Thinking About Developmental States
One remarkable feature of the discourse on the state and development in Africa is the disjuncture between an analytical tradition that insists on the impossibility of developmental states in Africa and a prescriptive literature that presupposes their existence. States whose capacity to pursue any national project is denied at one level (theoretical or diagnostic) are exhorted, at the prescriptive level, to assume roles that are, ex definicione, beyond their capacity or political will. Such states are urged to "delink", to reduce themselves, to stabilize the economy, to privatize the economy, to engage in "good governance", to democratize themselves and society, to create an "enabling environment" for the private sector, etc. In other words, to do what they cannot do. What we then have is, to paraphrase Gramci, the pessimism of the diagnosis and the optimism of the prescription. Obviously such a contradictory position is unsatisfactory. To attain some congruence between diagnosis and prescription, we need to retrace our steps back to the diagnosis. We shall argue that neither Africa’s post-colonial history nor the actual practice engaged in by successful "developmental states" rules out the possibility of African "developmental states" capable of playing a more dynamic role than hitherto. This assertion has to contend with a whole intellectual tradition on the prospects of capitalist accumulation in Africa and the nature of African states and societies — a tradition characterized by the casualness with which assertions about such prospects are made, and the deterministic and aprioristic nature of the discourse rarely based on analysis of the actual experiences, but merely on first principles, ideological conviction or faith.
We shall also contend that most of the analyses about African states that have led to so much despondency about prospects of development are based on invidious comparison between African states in crisis and idealized and tendentiously characterized states elsewhere. This invidious comparison has occulted the African state, making concrete analysis of its character less important than the normative statements about what it should be. The "ought" has proved more interesting than the "is"; turning debates on the state in Africa into the most pontifical and teleological of any theme in Africa.
If the state was given a central role in earlier views of the process of development in Africa, the situation changed dramatically in the late 1970s and 1980s. The African state is today the most demonized social institution in Africa, vilified for its weaknesses, its over-extension, its interference with the smooth functioning of the markets, its repressive character, its dependence on foreign powers, its ubiquity, its absence, etc. The state — once the cornerstone of development — is now the millstone around otherwise efficient markets. It is now the "rentier state", the "overextended state", the "parasitical state", the "predatory state", the "lame leviathan", "the patrimonial state" the "prebendal state", the "crony state", the "kleptocratic state", the "inverted state", etc. Although this inflation of epithets has reached high proportions in more recent years, the tradition itself predates the "crisis" years. Early criticism of the state in Africa came from the neo-Marxists whose own epithets to describe the pathological condition of the African state included the "petty bourgeois state", the "neo-colonial state" and the "dependent state". The many epithets underscore the fall from grace of the African state. It is now argued that not only has the state become dysfunctional in terms of the management of larger societal issues, but also a real nuisance in la vie quotidienne of its citizens, as evidenced by the "withdrawal" from state-dominated economic and social spaces (Chazan, 1988a; Chazan, 1988b; Rothchild, 1994). Some even go so far as to conceive of developmental schemes that completely circumvent or marginalize the state as non-governmental organizations, the private sector and local communities proceed almost surreptitiously with addressing issues of poverty and development without the encumbrance of the state.
The shift in attitudes is attributable not only to the dismal performance of African states during the current social and economic crisis, but also to a number of ideological, paradigmatic and structural shifts in both the domestic and international spheres. First, on the ideological level there has been the dramatic ascendancy of neo-liberalism — partly as a result of the rise and political triumph of the neo-conservative movements riding on the discontent with welfare state and the inflationary impact of Keynesian solutions. To the extent that perceptions of welfarism and state interventionism spilled over into the aid business, it is not surprising that the aid discourse has embraced some of the anti-statism of neo-liberalism. Second, at the structural level, the process of globalization has forced all governments to rethink and restructure the state-market relationships in their respective countries and to pay greater homage to "market forces".
The "Developmental State"
In the literature, the "developmental state" has two components: one ideological, one structural. It is this ideology-structure nexus that distinguishes developmental states from other forms of states. In terms of ideology, such a state is essentially one whose ideological underpinning is "developmentalist" in that it conceives its "mission" as that of ensuring economic development, usually interpreted to mean high rates of accumulation and industrialization. Such a state "establishes as its principle of legitimacy its ability to promote sustained development, understanding by development the steady high rates of economic growth and structural change in the productive system, both domestically and in its relationship to the international economy" (Castells, 1992: 55). At this ideational level, the élite must be able to establish an "ideological hegemony", so that its developmental project becomes, in a Gramcian sense, a "hegemonic" project to which key actors in the nation adhere voluntarily. The state-structure side of the definition of the developmental state emphasizes capacity to implement economic policies sagaciously and effectively. Such a capacity is determined by various others — institutional, technical, administrative and political. Undergirding all these is the autonomy of the state from social forces so that it can use these capacities to devise long-term economic policies unencumbered by claims of myopic private interests. It is usually assumed that such a state should, in some sense, be "strong" and enjoy "relative autonomy" from key social actors. The quest for a "strong state" in the development process was a strong feature of the "modernization" literature. Such a state was contrasted to what Myrdal (1968) referred to as the "soft state" that had neither the administrative capacity nor the political wherewithal to push through its developmental project. And, finally, the state must have some social anchoring that prevents it from using its autonomy in a predatory manner and enables it to gain adhesion of key social actors.
As formulated, the definition of the "developmental state" runs the risk of being tautological since evidence that the state is developmental is often drawn deductively from the performance of the economy. This produces a definition of a state as developmental if the economy is developing, and equates economic success to state strength while measuring the latter by the presumed outcomes of its policies. It has led to myopic concentration of analysis around success to the neglect of the "trial and error" nature of policy-making even in the most successful cases. If a developmental state is not be deified into some kind of omnipotent and omniscient leviathan that always gets what it wants, then the definition must include situations in which exogenous structural dynamic and unforeseen factors can torpedo genuine developmental commitments and efforts by the state. This allows room for poor performance due to exogenous factors, miscalculation or plain bad luck. At times, a government’s political will and technical capacity may simply prove inadequate to fend off exogenous forces. In Africa, we have many examples of states whose performance up until the mid-1970s would have qualified them as "developmental states" in the sense conveyed by current definitions, but which now seem anti-developmental because the hard times brought the economic expansion of their countries to a halt. Recognition of episodes and possibilities of failure leads us to a definition of a developmental state as one whose ideological underpinnings are developmental and one that seriously attempts to deploy its administrative and political resources to the task of economic development. Proxies such as "tax efforts" and public expenditure patterns can be used to measure such "seriousness". The main force behind the developmentalist ideology has usually been nationalism, inducing nations to seek to "catch up" with countries considered as more developed, to firm the resource base for national defence and security, etc. It is essential to stress these ideological underpinnings of state policies for it is these that provide the rationale for some of the "policies" and give legitimacy to otherwise unpalatable "sacrifices", not only because they serve as the "opium of the masses", but also because they knead together the ruling class. The centrality of ideology also points to the naiveté of the de-politicized quest for technocratic "governance", now pushed by international financial institutions (IFIs), in which a technocracy is supposed to carry out policies that are good for the nation for no apparent reason, not even self-serving ones.
Learning the Wrong Lessons for Africa
Not only has the spectacular success of the East Asian "Four Tigers" led to a re-reading of the role of the state in the development process, but it has also raised the question of repricability of their policies and experiences in other developing countries. The lessons drawn from these experiences differed and were often shaped by the pre-analytic predisposition of the observer. Earlier recognition of this performance of the "Four Tigers" was refracted through the prism of neo-liberalism so that the experience appeared shorn of all dirigisme and was cited as irrefutable evidence of the superiority of essentially laissez-faire policies. More specifically, reliance on market forces and the adoption of market-driven export-oriented development strategies was said to have led to efficient exploitation of the comparative advantage of these countries in cheap labour (Balassa, 1971; Little et al., 1970).
The first presentation for African consumption of the lessons from Asia from the neo-liberal perspective was the "Berg report" (World Bank, 1981), which has been the definitive document on adjustment for 17 years. There have been amendments, subtractions, additions and refinements of the argument, but as Adjustment in Africa (World Bank, 1994) clearly suggested, the World Bank was almost congenitally tied to the core argument of the Berg report with its faith in the market and a minimalist view of the state. The 1994 report insisted on the dichotomy made in African policy-making between state and market in which these appeared as rival forms thus reviving Manichean discourse that had for years vitiated "development planning" in Africa.
Subsequent analysis has shown that neo-classical reading of experiences of development in Asia has been tendentious, deliberately downplaying the role of the state in the "success stories". "Revisionist" literature on the Asian experience presents a picture quite different from that projected by neo-classical interpretation of that same experience. These countries were far from paragons of laissez-fairism and, instead, were highly "dirigiste" economies in which the states had "governed markets" to ensure high levels of accumulation, technology absorption and conquest of foreign markets. The general conclusion of this literature is that "market failure" so prominent in development economics is still a problem that warrants government intervention and that since such "failures" differ in intensity, scope and location, a selective set of interventions is required. The most significant lesson has been the central role played by a "developmental state" in the process of development. This "dirigiste" Asian experience and theoretical developments in economics have revived interest in some of the issues that were central to development studies, unleashing what Krugman (1992) has called a "counter-counter revolution". These issues include problems of human capital; possibilities of the state "crowding in" private investment; market imperfections and failures, industrial policy, etc. In the African case, the failure of structural adjustment programmes has compelled even the most dogmatic institutions to recognize the positive role the state can play in the process of development, beyond acting as a "night watchman".
In its book, Sub-Saharan Africa: From Crisis to Sustainable Growth, the World Bank (1989) acknowledged the importance of the state in managing development and social change, and brought back on the agenda the pro-active role of the state in development. However, the return of the state was now premised upon a whole series of proposals about "good governance". In Adjustment in Africa (World Bank, 1994) and Bureaucrats in Business (World Bank, 1995), the World Bank retreated to its more familiar ideological terrain in which a developmental state borders on an oxymoron. One sees in the tortured logic of the presentation of the Asian miracle, especially with respect to industrial policy and its reduction of a complex set of pro-active state policies into a vacuous "market friendliness". The lesson drawn for Africa by the World Bank was that, in the best of cases, development strategies or, more precisely, industrial policy was either superfluous or, where useful, merely simulated the market, which, in the opinion of some, would have done better without the interventions anyway. In the African case, two additional arguments were added — first, even if industrial policy had worked in the successful economies, African states were too weak and too prone to "capture" by vested interests, so that the pursuit of such polices would produce perverse outcomes. And, second, in any case in the World Trade Organization (WTO) trade régime most of the policies central to industrial policy were no longer acceptable.
The Impossibility Theses
The economic crisis of the 1970s, the demise of the theoretical armour for state intervention, the ideological hegemony of neo-conservatism in key funding institutions and donor countries, the palpable failure of "development planning" in many countries, stagnation and the crisis of accumulation in the socialist countries and the changing "mood" towards Third World Countries (the Afropessimism, the anti-Thirdworldism, etc.), the pessimism or cynicism of the development establishment about its counterparts in the recipient countries — all these pointed to "government failure" as more insidious than the market failure that state policies had purportedly been designed to correct. However, although some of the arguments against state intervention are based on an idealized and dogmatic view of markets, there is now widespread acceptance of "market failure" on the grounds of economies of scale, imperfect information, etc. Consequently, the most important case against developmental states in Africa is not faith in flawless markets, but rather that whatever the degree and extent of "market failure" African states cannot correct them in ways that do not make things worse. What emerges in the literature on Africa is that what has obviously worked in other "late industrializers" is simply a non-starter in Africa. While it is now admitted that the state has played a central role in the development of Asian countries, it is suggested that replication of the Asian experience is somehow impossible for Africa. The reasons include the (a) dependence, (b) lack of ideology, (c) "softness" of the African state and its proneness to "capture" by special interest groups, (d) lack of technical and analytical capacity, (e) the changed international environment that did not permit protection of industrial policies, and (f) past poor record of performance.
For instance, Peter Lewis, discussing the repricability of the Asian model, states:
"While some aspects of this model (for instance, greater political insulation of economic policy makers) could reasonably be achieved in African countries, the extensive co-ordinated economic interventions of the East Asian states are well beyond the administrative faculties of most African governments" (1996).
Similar sentiments are explicitly expressed by Callaghy (1993), who argues that African states lack the capacity to pursue the statist model of Asia since Africa is hemmed in as it tries "to navigate between weak states and weak markets and to do so with open political structures".
Lack of Ideology?
One argument often advanced by Africans themselves relates to the lack of an ideology of development anchored in some form of nationalist project. This is a recurring theme in political discourse in Africa. Frantz Fanon’s (1966 and 1967) tirades against the ideological numbness of the emergent ruling classes in Africa remain among the most sustained statements of this position. Many other political leaders and analysts have elaborated on this lacuna. Onimode talks of the "ideological vacuum" that he attributes to petty bourgeois commitment to their class interests and their fear of "revolutionary pressures", to the obscurantism of imperialist powers and to mass illiteracy "which imposes a culture of silence and passivity and inhibits popular demand for ideological discourse" (1988). Thus Claude Ake states: "The ideology of development was exploited as a means of reproducing political hegemony; it got limited attention and served hardly any purpose as a framework for economic transformation" (1996). For some, the lack of ideology is inherent to personal rule under which loyalty is not to some overriding societal goals but to individuals, often holding highly idiosyncratic ideologies that they themselves flout with impunity and with no moral qualms (Jackson and Rosberg, 1982; Sandbrook, 1986). Consequently, such leaders are said to have no moral basis on which they could demand enthusiastic and internalized compliance to whatever "national project" they launched. In the more extreme versions the lack of ideology of development is evidence of the cultural rejection of development by African leaders and their followers.
However, as I have argued elsewhere (Mkandawire, 1997), for most of the first generation of African leaders "development" was certainly a central preoccupation. Indeed some writers characterize the post-colonial state as "developmentalist" almost by definition. African leaders have always been aware of the need for some "nationalist-cum-developmentalist" ideology for both nation building and development. The quest for an ideology to guide the development process inspired African leaders to propound their own idiosyncratic and often incoherent "ideologies" to "rally the masses" for national unity and development. If such ideologies are still absent it is definitely not for lack of trying. The centrality of "development" was such that it acquired the status of an ideology ("developmentalism") that provided the ideological scaffolding of "development plans" and the authoritarian scaffolding given to it. For some, such an ideology has essentially served purposes of mystification and obfuscation. Thus Gavin Williams, writing about the ruling class in Nigeria, states:
"The Nigerian bourgeoisie lacks the commitment of a religious socialist or nationalist character of the rationalising, capital accumulating, surplus expropriating classes of Britain, Russia, Germany, or Japan during their period of industrialisation. Perhaps it is this which lies behind the repeated call for a ‘national ideology’, which seeks to subordinate the energy of the people behind a single national goal. In fact the Nigerian bourgeoisie do have an ideology, in the sense of a theoretical legitimisation of the status quo. It is found in the concept of ‘development’..." (1977: 286).
My own view is less cynical. By political commitment and social origins most of the leaders were deeply committed to the "eradication of poverty, ignorance and disease", which formed an "unholy trinity" against which nationalist swords were drawn in the post-colonial era. And even today, some view of development conditions African policy-makers’ perception of policy. The exigencies of political legitimacy impose "development" on any meaningful political agenda. Although the Bretton Woods institutions (BWIs) have managed to convince many that African leaders’ objection to structural adjustment programmes (SAPs) was because these would undermine their rent seeking and clientelistic chasse gardée, there are well-documented developmental arguments against SAPs, advanced by African bureaucrats, on the need to maintain public investment in infrastructure and education, on the need for some form of credit rationing to stimulate private investment, etc. The Economic Commission for Africa has over the years regularly codified these positions, which were often dismissed peremptorily by the BWIs.
In conclusion, one should note that, if the first generation of African leaders concentrated their energies on the politics of nation building, there are signs of a new leadership whose focus is on the economics of nation building. These new leaders swear by economic growth and seem to view good growth indicators as the main source of their legitimacy. In addition, if the earlier nationalist leaders associated capitalism with foreign control, the new leadership seems much less preoccupied with that. They have embraced privatization and attraction of foreign capital as centrepieces of their policy initiatives. Ominously, these leaders are more attentive to the apprehensions and appreciation of international organizations than to their domestic capitalists. While assiduously cultivating a good image in the eyes of international financial institutions (IFIs) and seeking out foreign capital, they tend to have a jaundiced view of domestic capitalists, whom they hold in spite and incessantly vilify for parasitism, failure jointly to set up modern enterprises able to compete internationally, etc.
In the modernization school that dominated development studies in the 1950s and 1960s, it was usually assumed that, once colonialism had shaken these underdeveloped countries out of their traditional stupor, they would embark on a process of modernization that would make them traverse certain "stages" — as spelt out by W.W. Roust in his famous "anti-Communist manifesto", Stages of Economic Growth (Rowstow, 1960) — towards a full-fledged capitalist system. Considerable empirical work was produced indicating certain historical regularities associated with economic growth, the idea being that once identified they could then be deliberately introduced or manipulated (through aid schemes and "development planning") in the underdeveloped countries to initiate or accelerate the growth process. "Traditional society" might set up barriers but these would be overcome by modernizing élites, aid and foreign capital. The first generation of post-colonial "development plans" were couched in a language that suggested conscious efforts to move economies from one "stage" — usually the "pre-take off" stage towards the "take-off" stage. In all this, the centre stage was occupied by "modernizing élites" guided by the aspirations of nation building and development. The "developmental state" was seen as not only desirable but possible and able to be facilitated by training programmes, aid, military support, etc. (Gendzier, 1985).
By the mid-1970s, this linear view of capitalist development began to lose its dominance largely due to the onslaught of the Dependence School that generally denied that capitalism in the periphery could play its historical progressive role (in the Leninists sense of leading to an increase in the productive forces of social labour and in the socialization of labour). Instead it spoke of processes of an ineluctable "development of underdevelopment". The assertion followed from a rather constricted view of possible "paths" of capitalist accumulation and a highly stereotyped and idealized view of how the "paths" of the developed capitalist countries, which were then posited as models against which current development experiences could be judged, had actually been. This point of departure in turn led to the mistaken view that, because capitalism in the periphery was different and produced a series of social, political and economic contradictions that were specific to it, it ceased to be capitalist or, worse, it led to stagnation — a view associated with the Russian Narodniks that Lenin was to debunk.
More significant was the fact that this perspective ruled out the possibility of developmental states in Africa that were either led by a national bourgeoisie or capable of nurturing one. This of course meant that either transnationalization processes had obviated the need for such a national bourgeoisie or the asymmetric nature of centre-periphery relations tended to produce class structures that were not conducive to dynamic accumulation and, more specifically, produced a bourgeoisie that was historically condemned to be no more than a "comprador bourgeoisie" subservient to the interests of foreign capital (Leys, 1975; Nabudere, 1981; Shivji, 1980). Such a ruling class could not produce the "captains of industry" needed for the mobilization of resources and acquisition of technology. Fanon (1966; 1967) was to provide the quintessential characterization of the socio-psychology of this class as essentially born senile and decadent before scaling the heights of enlightenment and industrial revolution. At best, Africa could have "lumpen bourgeoisie", "dependent capitalist" or, worse, "drone capitalist". Such descriptions pointed to one fact, namely, that the African state was not up to its "historical mission" of ensuring capitalist accumulation. They underscored how the African state diverged from the historical "norm" of the capitalist state in the "centre" in which the national bourgeois had created a state that was the linchpin of the industrialization of Europe. The question that emerged from this analysis was: is the aberration only temporary so that one could envision a set of policies and events that would turn this state into a "normal bourgeois state", or was the historical conjecture such that the position of these peripheral states would remain pathological and that the only solution would be some kind of "delinking" from the "world system"? Most of the countries that openly pursued the capitalist path were considered "neo-colonial" and so beholden to foreign interests that they could not possibly pursue something so eminently "national" as development. Versions of "associated dependent development" appeared in literature on Africa to accommodate the high growth rates in such countries as Côte d’Ivoire and Kenya, and were most articulately advanced in the so-called "Kenya debate".
The third position was that, even if capitalist accumulation was possible, transcending of capitalism in the periphery was not on the immediate agenda and there was no point in going through the phase of a nationally directed process of a capitalist accumulation and, therefore, of thinking about appropriate state structures and functions. This argument was the more persuasive when informed by the view that the "revolutionary pressures" were intense and that the revolution was around the corner (Ake, 1978). The "actuality of the revolution" (to use George Lukac’s phrase) meant that radical change was imminent. There was simply no point in considering possibilities of capitalist accumulation under the aegis of a national bourgeoisie given the apparent imminence of socialist transformation. Having reduced the choice in the Third World to that between "Barbarism or Socialism", there was no point in pondering the prospects of capitalist accumulation as a feasible, let alone, morally acceptable alternative. The more successful states, in terms of growth, were usually dismissed as neo-colonial and that was that. If a developmental state was to emerge it would be in the transient from a "national democratic phase".
By the 1970s and 1980s most of these arguments had begun to lose their force partly because of the Asian — and some African and Latin American — experience of what Cardoso and Faletto (1979) termed "associated dependent development" and partly because of ideological changes among key social movements that increasingly sought internal reform rather than rupture. The "associated dependent development" allowed for capitalist development in the periphery and in many ways provided the intellectual tools necessary for conceptualizing the possibilities and dynamics of "dependent development". The prerequisites for such development were, inter alia, that a progressive national alliance be established between the national bourgeoisie and labour and that the alliance constitute a "developmental bloc" able and willing to pursue a strategy of national industrial development over the long term. All this presupposed a "developmental state".
Similarly, those of "classical" Marxist persuasion asserted that capitalist accumulation was taking place in the developing countries in the "normal way" — both during colonialism (that "pioneered" capitalist industrialization) and, more obviously, after independence (Warren, 1980). Warren’s thesis was applied in its unadulterated form to Africa by Sender and Smith (1986), whose book was a polemical attack on the "nationalists" dependence view that colonialism and imperialism had bred underdevelopment. Arguments that capitalism had been stunted by colonialism were either evidence of "guilt and shame" and were lumped together with the literature of the "masochistic modern version of the White Man’s Burden" (Warren, 1980) or nationalist "scapegoatism" aimed at shifting the blame for post-independence policy failure on imperialism (Sender and Smith, 1986: 132).
Lack of AUTONOMY
One major set of recent "impossibility theorems"are derived from a focus on the internal conditions of African countries and are largely informed by neo-Weberian accounts of state-society relations or by public choice formulations on how the rational pursuit by individuals of their interests has led rather to lack of autonomy of the state and African malaise due to capture by societal interests.
The neo-Weberian critique has focused on the failure of African states to establish themselves as rational-legal institutions and to rise above the "patrimonialism" that affects all of them, regardless of their ideological claims and the moral rectitude of individual leaders. Going back to the functions that modernization had assigned to the state, the neo-Weberian highlights the flawed nature of the performance of the post-independence state, especially in its relationship with a society at large from which it has not been able to distance itself adequately so as to perform efficiently. In these accounts, "market failure" central to development economics and "government failure" central to neo-classical economists are replaced by something more debilitating and more recalcitrant — "societal failure" signalled not only by lack of "social capital", but also by the disease-like spread of this societal malaise into both market and state structures. Termite-like, Africa’s primordial and patrimonial relationship (what Göran Hyden refers to as the "economy of affection") has eaten into the very core of the edifice of modern administration rendering it both weak and incoherent. In Hyden’s words:
"... the economy of affection — is an underestimated threat to the macro-economic ambitions of either capitalism or socialism in Africa. Derived from a mode of production in which the structural interdependence of the various production units is minimal or nil it has no provision from a systemic superstructure to keep it together. Instead the economy of affection is a myriad of invisible micro-economic networks which, if allowed to penetrate society, gradually wear down the macro-economic structures, and eventually the whole system. The threat of the affective networks stems from their invisibility and intractability" (1983: 21).
Mired in redistributive activities imposed by affective relations, prebendalism or clientelism, so the argument goes, the state has not been able to provide the bureaucratic order and predictability that capitalists need if they are to engage in long-term investment. To the Asian "autonomous state" is juxtaposed the African "lame Leviathan" (Callaghy, 1987), which is so porous and "penetrated" by society, so beholden to particularistic interest groups, so mired in patron-clientelist relationships, and so lacking in "stateness" it cannot pursue the collective task of development, which demands insulation from such redistributive demands. It is these relationships that constitute what Bayart (1993) terms the "politics of the belly" that has paralysed African economy. Of the "governmentability" (i.e. mode of governance) produced by this "eating", Bayart states: "… it has crushed most of the strategies and institutions, in particular the Christian churches, the nationalist parties and the civil services, which have worked for the advent of a modern Africa. The experiences of governments which attempted to break free from their grip have either not lasted a long time or have in their turn been absorbed by its practices" (1993: 268).
There are a number of problems with this approach as we contemplate the prospects of a developmental state in Africa. One is that it is not always clear whether such state-society relationships are inherent to the level of development and that with passage of time the African state will evolve into a more respectable and recognizably developmental form. Or are they merely conjunctural phenomena attributable to the greed and venality of African leaders spurred on by the dramatic increases in revenue accruing to the state in the post-colonial era? Or are these attributes of the peculiarities and the historicity of African cultures that account for Africa’s predicament (as compared, for instance, to the blessings of Confucianism enjoyed by the Asian countries) that can only be transcended in the longue durée?
Another problem is that "neo-patrimonial" states in and outside Africa have pursued a wide range of policies including some that are squarely developmental. In other words, other than indicating the style of governance, neo-patrimonialism does not tell us much about what policies a state will pursue and with what success. In the African case "neo-patrimonialism" has been used to explain import substitution, export orientation, parastatals, privatization, the informal sector development, etc. The result is that, in seeking to explain everything, it explains nothing except perhaps that capitalist relations in their idealized form are not pervasive in Africa. Even more damning is the fact that some of the features of the African state highlighted by this literature have been a salient aspect of successful developmental states. Accounts of spectacular corruption in the high performing East Asian economies have become frequent in the press following the financial crisis. So, obviously, neo-patrimonialism is not a robust independent variable in explaining low economic growth. One solution to this conundrum is to suggest that, while the Asian variant of patrimonialism does not constrain rational bureaucratic decision-making (a contradiction in terms), Africa’s patrimonialism does just that. The African state is said to be afflicted not only with partenalism, but also with a debilitating strain of "pathological partenalism" (Ergas, 1986). Much of this speculation fails to spell out exactly what African cultural attributes would produce the pathology of paternalism in Africa. It also displays ignorance or idealization of the Asian experience and thus occults the very complex processes behind the successful performance of these economies.
Finally, we should also bear in mind that morally reprehensible or culturally unacceptable though certain "clientelistic" practices may be, we do not have a clear theoretical establishment of how they affect the performance of capitalist economies. Capitalist economies operate with a much broader moral latitude than it is often preached. A very wide range of morally reprehensible behaviour can be integrated into strategies of accumulation effortlessly. Not even the case for the negative effects of corruption and capitalist accumulation has been satisfactorily established, despite the new crusade against corruption.
Public Choice and Rent Seeking
The most cogently stated of these critiques is that of public choice school with the work of Bates (1981) being the single most comprehensive statement of the critique as far as Africa is concerned.
Essentially this critique starts from assumptions of how unregulated markets work. In general, these markets are said to operate in a Pareto optimal way in the sense that the allocation of resources that they generate is such that it can only be improved upon by making somebody worse off. Given that markets work well, why are "market distortions" by the state tolerated or generated? In Bates’ work, the answer lay in the rational pursuit of self-interest groups by organized individuals who pushed the state to adopt policies that generated "rents" for them. The state was then essentially a rent generating institution that inhibited efficient allocation of resources. In this literature "rent seeking" invokes the expenditure of resources to capture artificially created rents. It should be stressed that the point of departure of "rent seeking" literature is the perfect market. In real life and, indeed, by this definition, rent would be ubiquitous in any situation in which a state existed to safeguard or transfer rights.
Like "neo-patrimonialism", rent seeking is used in a procrustean manner so that it ultimately assumes the character of a bogeyman. While the concept points to something real in most economies, it has been made to carry more than it can bear. This has been partly because of the anti-statist ideology to which it has become tethered making it serve as an ideological weapon in the statephobia that neo-liberalism has cast so broadly, and partly because of the protean definition assigned to it so as to include anything from Mafia-like activities to the protestations by the Chamber of Commerce over pieces of legislation. In the case of Africa, rent seeking is conflated or used interchangeably with corruption, patron-clientelism and even the extended African family.
Rent seeking usually involves redistribution of income from one group to another. The effect of such redistribution on growth depends on its impact on incentives and the use to which the "winners" put the surplus in their hands. As Catherine Boone (1994) notes in the case of Senegal, rents can constitute a form of primitive accumulation, as can be inherited wealth or any form of windfall profit. She observes that, for the emergence of African capitalism, the key question is: will wealth collected in the form of rents be transformed into capital through productive investment? Other than the "easy come, easy go" thesis, there are no a priori reasons to believe that only the wealth earned by one’s blood, sweat and tears will be used productively.
In most of the literature, rent seeking activities are around firm, industry or sector micro-economic policies, leading to various micro-economic distortions that have all been grouped under "import substitution" policies. Rent seeking is generally responsible for micro-economic inefficiencies that are often remotely related to the macro-economic imbalances for which rent seeking is usually blamed. Rodrik (1995) points out that it was generally macro-economic imbalances and the failure to correct them in time that have accounted for the economic crisis in most developing countries. The countries that experienced the debt crisis were those that failed to adjust their monetary and fiscal policies and not those that had large micro-economic distortions. The "rent seeking" literature in Africa has tended to blur the distinction between micro-economic distortions and macro-economic balances, tending to believe that the latter was the logical consequence of the former. It is now generally evoked against active policy making even in directions that have been theoretically and empirically demonstrated to be beneficial. It has become the great caveat that brings the apparently inexorable logic of "market failure" to a dead halt. And yet many of the policies attributed to rent seeking and identified as the cause of Africa’s failure have been and are still in use by the high-performance Asian economies (HPAEs) to good effect. In other words, while micro-economic distortions were costly, what eventually drove many impost substituting countries to ruin was not so much the inefficiencies induced by rent seeking, but macro-economic imbalances that are not easily attributable to rent seeking groups.
Even in the context of new growth theories, we simply do not have evidence on the precise channels through which rent seeking adversely affects such variables as growth, if at all. In looking at some of the advice given to African countries, it turns out that what is wrong is not rents per se but rents attached to a wrong strategy. This partly explains why advocates of export-oriented strategies admit, albeit surreptitiously and reluctantly, to the need to deploy rents to stimulate export-oriented industries. In the push for exports towards which Africans are now being urged, it is suggested that governments provide selective confessional credits, export subsidies, etc. This involves creating "rents" in these new activities. It is not clear why these rents will not induce as much lethargy as those given for import substitution industry.
Rents can be both "productive" or "unproductive" in their incentive impact. In most models it is assumed that rents are exogenous to the individual firm. They are out there and the firm allocates resources to get them. It follows from this assumption that such an allocation will leave less resources for productive investments. However, once the assumption of exogeneity is dropped and once we assume instead that the level of rents a firm gets depends on the size of the firm’s activities, the story changes and we get an entirely different dynamics in which rent is a function of the firm’s performance. The pursuit of rents can lead to expansion of productivity activity. In such cases rent seeking becomes a spur to growth as rent seekers attempt to capture as much of the rents as possible.
In a study of Tunisia, Bellin (1994) concludes that government mediation of profits and even extensive cronyism can be compatible with productive investment and growth if appropriate political conditions prevail. What matters about rent is its contingency and reciprocity. This in turn depended on the nature of the state structure, the self-monitoring of the capitalist class themselves, the pressures of other social classes for performance and the logic of the régimes sustaining political coalition.
Much of the writing on Asia, at least up until the current financial crisis, took it for granted that the creation and allocation of rents by the state had played a central role in both creating a nationalist capitalist class and promoting accumulation. Writers on Asia point to "contingent rents", which have been used to encourage contests among private firms for government incentive and co-ordination schemes (Yanagihara, 1997). Such rents are paid to reward growth enhancing activities by private firms. Jomo, who has written extensively on Malaysia makes a very clear statement of the issue when he states:
"... the rentier nature or origins of income does not mean that such income will necessarily be subsequently deployed unproductively. Scale economies or other considerations may well determine that a perfectly competitive situation will be suboptimal, in which case the question arises of how best to distribute or allocate such rents. Rather than insist on competition in such circumstances in a vain search for efficiency, which would effectively dissipate the rent through the expenditure of rent seeking costs, the state could instead allocate such rents in a manner so as to accelerate and direct the accumulation process, e.g. in favour of industrialisation. Hence, for instance, effective protection policies have been used in Northeast Asia to push import substituting industries to export through the use of conditional incentives. It is not the existence of rents in themselves which should always be the focus of concern, but rather their distribution or allocation and deployment for productive purposes. In many circumstances, the existence or attraction of rent capture may well be the most effective incentive to encourage productive) investment or economic activity, e.g. technology development"
Elsewhere Jomo notes:
"Rent transfers may well contribute to, rather than undermine further investments in the national economy since rentiers can usually count on further advantages from such investment. If capital flight is thus discouraged, the greater concentration of wealth associated with such rentier activity may actually have the consequence of raising corporate savings, thus accelerating capital accumulation, growth and structural change" (1996:12).
The Asian use of rent seeking to spur firms to expand and export echoes this endogenization of rents. The dependency on rent earned on investment has been used as an instrument by governments to raise the profitability of investment in selected economic activities. This case is well argued by Akyüz (1996), who advances the proposition that the creation of rents and the pushing of profits over and above those that would be attained under free market policies were central to the process of accelerated capital accumulation and growth and establishing of new industries by providing a profit-investment nexus that undergirds the high corporate savings and investments in a number of Asian countries. He suggests five reasons for the success in the linking of rent creation to promotion of industrialization.
The point of the Asian experience is that the use of "rent seeking" as an argument against a more active developmental state is simply not credible. The relevant issues are "rents" for whom and with what reciprocal obligations for receivers of such rents? And the answer will lie on the desired income distribution and strategy of development. The denial of an active developmental state for fear of "capture" is tantamount to the denial of the possibilities in Africa of accelerated development achieved by a deliberate "government of the market" towards greater mobilization and developmental allocation of resources (including rents). In the African debates, the fear of the damaging effects of rent seeking has not only sustained the argument for a minimalist state, but has also given the foreign experts, who for inexplicable reasons do not engage in rent seeking like all other mortal beings, a moral upper hand.
- Rents were achievable through activities which served national interests.
- Rent seeking costs (information collection, influence peddling and bargaining) were kept low.
- Governments acted to close off non-productive channels of wealth accumulation such as urban real estate speculation.
- Rents were provided on a selective and temporary basis and withdrawn as new industries became mature enough to compete internationally.
- The realization of rents was related to performance standards.
Both the rent seeking and neo-patrimonialism argument have been used to seek more autonomous states by suggesting that the key to Asian states was such insulation. Analysis by institutionalists suggests that the view of the autonomy of the state in the "Asian miracle" countries is an oversimplification and the argument for state technocracies pursuing development in complete isolation from societal pressures is a myth and is not empirically founded. In the seminal work on developmental states, Chalmers Johnson (1981) underlined as a crucial feature the intimacy of their relationship with the private sector and the intensity of their involvement in the market. Subsequent writing on other developmental states has underscored this point leading to the useful, albeit problematic, notion of "embedded autonomy" to describe the nature of state autonomy in these societies as circumscribed by the dependence of the state on the activities of the private sector for its development project (Evans, 1992). Evans has also argued that the much vaunted autonomy is "embedded in a progressively dense web of ties with both non-state and other state actors (internal and external) through which the state has been able to co-ordinate the economy and implement developmental objectives" (1992). In popular parlance such a relationship is encapsulated by such expressions as "Japan Inc." or "Malaysia’s smart partnership", which all point to close relationship between state and domestic capital from what is advocated by IFIs. These essentially corporatist arrangements were central to the edification of the relationship of trust between state and capital. In many countries, independently organized business associations have had considerable influence on state polices. In South Korea, concentration of business and the highly diversified interests of the chaebols obviated the need for organized collective action. Instead business-government relations were managed through direct firm level and even personalistic consultations between the chaebols and state institutions (Cheng et al., 1996). Hawes and Liu note that in other Asian countries technocrats, who have enjoyed less autonomy than those in South Korea and Taiwan, have had "to seek allies where they could find them. both nationally and internationally, and they have found many willing partners in the demand for new institutions within the growing and increasingly competitive classes of the region" (1993: 647). The World Bank observes that "formal institutions that facilitate communication and co-operation between the private and public secures ... in effect an institutionalised form of wealth sharing aimed primarily at winning the support and co-operation of business elites" (1993: 181). The "isolation" of these states was not from all particularistic interests but from those of some particular interests or classes. More specifically what most of the "state autonomists" imply is an economic bureaucracy beyond the reach of populist pressures (Felix, 1994) — a point that has unwarrantedly led to the view that "autonomous" states must be authoritarian.
These problems arise from the tendency to treat conjunctural features of states as if they constituted structural or intrinsic features of African societies. Failure to handle a particular crisis is considered as evidence that the state is non-developmental in both ideology and technical capacity. The result is ambiguity in the use of concepts and their relationship with other variables. Associated with success in Asia, clientelism and close ties between business and the state have been advanced as evidence of "embeddedness" of state autonomy while similar practices in Africa are evidence of "capture". And now that same "embeddedness" in Asia is advanced as evidence of "crony capitalism" that has ineluctably led to the current Asian financial crisis. It is obvious that such concepts as neo-patrimonialism cannot serve as a robust independent variable — especially when given a culturalist twist.
Wrong Economic Histories
Much of this "impossibility" literature is based on a misreading of the economic history of Africa. The Berg report contained a brief history of Africa’s post-colonial development and the role of the state in that development. It portrayed both post-colonial policy and performance as unmitigated and undifferentiated disasters. The veracity of the Berg report’s analysis of the African economic crisis was taken for granted by most analysts of African economies who proceeded to derive generalizations from it and to provide the political explanations for that poor policy performance. And yet the Berg report had in many ways falsified economic performance during the preceding two decades.
First and foremost, it underestimated the enormous importance to African economies of external conjuncture and the role of foreign expertise. African economies generally do well when the global conjuncture is good and poorly when it is bad. It is a lesson that the BWIs have gradually learnt as their own stabilization and adjustment programmes have on several occasions been unscrambled by external factors. As for foreign expertise, this is one variable that is often conveniently forgotten in looking at the malaise of the African state. Nevertheless, international institutions do, on occasion, admit that their role in African policy making has been a major contributory factor to the policies African countries have pursued. Most policies that are today attributed to neo-patrimonialism and rent seeking were the orthodoxy of the day brought to Africa in well-funded and well-manned packages. The lack of "policy-ownership" is not a new thing in Africa and, alas, not a thing of the past either.
Second, key economic policies — especially those surrounding import substitution — were not the result of lobbying by rent seekers or "capture" of the state of these policies. Synthesizing the results of a number of studies on the interaction between the economics and politics in several developing countries, Robert Bates and Anne Krueger, who have contributed richly to the public choice school, state: "One of the most surprising findings in our case studies is the degree to which the intervention of interest groups fails to account for the initiation or lack of initiation of policy reforms" (1993:455). With the exception of a few cases, such "embeddedness" never really developed in Africa. If there was anything that the state in Africa failed to do it was to allow the local business class effective presence in policy-making. Or, conversely, if there is anything that African business classes failed to do it was to "capture" state policies. Much of the evidence of "capture" is deduced from the fact that gains accrue to identifiable groups or sectors. However, the argumentation here often involves a non sequitor. The fact that a group benefits from a particular set of policies does not prove that they lobbied for those policies, let alone that they have "captured" the state. Dispensation of rent by states does not establish capture by beneficiaries of such rents. Thus, when Mobutu embarked on "Zairenization", transferring foreign-owned firms to nationals, all one can say is that a state awash with revenue from increased commodity prices took some "nationalistic" measures which benefited some of Mobutu’s cronies. The true test of "capture" is the behaviour of the state during hard times. In the African case, key groups benefiting from putatively "captured" policies (such as the vaunted "labour aristocracy") have been dropped from the coalition with surprising ease. Conceptually, state policies were never a "class project" in Africa. Import substitution was neither the result of successful lobbying by rent seeking groups nor a consciously devised strategy to support the emergence of a national bourgeoisie; and even the small capitalists that emerged almost inadvertently, and at times despite state harassment, were to be abruptly left out in the cold as governments danced to the tunes of the BWIs. Indeed, where intimate relationships emerged they tended to be arbitrary and lacking in reciprocity. There were many historical reasons for the weakness of the African capitalist class vis-à-vis the state. For one, colonialism had suppressed the emergence of such a class so that, unlike the case in India, for instance, the national bourgeoisie played a marginal role in the liberation struggle and could easily be marginalized in policy making. The absence of a group of large indigenous capitalists with sizeable capital, organizational resources and entrepreneurial skills, obviated the need for the new states to form an alliance with such classes for its development project. It also limited the capacity of indigenous capitalists to "capture" state policies. In addition, only in rare cases have the domestic capitalist classes constituted an important base of state revenue. In the mineral rich economies, the state had access to revenue either by directly owning the mines or by relying on foreign capital. In other economies, the state has had access to peasant revenue without any mediation by a capitalist class, not even a merchant one.
Third, despite the many distortions of import substitution, up until the second "oil" crisis many African economies had performed relatively well. Indeed the performance of some of the countries was of "miraculous" proportions (for instance, Côte d’Ivoire, Kenya, Malawi and Tanzania had rates of growth of more the 6 per cent for over a decade, based largely on agricultural and industrial expansion). One interesting feature is that much of this growth was sustained largely by domestic savings which increased from around 15 per cent in 1960 to 25 per cent in 1980 (see figure 1). The rates of savings and investments compared well with those of East Asia, although they tended to yield lower rates of growth. The state played a central role in this process even in countries such as Côte d’Ivoire, Kenya and Malawi. Although the World Bank tended to use the Ivorian case as evidence of the benefits of its proposed adjustment models, the Ivorian state was highly interventionist and "dirigiste" with the state spearheading development of whole agricultural export activities through parastatals such as SODEPALM, regional development schemes and import substitution industrialization. And so Africa has had examples of countries whose ideological inclination was clearly "developmentalist" and that pursued policies that produced fairly high rates of growth in the post-colonial era and significant social gains and accumulation of human capital. African bureaucracies were able to extend infrastructure and social senses to degrees that were unimaginable under colonial rule. Moreover, in a significant number of countries, the political élite were able to reach arrangements that provided peace and stability. And, in a sense, "developmental states" are not totally alien to African climes. These experiences need to be critically examined for useful lessons.
Savings increased significantly after independence, reaching, on the average, 21.5 per cent by 1980. Close to a third of the countries had savings rates that were higher than 25 per cent by 1980.
- TABLE: "Savings rates in sub-Saharan countries"
Fourth, African development strategies were not inward looking in a simplistic "hostile-to-trade" manner. Nor was the failure to pursue labour-intensive, export-oriented strategies a failure to respect comparative advantage. Most development strategies were based on the assumption that, by using the comparative advantage in "land", African countries would industrialize by export minerals or other primary products to earn the necessary foreign exchange for industrialization, which would eventually allow diversification of their export bases. For these "land rich" economies revealed comparative advantage lay in these "land-intensive" exports rather than in the labour-intensive ones associated with Asia. Such a choice has had enormous implication on the stability, flexibility and social structures of African economies. The inflexibility was re-enforced by the lack of explicit export-investment nexus to diversify export away from monocultural structures.
Finally, the assumption by the state of an active role in economic affairs was not always the result of hostility to private investment putatively caused by visceral anti-capitalist reaction induced by colonial experience. The fact of the matter is that in the immediate post-independence period most African governments pursued what was known as "industrialization-by-invitation" strategies in which the attraction of foreign capital played a central role. Protective measures for industry were often part of the package of incentives demanded by or intended to attract foreign capitalists. It was the reticence of foreign investment that pushed African governments towards increased reliance on parastatals and joint ventures and escalation of the battle to attract foreign capital using a battery of invectives. There is some sense in which we may be reliving the same experience as once again African governments pursue "beggar-my-neighbour" strategies to attract foreign investment in manufacturing with little sign of success. The reticence of foreign investment was accompanied by a suspicion of and hostility towards indigenous capital by African states even in those countries that were avowedly capitalist in their ideologies.
New International Order
A new worrisome "impossibility theorem" comes from debates on globalization as eerily reminiscent of earlier dependence arguments. The argument is that the current order does not allow many of the policies that constituted the core of the activities of developmental studies. Protection of industries, financial repression, export promotion subsidies are now ruled out by current WTO arrangements.
Maladjusting the African State
The significance of these "impossibility arguments" is that the discursive framework they have engendered has produced a knowledge that has been acted upon by key policy-makers in a self-fulfilling manner. The consequence of these perceptions of the state has been a set of self-fulfilling predicaments. They have led to a set of measures that have so maladjusted African states that they provide proof of the impossibility theorems. To avoid clientelism and rent seeking, the state is squeezed fiscally and even politically. This weakened state then exhibits incapacity to carry out its basic functions (partly because of demoralization, moonlighting by the civil servants, corruption, etc.). This is then used to argue that the state in Africa is not capable of being developmental and therefore needs to be stripped down further and be buffeted by legions of foreign experts. And so we witness in Africa the reinforcement of policies that continue to erode the economic and political capacity of the state even as considerable noise is made about "good governance" and "capacity building". And it to this that we now turn.
Undermining State Capacity
One central tenet of adjustment has involved "rolling back the state". While it is true that any kind of response to the fiscal crisis of the state may have justified drastic reductions in state expenditure, both the cognitive framework through which the problem was based and the actual solutions proposed led not so much to the "rolling back of the state" but to a drastic erosion of its capacity as a state. The intention was to create what Johnson (1987) characterized as a "soft authoritarian" state whose main task was to create an "enabling environment" for the private sector by augmenting market rationality, reducing risks and uncertainty but not engaging in "market distorting" interventions that characterized policies of Asian developmental states. Writing on Mozambique, Marc Wuyts (1996) speaks of two processes that weakened the state under adjustment — the squeezing of the state through fiscal constraints and the splitting of the state from increased fragmentation of control over public money between state institutions and multitude of donor initiatives. One could add here the pillage of the state through the stripping of assets and "fire sales" through privatization.
The literature informing these possibilities has suggested that public expenditure in Africa is too high largely because of a bloated bureaucracy that drains the state coffers. The standard policy prescription was retrenchment of the civil service. While the literature on "downsizing" has always assumed the simultaneous introduction of performance enhancing measures, the reduction of the civil service in Africa has usually gone hand in hand with declining real wages and uncertainty even for those that remain on the payroll.
The effect of all this is captured by Janice Aron thus:
"The state in Africa has come full circle to the small government of pre-colonial days; but with the additional hysterisis effect from past shocks of a seriously depleted current institutional capability, deterioration in the current quality and scope of social services and infrastructure provision, coupled with a fiscal position highly vulnerable to changes in foreign aid" (1996:117).
Apparently alarmed by the damage its proscriptions have caused, the World Bank has become more cautious in its pronouncements about the downsizing of the civil service. A World Bank study noting that among developing countries sub-Saharan Africa had the lowest government employment as a percentage of the population, had the following observations:
"In many countries in sub-Saharan Africa, the civil service has sharply deteriorated in almost every way since the 1970s. (Botswana is one of the few exceptions.) Beginning in the 1980s, a succession of fiscal stabilisation programs has reduced government employment in Africa to the lowest level of any developing region. Thus, although additional downsizing may be necessary in some countries, most do not need to shrink the workforce but to overhaul the entire civil service system" (Schiavo-Campo, 1996).
No wonder "capacity building" is now a major buzzword in the donor community. It derives partly from the view that Africa’s institutions of governance are weak or inappropriate in some sense or other, and that, where the institutions are appropriate, the personnel managing them are poorly trained. This leads to a significant role of technical assistance in aid packages and "capacity building" programmes for individual African states. The "capacity building" project is the new justification of technical assistance even as international organizations bemoan their own preponderance in the formulation and implementation of policies in Africa. The brain drain afflicting many African countries is evidence of the fact that low morale and poor pay, rather than technical competence, are the main problem of the civil service in Africa today — itself the consequence of an anti-state ideology. Rather than on "capacity building", focus in Africa should first and foremost be on valorization of existing capacities through better "capacity utilization" and "retooling" of the civil service, reversing the brain drain and repairing the main institutions of training that have been starved to death even as donors set up new ones to produce parochial skills required in their new projects.
While the need for curbing authoritarian states is understandable, the incapacitation of the state has been extended to democratically elected ones largely the anti-state ideology rarely distinguishes between democratic and authoritarian ones. Indeed, in some of the literature it is suggested that neo-patrimonialism and rent seeking will be accentuated by democracy. Consequently, the designs are to impose restrictions on the new democracies by multiplying the number of "authoritarian enclaves" (e.g. independent central banks) that lie outside the purview of democratic politics and to limit the choices of elected bodies (Mkandawire forthcoming).
Proliferation of Tasks for Weakened States
One problem with setting out tasks that even a "minimalist" developmental state should assume is the absence of theories of social change and development from which it can draw policy instruments. Current theoretical discussion on development is dominated by "new growth theories" in a manner that does not help matters. The propositions of the new growth theories arise from an extension of the basic Solovian growth model so as to endogenize the various variables that it either assumed away or treated as exogenous — technology, increasing returns scale, human capital, etc. (Solow, 1956). These theories provide a new rationale for government intervention since they assert that the contribution to the overall social production of some investments is higher than their contribution to the income of individual agents, some government policies to foster such activities would be welfare enhancing (Barros, 1993). Its generic presentation takes the form:
is the growth rate of income; I is a vector of initial conditions, M is a vector of control variables or policy instruments and Z is a vector consisting of state variables of variables that are believed to represent appropriate conditioning information. There has been an explosion of tests of such models with the growth in the number of variables only constrained by data availability, there being no theoretical framework for determining relevant variables. This eclectic and rather procrustean explanation of economic growth has the paradoxical implication of increasing the "laundry list" of what governments should do even as the dominant ideology calls for a minimalist state. Virtually every donor can find a variable in these equations that justifies their intervention.
One reason for this is of course because the theories have tended to focus on what Abramovitz terms "immediate causes of growth" and thus provide little help to understanding the factors behind these immediate sources and the structural determinants that developmental states usually address (Nelson, 1997). This focus on immediate determinants has been encouraged by the preponderance of stabilization issues in current policy-making, with the result that "developmental fundamentals" and the institutional arrangements they call forth are subservient to short-term stabilization policies, which often include the erosion of precisely those institutions that should guide the development process. Now, stabilization policies require much fewer actors than development strategies. Isolated "change teams" in the Ministry of Finance or Central Bank can devalue currencies and liberalize foreign exchange markets. However, measures that call for creating and stimulating large numbers of local bureaucrats and private actors are another cup of tea, as the BWIs’ bureaucrats have gradually and painfully learnt.
On the basis of such econometric exercises, the number of things that would constitute a developmental state has increased pretty much at the discretion of individual econometricians. The result is that the state appears as some institution that processes a laundry list of an ever increasing number of items — prices, aid, investment, infrastructure, human capacity, governance, attitudinal and ideological changes, regional integration, stability, democracy, strong government, etc. The performance of African economies has been read off from this framework in a manner that is not particularly informative as to what the state should do since for all its focus on policies a whole range of variables some of which are beyond the control of the state have been gratuitously added to the equations — ethnic diversity, geographical location, size of country, perceptions of the country by foreigners, rainfall, etc. The problem is not only the proliferation of tasks, but the institutional arrangements set up to carry out such tasks. In most cases this has involved parcelling out of the different tasks to different funding agencies (governmental and non-governmental), which has simply worsened co-ordination problems.
Disembedding the state
We noted how much of the writing on African states bemoans their lack of autonomy. Both the invidious comparisons of African capitalists with idealized capitalists elsewhere and the fear of capture by rent seekers or patron-client networks have led to a negative and naïve view of the interrelation between public power and private interests, a view that pre-empts or precludes the possibility of building positive coalitions between the state and the business community. The presumption is simply that state-capitalist relationship in Africa can only be collusive and not synergistically and mutually reinforcing or benignly co-operative and collaborative. As a consequence, in the African case the call for state autonomy has been tantamount to a call for "isolation" by delinking of the state from its social roots while subjecting it to external "agents of restraints" through a battery of conditionalities and technical assistance. The BWIs have sought to free the state from the "capture" by distancing it from local vested interests. This alienation of the state is supposed to provide the necessary autonomy to ensure decisions that enhance national interests.
Compounding matters has been the "hijacking" of key state functions by international financial institutions further distancing the state from local capitalists. Indeed, contrary to their self-perception as the guarantors of private capital, the BWIs are a source of extreme insecurity among local capitalists. Wanton liberalization of markets without careful consultation with business classes, privatization that provides no special privilege to local capitalists, cessation of directed credit or "development finance", high interest rates, all these underscore the distancing of the state from local capitalist interests and the pre-eminent position of IFI’s interests and perceptions in policy-making. The comings and goings of BWIs’ missions are as much a source of uncertainty in the business community as the movements of commodity prices. Will they devalue? Will ministers of finance be changed? Will privatization be accelerated and thus force the government to engage in "fire sales"? Should one wait for the Paris Club meeting before investing? Will the government comply to the conditionalities?
"Creating" and Taming a National Bourgeoisie
Once the question of capitalist accumulation has been raised, then the question that follows, almost trivially, is that of the capitalist class that is to drive the process of capital accumulation in a given country. One thing that emerges clearly from the Asian experience is the significance of the dependence of the state on the activities of the private sector for its development strategy. For all the talk about "globalization", the edification of capitalist accumulation in a specific country ultimately depends on national characteristics (class formation, resource base, etc.) and policies towards both foreign and domestic capital. Historically, this class was referred to as a "national bourgeoisie". If capitalist accumulation is to take place, private domestic capital would serve as a catalyst. One reason is that Africa is unlikely to constitute an attractive place for foreign capital for some time to come. It is clear that capital does not flow from the developed to the developing countries on the scale implied by the relative factor endowments doctrine (Eatwell, 1996; Krugman, 1993). There is growing theoretical and empirical material suggesting that the segmentation in global markets is such that certain regions may not benefit from capital movements. The region that is invariably cited is sub-Saharan Africa.
Both the global flows of foreign investment and the exigencies of development of national economies place the largest burden of private investment on domestic capital.
The point here is that capitalist accumulation will be largely national for much of Africa. Indeed, given Africa’s very tarnished image, confidence by Africans in the continent’s future will be of prime value in resuscitating investment. Or, in the words of Michael Chege:
"... in circumstances such as these it is unrealistic to expect a turnabout in private foreign capital inflows, even with reforms. African governments must first cultivate the confidence of their own domestic investors. As with good governance, sensible economics begins at home" (1992: 159).
Or those of Kennedy:
"In the final analysis, only powerful and capable local interests — public as well as private — possess a degree of permanent, all-profound commitment to national need sufficient to generate the momentum required for a successful onslaught against the condition of dependent, distorted and restricted development" (1988: 191).
We have contended elsewhere (Mkandawire 1994) that if capitalism is to be politically viable in Africa, it will have to have some national anchoring based partly on the capacity of the indigenous capitalist classes to direct state policy toward their gaining access to labour, land and capital, toward limiting the role of foreign capital, and toward nurturing indigenous capitalist investment by facilitating institutions of stabilising capital-labour relations and supplying technical services and physical infrastructure. For political legitimacy the capitalist class will have to convince critical sections of the nation that its "project" of capital accumulation is in the national interest.
This brings us to the nature and capacity of African capitalist classes to respond to state initiative — a poorly studied area. There are two "capacities" relevant here. One is the capacity for "thriftiness" and therefore the possibility to invest and the other is the organizational capacity not only to manage one’s enterprise, but also to advance a class position and impose self-discipline. It is generally presumed that African capitalists are wasteful. However, compared to similar classes in the successful Asian countries, African capitalists are not bigger spenders. The problem with African capitalists is not lack of "thriftiness" but lack of faith in their own countries as investment sites and the consequent propensity to expatriate capital abroad. One should stress here that funds held by Africans abroad count in hundreds of billions (Collier and Gunning 1997). As for administrative capacity, the state can play an important role here not only through "extension services" to business, but in pushing for certain organization forms that exploit synergy and resolve co-ordination failure and reduce risk.
One feature of the debate on the national bourgeoisie is that, while the literature has in some way or another suggested its desirability, it has always run short of presenting the strategy for the creation and strengthening of such a bourgeoisie. One thing stands out clearly — the emergency of a bourgeoisie is not facilitated by laissez-faire régimes that international financial institutions have sought to impose everywhere in Africa. Evidence from a wide range of experiences with capitalist accumulation suggests that the emergence of a national bourgeoisie is fostered or even planned by the state or nurtured by it in a "hothouse fashion" (Marx 1962). The creation of a national bourgeoisie will pose innumerable political, ideological and even ethical questions. The measures required may include privatization, but it seems to me that privatization is probably much less important than stimulation of capitalists to invest in new and competing activities. More pertinent to our discussion is that privatization in Africa should be as a strategy for the transfer of state assets to a strategically placed domestic private capital or as an instrument of creating a national bourgeoisie. However, as we have argued elsewhere (Mkandawire 1994), privatization in Africa has not been premised on that objective. It has been largely driven by fiscal concerns of the state and ideologically driven pronouncements on the inefficacy of public enterprises and ideological aversion to state ownership and the unfounded belief that state investments always "crowd out" private investment or are inherently inferior in performance to private investment.
Reconstructing the State Apparatus
In virtually all the writing on the "developmental state" in Asia, great emphasis is placed on the need for a competent administrative apparatus. We argued above that the jaundiced view of the BWIs towards the state has allowed policies and practices that have stripped state structures to their bare bones. Reconstructing the administrative apparatus is therefore a central task. Here again we have to contend, on the one hand, with mystification of how Asian bureaucracies came about, suggesting that they somehow either come from or are based on some Confucian bureaucratic sense and, on the other, the wanton denigration of the African civil services as irredeemable cesspools of corruption and incompetence. As students of Asia remind us, building these bureaucracies has been a hard fought battle. Both the Asian and African experiences clearly suggest that it is not some cultural-ethnic attribute or some deeply rooted historicity that explains Asian administrative performance, but specific institutional arrangements between states and different classes that have underpinned the high accumulation model. In the words of Evans, "East Asian bureaucracies are neither gifts from the past nor easy outgrowths of surrounding social organisation. They are hard won edifices constantly under construction" (1997). The way forward does not lie in the wholesale neglect of existing capacities in the quest for "new" ones, but in the utilization, retooling and reinvigorating of existing capacities — including reversing the brain drain — and in the rebuilding the educational and training institutions in light of long-term developmental needs rather than the ad hoc manner encouraged by new "capacity-building" fads.
In all this, it important to bear in mind the conjuncture within which such states will operate. One of the arguments raised by the World Bank against the wisdom of emulating Asian industrial policy was that in this WTO era, many of the policies would go against trade conventions to which African governments are signatory. This may prove to be the most formidable constraint to the edification of developmental states in Africa and needs to be closely studied. First, on the ideological level, it is important to stress how both globalization and neo-liberal anomie make the articulation and credibility ideologies of nation building and development extremely difficult. And in terms of state capacity, there are widespread concerns that globalization may severely restrict the room for manoeuvre of individual states in such a way as to make the notion of a developmental state difficult to visualize.
We have maintained that most arguments raised on the impossibility of developmental states in Africa are not firmly founded either in African historical experience or in the trajectories of the more successful "developmental states". The ultimate result of the misreading of experiences in Africa and elsewhere is that Myrdal’s notion of the "soft state", once applied to Asia, is now presented as an almost exclusively African characteristic (Sangmpam 1993). Having presented key actors as irredeemably greedy, corrupt and captured by rent seekers and economies of affection, the misreading denies us the opportunity to think creatively of modes of social organization at both macro and micro level that can extricate African countries from the crises they confront. It also leaves the door wide open for unlimited intervention in African affairs and ultimately dissipates whatever enthusiasm the locals may have had for development. Lessons from other parts of the world clearly suggest that appropriate institutional structures did not always exist, but that they could be socially engineered. The aprioristic dismissal of possibilities of developmental states can only be attributed to prejudice or "mood". The experience elsewhere is that developmental states are social constructs consciously brought about by states and societies. As difficult as the political and economic task of establishing such states may be, it is within the reach of many countries struggling against the ravages of poverty and underdevelopment.
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