What can political economists tell us about Africa, aid and development?

This post also appeared on the World Bank’s ‘People, Spaces, Deliberation’ governance blog There’s a clutch of different research initiatives trying to understand Africa’s political economy and its impact on development and aid. Often, the tone of the political economists can be quite discouraging – Alex Duncan gives a tongue-in-cheek definition of a political economist as ‘someone coming to explain why your aid programme doesn’t work’. There are few practical ‘take aways’ either for large bilateral aid agencies, or NGOs other than ‘give up and become a researcher’. Africa research logosAnd that’s pretty much the tone of a logotastic ‘joint statement’ from 5 research programmes based (loosely) in the UK, Denmark, and the Netherlands (The Africa Power and Politics Programme, Developmental Leadership Programme, Elites, Production and Poverty: A Comparative Analysis, Political Economy of Agricultural Policy in Africa, Tracking Development). Here’s some highlights: From the summary: “African countries badly need to embark on processes of economic  transformation, not just growth, and they are not helped to do so by insistence on  prior achievement of Good Governance, meaning adoption of the institutional ‘best  practices’ that have emerged in much richer countries.” From the full statement: “Our single most important message is that development outcomes in poor countries depend fundamentally on the political incentives facing political elites and leaders….. Because of the way democratisation affects politicians’ incentives in poor developing countries, the introduction of competitive elections is a mixed blessing for achieving the economic transformation that Africa needs.” “The reasons [a number of South-east Asian countries] achieved sustained, pro-poor growth [and Africa has not] over the 50 years since 1960 are mostly about policy differences. During the early decades of the period, Indonesia, Malaysia and Vietnam invested heavily in rural development, driven by urgency, outreach and expediency. They did so under a variety of political regime types, none of which were free of major corruption. They made some progress towards democratisation only after achieving  substantial economic  transformation.” The paper’s ‘big idea’ is that “What shapes the ability of policy to drive economic transformation is the extent to which mutual interests, APPP et al ToC diagramcooperative relations and synergies emerge between three  large groups of actors. [see diagram] [Usually] the relationships are not mutual, cooperative and synergistic, but antagonistic, exploitative and perverse. [But the key to improving aid practice is] understanding exactly how and why exceptions occur.” “Because politicians are typically constrained to generate and use rents to cement their alliances,  ‘good politics’  can  result in ‘bad economics’” Elites need cash to funnel to their supporters and so have to milk the state for short-term rents, rather than investing in the future, as the Southeast Asian elites did, (supporting pioneer firms, building roads, providing health and education etc). The trouble is that in such a system “the introduction of formal multi-party competition into such an environment does not alter the basic logic. Clientelism in Africa is to a greater or lesser extent competitive under both authoritarian and more democratic regimes…. Typically, multi-party elections formalise and sharpen this competition with often mixed results for development.” The paper identifies two broad kinds of exceptions to the clientilist rule: Big-picture exceptions: In a somewhat desperate search for developmental states in Africa, the paper comes up with “the early-independence regimes of Houphouët-Boigny (Côte  d’Ivoire), Kenyatta (Kenya) and  Banda (Malawi) [and today,] Ethiopia and Rwanda.”  These have all “achieved centralised rent-management [thus freeing them from the distractions of competitive clientilism] and this led to significant economic transformation and social advance for a period.” Ah, so the best way to improve on competitive clientilism is to eliminate the competition, not the clientilism.  Oh dear. Small-picture exceptions: successes in Asia were in many instances the result of breakthroughs in particular sectors or commodity chains which only later became generalised… [African examples include] sugar in Mozambique and dairy in Uganda.” What does all this mean for aid donors (the authors are basically talking to the big money donors, not relative minnows like Oxfam)? “The central message that needs to be got across is that the conditions which keep the African masses in poverty are the result of decisions by politicians who are responding to incentives  that change slowly and are not in the  short  term very  favourable to development. More immediately, they stem from the inability of sector actors to overcome their collective action problems in the face of unsupportive if not predatory state behaviour. They cannot, therefore, be addressed by merely transferring economic resources from the global rich to the global poor. Indeed, such attempts can make matters worse, by further weakening those political incentives that work in favour of domestically driven economic transformation. If this is true, aid needs to become far less supply-driven and more focused on supporting processes that show real promise, based on an informed assessment of the local situation and the lessons of history. In particular, there should be no implication that donors know best what institutions poor countries need.” Sorry guys, you're not relevantThe political reality check is excellent, but the lack of genuine ‘so what’s’ (despite the paper’s protestations to the contrary) is a real problem. As is the casual abandonment of human rights, democracy, citizenship and social struggle. Citizens, social movements, the Arab Spring (see left) barely get a condescending mention in all this high level grown-up talk of governments, elites, donors and political settlements. Still, for NGOs who usually prefer Gramsci’s ‘optimism of the will’ to his accompanying ‘pessimism of the intellect’ (this paper suffers from the opposite problem),  it should be at least food for thought that a cold-blooded look at Africa’s recent history persuades a group of serious academics that the best Africa can hope for is benign dictatorship, epitomised by Rwanda’s Paul Kagame, which delivers “social provision under a centralised rent management regime [and] illustrates how a  powerful upward accountability of public service-providers and local administrations  to the national political leadership can remarkably improve service quality, more  than adequately substituting for the downward accountability to users that tends to  be stressed in donor rhetoric.” What’s more, I think that a more progressive reading of this work is possible – outsiders must give up trying to impose blueprints, and concentrate on spotting and supporting positive developments as they emerge (with many of them coming from the very social movements that this group ignores or dismisses). But that will be of little comfort to the big official agencies, which are too big and too politically constrained to pursue that more entrepreneurial approach. They are left with what I’ve previously termed the ‘decent chap’approach – picking political winners by “focusing  particularly  on sectors  or areas  where  government  attitudes are positive for  political reasons and  sector  actors have  revealed a collective ambition to move ahead.” Shame Paul Kagame says he doesn’t really want more aid.]]>

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12 Responses to “What can political economists tell us about Africa, aid and development?”
  1. Matthew Lockwood

    For someone who used to work for a (politically minded) Central American solidarity campaign, this post is remarkably aid-centric. So political change (and external political interventions) matter more than aid. That’s depressing only if you are in the aid business. Surely development policy should fit reality, not the other way round…

    • Duncan

      Disagree Matthew. Like I say at the end, I think there is a positive and politically literate conclusion to be drawn from this work – pretty much along the lines of From Poverty to Power (or for that matter, your wonderful book, The State They’re In). Namely, that development is primarily a domestic process; imposed aid blueprints are often irrelevant or worse; outsiders like INGOs can make a relatively minor contribution by supporting progressive political interaction between state and citizen. The trouble is that this conclusion doesn’t really work for the authors of the paper, because their main client is Big Aid, and large donors aren’t designed to get involved with politics as described in the paper. So I’m not depressed, but if I was working for DFID, I might feel differently.

  2. Great review Duncan – the absence of takeaways is hugely frustrating for those of us engaged with policy-makers.
    What, for instance, would the above mentioned research have to say – to inform – to the UK Government’s enthusiasm for “the golden thread” of “good governance”? How might the research help to shape a constructive policy agenda that builds on the UK Governnment’s enthusiasm for governance, but which avoids a one-size fits-all we-know-best approach?
    These are important conversations. It’s not clear to me that they’re happening.

  3. Andy

    “The central message that needs to be got across is that the conditions which keep the African masses in poverty are the result of decisions by politicians who are responding to incentives that change slowly and are not in the short term very favourable to development” – oh dear, what a mouthful! And isn’t the language rather patronising? Who are these ‘African masses’? Instead of ‘intellectualising’ things in this way, why not talk about the detail of African politics, just as we would at home? A lot of African people, of all classes and ethnicities, are aware of what is going on and been carried out in their names (though they are not always free to speak out about it). But it sometimes seems that the majority of these researchers, safely from their vantage point of their officers in London or elsewhere, either don’t have the time or aren’t interested in the detail. The result is often quite sweeping statements, or major misjudgements about what is going on on the ground. Another result is what you describe as ‘good chapism’ of the kind that predominated in the post-colonial period – ‘good chaps’ of the ilk of Idi Amin. I think your comments here are quite sharp ones, Duncan. But I suspect that this group of researchers won’t listen much, because it seems that they have already made up their minds about who are the ‘good chaps’. They may also be seriously misjudging the extent to which their favourite ‘success stories’ could go sour…..for instance, I suspect that, had they carried out this research work a few years ago, Ben Ali’s regime would have been also been interpreted within this framework as the developmental state on the right track – strong economic growth, good macro economy, and ‘powerful upward accountability’ etc. Perhaps their studies would benefit from reading less academic papers and more regional newspapers, and talking to people in the street more?

  4. Ole Therkildsen

    Duncan summarises very well some of the main messages of ”The political economy of development in Africa” – the joint statement of which I am one of several authors. As he rightly concludes, we argue that outsiders should stop trying to impose blueprints for what institutions poor countries need, and instead concentrate on spotting and supporting positive developments as they emerge.
    But there is not enough punch in that conclusion according to Duncan: “… the lack of genuine ‘so what’ .. is a real problem.”
    We cannot satisfy the hunger for simple solutions, however. Our conclusion is a logical consequence of our insistence that the watchword has to be ‘good fit,’ not ‘best practice.’ How external actors may influence for the better the institutional architecture and political settlement of poor African countries at the national level is therefore an issue on which we cannot be very specific at a general level.
    This is not a copout. While there is little new in stating that ‘context matters,’ we argue that the political incentives facing political leaders is the key to open the black box of ‘context.’ These political incentives vary significantly across countries and time periods. They even vary between sectors within a country.
    Any external intervention needs to be realistic about such political incentives. This implies targeting activities where the political interest is high and development-oriented, and avoiding those which are particularly subject to competitive and predatory rent-seeking. Much will depend on a sector-specific assessment of the feasibility of brokering more constructive relationships among sector actors including those elements of the state bureaucracy with the potential to acquire the relevant capabilities and construct the needed networks.
    Where are citizens, social movements and organised groups in all this, Duncan and Andy rightly ask. The detailed case studies from each of the five research programmes do show examples of how upwards pressure on power holders can sometimes influence policy-decisions and implementation. But we also conclude that this is not a typical event in poor African countries (the Arab Spring takes place in a very different context). This does not mean that downwards accountability is not important, does not exist and should not be supported. We are simply pointing out that the donor rhetoric on this important issue does not correspond to the realities on the ground.

    • Duncan

      Thanks Ole, very helpful clarification. Going a bit further on the ‘so what’ issue, is your advice to donors to stay away altogether from countries characterized by predatory governments or take a different approach to try and create the conditions for some future transformation? The challenge is surely that, as successful states grow, tax, and reduce their aid dependence, aid agencies will either be forced to find a way to engage in precisely those fragile and predatory states that you say they should avoid, or they become redundant. The idea of trying to identify islands of non-predation, eg sectors, ministries etc, is one way forward, as is investing in tertiary education/forming the next generation. As for supporting the growing strength of non-government actors, that is definitely what Oxfam is doing, but I’m not sure how far official donors can get involved there without getting into political hot water or doing damage to the very actors they are trying to help, either by the distorting effect of over-funding small organizations, or by laying them open to accusations of being foreign-funded (as is happening in Egypt right now). Any other suggestions?

  5. Ole

    Duncan makes two good points.
    One is that donors must find a way to engage in fragile and predatory states – but we advice to stay away from such places. Duncan is not quite right but a clarification is needed here. Although the geographical coverage of the five research programmes is wide, we have worked exclusively in countries at peace and not in any of the most fragile states of sub-Saharan Africa. It is to the former type of countries that our advice applies. What donors may do in war-torn conflictual countries is obviously a very relevant question to ask, but it is a bit outside what the five programmes have dealt with.
    The other point is about how donors can engage with non-governmental actors. Richard Crook, one of the researchers involved in the five research programmes, has written an interesting article on this topic: “The influence of transnational NGPAs on policy processes and policy outcomes: rethinking North-South relations,” (NGPAs are Transnational non-governmental public actors). It will be published this fall in “Global Matters for Non-governmental Public Action,” a book edited by Jude Howell. Richard’s argument is that “in fact a credible Southern base is a crucial factor in achieving any degree of successful influence over development policy processes at either international or Southern national levels… the willingness of local regimes to work with NGPAs is a determining factor, …. it is not necessarily democratic regimes which are the most conducive to success. In practice, what is most important at the national level are the political skills and strategies which can enable NGPAs to penetrate and work inside relevant policy communities, and to engage with subsequent implementations and their feedback.” If you substitute ‘donor’ for NGPA, Richard’s argument provides important insights about how donors may engage with governments.

  6. Duncan

    Adrian Leftwich reckons it’s all about leadership – not just Big Men, but at every level, and in every sector:
    ‘In every country, in every sector and issue area (from gender to contract frarming) there exist and are emerging progressive (or ‘developmental’) leaders or ‘reformers’ (for want of a better word) – in the public service, armies, business, workers’ organizations, civil society, amongst politicians, the media, professions, education – formally or informally organized, within and beyond the state, who understand the need for institutional arrangements that help to resolve collective action problems and promote public goods. And contingent events, as ‘windows of opportunity’ or critical junctures, are often important in providing the opportunity or establishing incentives for reform.’
    So the so what presumably becomes how do we support these emergent leaders?

  7. Duncan

    Here’s a strong rebuttal on Rwanda-as-model from the World Bank governance website, which also published the post:
    Name: Nilgun Gokgur
    I strongly disagree with the limited analysis and the assertions of the
    Africa Power and Politics Program (APPP), namely the various reports and
    articles by David Booth and Frederick Golooba-Mutebi on Rwanda with claims
    that the ruling party-owned enterprises are “developmental.” Even with
    limited available data, I can demonstrate that Rwanda’s party-statals
    (enterprises fully or partially owned by the ruling party, Rwandan Patriotic
    Front, in joint venture with state-owned enterprises, the military and the
    party-linked business elite) have negative development impact on stakeholders
    and, therefore, cannot be called developmental. The absence of economic and
    political distance between these party-statals and the Rwandan state has led
    to latter’s inability to manage the rents effectively in contrast to East
    Asian states. The party-statals have now become no more than extractive
    economic institutions easily winning government procurement contracts,
    impeding competition, job-rich employment generation and private sector
    Since 1994 in a period of eighteen years, a total of 24 party-statals under
    three investment holding companies–Crystal Ventures (formerly Tri-Star),
    Horizon Group, and Rwanda Investment Group (RIG)—have managed to grow and
    dominate the commanding heights in key sectors (construction, real estate
    development, security, energy, manufacturing of furniture and packaging
    materials, furniture importing, agro-processing of tea and coffee washing
    stations, pyrethrum, telecommunications, broadcasting, and media). All
    party-statals combined have the highest value of fixed assets, total assets,
    the turnover and, more importantly, the largest share in gross output. The
    average size party-statal is still larger than any large enterprise operating
    in Rwanda’s tiny formal enterprise sector. Furthermore, party-statals
    impose serious fiscal risks as they drain the scarce resources of the state
    and those of the donors (i.e. the rescue merger of the Housing Rwanda Bank
    with Rwanda Development Bank last year). Development partners need to insist
    on transparency, accountability and full disclosure of party-statal assets
    and accumulation of their economic rent and profits. Besides enterprise
    level financial and operational performance analysis, party statals’ impact
    on the Treasury needs to be fully measured and monitored. Moreover, the
    state can devise strategies for the party-statals to exit in order to
    increase economic competition (hopefully with political competition) and
    employment. Only then it can be called a true developmental state with
    genuine commitment to private sector development.
    I should add that I had a chance to refute David Booth’s claims on Rwanda
    at a conference, “Rethinking State and Society in Africa” on April 27,
    2012 at the Institute of Development Policy (IOB), University of Antwerp,
    Belgium where I was a Scholar in Residence working on a forthcoming
    discussion paper, “Rwanda’s Party-Statals: Are they enhancing or impeding