05/2012

1

In search of a politics of economic transformation in Africa

David Booth

www.institutions-africa.org

David Booth

Presentation to IOB seminar “Rethinking State, Economy and Society: Political settlements and transformation potential of African states”, Antwerp, 27 Apr 2012

2

Overview

The problem: economic transformation and African governance

What we know ... about the macro-political preconditions

What we know ... about the micro-political preconditions

If true, what does this mean for policy priorities and action?


02/05/2012

2

3

The problem, 1: Africa versus Southeast Asia

1600

1800

Southeast Asia and Sub‐Saharan Africa: GDP per capita (constant 2000 USD), 1960‐2009

400

600

800

1000

1200

1400 Southeast Asia

Sub‐Saharan Africa


0

200

400

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Source: Jan Kees van Donge, David Henley and Peter Lewis, ‘Tracking Development in South-East Asia and sub-Saharan Africa: The Primacy of Policy’, Development Policy Review 30(s1), Feb 2012

4

More on Tracking Development (Leiden)

Paired comparisons:

Nigeria/Indonesia

Kenya/Malaysia

Tanzania/Vietnam

Uganda/Cambodia

Primacy of policy:

Sound macroeconomic management

Economic freedom for peasants and small entrepreneurs

Pro-poor, pro-rural public spending


p p p p g

Implementation approach:

Outreach: get benefits to a large number of people

Urgency: do it quickly, with the resources immediately to hand

Expediency: laws, rights and ideological precepts take second place

02/05/2012

3

5

The problem, 2: Economic growth versus transformation

Economic headlines of 2010: Africa on the move

McKinsey report “Lions on the Move”: accelerating growth during 2000s;not just a resource boomnot just a resource boom

Steven Radelet CGA book: steady economic growth and democratisationsince mid-1990s in 17 “cheetah” countries

Economic headlines of 2011: not just growth but … transformation


Justin Lin K.Y. Amoako UNECA Economic Report 2011

6

More on economic transformation:

Productivity breakthroughs in smallholder agriculture

Structural change (diversification of production and exports)

Acquisition of skills and technological capabilities by firms (of a Acquisition of skills and technological capabilities by firms (of a certain size)

Anticipation of comparative advantages

And, therefore, an active state, to

tackle major infrastructure obstacles (transport, power, water)

free-up markets


improve health, education and skills

facilitate and force firms to grow and upgrade

02/05/2012

4

7

The problem, 3: What about the politics?

A 30-year conventional wisdom about Africa has ruled out successfulstate interventionism:

Inevitability of political corruption and managerial inefficiency – “rentseeking”, “neopatrimonialism”

“First get good governance” – so that states are accountable to citizens

That means better public financial management, multi-party elections and

… democratic decentralization

Global hype around the Arab Spring – renewal of public belief indemocratization as magic bullet


democratization as magic bullet

The trouble is:

Asian experience does not support the Good Governance orthodoxy orpopular faith in democracy as the solution to all problems …

… nor does African experience

8

The trouble with ‘good governance’: Asia

In SE Asia, as in NE Asia, a transformational policy mix was delivered by very different types of

i dregimes, and

few conformed to conventional good governance

those that were not ex-communist would be considered neopatrimonial

We need to work harder at identifying what it is about


y ggovernance that matters, and what doesn’t matter, in getting very poor countries to the next level …

02/05/2012

5

9

Mushtaq Khan on governance and growth


10What do we know about “rent seeking” and transformation in Africa?

In Africa as in Asia, the formula that seems to work fortransformation combines

A mechanism enabling centralization of control ofeconomic rents and their deployment with a view to the(relatively) long term

Political protection for competent, socially embedded,sector bureaucracies

Recent theory tells us why this should be the case

Contrary to the good-governance orthodoxy, economic


y g g ytransformation requires the generation and investment of “rents” – e.g. to finance learning costs of pioneer firms

The allocation of rents is also the key to political settlements that maintain peace and a predictable economic environment

02/05/2012

6

11What else do we know about macro-political pre-conditions?

Historically, this “developmental patrimonialism” hasonly happened under two types of particular conditions


12

Why democracy doesn’t help In history, elections and liberal-democratic

institutions have very different effects indifferent socio-economic settings

Until societies have substantial organizationalU t soc et es a e substa t a o ga at o acapacity, so that promises to deliver public goodsare realistic and credible

… it will always be cost effective to win electionswith bold gestures plus distribution of privaterewards (and punishments) to voters and clients

The short-termism that elections generate ismore damaging when countries are dividedi t bi th i bl d th C tit ti


into big ethnic blocs, and the Constitutionsays “winner takes all”

These issues need to be understood as large-scale collective-action problems

02/05/2012

7

13

What have we learned about the micro-political preconditions?

APPP Local Governance research: what works to overcome key bottlenecks in local public goods’ provision?bottlenecks in local public goods provision?

Water & sanitation; safe motherhood; public order/security; facilitation of markets & enterprise

Malawi, Niger, Rwanda, Senegal, Uganda

Co-provision is the norm; much informal privatisation as well

Focus on proximate institutional factors + wider enabling/inhibiting conditions


conditions

Fieldwork + literature

14

Critical importance of policy coherence vs.

What have we learned about the micro-political preconditions?

incoherence Caused by politics +

donors

What motivates better public goods provision – not global magic bullets

Especially not the magic


p y gbullet of the “demand side” and social accountability

Enabling vs. blocking local problem-solving

Ostrom was right!

02/05/2012

8

15

Implications for action? Getting agriculture and rural infrastructure properly on the agenda

Getting a greater sense of history about development, democracy and the realisation of human rights

No crude trade-offs, but good things don’t always go together

More steadiness, and less jumping on global bandwagons

Making democracy safe for development!

Explore ways of taming competitive clientelism, electoral short-termism and “winner takes all”

Stop promoting magic bullets of “demand” and start unblocking local bl l i hi h i t th


problem-solving, which is not the same

Conceptually, revisit some of the master-concepts that have guided governance reform:

From “best practice” to “good fit”; but also

Less principal-agent thinking and more on collective-action problems and solutions

Africapower and Africapower and ppoliticsppolitics


The Africa Power and Politics Programme isa consortium research programme fundedby the UK Department for InternationalDevelopment (DFID) and Irish Aid for thebenefit of developing countries.

ppt booth iob seminar 27 apr 12

Business