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Part III: Effects of the pursuit of science and technology

7 Effects on the economy as a whole
8 Effects among the sectors of the economy
9 Effects within organizations

7 Effects on the economy as a whole

Introduction
Overall expenditures on advancing science and technology
Expenditures of R&D institutes
Government financing of advances in science and technology
Flow of foreign funds into science and technology
Summary of the statistical evidence
A counterfactual experiment

Introduction

In this and the next two chapters we shall analyze the material collected in Ghana, Kenya, Tanzania and Uganda, in order to try to determine the effects of the adoption of Structural Adjustment Programmes on the countries' ability to pursue science and technology. We have defined science and technology in the conventional manner, as the output of three sets of organizations - educational institutions purveying scientific and technological knowledge, R&D laboratories, and productive enterprises. The prime function of the second of these three is to advance science and technology; the prime function of the first and third is not; but in carrying out their prime function - education and production respectively - they actively promote increases in science and technology.

The division of material in this and the next two chapters is based upon the degree of aggregation of activities: in this chapter we shall analyze material of large scale, covering the economy as a whole; Chapter 8 will be devoted to an analysis of material at the level of the sector or the industry, and Chapter 9 to material covering individual institutions. Our chapters thus proceed from the macro-economic, through the meso-economic, to the micro-economic.

In choosing to divide the material by degree of aggregation we are not being guided by theory, which usually focuses on one level alone and makes simplifying assumptions about the other two. Nor are we following the course of our investigation, which focused on one country at a time. Rather we are adopting the procedure of the botanist or the biologist, who begins with what the eye can see and then looks at smaller and smaller bits of organisms with visual aids. The economist's eye is trained to see the overall economy; his equivalent of the botanist's and biologist's visual aids are historical and statistical knowledge of specific economic activities.

In this chapter, our progress from the aggregate to the individual will advance no further than the subdivisions of all economic activity into that carried out within the public sector and that carried out within the private, and into that financed by the country itself and that financed by foreign donations. The division between public and private is more or less equivalent to activities carried out in the interests of the society as a whole and those carried out in the self-interest of the actors. To be sure, public servants do on occasion put their own interests first; and private citizens may put the public interest first; but the matter of primacy of interest will not concern us until Chapter 9. The distinction between what activities lie within the public sector and what within the private is never clear, so we shall have to consider this matter too. The division between local and foreign financing is clearer in nature.

Moving from degree of aggregation to the order of presentation, we shall follow, in all three analytical chapters, the same order: first we shall present our data, both the statistical compilations and the limitations to their accuracy. Secondly we shall draw whatever associations seem apparent, for the countries within our sample. Thirdly, we shall enlarge the sample to report whatever corroborating data there are for other Sub-Saharan countries, or, lacking comparable Sub-Saharan data, for other developing countries.

Having presented the data, we shall move to the fourth item on our list, namely attainment of the terms of Structural Adjustment Programmes. In this item we shall address such issues as the objectives to be achieved either within the span of the programme or over the longer run; and the conditions imposed upon the borrowing countries or commitments undertaken by the lenders. As an example, imagine that one condition imposed upon, and agreed to by, the developing country is that it increases the fraction of its GDP allocated to advancing science and technology to 1 per cent: we could then compare the actual allocation with this specification.

Such specificity, such a close association between, on the one hand, the activities that interest us and, on the other hand, the observations or objectives or commitments in the Structural Adjustment Programmes, is rather unlikely. More likely are either an inexact association between what interests us and what the lender and the recipient are committed to, or no association at all. We will not be surprised if what interests us is not mentioned in a Structural Adjustment Programme: lack of association can easily be explained in part because of the long-run focus of science and technology; in part by the difficulty in defining and measuring scientific and technological progress. In these cases, we will be able only to make explicit the lack of association.

Our order of presentation will terminate with a summary of whatever conclusions emerge from the analysis. To say that they will be conclusions on the effects of Structural Adjustment Programmes on the pursuit of science and technology at the macroeconomic level would be going too far: that exercise will be left to Part IV, where counterfactual cases will be formulated. After all, we cannot draw any conclusions about the effects of Structural Adjustment Programmes unless we can make some estimate of what would have happened had there been no such programmes, and the material presented here will give us no indication of that. This chapter, and the next two, present empirical material, not speculation.

Overall expenditures on advancing science and technology

The first set of statistical estimates that we shall provide for our four countries are those of total expenditures on advancing science and technology. As will be seen subsequently, these have four components: the expenditures of educational institutions on science and technology; the expenditures of R&D institutes; the training and technical services carried out by productive firms, and (except for Ghana) foreign donations. The totals, by year for each country for the years for which we have made estimates, are presented in Table 7.1. The data are provided in both current values, and in constant values, at prices as of a common year, 1987.

The figures in Table 7.1 on yearly expenditures on advancing science and technology in the four countries, are very rough estimates: those for Ghana may be accurate for the period 1974-1987 (see Table 3.18), but later figures are based on the small sample of organizations reported in Tables 3.12-3.17, and include only some foreign donations; those for Kenya are shorter in sequence but reasonably accurate; those for Tanzania up to 1988 are on the low side, because of incomplete coverage; and those for Uganda have two different sources, being either blown up from expenditures on agricultural R&D (1981/2-1989/90) or taken from budget approvals (1990/1 and 1991/2). Since the figures are fragmentary, and the series interrupted, comparisons among them are hazardous. What seems apparent is that, within a single country, expenditures fluctuate widely year by year. In Kenya, Tanzania and Uganda there are upward trends over time, in Ghana there is not, but this may be a shortage in the statistics.

Table 7.2 relates each country's expenditures on advancing science and technology to its total expenditures on goods and services, as measured by GDP. Taking the results country by country, Ghana's percentages fluctuate widely: over the 14-year interval 1978/9-1991/2 the general trend appears to be downwards, from an average of 0.9 per cent over the first three years to an average of 0.4 per cent over the last three. There may have been a recovery in the most recent two years, as foreign donations have flowed into the country at an increased rate, but it is doubtful that the percentages of the late 1970s have been attained.

Table 7.1 Estimates of total expenditures on advancing science and technology by Ghana, Kenya, Tanzania and Uganda in units of the national currency at current and constant prices 1978/9-1993/4

Sources:
Tables 3.1, 4.1, 5.1, and 6.1 (GDP deflators). and 3.18, 4.18, 5.22 and 5.26, 6.13 and 6.14 (expenditures on science and technology)
For Ghana, calendar years listed as the later of the two fiscal years; e.g., calendar year 1991 listed as 1991/2
Notes:
^a: Ghana's totals exclude most foreign donations, in unknown amounts

Kenya's percentages show a steady increase from 1986/7-1990/1, but have probably fallen since then. The next column of Table 7.2 provides Tanzania's, which indicate two upward shifts, from roughly 0.3 per cent to roughly 0.6 per cent, in the year 1983/4, and again to an average of 2.4 per cent in the years 1989/9-1991/2. This quadrupling in the intensity with which resources are devoted to furthering science and technology coincides with the institution of reforms and the receipt of substantially greater foreign assistance.

Uganda's series displays an even greater shift, occurring between 1986/7 and 1988/9, five years later than Tanzania's, followed also by a second shift in 1991/2, the last year for which we have data. Both shifts were of an order of magnitude, from approximately 0.004 of a percentage point to one-tenth, and from one-tenth to 2.2, the last a figure as high as any encountered elsewhere in Africa. Later we shall decompose the data for these recent years, which will provide an explanation for the extraordinary surge in Uganda's expenditures on advancing science and technology.

Table 7.2 Total expenditures on advancing science and technology by Ghana, Kenya, Tanzania and Uganda as percentages of GDP 1978/9-1991/2

Sources:
GDP, at current prices; Tables 3.1, 4.1, 5.1 and 6.1
Total expenditures on advancing science and technology; Table 7.1
Notes:
^a: Ghana's percentage in the latest years is biased downwards, because of incomplete coverage of foreign donations

The figures in Table 7.2 permit a comparison across countries, as do those in Table 7.3. In Table 7.3 the comparisons are of the volume of resources committed to advancing science and technology, in total and per capita. The common basis for measurement is current US dollars; the first four columns of Table 7.3 measure total expenditures, the second four columns expenditures per capita. Looking at the first four columns, the figures for the beginning of the span of 14 years shows Ghana as spending far more than any of the others, and Uganda far less. The end of the span of years shows Ghana in last, rather than first place, and the other three countries more or less equal. The decline of Ghana and the rise of Uganda were both precipitous, the former occurring around 1982/3 (for which year, unsurprisingly, there is no estimate), the latter in the very last year for which figures are available, 1991/2.

Allowing for differences in population between the four countries, as is done in the final columns of Table 7.3, yields similar conclusions: in the initial years Ghana allocated substantially more, per capita, to pursuing science and technology; in the last year Uganda more than caught up. In the intervening years Ghana's, Kenya's and Tanzania's expenditures were of the same order of magnitude, and Uganda's (during the period of turmoil) of two orders of magnitude less.

An additional conclusion can be drawn from the figures in the last four columns of Table 7.3, namely that annual expenditures per capita were and are extremely low. The highest figures were US$14 (Ghana in 1978/9 and 1980/1), but the median was between US$1.00 and US $2.00 per inhabitant per year. When we remember that total expenditures on advancing science and technology include both R&D and technical education, a median expenditure of one to two US dollars per year, per person, is woefully inadequate. How can science and technology progress in countries which devote such paltry amounts to their pursuit?

The above are the most tentative of conclusions, for we cannot ascribe much accuracy to the data, being as they are informed guesses rather than respectable statistics, and presented more for completeness of coverage to provide a measure of the commitment to advancing science and technology - than for persuasion. However, as we shall see in Chapter 10, there are a few data from countries outside our sample of four which will enable us to put them in some perspective.

Table 7.3 Expenditures on advancing science and technology by Ghana, Kenya, Tanzania and Uganda total and per capita, in US dollars 1978/9-1991/2

Sources:
Total Expenditures: Table 7.1
Exchange rates into US dollars; Tables 3.1, 4.1,5.1 and 6.1
Populations: Tables 3.2, 4.2,5.2 and 6.2

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