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Although the sixtieth anniversary of the ASA’s founding offers an occasion to celebrate the association’s accomplishments, it also coincides with a historical moment of resurgent authoritarianism, growing intolerance, and renascent nativism. Democratic institutions in the United States and abroad are under attack; bigotry, injustice, and incivility have become re-energized. This article reflects on the discourses, spaces, and technologies employed by Africans to contest the multiple expressions of political exclusion on the continent over the last sixty years. It finds inspiration and lessons that might guide us as we develop our own forms of political advocacy in this illiberal age.
New bureaucratic agencies – most commonly central banks, privatisation agencies and regulatory commissions – multiplied across Africa following the adoption of neoliberal reforms in the mid-1980s and 1990s. The theoretical inspiration behind the creation of these agencies was that economic reforms would be more successful if those who implemented them were professionally trained ‘technocrats’ institutionally insulated from the push and pull of everyday politics (Williamson 1993; White and Bhatia 1998). Concerns about bureaucratic independence have been particularly acute in Africa because bureaucratic institutions are perennially perceived as corrupt and inefficient. For example, the World Bank's 2014 World Governance Indicators (a largely perceptual metric), put sub-Saharan Africa last among all regions in ‘government effectiveness’, ‘regulatory quality’ and ‘control of corruption’ (see Figure 7.1) – aspects of governance associated with the quality of bureaucratic institutions.
Despite their widespread proliferation, we know little about where and why independent bureaucratic agencies were created; how independent or insulated the bureaucrats who staffed them were; and how effective the agencies were at accomplishing the tasks for which they were designed. This chapter explores the myriad dimensions of bureaucratic politics and technocratic practice through an examination of privatisation agencies.
Arguments about the value of technically competent, independent bureaucrats have a long lineage in political science. Theorists from Friedrich Hegel to Max Weber to Woodrow Wilson have advocated for a bureaucracy with specialised knowledge and the legitimate authority to administer policy free from interference by politicians (Wilson 1887; Weber 1978). During the 1980s and 1990s, supporters of neoliberalism seized on this notion to advocate for the creation of formally independent agencies to handle sales of state-owned enterprises in Africa. Their justification rested on several claims. First, the process of economic liberalisation is complex and requires a high degree of technical acumen. The formation of an agency staffed by technocrats was expected to increase the likelihood that liberalisation would proceed quickly and successfully (White and Bhatia 1998; Kayizzi-Mugerwa 2003).
Second, independent bureaucracies guard against coalitional drift. In the event of a turnover of the party in power, the presence of an agency increases the possibility that economic reforms will continue (Shepsle 1992). Third, formally independent bureaucratic agencies are a signal to investors that a government has credibly committed to reform (Brune et al. 2004).
This study investigates the effects of formal bureaucratic independence under varying democratic conditions. Conventional accounts predict that greater formal independence of technocratic agencies facilitates policy implementation, but those claims rest on observations of industrialised, high-income countries that are also established democracies. On the basis of research in developing countries, we argue that the effects of agency independence depend on the political context in which the agency operates. Our empirical subjects are privatisation agencies and their efforts to privatise state-owned enterprises in Africa. We predict that greater independence leads to more thorough privatisation under authoritarian regimes, but that the effect of independence declines as a country becomes more democratic. Using an original data set, we examine the relationship between formal agency independence and privatisation in Africa from 1990 to 2007. Our results modify the conventional wisdom on bureaucratic independence and culminate in a more nuanced theory of “contingent technocracy”.
In Party Politics and Economic Reform in Africa's Democracies, M. Anne Pitcher offers an engaging new theory to explain the different trajectories of private sector development across contemporary Africa. Pitcher argues that the outcomes of economic reforms depend not only on the kinds of institutional arrangements adopted by states in order to create or expand their private sectors, but also on the nature of party system competition and the quality of democracy in particular countries. To illustrate her claim, Pitcher draws on several original data sets covering twenty-seven countries in Africa, and detailed case studies of the privatization process in Zambia, Mozambique and South Africa. This study underscores the importance of formal institutions and political context to the design and outcome of economic policies in developing countries.
Property Rights – How extensive are constitutional constraints on arbitrary alterations to property rights?
Very limited; few or no constraints on ability of state to intervene into individual rights to possessions and property.
Limited; state has broad powers to intervene; few individual rights acknowledged.
Somewhat limited; individual rights are generally but vaguely acknowledged: restrictions on state power vague or not delineated.
Somewhat extensive; individual rights to property and possessions acknowledged; state powers to intervene restricted.
Very extensive; rights of individual to property and possessions clearly delineated; state powers to intervene very restricted.
Land Law – Is there an existing land law? Do people have a right to own title to their land or business? Who has the authority to allocate land? Does land act favor rights of certain groups over others? How restricted are the rights to buy/sell land?
Individual land tenure rights expressly forbidden by law.
Individual land tenure rights limited by law.
Individual and communal rights recognized but not clearly demarcated or protected by law.
Individual rights coexist with communal land rights by law.
Individual right to buy, own, sell, lease land regardless of gender, race, ethnic, racial, national background.
Privatization Regulations and Related Investment Codes – Does country have laws or decrees mandating the full or partial sale of state assets? How favorable are they to investors?
Very unfavorable; no privatization law or excessively restrictive law with extensive restrictions on nationality and type of investment; repatriation of profits.
Unfavorable; some restrictions on SOEs to be privatized and on nationality and type of investment, repatriation of profits.
Neither favorable nor unfavorable; legislation to privatize state assets exists but provides no clear indication of whether it is favorable or unfavorable to investors. Alternatively, country does not have regulations on the privatization of existing SOEs but does encourage investment by the private sector.
Favorable; welcoming to investors but some restrictions on type of investment or repatriation of profits.
Very favorable; few restrictions on assets to be privatized, nationality of investor, repatriation of profits, type of investment, sector for investment.
By the early 1990s, conditions in Zambia appeared highly favorable to the implementation of economic reforms. Previous efforts by the one-party state to address structural imbalances in the economy had failed. Copper production, Zambia’s greatest asset, had stagnated; by the late 1980s, even that sector’s powerful trade union was calling for private sector investment to revitalize the mining industry. Declining formal sector employment amidst rising prices for basic staples such as mealie-meal, left a majority of households struggling to meet their daily needs. Furthermore, by 1991, voters of Zambia had channeled their discontent into support for a new party, the Movement for Multiparty Democracy. The MMD was elected by a landslide when the country returned to multiparty elections after a hiatus of two decades. Notably, the election manifesto of the party pledged to adopt privatization once it assumed office. Donors responded to the new government’s plans to transform the economy by increasing aid.
Nearly fifteen years later, however, the implementation of institutional arrangements designed to foster a private sector–driven economy had brought mixed results. On the one hand, the Zambian government made a high motivational commitment to expand its private sector and the extent of this commitment was associated with the extent to which Zambia approximated a commitment that was credible in the imperative sense by 2005. The government sold firms, liberalized trade, passed legislation favorable to business, and reformed the banking sector. On the other hand, owing to opportunistic actions by the ruling party, that commitment failed to be fully credible. Zambia’s imperative commitment score of 24.5 is the median score of those countries analyzed in Chapter 2. Such results do not reflect well on a program that observers once labeled “one of the most successful in sub-Saharan Africa.”
Some scholars have praised the commitment of African governments to the privatization of state-owned assets and declared them successful reformers, whereas others have bemoaned the capture of market reforms by aggrandizing states or condemned the unsuitability of neo-liberal strategies for poor countries. At the heart of the debate about the implementation and outcome of private sector development lie significant questions about how much and what kind of commitments states have made to transform their economies. To answer these questions, this book operationalized Kenneth Shepsle’s distinction between a motivationally credible commitment and a commitment that is credible in the imperative sense. Conceptually dividing these two aspects of commitment differentiates the moment when governments choose to establish limits to their discretionary authority by adopting new formal institutions from that moment at a future time when structures, rules, and interests act to constrain the state’s ability to act arbitrarily. The distinction recognizes the dynamic, temporal, and processual aspects of an institutional reform as significant as privatization.
Assessing Credible Commitments
Reinforcing the theoretical insights offered by the literature on institutions, this book argued that formal institutional arrangements, not governmental reputation or investor beliefs, should constitute the starting point for determining whether governments in developing countries made motivationally credible commitments to build market economies. To isolate that moment when states committed to private sector creation or expansion, I systematically disaggregated key dimensions of the reform process in twenty-seven African countries and identified which formal rules and agencies they adopted. The index revealed that even when the decision to reform was executed in the midst of crisis or driven by exogenous actors such as the World Bank, governments did not embrace a uniform, standard package of neo-liberal prescriptions. Rather, the constitutional revisions, laws, decrees, regulations, and agencies that African governments adopted to withdraw from their economies and create private sectors reflected balanced considerations by states regarding their historical legacies, ideas, and capacities and subtle accommodations to existing and potential partisan coalitions. These results show that institutional choices made by governments in Africa to reform their economies appear neither more, nor less, formulaic than those made by other transitional countries.
The South African economy differs markedly from those of Zambia and Mozambique in many respects. Its GDP of US$283 billion in 2007 dwarfed most other economies in Sub-Saharan Africa. Per capita income for this nation of 48 million people averaged US$4,770 in 2007, while those of Mozambique and Zambia were US$310 and US$700 per capita, respectively. South Africa dominated regional trade among the group of countries that are members of the Southern African Development Community. In addition, South African investment in Mozambique and Zambia consistently ranks among the top with regard to the number and value of investments. Its influence on the other two cases is therefore considerable.
Unlike the other two countries, the private sector dominated South Africa’s economy at the time of the transition to parliamentary democracy. Whereas the state sector in South Africa was important, its contribution to the GDP was only 14 percent. Moreover, the government’s decision to commit to structural adjustment cannot be traced to a severe crisis in the parastatal sector, as was the case with the other countries. Although global trends and interests influenced the economic policy choices of South Africa’s new democratic government after 1994, the adoption of a neo-liberal agenda did not derive from donor dependence, nor was it linked to the pressures of conditionality.
The previous chapter established theoretically that commitments to private sector development have imperative credibility when constraints exist on the state’s ability arbitrarily to renege on market reforms. Empirically, it documented a considerable range in the extent to which most African governments approximated ideal type, imperatively credible commitments. With respect to cases such as Botswana, Mauritius, and South Africa, which already had private sectors that had been operational for some time, institutions largely acted to constrain the state’s discretionary behavior. On the other end of the spectrum, cases such as Zimbabwe or Guinea illustrated that governments continued to intervene arbitrarily in strategic sectors or to encourage corrupt practices by customs officials. Although they did not approximate the ideal type, countries such as Mozambique, Cape Verde, Ghana, or Mali, with histories of significant state intervention, sold state assets, liberalized trade, and built formal relationships with an emerging private sector. Finally, the scores of countries such as Madagascar, Niger, and Cameroon indicated that state discretion competed with institutional constraints across a range of economic arenas.
This chapter explains these divergent trajectories of institutional development by investigating the ways in which the political dynamics of particular countries propel or constrain the privatization process. Not only do existing political coalitions mold institutions over time, but state responses to their actions also produce unanticipated outcomes. Moreover, reforms generate new constituencies that have a vested interest in maintaining new institutional arrangements. For example, growing numbers of foreign and domestic investors brought their preferences to bear on states in Malawi or Ghana. Investors helped to make commitments more credible because, in selected instances, the pursuit of their interests acted to curtail state discretion. Alternatively, institutional changes may catalyze interests that seek to undermine existing arrangements in order to maintain a status quo more coincident with their preferences. Zimbabwe and Nigeria have demonstrated such patterns.
The starting point for the privatization of the Mozambican economy was much worse than that of Zambia. A seventeen-year war that concluded in 1992 had left the economy in a shambles. Infrastructure had deteriorated, many state firms were destroyed or not working, and the salaries of thousands of state workers were in arrears. State capacity in areas such as regulatory enforcement or technical expertise was low. The political environment was also discouraging. The two main parties that participated in the first democratic elections in 1994 were the belligerents in the war, and they brought many of their former grievances into the postwar settlement. The peace accord constructed a political system that relied on institutional means such as the rule of law, but also extra institutional mechanisms such as bargaining and threats to avoid damaging stalemates or a resurgence of conflict.
The experience of conflict, a fragile state, a failing economy, and a hostile political setting – these factors indicated to most observers that the privatization process would be protracted and conflictual; that its impact would lack credibility, and that its consequences would prolong political instability. Yet, not only did Mozambique sell a percentage of state firms comparable to that of Zambia, but also its imperative credibility score was higher than Zambia’s. It sustained positive growth rates over more than a decade and attracted significant amounts of new investment. Particularly noteworthy was that the government relied on private sector development to rebuild state capacity.
For many countries in East and Central Europe, Latin America, and Asia, the implementation of political and economic reforms over the last quarter century has constituted a sharp break from the past. Words such as “transition,” “transformation,” “schism,” and “shock therapy” suggest ruptures of momentous proportions. Many countries have become democratic and adopted market economies. Prices have increased; imports have risen. Workers, consumers, and citizens now rely on blogs or newspapers, the ballot box, or street demonstrations to demand secure jobs, free elections, or fair trade.
In Africa, no less than in the former Soviet Union or Latin America, political and economic changes have been just as transformative. Many African governments now practice some form of democratic electoral politics and many citizens enjoy basic political rights and civil liberties that were denied to them just twenty years ago. To varying degrees, countries have also liberalized trade, set up investment centers, established stock markets, and passed privatization laws. Governments in Mali and Uganda have sold their parastatals to foreign and domestic investors. Malls, fast food restaurants, and cafes selling flavored coffees have sprouted up from Kampala to Cape Town. A dizzying array of consumer goods are hawked on the streets of Lagos or displayed in upscale shops in the northern suburbs of Johannesburg.
Since the 1980s, many governments in Eastern Europe, Latin America, Asia, and Africa have designed new formal institutions to foster democracy, to reduce the role of the state, to build market economies, and to develop their private sectors. In many countries, the arrangements were not the product of incremental institutional evolution. Rather, they reflected deliberate choices made by governments to address economic crisis, control spending, court investors, or assuage popular protest. In some cases, conditions attached to loans by international financial institutions and donors forced countries to adopt new rules; other governments enacted new laws owing to pressures from social actors or the global diffusion of neo-liberal ideas.
The adoption of new formal institutions has raised interesting questions with respect to their contribution to the complex and contentious process of economic and political transition. Regardless of whether they are rational choice theorists or historical institutionalists, scholars of institutionalism have been especially concerned with the kinds of institutions governments have adopted; how governments have demonstrated their commitment to these institutions; and whether such commitments can be credible in the context of a country undergoing a multifaceted transition. Furthermore, scholars have sought to explain the dynamics and consequences of institutional development as well as whose interests are, or are not, served by particular institutional choices.