Making the International : Economic interdependence and political order
Mkandawire
Developmentalism, in the sense of successful promotion of rapid economic transformation, is a
overriding concern of all citizens and african leaders. The depth of poverty is a core theme in the
african political agenda, highlighting the role of the state response.
A developmental state is a state that combine an ideology of development with an effective capacity
to manage resources in order to promote development.
After two decades of “lost development” , Africa has experienced a great wawe of external policy
intervention as a consequence of the most dramatic economic decline in the world.
The foreign field that assumed this aim has been that of foreign aid, in addition the leverage of the
development aid has allowed to effect the internal change in african states.
The tool has been the conditionality – the placing of policy conditions in exchange (return) of aid in
form of grants and loans. This intervention extreme influences the construction and the dismantling
of the state capability to manage the dilemma between international market and internal
constraints., leading to a confiscation of the ability of the state to define their own role and give
expression to the community it represents. The restructuring of african states by external agency
has been caracterized by “structural adjustment”.
Periodozation of post indipendence african economic policy in a cycle of interdependence between
economics and politics
Economic growth record
1963-1973
high growth
1974 to the early
1980 the “crisis years”
economic crisis and decline
1982-1995 the
adjustment years
1996-2001 the
recovery years
Role of the state
State led developmentalism
Attack on the state as the source of
economic crisis
Economic stagnation, macroeconomic
stabilization
Fragile resumption of the growth
The thesis of african
incapability
The return of the state?
Governance, partnership,
Institutional reform
Even tough the European had desribed their mission as that of bringing civilization, only after 2 war
world the colonial authorities made explicit statements on economic development and colonial
welfare and development scheme were introducted. Truman Plan point 4
Two contradictory forces contributed to the plan 1) the need of colonial power on the aftermath of
the war for contribution fom the colonies for the reconstruction of devasteted metropolitan
economies: increasing primary commodities export from colonies to provide raw materials to be
processed in industry the w. Countries. In addition the foreign money earned by the colonial exports
was held as reserves in metrop. Countries, the financial reserves of colonies in this way helped the
E. Countries against the scarcity of dollar and finally the colonies also served as new markets for
imperial industries.
In this situation , economic development of this type excluded strategies of sostitution of
importation – Out-warded economies and auto centred economies -. S. Amin.
The goverments however were under pressures of many social groupes that had emerged and
inspired by the claims of imperial powet that the fight against nazism was the fight for freedom and
of indipendence of nation – Creation of United Nations and its Universal declaration of Human
Rights.
So Trade policies that potected the national industries, the creation of national currencies and
regulatory financial institutions, anyway states were created but without nations and without room
of manoeuvre. One source of the constraint lays in the process of decolonization, ex-colonial states
maintained some leverages on the new african indipendent states through aid and trade
arrangements(agreement bilateral), military intervention and diplomatic pressures created the Neocolonialism a new bur old form of relation. Criticism by Krumah, Nyerere, Lumumba against the
attempt to undrmine their newly achieved indipendence.through a practice of “divide et impera”
supporting pliant leader through military intervention, economic sabotage, assassination against
anyone considerd hostile to neo-colonialist project.
Nation building that was a central preoccupation of the new leaders, and it provided a new
ideological support to exercise their national sovereignty and assert their authority internally.
The african sovereignty that had been accepted de jure in the post-colonial world order because of
cold war, would contend with many external pressures and centrifugal social forces.( dilemma
centrifugal against centripetal social forces and groups).
International consensus between the developmentalism and the concern of create a national stability
and stable states and in general for a more active role of the state in economic development.
Influences of Keynes that provided an economic theory that was compatible with social security and
socila service, and influences of the success of central state economic planning of the URSS.
In addition the emerging theories of” develoment economics” like theory of stages of Rostow that
suggested that stages of develoment could be identified from history thwere was the possibilities of
learning how accelerate the growth through state policies. Econopmic theory concerning the role of
the state put attenction on Macroecnomics – that analyses the structure and the operation of the
economy as a Whole – Microeconomics analyses the decisions of individual economic actror, such
as people, hopusehold and firms.
The historical and theoretical considerations on the role of the state in developm the teritory, were
also drawn upon the resurgent nationalism that gave development the status of an ideology –
developmentalism driven by nationalist aims to secure the resource base for national security and
defense.
If sovereignty is considered as the claims of the state for the right to rule in recognition of that right
by the citizens or other sovereigns states; Autonomy is refered s the capability of a state to carry out
choices of economic policy around strategy of economic development.
While the former can exist without the latter the latter cannot exist without the first, sovereignty is
not a condition for sufficient autonomous action. Economi constraint limit the state autonomy as
constraint to import limit th capacity of industrial effort as the declining ternms of trade, poverty
and aid donations limit the capability for the state to provide good primary health and schooling.
Hovever if a state face the difficulty to rule on a divided society, fragmented, the other side of the
problem is the need of a state to overcome private particulastic interests (short term) and to
extabilist its autonomy from particularistic social forces in order to achieve and device a long term
economic development and social policies.
African state were directed by a developmentalist ideology and nation building towards aims of
economic performance, i.e. increasing investment and industrial rate, and to manage the resources
for developmentalist purpose.
This ideology often justified the neglect of human and democratic issues and costitute the
scaffholding to subordinates this issues at the rules the economic plans. This led the state to a
centralized and authoritarian structure that in the name of nation building and development justified
not only authoritaniarism but also the necessity to carry out long term plans unburdened by the short
term of the electorate. Developmentalism thus subordinate human rights to the cause of national
development.
Dependency school criticism
Radical nationalists argued that the neocolonial states were undrmined by external interferences and
doubted wheather this external dependence could allow it to be an instrument of development..
The argumernt was based on the idea according which capitalist develpment in western countries
had been driven by astrong national bourgeoisie that had created a state that could be a lynchpin of
industrial efforts:
African countries peripheral to the international capitalism could not produce an african boureoisie,
the spread of interational firms based in the west, transformed the role of african dominant classes
to be no more than a comprador bourgeoisie or lumpen bourgeoisie.; its historical mission was
ensuring the capitalist development.
Falletto e Cardoso argued indeed that a dependent capitalist development was possible within the
alliance of national bourgeoisie with the working classes in an attempt to achieve national
development. – Ivory coast and Kenia.
Capitalist development in Africa ( good rates of growth) coincided with the golden age of capital on
world scale.
Vedi tabelle su
1) Tassi di Crescita del GDP reale pro-capite in subsaharian country.
Sebbene le periodizzazioni offerte diano uno spaccato interessante secondo le differenze del ruolo
dello stato nell’influenzare queste politiche, potremmo valutare nelle periodizzazioni cosi strette
che il grafico mostra crisi cicliche
2) Tassi di crescita media annuale per settore e GDP: crescita dell’industria tutta ( maufatti,
minerario, energia), agricoltura crollo, difficoltà di trasformare l’agricoltura no-Green revolution,
molte persone che vivono di agricoltura.
Industrial development required high rate of investment, as a percentage of GDP like asian
countries, though investment generate lower rates of growth. Africa produced in 1974-75 a gross
rate of formation of capital at 24% until 1980 matching witha rate of Gross domestic savings)
before falling off.
In post independent africa, country used to undertake the monopoly of purchasing and selling of
agricultural commodities through the marketing boards.
State owned industries and joint venture; Private public ownership, Labour market legislation to
impose minimum wage and direct provision of jobs.
The developmentalists states in Africa between 1961-1973 however the struttre f economy made
this stetes vulnerabl eto the crisis in the world-economy.
1) Great ineqalitu between countries and within countries ; 2) process of development with an
intensive use of capital, i.e. produced few jobs and didn’t allow the state to meet the basic
needs.
2) Request for growth and equity
3) Failure of the strategy to promote exports of manufactured goods- comparative advantages
in primary export to fuel the purchase of capital equipment, capital goods and intermediate
products
4) Declining terms of trade- Prebish – declining term of trade even if WB officials trie to
persuade
5) No responsiveness in agriculture , stagnation
African states sought individual arrangement with external institutions.
Authoritarianism produce predatory regime and same times they didn’t win the adesion of key
element of society.
Crises
African average rates of growth of GDP saw their maximum in 1974 then they declined , 1983 all
african states hsd a average decline of 5% . Why?
Some countrie suffered other not, 1973-1979 years of oil crises, the OPECtook advantage of world
market conditions to force up oil prices, boom in the oil prices and by the mid of 1970 – Nigeria
and Angola.
These was also a period of economic recession and inflation, the extenal economic shocks exposed
the vulnerability of african develpmentalist economies countries, external volumes of trade
collapsed because the decline of supply in Western market, several balance of payment crises
Two choces for African countries 1) change their economy 2) continue to borrow finance from
abroad improving the structural tendence to debt.
W. institutions : Bretton woods: FMI create a stable climate for trade harmonizing the policies
financial and monetary of the countries and financial assistance for difficulties in B of paym., WB
the task of “reconstruction and development”, leading money for the post war reconstruction, and to
the developing countries. WTO- UN;
Since the end of reconstruction of Europe, WB activities were directed to developing countries.
Anyway the precedence was given to the programme of stabilisation of the FMI, “fundamentals
preoccupation” , created the necessity of political conditionalities, while poverty and development
disappear from agenda.only later they re-appeared under the label “comprehensive development
framework”.
The FmI reassured that the declining terms of trade were temporary phenomenons, directing also
african countries to borrow from private market when the real rate of interest were low.
Net outflow of capital during mexican crisis, only BWI – Tanzania case – reserves –threatened to
spend unless no development aid.
Economic crises and state crisie made vulnerable to external political and economic pressures , to
understand the nature of political crises we should see at the structure and the policies of the
developmentalist state.
Authoritarian rule does’not produce developmental state, but these latters tended to derive their
legitimacy from unity and economic development, when the economic crises struck it engendered
an effort to sustain public expenditure, its failure to manage ec. Crises, increasingly rested its
authority on force and coruption, producing a vicious circle of reduced economic performance and
reduced legitimacy.
Lay the basis for an attack on the African state
In WC the neo-conservative governments blamed the inflation on fiscal irresponsability of the state,
and for the developing countries, the dominant international view blame against the interventionism
of the state and distorsion of the market – Lame Leviathan ; these arguments wanted to show that
african debt was growing because stae had undermined the competitivness, reduced the share of
trade.
WB Accelerated Development in Sub-saharian Africa: an agenda for action or Berg Report: Freeing
the market, reducting the rle of the state, great influences: critique to the state-led pattern and to
national projects.
The argument was that the state could not intervene adeguately for reasons rooted in the nature of
the state and politics of policy making
Adjustment Years
1980-1995 period of wholesale external assault on african states capabilities , and external purpose
to redifine the role of the state towards stabilization rather than on development. Adjustement
driven by the BWI: included economic stabilization, reduction of the scale of the state economic
activity and the reorientation of its activity to market led economic activity and policies.
N the Berg Report the performances of african states has been undifferentiated and superficial, it
understimates the role of external conjuncture on african economies; that generally go well when
the global conjuncture is good but poor bad when it’s bad.
THIS MEANS OPENESS AND VULNERABILITY
Primoerdial and patrimonial relations have been inserted ibn the modern form of administration
rendering them weak and incoherent.
The neo-weberian crititìque of the state: neopatrimonialism and personal authority of individual role
and the state is used to distribire resources to support personal rule.
African state more than represent the modern side of the Traditional /modern dichotomy were seen
as inclined to clientelism and politics of “belly” that guided social actions.
Bates WB – market generally work well if allowed to function freely, stae interventions caused
market distorsion, so if the price are high the state can control them and give the opportunity to
make profits to other.
African states were infested by rent-seekers that creaed a priviliged class togheter the official of
states, this had rendered the state incapable of pursuing long term development.. Stae bureaucrats
were part of this disaster; so removal of the state intervention at the source. BUT THIS IS A
STATIC MODEL BECAUSE RENT SEEK can also creates growth.
Imperial approach: africa need tecnological expertise and a rigid relation between donors and
recipients. Most african governments acceptance of IMF policies was based on the view that this
agreement would have engendered a flow of foreign investment. But the afct the no african country
have graduated, make us know about the negative impression nthat africa mntains on investors.
Consequently despite the fact that rates of return of direct investment in Africa have generally been
higher than anywhere in other developing countries, an intangible “risk factor” contnues to deter the
investors.
FDI flows have declined by the mid 1980, the early 1990 when adjustment should have been
creating investment inflows have been disappointing: under 2% of global investment during the
1990s and fell below at the turn of century.
Furthermore the FDI entering in africa is of dubious benefit to long term development – hot money
– speculating flows at brief term, in addition there is a ong term structural investment in mineral and
oil out of manifacture sector (competition) because of prospects of better world prices in other
moments so the ownership from the state pass to privqte enterpeneurs. – Acquisition of already
existing enterprises not green field project in new productive sector.
Privatized plants have been sold by the state and privatizations acquisition made up to 15% of totl
FDI in africa, this inflows have been created to engeder an outflaw more consistent than the former.
Africa as a net capital exporter, agfrican capital invested oversea – Net outflaw from 1972-1995
US$ 285 billion. Social benefits for investment in term of employment and income are lost.
The recovery years, Fisher- Africa on the move, The turning point, better policies rather than an
exogenous strategy: structural reforms have been realized in many A. Countries, domestic price
control abolished or liberalized, inefficient public monopolies dismantled, a large numeber of state
enterprise have been privatized, in the external sector the tariff barriers have been eroded, the
import duties have been lowered in some countries, exchange rates have been freed and unified,
most countries have also eliminated control on bank creditand estabilished market-detrmined
interest rate. – Succesfully adjustment.
But there is a shift of policy – Wolfensohn Without an effective state, sustainable development
neither socvial and economic is imposssible, its role of facilitating, mediating and encouraging
activities of private business and individual.
Second generation of policy – social and human development ; but as we have seen the IFI now
demanded for a striong state what they have dismantled in previous years