There have been many explanations for why Africa has not seen higher growth rates in light of the deconstruction of colonialism and the introduction of liberal economic policy.  The fact that is most startling about economic progress in the region is even after estimates take into consideration all possible constraints hindering productive economic growth, Africa’s current growth rate still falls far short of this lower bound.  Many explanations have been put forth, some of which I have mentioned in past articles (Sachs’ argument regarding climate difference and Africa’s agricultural woes), but one argument that deserves further explanation and discussion is that put forth by Harvard Professor Robert Bates, on the importance of government behavior and in particular the role of politics in Africa’s economic structure.

 

When Africa is compared to other regions in the world with respect to economic growth and the role of government in facilitating growth, it is no wonder that they pale in comparison.  In 1950 following the end of World War II and the first remnants of the Cold War, other areas around the world such as South Korea, Singapore, Taiwan, and Hong Kong were as devastated as many Sub-Saharan countries, if not worse.  In the last five decades these latter four countries have experienced phenomenal growth rates and have outpaced many of the most developed countries in average annual GDP per capita.  Even today there are widely held beliefs as to how and why these particular countries were so successful in their development efforts.  

 

If we look at the issue from a comparative perspective, it becomes clear that regions in Latin America and Sub-Saharan Africa saw only minimal growth rates and to some extent negative growth rates in the same time span.  When comparing Latin American countries with the East Asian NIC’s, it is often cited that many governments in the former adopted and continued to pursue negative economic policies such as import substitution industrialization (ISI), and did not embrace free trade and the market soon enough.  But critics of this argument point to the fact that many of the East Asian countries also practiced some form of ISI prior to opening up their borders to trade, and thus enacted protectionist measures that allowed many infant industries to grow and develop without the threat of free market competition from neighboring countries.  The argument works both ways, but both perspectives have the unique ability to restrict our attention to the role of the government.  ISI and other protectionist policies were largely initiated and supported by the domestic governments in question.  Thus its mixed success in different regions might also be attributed to those governments’ behavioral practices and the role politics played in each society.  

 

There will always be those who continue to proclaim that government should not interfere with the workings of the market and any attempt to do so will result in losses to efficiency and missed opportunies for private business. But many individuals residing in the less liberal camp have already sounded the alarm bells.  For them, government does indeed have a crucial role in determining the outcome of the market.  The first proponents of a pro-state model in development advocated a developmental state that had secured its position domestically before venturing out into the international wilderness. This included a strong central government, a unified national currency, and a unified front absent of border disputes or internal strife.  A particular characteristic of the East Asian countries was their government’s policy to place public education and health care high on their agenda.  Such public initiatives led to higher levels of literacy, lower levels of infant mortality and improved life expectancy.  

 

Other examples of weak government structure and the adverse negative effects of forced liberalization and free market capitalism can be pinpointed in regions of Latin America during the debt crisis of the 1980s and the East Asian debacle in 1997 following the devaluation of the Thai Baht.  The former event led to the introduction of many structural policies aimed to stabilize the economy by forcing countries to adopt liberal economic prescriptions at the cost of other developmental gains.  Institutions such as the World Bank and the IMF were notoriously known for promising aid to debt-ridden countries but at the expense of forcing them to adopt structural adjustment policies that were in conformity with forced opening of markets and expansion of free trade.  One of the many problems with this prescription was the complete denial that many of these countries needed to possess a stronger governmental apparatus and shift focus away from a market oriented to a more state-led development effort.  

 

In the East Asian Crisis the source of the widespread chaos was not exactly the governmental structure but rather the financial structures that were actively involved in foreign trade.  The 1997 devaluation of the Baht was in response to growing pressure by foreign traders and the belief held by many investors that their investments would not pan out.  Many of the problems that arose could have been avoided if the countries involved had a stronger financial apparatus that could weather the storm of foreign investors and the ill will of short-term capital flows. 

 

The purpose of the above examples has been to demonstrate the importance of a strong central authority in the early stages of development.  When looking from the perspective of the Sub-Saharan countries, to say that many of these countries are in desperate need of a strong central authority that is committed to development is more than an understatement.  Considering the high levels of corruption and crony capitalism that is prevalent in African governments, it is no wonder why a state-led development model has failed to take root.  But it is particularly important that we not forget these case studies from around the world and incorporate those ideas that have had the profound effect of catapulting countries once thought to be stagnant onto the path of growth and development.  Sub-Saharan Africa has the potential to grow and develop, but it will depend on whether the governments of these nations are committed to fighting the ills of poverty and inequality.   

Wade, Robert., Wheels within Wheels: Rethinking the Asian Crisis and the Asian Model. Annual Rev. Polit. Sci. 2000, vole 3. 85-115.