Economics
and the Democratic Wave in Africa: Development, Distribution,
Democracy, Adjustment, and Conflict
c E. Wayne Nafziger
University Distinguished Professor of
Economics
Kansas State University, Manhattan
nafwayne@ksu.edu
http://www.ksu.edu/economics/nafwayne/
Plenary Speech to the Mid-America Alliance
for African Studies
University
of Kansas, Lawrence
September 25, 1999
I. Democratization and economic development
II. Africa¨ economic performance in the 1980s and 1990s
III. The crisis in food and agricultural development
IV. Agricultural policies before liberalization
V.
Agricultural policies during liberalization
VI. Stabilization and Structural Adjustment
VII. Adjustment, Clientelism, and Predatory Rule in Africa
VIII. Economic Policies
A. Stabilization, Adjustment, and Reform
1. Changes in the Bretton Woods institutions' goals,
instruments, and openness
2. Trade liberalization
3. External capital-market liberalization.
4. Open debate.
5.
High-income OECD countries' interests.
6. Reduction in trade barriers against Africa and other Third World countries, to
reduce external
vulnerability and provide more scope for export-led growth.
B. Aid and Debt Relief
1. Aid to Vulnerable Economies.
2. Cushioning the effects of sudden external shocks.
C. Rescheduling and writing down debt
D. Investment
E. Economic and Political Institutions
1. Institutions
2. Improving the State's Capability to Collect Taxes and
Provide Basic Services.
F. Safety Nets for the Poor
G. Reduction of Inequalities
1. Uneven development between regions and ethnic communities.
2. Educational inequality.
H. Food and Agriculture
1. Agrarian reform and land redistribution.
2. Secure property and usufruct rights for traditional community or village land-rights
systems.
3. Aid for food and agricultural development.
In the early 1990s,
with the breakup of the Soviet Union, Western scholars and
national leaders expected a surge toward liberal economic reforms
and competitive democratic elections. Russia, Central and Eastern
Europe, Latin America, and sub-Saharan Africa appeared ripe for
extensive economic and political liberalization.
Huntington
(1991: 6-7) visualizes this as a later stage of a wave of
democratization in new countries. He defines democracy as ^a
institutional arrangement for arriving at political decisions in
which individuals acquire the power to decide by means of a
competitive struggle for people¨s vote. ̄
Bratton
and van de Walle contend (1997: 3) that ^the first half of the
1990s saw widespread political turbulance across the African
continent, which can be summarized with . . . transitions away
from one-party and military regimes start[ing] with political
protest, evolv[ing] through liberalization reforms, often
culminat[ing] in competitive elections, and usually end[ing] with
the installation of new forms of regimes. . . . [These movements
and institutional rearrangements] amounted to the most far-reaching
shifts in African political life since the time of political
independence 30 years earlier. ̄
From
the perspective of the late 1990s, Bratton and van de Walle are
uncertain that this early regime transition marked a watershed in
African politics. Joseph (1998: 3-4) views the electoral
democracies with few civil and political freedoms that have
abounded in Africa in the 1990s as "virtual democrac[ies], .
. . deliberately contrived to satisfy international norms of 'presentability'."
The opposition parties, free press, labor unions, and strong
civil society needed to support a transparent, accountable
democratic society were still lacking. (Ibid., pp. 4-9).
According to Zakaria (1997: 22-43), strongmen in these illiberal
African democracies create electoral rules of the game to divide,
coopt, and subdue the opposition; maintain private armed forces
and death squads; and detain political opponents; in ways that
distort democratic institutions (ibid.; Joseph 1998: 14-15;
Barkan and Ng'ethe 1998: 33; Gyimah-Boadi 1998:20).
Bayard,
Ellis, and Hibou (1999: 2-3) note ironically that ^the
democratization process begun in 1989-91 . . . has actually
increased the tendency towards the erosion of national
sovereignty, since aid donors now attach conditions governing
human rights to the loans and grants which they offer. But these
conditions . . . have little effect on the substance of relations
between the elites of the various anciens regimes and
those people who are intent on pursuing a political revolution.
They have, however, had the effect of obliging the main actors to
change their system of legitimation. ̄
Sandbrook
(2000) cites several sub-Saharan ^countries in which
democratization has recently aggravated ethnic/communal divisions
and accelerated a downward spiral into deadly conflict: ̄ Congo-Brazzaville,
Central African Republic, and Kenya. Ottaway (1995: 235?6)
identifies the critical dilemma:
[D]emocratization . .
. is a highly disruptive process in itself: it encourages the
conflicts that exist in a collapsing state to manifest themselves
freely, but without the restraint of the checks and balances, and
of agreement on the basic rules, that regulate conflict . . . in
a well?established democratic system.
Ndulu and O¨Connell (1999: 51) use Bratton and van de Walle¨s (1997) classification of 45 sub-Saharan countries by political regime in 1988 (excluding settler oligarchies of Namibia and South Africa): multi-party systems, one-party systems, and military oligarchies. Ndulu and O¨Connell show that, in total, the five multi-party systems ?Botswana, Gambia, Mauritius, Senegal, and Zimbabwe ? started out richer (in 1960) and grew rapidly, expanded their advantage in real GDP per capita over time (figure 1). Although one-party regimes, whether competitive or plebiscitary, grew in the 1960s, they barely increased after 1970. Finally, military oligarchies started as the poorest of nations, and despite limited growth in the 1970s, have remained the poorest. To Ndulu and O¨Connell, this reinforces Lipset¨s hypothesis (1959) of the correlation of economic development with democratic institutions. Democracy is difficult to sustain where there is no accompanying economic development.
Ndulu
and O¨Connell (1999: 52-53) emphasize the association of good
governance with African growth and the neopatrimonial feature, or
personalized patterns of authority and obligation, with African
authoritarian regimes, and their resulting slow growth. In my Inequality
in Africa, I show how falling average incomes and growing
political consciousness added pressures to national leaders,
whose response was usually not only anti-egalitarian but also
anti-growth; hurting small farmers' incentives, appropriating
peasant surplus for parastatal industry, building parastatal
enterprises beyond management capacity, and using these
inefficient firms to give benefits to clients. Regime survival in
a politically fragile system required expanding patronage to
marshal elite support, at the expense of economic growth. Elites
extract immediate rents and transfers rather than providing
incentives for economic growth. In addition, spurring peasant
production through market prices and exchange rates would have
interfered with state leaders' ability to build political support,
especially in cities (Nafziger 1988). Moreover, investment by
African elites shifts from readily taxable forms toward mobile
capital and even capital flight (Ndulu and O¨Connell 1999: 54-55).
These political elites also prefer quantitative restrictions and
licensing over price-based policies, because of the scope for
targeting these benefits to favored parties.
Ake
(1996:1, 18) reinforces this contention when he states that for
Africa, ^the problem is not so much that development has failed
as that it was never really on the agenda in the first place. . .
.[W]ith independence African leaders were in no position to
pursue development; they were too engrossed in the struggle for
survival. ̄
The
struggle over declining economic benefits affects the composition
of ruling elites and the nature of patron-client patterns, thus
potentially destabilizing the polity. In return, these changes in
the political system may constrain policies toward economic
growth and development. Since the late 1970s and early 1980s, the
interaction between negative growth and political predation has
contributed to a downward spiral seen in African countries such
as Angola, Ethiopia, Sudan, Somalia, Liberia, Sierra Leone, Congo,
and Nigeria.
Africa's economic
crisis originated from its inability to adjust to the 1973-74 oil
shock, exacerbated by a credit cycle, in which states
overborrowed at negative real interest rates in the mid- to late
1970s, but faced high positive rates during debt servicing or
loan renewal in the 1980s. African leaders' statist economic
policies during the 1970s and early 1980s (OAU 1980) emphasized
detailed state planning, expansion of government owned
enterprises, heavy-industry development, and government
intervention in exchange rates and agricultural price-setting.
These policies contributed to stagnation and growing poverty (especially
in rural areas) and inequality. The political elites used the
state to pursue economic policies that supported their interests
at the expense of Africa's poor and working classes (Nafziger
1993).
In
1980, only 8 of 29 (28 percent) sub-Saharan African countries had
a lower gross domestic product or GDP (income earned within a
country¨s boundary) per capita than in 1960 (World Bank 1982:
110-11). In contrast, 32 of 48 (67 percent) sub-Saharan countries
had a lower GDP per capita in 1997 than in 1980. Indeed, from
1980 to 1997, GDP per person in the sub-Sahara declined at almost
1 percent yearly. The sub-Sahara¨s average growth rate was 1.5
percentage point per year lower than non-African developing
countries (mainly in Asia and Latin America) from 1980 to 1997 (figure
2). In 1997, the sub-Sahara had the lowest GDP per capita (in
purchasing-power-parity dollars ? see table 1) of any region in
the world (Collier and Gunning 1999: 3-4; World Bank 1999b: 191;
Ndulu and O¨Connell 1999: 42-44).
Sub-Saharan Africa¨s decline in GDP per head was widespread during the 1980s and early 1990s (figure 3). In fact, one-half of the slowest growers of the 1980s experienced persistent stagnation from 1972 through the early 1990s. Most of the decrease was in the face of slightly increased physical capital and educated labor, but a substantial fall in the best measure of the level of technology (that is, total factor productivity or output per combined factor inputs). However, since 1995, there is one bright spot: those sub-Saharan countries with political stability have enjoyed a slight growth in average GDP, even outperforming non-African developing countries (Ndulu and O¨Connell 1999: 41-42).
Poverty
rates in sub-Saharan Africa, based on the share of the population
living on under $1 per day (in 1985 purchasing power parity
dollars), were the second highest of any region of the world,
with 39 percent in 1993, virtually no decline from 1987. South
Asia had the highest poverty rates with 43 percent.
However,
in 1993, the sub-Sahara was the region with the highest poverty
gap, 15 percent, a gap which increased slightly over time. The
poverty-gap approach considers income distribution below poverty.
This gap measures the additional income needed to bring the poor
up to the poverty line (World Bank 1999a: 1; Nafziger 1997: 130,
discusses Sen¨s concept of the poverty gap).
Despite
economic stagnation and decline, sub-Saharan Africa¨s literacy
and adult and child survival rates improved in the decade before
the mid-1990s. Adult literacy rate in the sub-Sahara rose from 43
percent in 1985 to 56 percent in 1995, with the greatest advance
among females. Life expectancy at birth increased from 49 years
in 1985 to 52 years in 1996, despite the increased incidence of
AIDS. Infant mortality fell from 119 per 1,000 live births in
1986 to 91 in 1996, while the under-five-years mortality rate
declined from 193 per 1,000 in 1980 to 147 in 1996. Life
expectancy, and infant survival and child survival rates are the
lowest of any world region, and the adult literacy rate is the
lowest of any region except South Asia (World Bank 1999b: 193,
203; Sewell, Tucker, and contributors 1988: 246-48). Survival
rates rose with improved sanitation, medicine, and health
practice, often, as for example with potable water, with
relatively little domestic spending, together with strategic
transfers, such as medical assistance and vaccinations, from the
aid community (Nafziger 1997: 218-22).
The Crisis in
Food and Agricultural Development
Since the 1960s and 1970s,
sub-Saharan food production per capita has fallen (figure 4),
partly a result of the neglect of agriculture by most African
states. A highly unequal food distribution means that
malnutrition levels are high. Declining real household incomes in
Africa (through falling income or rising food prices among the
low-income households) reduces household food availability,
decreasing nutrient intake and increasing malnutrition, and
little progress in reducing disease and mortality (especially
among infants and children) (Cornia, Jolly, and Stewart 1987).
From 1962 to 1989, food output per capita grew at an annual rate
of 0.5 per cent in developing countries, 0.3 per cent in
developed countries, and 0.4 per cent overall, but declined 0.8
per cent in sub-Saharan Africa, meaning that food production
there grew more slowly than population. (The data are calculated
from figure 4, using a five-year moving average to smooth out
annual weather fluctuations.) Food production per person
increased from 1962 to 1989 in all world regions except the sub-Sahara
(figure 4).
Africa's daily calorie consumption per capita, 2116 (the same as
in the early 1960s and less than the 2197 of the mid-1970s), was
92 per cent of the requirement by the FAO, 1988-90; calorie
consumption in all other regions exceeded FAO requirements (United
Nations Development Program 1994:27, 118-20, 132-33, 207-08).
Africa's food security index is low (and falling since the 1960s)
(Jazairy, Alamgir, and Panuccio 1992:27, 398-99), not only
because of large food deficits but also because of domestic
output and foreign-exchange reserve fluctuations, as well as
foreign food-aid reductions. In 1989, Adedeji (1989:2) spoke of
^the humiliation it has brought to Africa in having to go round
with the begging bowl for food aid. ̄ Figure 4 suggests that
Africa¨s food output position has barely improved since then.
Illustrative of the enormity of the sub-Sahara's difference from
other developing countries is that while the sub-Sahara and India
both produced 50 million tons of foodgrains in 1960, in 1988
India produced 150 million tons (after the Green Revolution and
other farm technological improvements) and sub-Saharan Africa (with
faster population growth) was still stuck at little more than 50
million tons. India's yield per hectare increased by 2.4 per cent
yearly, while the sub-Sahara's grew at a negligible annual rate
of 0.1 per cent. Thus, the sub-Sahara, which was on parity with
India in 1960, produced only about one-third of Indian output in
1988 (Singer 1990:178-81). Additionally, the increasing
population density on agricultural land has already exacerbated
food crises and conflict in low-income Africa (Nafziger and
Auvinen 2000).
I will discuss
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