Sudan's Political transition 1990s

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ECONOMIC CHANGE AND

P OLITICAL LIBERAL TZATION

IN SUB-SAHARAN AFRICA O

EDITEDBY JENNIFER A' WIDNER

THE JOHNS HOPKINS UNIVERSITY PRESS / Baltimore and London

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Contents

Preface and Acknowledgments vii

Map of Africa x

Introduction t ( lennifer A. Widner

PART 1: THEORETICAL PERSPECTIVES L1

One: The Impulse to Reform in Africa 13 ,/ zV;q Robert H. Bates

Two: Through the structural Adjustment Minefield: Politics in an Era of Economic Liberalization 29

Barbara Grosh

PART 2: CASE STUDIES 47 \

Three: Political Reform in Anglophone and Francophone African Countries 49

lennifer A. Widner

Four: Structural Adjustment, Rent Seeking, and Liberalization in Benin 80

Richnrd Westebbe

Five: Economic Crisis and Political Realignment in Zambia 101 Michnel Bratton

The ]ohns Hopkins University Press 2715 North Charles Street, Baltimore, Maryland 21218-4319 The Johns Hopkins Press Ltd., London

Library of Congress Cataloging in Publication Data will be found at the end of this book.

A catalog record for this book is available from the British Library.

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ROBERT H. BATES

One@ , The Impulse to Reform in Africa

Africa is in the midst of a sweeping movement of political reform. Incumbent presidents have been voted out of office. others have retired, mosi notably Julius Nyerere. Still others have been challenged

to broaden their ruling coalitions, oPen uP their political institutions, and tolerate opposition and dissent. Authoritarians, such as Hastings Banda, Daniei arap Moi, and Mobutu Sese Seko linger on, But even they face strong .hull".,gut. As analyzed by Claude Ake, Richard Joseph, and otliers, the democratic impulse now runs strong in Af- rica-a fact long ago discerned by Richard Sklar'1

Africa thus j;id what Samuel Huntington celebrates as the "third wave,' of democrattzatton: the political reforms that began in Iberia in the mid-1970s, then swept through Latin America and Asia, cul- minating in the late 1980s in the downfall of Leninist parties in Ea_stern Europe lnd ttre Soviet Union. In analyzing this cuuent of political reforin, Huntington, like others, notes that democratization tends to- "break out" in middle-income countries, countries whose per capita incomes range from $1,000 to $3,000.2 only a handful of corrntries in black Africa fall in this range: Gabon, South Africa, and possibly Mauritius and the Congo. In contrast to other parts of the world, the political impetus to reiorm in Africa thus operates in the midst of poverty.-

In this respect, the reformist movements in Africa are distinguished by several paradoxes:

14 ROBERT H, BATES

-while demanded domestically, they are often supplied interna-

tionallv.

-IlVhile calling for new political beginnings, they are often led by old

politicians.

-ftre reforms they call for are often initiated by the very governments

they are attacking. This chapter seeks to resolve these paradoxes.

The Development Commitment

The "year of democratizafiott" in Africa-l99l-followed by three decadesihe,,year of independence" -1960. Characteristic

of the drive

for independence was ttre demand for the use of politicalpower for economilc purposes, a demand that ran parallel to deeply held political convictions and ideological commitments. ,

The nationalist movement mobilized a wide atTay of. economic in- terests. one segment was drawn from the white-collar workers who staffed the bur6aucracies that managed the governments and firms

created by the European occupiers. Articulating their_demand-s in the language"of political liberalism and racial equality, they -condemned theluplrior ionditions of service accorded expatriates: higher salaries, better housing, larger transport allowances, and so forth.3 Their de- mands drew iupport from ill who aspired to salaried employment: students in the universities and secondary school and their parents, who were investing in the education of their children. These shared economic interests gave impetus to broader political demands for racial

justice. Business and commerce also backed the nationalist movement.

Because of the collusion of the large, expatriate firms in western Africa,

indigenous businessmen were able to attribute inflation in the postwar peri6d to machinationsby the colonialists' Condemningprice Eiuging and monopoly profits by imperial firms, they mobilized popular sen-

timent for nationalist atiackJon foreign economic domination, on the

one hand, and nationalist appeals for public support for indigenous entrepeneur#tn the other.a

An analogous,-pattern aPPears in eastern Africa. Michael Cowen and Nicolab#iinson traci-the origins of nationalist politicians in Kenya to indigenous competitors of colonial firms' Many entered poliiics to proiest the administrative barriers that pr.otected foreign iirms and i^4creasedthe cost of entry for those who, like themselves, sought weath through commerce. A. L. Epstein notes a similar Pattern

",in /ambia, where businessmen-the so-called hawkers-helped or-

The lmpulse to Reform in Africa 15

ganize nationalist political parties in the urban townships.s The examples could be multiplied. Robert Bates, Lionel Cliffe,

Goran Hyden, and others stress the economic demands of the peas- antrfinichard Sandbrook, Richard |effries, Epstein, and others itress those of urban labor.6 The nationalist movement thus introduced a core political expectation: that in Africa the road to prosperity ran through politics, a point perhaps best made by Kwame Nkrumah when he enjoined his contemporaries: "Seek ye first the political king- dom, and all else shall be added unto you."7

In the postindependence period, the nations of Africa took different and COte

d'Ivoire coristructed a

so as to channel resources from activities to which they gave a higher priority than did the market. The result was a characteristic pattern of market intervention. This poliry mix provides a mechanism that helps account for why, in the African case, poor economic perform- ance and demand for political reform go together.

The Economic and Political Consequences: A Simple Model This section sketches a simple, idealized,version of this mechanism

and derives from it implications for the economics and politics of Africa. As seen in figure 1.1, given competition, normally behaved forces of supply and demand generate a market equilibrium: they establish a price (PJ at which the quantity demanded (QB) equals the quantity supplied (Q$). Governments may seek to alter the market solution, however. For example, for social or political purposes, they may lower the price to a point below that generated by market forces (say to P,).

In their attempts at state-led growth, African governments fre- quently adopt policies that generate such distortions in markets. In agriculture, for example, they have sought to lower the price of food

promoting the formation of an indigenous (if politically dependent) bourgeoisie.l0 While differing in their developmental Eaiectories, Af-

nts w@ch sought to overturn ffi5fr4-To alter incentives and relative rates of return nts were

l"-

16 ROBERT H. BATES The Impulse to Ret'orm in Africa 17

grams, their costs contribute to the macro level imbalances charac- teristic of Africa's economies. They also lead to characteristic political patterns: clientelism and patronage politics, corruption, and the pri- vatization of public institutions, resulting in a loss of legitimacy by the activist governments that captured power at the time of inde- pendence.

The mechanics that link the microdistortions to macrolevel effects can readily be outlined. The new price, P' is not an equilibrium price. At the lower price, less efficient producers cannot profitably supply goods; and consumers will demand more goods than the remaining producers can supply. The quantity demanded therefore exceeds the quantity supplied, putting an upward pressure on the price. To render the price sustainable, the government must therefore subsidize the costs of production such that the less efficient producers find it prof- itable to supply the good at the reduced price; the result is fiscal pressure on the state. Alternatively, the government must import the good; the result is loss of foreign exchange.

It should be stressed that the interuentionist policies pursued by governments in Africa have been pursued elsewhere. As revealed in Indonesia and Thailand, such policies can in fact be compatible with economic growth, Unlike Indonesia, however, most African nations have failed to maintain stable macroeconomic policies; they have pur- sued populist economic programs, using their budgets to purchase public support, to finance large military establishments, or to construct elaborate monuments for the sake of hational pride. Unlike Thailand, most African governments fail to pursue positions of advantage in global trade; most often, they adopt trade or commercial policies that separate their economies from international rirarkets. In the context of such macroeconomic policies, the interventionist policies of African governments inflict great damage on Africa's economies, contributing to Africa's budgetary deficits and mounting international indebted- ness. Insofar as the legitimary of any incumbent regime is tied to the performance of its economy, they also weaken Africa's governments.

The characteristic pattern of government intervention not only af- fects Africa's economic performance, it helps to define Africa's char- acteristic patterns of politics, as well. Interventionist policies can trans- form economic markets into political machines. Interventions help to create a form of politics that has been termed personalistic: one in which those who hold power exchange personal benefits for political loyalty.l3 The logic can be seen in figure 1.1: at the official price (Pr), the quantity demanded exceeds the quantity supplied; the value of the commodity then rises to P*-a price that high demanders of the

at" Q""= ab v;

Figure 1.1 A stYlized market

forurbanconsumers,thepriceofrawmaterialsforurbanindustries, ;;ilt" price of inputs for farmers'11 For industty'.-'.1:I l":"-i3t*n' to lower the pricei charged for electricilV u"q PetrgleuT lroducts' For consumeis, they have subsidized the prices of ess€ntral

tom-

*"aiti*, .ooLirrg oil, paraffin, processed foods' and clothinS' for example.l2 In creJit rrruik"tt, they have sought to lower interest

rates'

;;;I';"tl;;;;;;;"'s" uxct'a"ge, thev-have sought to lower the ;;;;G;;i*h"reuy r:educing fhe costsof

importing from abroad'

Such interv"rrt pr,. are ofteri targeted at a specific market or in-

a"ffi-1" p*.geeltn"y are carried oulrr arylii!:]:ii:'il1:it" * mobilize resources ,o* io futfill developm"nt obiectives. while de- fined at the level of a specific market or industry' the

impact of these

intewentions soon refrsters at the macro level' This is true by deti-

il;;i*",rdt intplsed upon the exchangg rte ald.interest rates: the impact of such measures is economy*idu' ntrt

it is also true of "kil#;; i"J"rir',f*el distortions. Whet, summed over all pro-

O""=aB

18 ROBERT H.BATES

good are willing to pay' The excess demand therefore creates new

value, but it also .t""iJJ tnu oppottu"ity for discretion' With demand

exceeding supply, tt o'" *tlo'to**u"d po*"t over the allocation of

the good grve it to- some and withhold it from others' Government

intewention ir, ir,a."iJus and markets can thus be used to create

organized followings-groop' of ee,1s91s who owe their individual

fortunes to discretron ufi o' p"ttottutitfic acts bY those in Power'

In Africa, the interv6niio't' ut'o help to cr"atu a form of politics

that has been termed-pitrimoniatrone.in which those who hold power

derive their incom", f;;; lh;.o,".tn In the sftuation just described,

the political leader gi"es uwuy the scarce commodity at subsidized

prices and reaps PJ;it"t t"*it" in exchange' There exisT,-l second

il;ibi*)" h;;"iut, ti't"i"uaer can use his 6mmand over the market

or industry to r".ot"-ihe iood 1tfr9 government price' P" and sell

it at the market .r"""i"j frice, P*' thereby reaping a higher income

from his Public office'1s Intewentions hef create a third form of P"liT":.ii O.tlt:u:-::" 'nu'

has been termed ,i't titt'i"g' In this interpretation' the origins of

sovernmen. progru*' ;;;t[i" t^e politi&t or economic ambitions

of leaders, but in the actions of interest grouPs' Political leaders in-

tervene in markets;;;;;;" io politicaip.esi,rrer by lobbyists who

seektosecurethegoodorserviciattheprivileged-price'P''Inre- sponse, go.r"rr,*ur,'r"JfiiJ"rt *"i"t"in the Pt9gl3* !y

offlils suu- sidies that make the ;;ut athactive to poiiticl[y t"Fil:l-":ial

in-

terests.l6 The result ir'th" t"" of government po*er to underpin the

economic fortunes "l " prJr"gef, segment of civil society-private

groopt that possess influence.over Pullic Programs' Thus far, I assume that leaders c-ontrot the Pt"gtiT:ll:l.govern

and either give tLe eco;omic benefits of the ryoSt-u*

to individuals

or groups o, .or,roiil^ii-irtl*t"r"us'-Naturilly' however' the bu-

reaucrats who run;r;;"';r;t;;, are less than'perfect ag€nts of the

leaders'will: they il;;;k; can-privatize the benefits of the public

prosrams, selling ;;;;;";"r thie counter at black market prices'

[ffi;;;ftpi?r''Et" public agencies survive in part off the proceeds

of these sates. rnis,"f]'lrrh;;i1"";" of politics in Africa is bureaucratic

corruption. ^--F.A" KX,Yr";A{{""suepoliciesthatareecon"*t:t}Ij :jiY:l1*l:'.'(Jvcr'ursr r'"

"*' "["

S"ritiJ anJ snortages of foreign - exchange'contributing to publi -:.,^-^^ ^G *^lirinc in nosr- i"t:::;;ii.?"'"r5"p1"*#-characterislg:li:lT":lry:::'":Xti:1, #;J;;;,qi'i*':Af ica'sec!nSc-T::':^H'.:T':#ilffi::

The Impulse to Reform in Afriu 19 for-and demand for-reform originate in the midst of economic misery.

The Delay of Reform: The Weakness of the Bourgeoisie

- Personalism, patrimonialism, rent seeking, and corruption have long provoked condemnation within Africa. writers as diverse in style and orientation as Ayi Kwei Armah, Chinua Achebe, and Ngugi wa Thiong'o dramatize the relative wealth of those who havJ seized power in postindependence Affica.l7 Ordinary citizens cheer the mil- itary coups that toppled civilian governments and then turn against the military.ds well. Their condemnation of their governments is fueled by their growing recognition that governmeni policies undermine their economic well-being, even while promoting the well-being of those in politics.

Given the breadth, depth, and duration of public opposition to prevailing political practices, why, then, has reform been so delayed? There are several reasons, all of which share a common attributel the lr"k of u"otro*i" ir.u{ttirrur fot irt"t"rtr,

"trd ""p""iullv bo*nF

- interests, to opPose African governmenti. Notwiffitanaing numero"s p"Utic staii-ents to the contrary, Af-

rica possesses an active and powerful private sector. The markets and trading routes of Africa have long histories, strong institutions, and highly professionalized cadres.l8 These commercial networks thrive even in the midst of the interventionist policies of the postindepen- dence period; they provide the framework for the black markets that have burgeoned even as public institutions decayed.le \A/hile a major force in the real economies of Africa, this market economy has none- theless failed to provide the focus for a coherent, reformist political movement.

Participants in this informal economyhave failed to act as a coherent bourgeoisie-failed to provide the political impetus necessary for sus- tained economic reform. One reason is that, instead of being op- pressed by the gap between official and market clearing prices, traders in Africa profit from it. A portion of their profits results fuom arbitrage between official and unofficial markets, especially in internationar trade, where traders benefit from smuggling and profit from the ar- bitrary valuation of national currencies.

Rather than turning to protest, then, "marketeers', turn to trade and seek to benefit from the very policies that destroy the business environment for firms in the formal sector.

lli:t""*1trtr#i;?;*;;r crisis. rhe consequence is that the need

ROBERT H. BATES

is that " in the 4ut Hirschman-s distinction does not quite serve/

The Impulse to Reform in Africa 21,

economic performance of African governments and the distributive impact of their policies undermine their moral right to govern, there is little in the way of a coherent middle class to oppose these policies.

impoltant to realize that efhnic rivalries can be manufactured by pol--mfiilbusettr rder. If a reformer advocates

merit promotions instead of patronage, for example, incumbents point out the potential for discrimination against those who are historically deprived.z If reformers call for a reduction in subsidies, incumbents from poorer regions condemn the proposal. And if reformers call for a more competitive political regime, incumbents point to the threat of ethnic violence, even while inciting some violence to lend credibility to their contention.

Ethnic ties are deeply meaningful to many Africans. To gain social standing in their communities,-elites often invest their material wealth in local causes, building schools, clinics, or public works, for example. They often marry locally, build a second home in the village, and send their children to live there. Some seek traditional titles and sacrifice major portions of their incomes from the modern sector for traditional prestige. Appeals to ethnic loyalty by politicians who feel threatened by reformist agendas thus can easily divide Africa's eco- nomic elite and undermine the potential for forming a coherent op- position.

The reformist impulse is thus weak in the African bourgeoisie. Merchant capital depends upon, or even benefits from, government interventions. Industrial capital is publicly owned. The managerial bourgeoisie is silenced by public authorities. And the loyalties of the economic elites are divided by political manipulation.

The Organization of Reform

. From whom, then. dnes fhp reformisf imnulse emanate? One source is fixed and specific hrrmarlcafifal fhnse oeople who have invegjE:d

_in skills fhaf are hrr+ imFp#ectly transferable elsewhere\ Among these are the old guard politicians and those who people the ranks of local, community-based hierarchies: lawyers, community activists, and church leaders.

A lawyer in Ghana, for example, especially one at the peak of his career, is unlikely to find a comparable position in London. Although

._ildustries not voice tn rica's econo*i", 4{@rygons? one r.easo: ll tPt.I* i" f the caPital embodied in these ;;r#;;;;;pitalis often ownedby foreigners or the government. The ;;il po.u<it of the nontrading bourgeoisie is managerial' not cap- itaisf its members receive paynient inihe-form of salaries rather than

;;;;g; from shares.'zl Th; squeezing.of guuti rents from.these in- vestmJnts and their dissipation by inefficient regulatorypolicies

may

offend the sensibilities of 'these tallnted cadres, but they do-no] rlolate

it "i,

p"i""tu economic interests. The losgeq imPosedsgnqtitute losses ! ir ---c^.^^r k^^-,,n, saslrar +hqn fn fheir oersonal fortunes.to the 411$q@rcrl PsrDurrqr

rvrrqrrvs! <.-.--_'---:-;-. As a manag".ru, "ffi6"se

cadtei Je"[loin-fneif-1me-df'.ft .-l:

involves solving production problems under highly adverse condi-

tions. It also inioives giving policy advice to directors of enterprises,

t"""y * *t om are brireauirats oi party personnel who vote but do not own the shares of government' ei ihose of us who have done ilr"ur.r, in Africa trroi, much of the counsel the managers offer constitutes a stinging inilictment of government,policies

anda plea

ior ttre freeing of iruit"ts' But the ref6rmist impulse tl T:lI:f.lPt^" cadres has beln stilled by the governance structure of Atnca's

llrrns,

ir, *t ict ind"strial authority ofien rests in the hands of political elites' Bv hirine and firing managerial personnel' making

judicious use of

;'#?; ""Jtae"ii"g u.&tt to credit and foreign exchange' public

Ji*.iorr' q"icttyitine ine protests of disaffected managers and their

"pp"tit.ti to-thgpr€taifi"g ry1y o{

doing business in Africa'

Activist governments in"Afriia intervene in markets and regulate

industries,"contributing to the macroeconomic imbalances that

weaken Africur, ".orrogliEs

and generate demands for reform' but also

strengthening"the caficity of i"ncumbent regimes to neutralize the

ie{ori',ist opp"osition.'ihe;esult is deadlock, as those who oppose the

pr5""ifi"g pttu.ut-".onomic order are stifled by it' While the poor

Africa's economic elite fails to become a coherent t is easy to com-

prehend how ethnic loyalties provoke

commerce and trade

Urri iutt u, in physical capital? There 1e polts' "llif::' mine-s:{'f*b

establishments, and sopIU.tt

T .t

22 ROBERT H. BATES

he might join an international agency, his career path is not inter- nation-al. Unlike finance capital or people with general, as opposed to community-specific, skills, professionals cannot readily defect abroad. Therefore, in the face of declining welfare, rather than exit, they may find it preferable to give voice.

Such people have paid; they have used family savings to gain an education. After others left school, they remained to train profes- sionally. In the early stages of their careers they continued to train, undertaking low-paying apprenticeships. Only later did they begin to reap the rewards of their sacrifices. @

ve them of a heads of families, moreover, a Pros-

ihe future prosperity and political stability of their country. These

The Impulse to Reform in Africa 23

government rather than by ascending through its ranks. It is char- acteristic of African reformist movements that they tend to be led by old guard politicians. For the reasons given here, it is also not sur- prising.

Thus from a human capital framework, along with the theory of exit and voice, one can derive the characteristics of those who people the reform movement in Africa. I now add two refinements.

The decision to join the reformist opposition constitutes a gamble; the uncertain value of the prospect must exceed the certain value of the status quo. All else being equal, then, the less attractive the pre- vailing conditions, the greater the willingness to gamble on reform. Two implicadons follow. One pertains to the conditions under which reform will,'take place: we would expect to see reformist political gambles being taken in countries subject to economic stagnation and poverty. Another pertains to the-composition of the reforrnist lead- ership: economic elites have the most to lose and therefore would choose risky political gambles only when convinced that the "certainty equivalent" will remain intolerable. For this reason/ too, reformism is linked to poverty.

The decision to initiate reform movements is also a strategic de- cision: the value to an individual of the gamble to demand political reform is determined in large partby the decisions of others. When protesting politically, it is safer to be a member of a crowd. The implication is that coordination is essential to the politics of reform. Knowing that others have acted or will act decreases the perceived risks of acting. If reformism appears to be sweeping through the continent or assumes the status of a force of history, then being a reformer becomes less dangerous. The strategic nature of initiating reforms thus helps explain the pronounced element of contagion in reformist politics. It helps explain the diffusion rate of reformist move- ments and their geographical patterns. It also helps explain the sig- nificance of external actors. Increasingly, international agencies de- mand domestic politicat reforms in Africa. In responding to these external demands, some African governments themselves become reformist. And the interventions of these agencies encourage indi- viduals to enter the reformist ranks, both by reducing the threat of reprisal and by convincing them that, rather than being isolated dis- sidents, they are part of a concerted movement.

The impetus for refqtro then, rather thaloriginating in the ranlg of commercial or industrial capital. originates within fhe ranks of .;

people, then, want good government.- In addition to their willingness and ability to give voice to their

demands for reform, professionals possess another advantage: access to independent assoCiadons-the church or the law association, for example. within these associations, they practice the arts of self- govetllunce, orgarizing activities, developing tactics, canvassing for irembership, riising funds, making rules, and so forth' In addition, they use these assoiiations to develop, debate, and make public an alternative vision of national governance. Their associations provide lines of communication, some of which are privileged (the relationship between lawyers and their clients or between the clergy and their congregatiotti, for example). These associations afford their members

inteina=tional ties, linking prominent dissidents with professionals in other nations, while enabling the latter to monitor African govern- ments and defend the libertybf their African colleagues. Professional associations thus provide the organizational infrastructure for dissi- dent movements in Africa.

The human capital of old guard politicians is also geographically specific. DefeatElin previous political struggles, the opposition waits ot, th" sidetnes for an opportunity to reenter the fray. Abroad, they would ioin those-wltU, onie at the center of events, have been thrust to the potitic;iinargins, swelling the dejected ranks of political ref- ugees. Unknown iry say, Paris, they remain famous at home' They cin transfer neither their reputations nor their political capital: their

" knowledge of.wh6 holffgrudges against the old regime or w_ho believe thgir ambitions couldbe realiZed more rapidlyby toppling the existing

ROBERT H, BATES

at home rather

!-atterned: itJ location ii influenced by the extent and duration of economic decline and its timing by forces that give assurance that, if reform is initiated, others will join'

The Impulse to Ret'orm in Africa

newly democratic governments, they are-likely to choose the latter. Friends of Africa, therefore, view political change as a necessary re-

quirement for continued funding for development assistance, and ihey proa recipient regimes to open up to political reformers oI to initiate reform themselves.

Domestic reform in Africa thus presents an odd spectacle. \A/hile demanded domestically, it is supplied internationally; it is also sup- plied by the very governments whose behavior led to the demand for

reform in the first Place. With governments taking the lead, political change in Africa could

simply yield the recreation of the old order. Features of the dynamics give hope, howevdr, that change will result in something more than ihat. PoliUcal reform has been undertaken as part of economic reform. The reduction of controls and the movement toward market prices eliminates rents; and indeed, protests over the losses of these rents, particular$ by civil servants, help fuel political opposition' But if go,rertt-ettts succeed at this task and create strong economic bu- ieaucracies in their efforts at economic reform-bureaucracies able to resist distributive claims and to minimize economic distortions-then the beneficiaries of the old order will not be able to recolonize the new. They will have been disinherited. Possibilities thus exist for political realignment, rendering a return to old practices less than inevitable.

Conclusion

Top-Down Reform

This chapter began by noting that the behavior of African govern- ments in the postindependence period both weakened their econo- mies and shaped the nature of Africa's politics. It ends by demon- strating that the very policies that made reform necessary and desirable help as well to define one of its most characteristic attributes: that reform tends to be top-down, that is, to be led by the very governments whom the reformers attack'

The demand for political reform possesses strong domestic roots. While the

rest upon markets and industries that have turned into political or- ganizdtions. This form of political organization generates a need for

6orrowing, and lenders seek political reform as the price for continued

credit. To"buy time for their regimes, governments introduce.political reforms to secure these loans from foreign donors and creditors, who

have underpinned the economies of Africa and who now insist on political liberalization as the price of further lending.-

Creditors became political reformers in part because of changes in

international politicai alignments' During the cold war, competition among the big powers led to a search for friends, even among morally

.or.oit na6oii; the big powers therefore extended financial aid even to these governments. N-ow that the cold war has ended and the great

power riiralries have gbated, creditor governments are freer to act in

accord with politicat!-linriples, and they choose as their political friends those'who prac$Ce,gbod government. In addition, Africa has

friends within the dbtelopment agencies, even if African governments

do not. Institutions roclt as the world Bank have an institutional commitment to lending in Africa. But the Bank and other lenders must

raisdmoney from dgnor gorrbrnments, most of which are democratic.

Given the present international realities, if donor governments can choose S"t*u". lending to authoritarian governments or lending to

Why, in Africa, do democratic reform and poverty go together? I argUe that economic decay and political instability share.a-common otlgitr, the interventions that yield clientelism, patrimgnialism, and coriuption promote as well fiscal deficits and trade imbalances.

In further probing into the economic base of political reform, I argue that, however passionate may be the domestic political impetus

foi reform, it is nonetheless weak. While Africa is racked with eco-

in Afriia oiEovements of bourgeois liberalism. The very policies that create the prevailing economic and political order in Africa divide the middle class, an outcome strengthened by the ethnic and cultural diversity of Africans.

Refoimism in Africa thus possesses distinctive characteristics. It is passionately championed by the articulate wordsmiths of the profes-

is often

ROBERT H. BATES The ImPulse to Reform in Africa 27

(Cambridge: Cambridge university Press, 1978); and Epstein, Politics in an

Urban African Commun i tY. 7. Thandika Mkandiwire, in his comments on this chapter, reminded me

of a contrasting current in African nationalism: a willingness to incur economic

costs in orderlo gain political liberty. Figures as diverse as Hastings Banda and Sekou Toure illustrate his poini, th; first by taking Malawi out of the Central African Federation anilthe latter by breaking ties with France' As noted by Mkandawire, sekou Toure proclaimed: "we would rather be poor

on our feet than rich on our knees." These orientations toward politics, while

clearly less materialistic than those stressed in this chapter, would of course

also iontribute to the ilnpoverishment of Africa. 8. See, for example; Cotn Leys, lJnderdeuelopment in Kenya (Berkeley: Uni-

versity of California Press, L975)' s. see the superb analysis in Tony Killick, Deoelopment Economics.in Action:

A Study of Economic Policies in Ghnna (New York: st. Martinls, 1978). 10. sayre schatz, Nigerian Capitalism (Berkeley: university of California

Press, 1977). 11. See, for example, Robert H. Bates, Markets and states in Ttopical Africa

(Berkeley: University of California Press, 1981)'' 12. S"ee Killick, fievelopment Economics; Scott R. Pearson, Gerald C. Nelson,

and J. Dirck Stryker, "Incentives and Compatative Advantage in Ghanaian

Industry and egriculture," Stanford University, 7976, typescrrptiand Robert

H, Bates and Piul Collier, "The Politics of Economic Reform inZambia"' in

Political and Economic lnteractions in Economic Pokcy Ret'orm, ed. Robert H. Bates

and Anne O. I(rueger (Oxford: Basil Blackwell' 1993)' 13. Robert H. ]ickson and Carl G. Rosberg, Personal RuIe in Black Africa

(Berkeley: University of California Press, 1982). 14.RichardJoseph,"Class,state,andPrebendalPoliticsinNigeia"'lour-

nal of Commonweakt and Comparatiae Politics 2L, no' 3 (1983): 2L-38; Thomas

Callaghy, The' State-Society Str:uggle: Zaire in Comparatiae Perspectioe (New York:

Columbia UniversitY Press, 1984)' L5. See Richard. L. Sklar, "The Nature of Class Domination in Africa"'

lournal of Modern Afriun Studies 17 (1979):531-52'.]"6.SeeAnneo.Krueger,,,ThePoliticalEconomyoftheRent.Seeking

Society," Ameriran Economic Review 64, no' 3 (1974)t 291'-303' 17 ' AyiKwei Armah , The Beautyt'ul ones Ate Not Yet Born (Boston: Hough-

ton Mifflin, 1968); Chinua Achebe, A Man of the People (Garden Gty' N'Y': Anchor Books, 1967); Ngugi wa Thiong'o, Petals of Blood (New York: Dutton'

1978\. 18. See, for example, the contributions in Claude Meillassoux, ed.' The

Deaelopment of lndigeious Trade and Marketing in West Afriu (London: Oxford University piess, igZt); Richard Gray and David Birmingham, Pre-Coloninl

African Tiade (London: Oxford University Press, 1970); and the sup,€rb over-

view in William O. jones, 'Agricultural Tiade within Tropical Africa:]Iistorical

Background,,, in Agriculturai Deoelopment in Africa: Issues ot' Public Policy, ed.

sional classes, but it is led by the old war-horses-politicians dis- credited by their previous comPlicity with the old order. Reformism has strong domestic roots, but it is powerful because it is backed by internatio-nal agencies and foreign capital. It opposes Africa's.gov- ernments, but it is often initiated by them. A major purpose of this chapter is to account for these paradoxical characteristics'

Notes

I would like to thank ]ennifer widner, samuel Huntington, Thomas Cal-

laghy, and Catherine Elkins for comments on this chapter'"t. Claude Ake, -Rethinking African Democracy," lournal of Democracy 2,

no. 1 (1991): 32-44;I\chard Joseph, 'Africa: The Rebitth of Political Freedom,"

Journal ot' Demonacy 2, no. 4 (1991): t1-24; Latry Diamond, ]uan l' Linz' and'Suy*o,r. Martin iipset, Demouacy in Deuelop-ing Countries: Africa (Bouldet

Colo.: Lynne Riennlr, 1988); and Richard L' Sklar, "Developmental Democ- racy," iomparatiae Studies in Society and History 29, no' 4 (1987)t 686J1'4'

i. Samuel p. Huntington, The Third Waae: Democratization in the l-ate Twen' tieth Century (Norman: University of Oklahoma Press, 199!), 62'

3. See, ior e*ample, David Abernethy, "Bureaucratrc Growth and Eco- nomic stagnation in sub-saharan Afica," in Afticy's Dea-elopment Challenges and the world gank, ed. stephen K. Commins (Boulder, Colo.: Lynne Rienner,

1e88). +. See P. T. Bauer, West AfriunTtade (London: Routledge and Kegan Paul'

1964); Dennis Austin, Politics in Ghana, 1-946-1960 (London: oxford University ptess, 1970); and A. G. Hopkins, An Economic History of west Aftica (New York Columbia University Press, 1973).

5. Michael P' Cowen,,,,Capital and Household Production: The Case of

Wattle in Kenyds Central Prbvince, 1903:1964," Ph.D. diss. University of Cambridge, 19zg; Nicola sainson, The Deaelopment of Corporate Capitalism in

Kenya, L5L8-1978 (Berkeley: Univerltl of California Press, 1979); see also cariin fitctring, Ciass and-Economic Change in Kenya (N"y-I1T1 Yale Uni- versity Press, i980;; John Spenser, The KAII (London: KPI, 1985); and

A' L' Epstein, Politics in an lJrban African Communify (Manchester: Manchester Uni-

versity Press, L958). 6.

"See Robert H. Bates, JcF ays on the Politiwl Economy of Rural At'rica (Berke-

ley: University of California Press, 1983), chap. 4; Lionel Cliffe, "Nationalism

u.ra tn" Reaction to Forced-..,Agffcultural Change in Tanganyika during the Colonial Period," Taamilii lJuty ffzo;: 1-L5; Goran Hyden, Beyond Uiamaa in Tanzania: Deuelopment and the Llncaptuted Peasantry (Bert9t9y, University of

California Press, 1b80); Richard Sandbrook, Proletarinns and Afriwn Capitalism:

The Kertyan Case, 1960-1912 (CamBdidge: Cambridge university Ptess.' 1974);

nichardJeffrie ",

ilorr, Pit.,er, and ldeology in Ghana: The Railwaymen ot' Sekondi .t

ROBERT H. BATES

Robert Bates and Michael F. Lofchie (New York Praeger, 1980). 19. Jerry ]enkins, ed., Beyond the Informal Sector (SanFrancisco: ICS, 1988)' 20. Albert Hirschman, Exit, Vaice, and L,oyalty (Cambridge: Harvard Uni-

versity Press,1979). 21. For a discussion, see Richard L. Sklar, Corporate Power in an At'rican

State (Berkeley: Universify of California Press, 1.975). 22. See, for example, the discussion in Nelson K ashr, The Shrinking Political

Order (Berkeley: University of Califomia Press, 1976); and Donald Rothchild and Victor A. Olorunsula, State uersus Ethnic Claims: African Policy Dilemmas (Boulder, Colo,: Westview, 1983).

BARBARA GRO SH

Two Q Through the Structural Adjustment Minefield: Politics in an

Era of Economic Liberalizatron

Since independence in the 1960s, virtuallyevery-sub-saharan African

;;;;y ha:s pursued policies of substantial regulation and,1o1|ol br planners. These policies include (but go beyond) the complex

ot Prac- 'tices that have been discussed in the semi-industrial countries since

1973 under the rubric of.financialrcpression,l The countries of the region

fru"u "*p"tienced

the Jluggish (even negative) growth predicted by

the ecoriomists who began the critique of such policies'

In the 1970s and 1980"s most of these countries were forced by their

low growth and increasing balance of payments problems to turn to

the multilateral and bilateial agencies fbr help. This help comes with

strings attached, in the form of qroglm-s for stabilization and sffuc-

tural"adjustment, the thrust of which is the dismantling of significant

parts of their apparatus for regulation and control' For shorthand' I

ierm these polici'es programs of economic liberalization' Also in the late rgdos and early !g90s, massive political change

came to Africa, following dissent both from old politicians who could

no longer be contained"wittrin the one-party system and from pro-

fessionil grouPs not previously politicafly active (in some cases be-

cause of i-h" ,"pr"rrion). This"chutg" has taken various forms, in-

cluding the retirement of heads of state, couPs, civil wars' and the

end of"one_party rule. The sequence of these events-economic lib-