Beyond Structural Adjustment The Institutional Context of African Development

312 Pages·2003·1.39 MB·English

by  Nicolas Van De Walle

eyond tructural djustment
B S A
eyond tructural djustment
B S A
he nstitutional ontext of
T I C
frican evelopment
A D
dited by icolas van de alle,
E N W
icole all,
N B
and Vijaya Ramachandran
BEYOND STRUCTURAL ADJUSTMENT
Copyright © Nicolas van de Walle, Nicole Ball, and Vijaya Ramachandran,
2003.
Softcover reprint of the hardcover 1st edition 2003 978-1-4039-6316-1
All rights reserved. No part of this book may be used or reproduced in any
manner whatsoever without written permission except in the case of brief
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ISBN 978-1-4039-6317-8 ISBN 978-1-4039-8128-8 (eBook)
DOI 10.1057/9781403981288
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First Palgrave Macmillan edition: November 2004
10 9 8 7 6 5 4 3 2 1
ontents
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Acknowledgements vii
1. Introduction: The State and African Development 1
Nicolas van de Walle
2. Financing Africa’s Development: Toward a Business Plan? 35
Ibrahim Elbadawi and Alan Gelb
3. Tax Reform and Democratic Accountability in 77
Sub-Saharan Africa
Lise Rakner and Siri Golpen
4. African Governance and Civil Service Reforms 101
Dele Olowu
5. Forging Developmental Synergies Between States 131
and Associations
Aili Mari Tripp
6. Democratic Decentralization of Natural Resources: 159
Institutional Choice and Discretionary Power Transfers
in Sub-Saharan Africa
Jesse C. Ribot
7. Foreign Aid and State Administrative Capability in Africa 183
Arthur A. Goldsmith
8. Governance and the Private Sector in Africa 213
Linda Cotton and Vijaya Ramachandran
9. Governance and Private Investment in Africa 241
James J. Emery
10. Governance in the Security Sector 263
Nicole Ball, J. Kayode Fayemi, Funmi Olonisakin,
Martin Rupiya, and Rocklyn Williams
vi Contents
Notes on Contributors 305
Index 309
cknowledgements
A
T
his collection of essays has its origins in a project undertaken by the
three editors for the Overseas Development Council (ODC) from 1999
to 2001. We wish to thank John Sewell, the ODC’s last president, for
his support through out the life of the project. We are grateful to the
Ford Foundation for the generous financial support it provided to
theproject, and to Manuel Montes for his steadfast support throughout.
In addition, Nicole Ball thanks the Swiss Development Corporation,
which provided additional support for the security component of the
project. Following the untimely closing of ODC, the project was housed
at Georgetown University. We wish to thank Lola Brown and Mary
Schmiedel for their excellent administrative support, and Paloma Bauer
for research assistance.
Finally, an early version of Chapter 6 by Jesse Ribot appeared in the
journal Public Administration and Development (Vol. 23, No. 1, 2003)
under the title “Democratic Decentralization of Natural Resources:
Institutional Choice and Discretionary Power Transfers in Sub Saharan
Africa.” We thank the editors of that journal for permission to reprint
this material.
h a p t e r 1
C
ntroduction: he tate and
I T S
frican evelopment
A D
Nicolas van de Walle
M
ost observers recognize that strong and effective governance is a key
to Africa’s recovery. As the World Bank famously put it back in 1989,
“underlying the litany of Africa’s development problems is a crisis of
governance” (1989, p. 60). The region’s burst of political liberalization
and democratization in the early 1990s significantly increased popular
participation in political life, even if not all countries have made a
smooth transition to multi-party electoral politics (Smillie, 1993;
Bratton and van de Walle, 1997; Joseph, 1998). The emergence of inde-
pendent media, opposition parties, and an increasingly rich and varied
civil society have all been striking innovations. On the economic front,
the mid-1990s witnessed a burst of growth, bringing many countries of
the region their best economic results in two decades.
Yet few observers would argue that this wave of good news has
strengthened states or their ability to promote development. On the
contrary, many of the states in the region continue to be in crisis. In the
worst cases, central states are threatened by the kind of complete col-
lapse that has already been witnessed in Somalia or Congo. Even in the
most stable countries, states do not appear capable of spearheading
structural transformation of the economy, given myriad problems of
low capacity, fiscal crisis, and corruption.
The weakness of central state institutions exacts a cost. In some coun-
tries, there has been a clear deterioration of infrastructure, as an increas-
ingly bankrupt state is unable to maintain the achievements of the
past.Even more seriously, many observers have noted rising crime and law-
lessness, particularly in the countryside, far away from the capital, where
the reach of the state is weakest and law and order often not enforceable.
2 Beyond Structural Adjustment
At the same time, the vacuum left by state retrenchment is being filled
by new institutions, in innovative ways which suggest bright new possi-
bilities (Fowler, 1991; Bratton, 1994). All over the region, there has
been a veritable explosion of non-governmental organizations (NGOs),
village associations, and civic groups of various persuasions and aims. In
addition, virtually every country in the region has begun ambitious
decentralization reforms to shift various policy responsibilities from the
central state apparatus down to the provincial, district and local level.
This combination of a continuing crisis of African state structures and
the emergence of a significant voluntary sector and of local governments
could have important economic and political implications for the region.
As I will argue below, the donor community has advanced a fairly ideal-
ized version of the current evolution that suggests that a distinctly
African model of development is slowly emerging in which a retrenched
state provides a small number of public goods, but then takes a back seat
to actors in civil society for most development activities. Yet, little is
known about the evolving relationships between central states and these
emerging institutions.
This book focuses on the implications of this evolving institutional
landscape for the development of the Sub Saharan Africa region. It
examines the empirical record, in other words what is currently happen-
ing across the region; but also it ponders the normative implications of
this evolution, in other words, what should be happening. The different
contributions following this first chapter examine the impact of the
growing institutional pluralism on aid and economic policy making.
Focusing on the evolving nexus between the state and these other devel-
opmental institutions, the authors analyze how the emergence of new
institutional actors is altering the developmental role of the state. How
are they affecting state capacities and the ability of the state to finance its
developmental responsibilities? Does the role of foreign aid change as
these new actors gain in importance? How much are NGOs and local
governments changing the process and outcomes of development poli-
cies? To what extent are development responsibilities being devolved
away from the central government? What are the implications of the
current evolution for donors and policy makers?
These are the questions addressed by the authors in the chapters that
follow. First, Elbadawi and Gelb examine the general financial context in
which development will take place in the region. They argue that debt
relief, greater aid effectiveness and a sustained increase in the flow of
external resources to the region will be necessary to revitalize local
economies. The necessary role of external aid is an implication of the
chapter by Rakner and Gloppen, which examines the ability of African
Introduction 3
governments to finance their development through own-revenues. The
authors argue that tax reform has not progressed far in the 1990s, and
they suggest that more systematic democratization of public life is
necessary before African political systems exhibit the kind of public
accountability that is the hallmark of modern government.
A second set of chapters examines the institutional reform record in
the 1990s. Olowu analyzes the evolution of civil service reforms in the
region. Ribot looks at decentralization efforts and the emergence of
local government. Nicole Ball and her colleagues examine the efforts to
reform the important security sector, a critical factor for economic
growth, since both domestic and international investors express concern
about insecurity in various investor surveys. Goldsmith’s contribution
focuses on the efforts of the donors to promote state capacity and argues
that the record is more positive than many observers have argued.
A third set of chapters examines the developmental role of non-
governmental actors. The contributions vary in their approach and con-
cerns but all share the view that private actors should be complementary
with the central state, rather than in competition with it. All agree that
a stronger central state ultimately helps private actors and vice versa. In
her contribution, Tripp focuses on the NGO sector and civil society and
their evolving relationship with the states of the region. Cotton and
Ramachandran examine the private sector’s potential contribution to
development. They argue that governance reforms by the central state
are necessary before the private sector can help promote development.
A similar message is provided by Emery’s chapter, which examines the
many continuing obstacles to private investment created by the policies
of state institutions.
The rest of this introductory essay sets the stage for these different
contributions. In the next section, I review the intellectual climate in
which institutional reform was first conceived and initially implemented.
A normative theory of state reform emerged from the debates within the
scholarly and policy communities in the 1980s and early 1990s. I then
ask whether the actual institutional evolution during the 1990s followed
this idealized vision. Even as new actors have emerged and considerable
institutional innovation has taken place, the developmental focus of the
state has changed little. Governments have employed a political logic
rather than a developmental one to shape their focus, in a context of aid
dependency and resource scarcity. A final section then asks what impact
the emerging institutional dispensation can have on development out-
comes. As long as the central state is so weak, I argue that state elites will
view other developmental actors as competitors rather than comple-
ments. Strengthening the central state is thus a paradoxical prerequisite