The Global South is relatively neglected in research about our “compartmentalized world.” The volume of publications on inequality has increased five-fold since 1992, but many of these focus on the top 1 per cent of households located in the Global North (International Social Science Council, 2016), much like Thomas Piketty’s work (e.g., Piketty, Reference Piketty2014), and others published in leading journals and magazines such as Social Forces (see, for example, Kwon, Reference Kwon2016), Regional Studies (see, for example, Kane and Hipp, Reference Kane and Hipp2019), and The Economist (see, for example, The Economist, 2019). Yet, both spatial and social inequalities are widespread and increasing within and between groups in Africa and between Africa and the rest of the world (Obeng-Odoom, Reference Obeng-Odoom2013b, Reference Obeng-Odoom2014a; Smet, Reference Smet2019).
Further, the drama of compartmentalization continues, and is arguably magnified, in today’s gilded age. With some prevarication, the International Social Science Council appears to jubilate that the number of publications on the issue has increased in recent times, However, inequality was always an issue: as has been evident in the plunder of resources in Latin America and Africa and the underdevelopment of the Pacific, the Middle East, and many parts of Asia. Many in Indigenous communities have been living in traumatic conditions while many of their white neighbors have so much more to eat than they need and more than is healthy to consume. Such stark contrasts have been the focus of Latin American scholars and many others researching the “development of underdevelopment” (e.g., Frank, Reference Frank and Rajani1966). So, why has the intense interest in inequality reemerged? The simple answer is – as Thomas Piketty’s Capital in the Twenty First Century (2014) demonstrates – inequality is increasingly becoming a major issue in the West. The West has always had a fever of compartmentalization, but this increase in temperature has reached threatening levels, which many fear that it could undermine continuing class- and race-based privileges. For once, it appears that there is some sort of shared interest with “the Wretched of the Earth” for a genuinely global approach to fight a common enemy. But even then, the focus continues to be placed on “the top 1 per cent” in the global core.
With all its weaknesses, development economics has been the source for insights on global economic inequalities. A focus on inequality started in the 1960s, as demonstrated in H. W. Arndt’s work, Economic Development: The History of an Idea (1987, pp. 97–100). However, this emphasis on inequality quickly petered out. Economists put the case for growth instead because ‘something must be grown before it is redistributed’. Since then, “inequality” has crawled on but more often slipped off the development agenda. Currently, development economics pays more andmore attention to inequality, but only as “risk,” as a brake on economic growth, or as a hindrance to poverty reduction; not because it is the root of what W. Arthur Lewis, in analyzing economic development, called “racial conflict” (Lewis, Reference Lewis1985) or other conflicts in the Global South (Obi, Reference Obi2009; Obeng-Odoom, Reference Obeng-Odoom2019); not because inequality kills more than disease or limits the potency of healthcare programs (Obeng-Odoom & Marke, Reference Obeng-Odoom and Marke2018; Wilkinson & Pickett, Reference Wilkinson and Pickett2010; Reference Wilkinson and Pickett2018); not because inequality helps explain the current socioecological crises and, indeed, undermines the struggle for a green and clean planet (Stilwell, Reference Stilwell2017, Reference Stilwell2019); and certainly not because inequality is unjust.
The relentless pursuit of economic growth is, in essence, the Holy Grail in development economics. As exemplified in the contribution of economists to the special issue of Foreign Affairs (vol. 95, no. 1, 2016) on “Inequality: what causes it, why it matters, what can be done,” if growth can be sustained then inequality will take care of itself (see Bourguignon, Reference Bourguignon2016). Indeed, even without exploring different types of growth and how they arise (Gore, Reference Gore2007), or whether commonly utilized notions of well-being in the West are similarly useful in the Global South (Mahali et al., Reference Mahali, Lynch, Tolla, Khumalo and Naicker2018), mainstream economists like David Dollar and Aart Kraay (2002) hastily declared that “growth is good for the poor”, an argument which, more recently, has been emphasized as “growth still is good for the poor” (Dollar et al., 2016).
In practice, whether it is growth, poverty, inequality, or any of the many changing goals and ends of development, development has become a patronizing notion that creates an idealized image of the West in the South or a unique/exotic image of the South as an “other.” Development has become an orgy of Orientalism (1978), to recall Edward Said’s masterpiece. Helping the poor is a common language, as is “sympathy,” whether it is in terms of evaluating interventions (program/project aid), or goals – be they Millennium Development Goals (MDGs), Sustainable Development Goals (SDGs), or both. The award of the 2019 Nobel Prize in Economics for what the awardees call “the experimental approach to development economics” (see Banerjee and Duflo, 2009) further legitimizes the zeal to come across as “helping the poor”. Much less attention is paid to nuanced conceptualization of these goals (on SDGs, see Gore, Reference Gore2016; on MDGs see Obeng-Odoom, Reference Obeng-Odoom2012; and Obeng-Odoom & Stilwell, Reference Obeng-Odoom and Stilwell2013). Questions about the growing power of unaccountable NGOs and foundations are seldom asked and even more rarely answered. As Clifford Cobb (Reference Cobb2015) has recently publicized, without the accountability and scrutiny to which national bodies are subjected, foundations set the agenda and frequently divert attention away from structural causes of inequality to effects such as corruption of national governments, backward cultures, and differential levels of human capital.
The Problem, Conventional Diagnosis, and Mainstream Prescriptions
Why Africa? Africa is the poorest continent in the world. Of the twenty-six poorest countries globally, twenty-four are in Africa (Harrison, Reference Harrison2011). More than 40 per cent of the population in sub-Saharan African (SSA) lives in extreme poverty. Although this represents a decline from the 1990 level of 57 per cent, the rate of poverty reduction in SSA is the slowest in the world. Poverty in Africa’s growing urban centers is on the rise (UN, 2015). Across the continent, inequality is also on the rise within and between countries, groups, and classes. In spite of great expectations that Africa will “catch up” and, until recently, the recent resurgence of economic growth, the effect of growth has not consistently reduced poverty levels nor increased the share of Africa’s GDP in the world economy. While Africa’s largest economies, Nigeria and South Africa, grew substantially, their poverty levels remained either unchanged or increased (Lawanson & Oduwaye, Reference Lawanson and Oduwaye2014, see also Chapter 6). This “progress and poverty,” as Henry George (Reference George 2006) once described the co-existence of affluence and want, can also be seen in the global sphere where, in spite of rising economic growth in Africa, Africa’s contribution to world GDP has remained stagnant at 2 per cent since 2005 (United Nations Office of the Special Advisor on Africa (OSAA) and the NEPAD-OECD Africa Investment Initiative, ca. 2016).
Persistent inequality and poverty in Africa is typically explained as a function of the scarcity of human capital, the lack of physical capital, and natural capital problems. It is common to lump these problems together as a cultural problem (Gĩthĩnji, Reference Gĩthĩnji2015). Theoretically, this “culture of poverty” idea – first developed by the anthropologist, Oscar Lewis (Wilson, Reference Wilson1992) – can be explained in two ways. The more conservative view, perhaps best presented systematically by the political scientist Edward C. Banfield (Reference Banfield1976a) in The Unheavenly City, is that Africans have a culture that keeps them impoverished and, hence, no amount of public intervention such as decent schooling facilities for Africans can address their problems. The only solution is to assimilate the black populations into white groups or to get blacks to copy the whites. A more liberal interpretation is that the “culture of poverty” arises from poverty itself. The poor devise this culture as a survival mechanism and, hence, public policy that is able to remove poverty can also remove the culture of poverty (Banfield, Reference Banfield and Hochman1976b; Marmor, Reference Marmor and Hochman1976). The work of African economist, Eiman Zein-Elabdin (Reference Zein-Elabdin2016), provides a detailed account of how economists treat culture in their analyses of Africa (see also Ramnarain, Reference Ramnarain2016), a point to which we shall return in Chapter 1.
At this stage in the analysis, it is sufficient to peel off the cultural label and unpack its contents. Figure I.1 attempts to do so.
Figure I.1 Conventional diagnosis of poverty and inequality in Africa
This figure shows the interaction of three forms of capital that, the argument goes, individually, and in their relationships, spell doom for Africa. Africa lacks physical capital or the humanly produced factor of production. Human capital, considered to be analogous to health, education, and experience, is held by many leading economists to be the principal driver of productivity, wage levels, and whether there is a convergence of incomes and wealth across, within, and between social groups, but this human capital is also lacking in Africa (Schultz, Reference Schultz1951, Reference Schultz1961; Gylfason, Reference Gylfason2001, Reference Gylfason, Arezki, Gylfason and Sy2011). Natural capital, or “natural stocks that yield flows of natural resources and services without which there can be no production” (Daly, Reference Daly1990, pp. 249–250), are abundant in Africa yet Africa has not been able to utilize them for any special advantage.
The reasons for this state of affairs can be found in how the forms of capital relate to one another. These forms of capital are considered substitutable (Salih, Reference Salih and O’Hara2001). That is, one could be used to obtain the other in the process of production. In this sense, total capital can be maintained by expanding physical capital, which is typically considered as the limiting factor. While ecological economists hold natural capital to be “special,” as it is the foundation of our existence, and the link between environment and development (Daly et al., Reference Daly and Cobb1994), mainstream economists tend to consider natural capital as an ordinary factor of production that must be utilized to increase the share of the other forms of capital to bring about economic growth.
Africa’s natural capital, however, drives out all the other forms of capital. So, the natural capital problem has become a widely discussed issue in the study of Africa. Drawing on a wide range of theoretical positions, from “resource curse,” “neopatrimonialism,” to the “tragedy of the commons,” the rich, diverse, and vast natural resources of Africa are seen as fundamental to the explanation of the continent’s poverty and inequality problems (Hardin, Reference Hardin1968; Collier, Reference Collier2006, Reference Collier2009a, Reference Collier2009b; Handelman, Reference Handelman2010; de Soto, Reference De Soto2011). Most of the existing work on minerals in Africa is framed around the resource curse thesis, which connotes the direct relationship between resource boom, and economic, social, as well as ecological pillage (for reviews, see Obeng-Odoom, Reference Obeng-Odoom2014a, Reference Obeng-Odoom2015a).
The original explanation for this paradox of abundance was framed around the so-called “Gregory Thesis” (Murray, Reference Murray1981) after Robert George Gregory who showed how a boom in natural resources led to deindustrialization in Australia. The idea was recalibrated as “Dutch Disease” by The Economist magazine when it was describing how the Dutch economy experienced deindustrialization, following the dependence on the oil and gas sector in the North Sea (The Economist, 1977). Subsequently, Max Corden and Peter Neary (Reference Neary1982) provided a more systematic explanation of this paradox. According to them, in resource-rich economies, resources, including capital and labor, tend to move away from the manufacturing sector to the booming sector which can, in turn, cripple all other sectors – a process they called “resource movement effect.” A “spending effect” sets in when, with the demise or contradiction of sectors other than the booming one, prices of goods and services in the non-booming sector rise as demand outstrips a declining supply. This spending effect can also set in when the sudden inflow of resources increases the purchasing power of some locals who, in turn, demand more of certain services – a process that tends to push up the prices of such services.
Either way, relative prices of goods and services increase in the booming economy. This, in turn, increases the relative exchange rate. While this process does not automatically affect the nominal exchange rate, it usually does in the sense that spending processes lead to the purchase of more local currency either because foreigners are buying more local currency in order to buy the country’s natural resources or that foreigners are paying the country international currency which is used to buy local currency. As more local currency is bought, the price or exchange rate of that currency appreciates. A strong currency is usually viewed positively, but not so for manufactures that are exported because they become too expensive. Similarly, as the country obtains strong currency, it is cheaper for people to import more but that, too, can adversely affect manufacturing as fewer local manufactures are bought. Paul Collier, the University of Oxford-based development economist, has been a leading voice in the application, and further development of this idea. In his work, environmental problems, and socioeconomic and political tensions are all driven by resource booms, as exemplified in his vast scholarship on the subject (Collier, Reference Collier2006, Reference Collier2009a, Reference Collier2009b).
Regarded as a “breakthrough,” because it went against the prevailing “big push” approach to development at the time (Fosu & Gafa, 2018), the natural capital problem is not only restricted to minerals: it is much wider, usually extending to features of African land culture that inhibit investments and economic growth. Specifically, African communities have open-range land rights systems which are alleged to be inefficient and insecure, to impede access to credit, and to be inappropriate for the purpose of public administration, planning, and the provision of schooling. Indeed, the ready availability of land resources ostensibly drives out self-investment in human capital because working in such resource-based sectors requires little education and training (Gylfason, Reference Gylfason2001). This strange case of natural capital driving out human capital serves as the basis for the argument that Africa has natural resource advantages (abundance of landed resources), but its customary land tenure system creates economic disadvantages (lack of human capital, lack of physical capital) (Collier & Venables, Reference Collier and Venables2012).
Sharply critical of this view is a range of social scientists, especially social anthropologists and political scientists, who argue that it is precisely the erasure of African land culture that is the problem. What we have, then, is a debate in which one side condemns, while the other side romanticizes culture and traditions. Table I.1 contains a summary of the principal polarized positions in the debate.
Table I.1 Diverse cultural approaches to development
|Economists||Political Scientists||Anthropologists and others|
|Unit of analysis||Customary institutions||Individuals and their clientelist relationships||Social identities, cultural groups, communities and community practices|
|Theories||Transactions costs||Public choice, neopatrimonialism||Social capital|
|Vision||Formalization and growth||Formalization and managing cultural expectations/results||Preservation of culture but also accepting that cultures change|
|Key proponents||Hernando De Soto, Klaus Deninger, Erica Field, Douglas North, Ronald Coase||A. K Onoma, Michael Ross||Carola Lentz, Liz Alden Wily|
The approaches summarized in Table I.1 are culture-centric, but they differ substantially in detail. Economists, especially those at the World Bank, frequently utilize cultural approaches to understand Africa in their engagement with the continent. In its seminal report on land, Land Reform (World Bank, 1975), the World Bank put forward the case for the use of formal title registers, individual tenure, and promoting market exchange in land.
Its lead economist with responsibility for land and development economics, Klaus Deininger, later coauthored a paper reporting that the World Bank had changed its views (Deininger and Binswanger, Reference Deininger and Binswanger1999). The revised World Bank position is stated in its 2003 report, Land Policy for Growth and Poverty Reduction (Deininger, Reference Deininger2003). Like the 1999 paper, the World Bank stresses its change in orientation, but a critical reading reveals that the basic argument remains the same or similar. Marketization of land is viewed as the key for economic development and poverty reduction. The report claims that customary land requires recording and state backing to be secure. Secure tenure is given by government through enforcing formal land rights. Women’s rights are better guaranteed by formal rights. More formal tenure is the only reason credit can be given; customary tenure ought to evolve to individual tenure in the process of economic development; and land must be regarded as an “asset” and its exchange encouraged (Deininger, Reference Deininger2003, pp. xvii–xlvi).
Various agencies of the United Nations (e.g., FAO and UN-HABITAT), USAID, and an assortment of German development institutions (e.g., KFW Development Bank and GTZ) consistently have promoted this type of land reform. They offer the additional reason that it protects people from capricious and arbitrary evictions (Obeng-Odoom & Stilwell, Reference Obeng-Odoom and Stilwell2013; Ehwi and Asante, 2016; Bertrand, 2019). In fairness, some economists, even in the World Bank, are more cautious about the pursuit of formalization, as is evident in the work of Hanan Jacoby (Jacoby & Minten, Reference Jacoby and Minten2007).
Academic economists can be more nuanced too, but the tendency to emphasize titling is prevalent, often creating tensions between local context, inherited ideals, and imposed practices (Akiwumi, Reference Akiwumi2017). Duke University economist Erica Field, in several papers on the theme, seeks to demonstrate that the formalization of property rights leads to economic growth and redistribution of wealth and income, not only across the general population, but also between gender and ethnic groups. Registration is the route to access credit, to generate entrepreneurship, to improve urban housing, and to reduce urban poverty (Field, Reference Field2005). Some Asian economists also have given forceful support to this argument: the colonial adoption of registration that South Korea copied from Japan has been used to explain the rapid development of South Korea (Yoo & Harris, Reference Yoo and Harris2016) and the greater degree of liberation of its women (Yoo & Steckel, Reference Yoo and Steckel2016).
Others, like MIT economist Daron Acemoglu and Harvard University economist James Robinson, take the approach to the global stage in explaining the social conditions of the poorer nations in their tome, Why Nations Fail (Acemoglu & Robinson, Reference Acemoglu and Robinson2012). In doing so, their explanation draws heavily on the idea that the lack of clearly registered and formalized property rights holds African nations back and hence an aggressive marketization of landed property is the sure path to economic prosperity. This optimism is buoyed by research that appears to show that titling and hence security of tenure free idle labor by making it possible to draw people into the labor market who previously had wasted time taking care of unregistered land (Field, Reference Field2004). Indeed, these gains in efficiency arise from switching the role of guaranteeing security of tenure from local communities to the state. Also, titling leads to “substitution of adult for child labour” (Field, Reference Field2007, p. 1561).
Although widespread in academic circles and influential among policy makers, as Dan Bromley’s (Reference Bromley2008) review shows, this tendency to formalize has caused more harm than good (see Manji, 2006; Chapter 3). Not only are its assumptions unrealistic, its predictions are not borne out by real-world experiences in Africa. More fundamentally, the “social costs” (see Kapp, Reference Kapp1950/1971) of tearing apart property systems that have been communal for ages have manifested in widespread displacement and, hence, expulsion. Perhaps, the worst part of this process has been the transfer of landed wealth from the poor to the affluent, many of whom are also key advocates of this particular type of land reform.
There are, of course, major exceptions in the research on the economics of land reform. The work of economists such as Jean-Philippe Platteau, William Darity Jr., and Dan Bromley are clearly respectable exceptions. However, the tendency in the field is to pursue formalization, often in insidious ways of looking for – indeed creating – the precise conditions under which different types of formalization may produce beneficial effects. This “continuum” approach is also advocated by United Nations agencies such as UN-HABITAT. That is, there is a tendency – indeed a conceptual bias – to pursue formalization and to underestimate the power of other systems (Elahi & Stilwell, Reference Elahi and Stilwell2013).
In political science, this cultural approach is exemplified in A. K. Onoma’s book, The Politics of Property Rights Institutions in Africa (Reference Onoma2009). Onoma endeavors to show how patronage and clientelist relationships define the distributional effects of land reform. More fundamentally, he seeks to explain the nature of land reform primarily in terms of demographic and other internal factors such as ethnically informed ideologies. It is this approach to political science that is the source of inspiration for economists who pass some political comments about Africa, as exemplified in W. Arthur Lewis’ (Reference Lewis1965) book, Politics in West Africa. More recently, Ernest Aryeetey, a leading development economist, deployed this approach in his lecture at the United Nations University World Institute of Development Economics Research when he sought to answer the question, whether “democracy has failed African economies.” Although very closely linked to the public choice school of economics, the approach is, however, steeped in political science cultures that carry over to various “African Studies” departments.
Extreme forms of such analyses can be found in the idea of neopatrimonialism widely espoused by American political scientists. Highly influential, because it guides the approach of many key actors in the international community in dealing with African states, neopatrimonialism provides the basis for predicting the economic performance of Africa, and, reigning as the dominant political science approach to studying Africa (Mkandiwere, Reference Mkandawire2015), neopatrimonialism rests on the methodological claim that African politics is shaped by the “personality, management skills, and governing institutions of the incumbent ruler” (Bratton & van de Walle, Reference Bratton and van de Walle1994, p. 465). More fundamentally, this politics is inherently African:
Our thesis is as follows: embedded in the ancien regime. Authoritarian leaders in power for long periods of time establish rules about who may participate in public decisions and the amount of political competition allowed. Taken together, these rules constitute a political regime. Regime type in turn influences both the likelihood that an opposition challenge will arise and the flexibility with which incumbents can respond. It also determines whether elites and masses can arrive at new rules of political interaction through negotiation, accommodation, and election, that is, whether any transition will be democratic.
Even if the specific theories used in these analyses differ, the essence of the analysis – the emphasis on culture, difference, and internal factors to the fundamental neglect of international neocolonial and neoimperial factors, global markets, contexts, and the economic structure of the world system – makes this approach similar to the public choice theories used by diverse economists such as Duncan Black (Mueller, Reference Mueller1976). Indeed, the pre-analytic commitment to show that patronage and clientelist behavior is “rational” and the result of “self-interest” is often cast in terms of the new institutional economics credo of “transaction costs,” as a reviewer of Onoma’s book correctly points out (Lund, Reference Lund2012).
The fundamental ontological, methodological, and empirical errors in neopatrimonialism have been systematically demonstrated. According to Thandika Mkandawire (Reference Mkandawire2015, p. 602), “The attribution of all African ills to neopatrimonialism simply undermines internally driven change by occluding the real problems.” Such problems, including Africa’s unequal position in the world system, are conveniently glossed over by appealing to cultural defects in African leaders and hence building a framework that inevitably leads to Afro-pessimism founded on claims of causality that are suspect, metaphors that are better defined by their exceptions, false paradoxes, and non-sequiturs. A teleologically functionalist approach, neopatrimonialism has created what Mkandawire (Reference Mkandawire2015, p. 602) calls “ontological despair” which, in popular parlance, has also fuelled much Afro-pessimism.
Many anthropologists of Africa have developed the opposite ontological and epistemological positions, which lead to quite different arguments. Drawing on ideas of “social capital,” they contend that it is authentic African culture that will liberate the continent from the shackles of poverty, want, and inequality (for a critical review, see Fine, Reference Fine2010). What is puzzling about this seeming challenge to the “cultural approach” is that, although it is not cast in “a general equilibrium framework … for the analysis of a host of issues related to property rights enforcement, corruption, and investment” (Acemoglu & Verdier, Reference Acemoglu and Verdier1998, p. 1382), the standard trope for mainstream economists, it is also a variant of cultural determinism.
By focusing on cultural practices without systematically linking them to their evolution over time mediated by the economic system – especially the creation and distribution of rents locally and globally – this type of anthropological work produces another cultural “fetishism” (Alden Wily, Reference Alden Wily2011). Francis Nyamnjoh, the Chair of Anthropology at the University of Cape Town, famously pointed out that anthropology is guilty of failing the standard of social science scholarship; that is, engaging all possible evidence on an issue. Instead, the standard practice is to ignore major global structures and look, rather, at local stories – gleaned from interviews, whether done over two or a million years – without a wider political-economy engagement (Nyamnjoh, Reference Nyamnjoh2012a, Reference Nyamnjoh2012b, Reference Nyamnjoh2013).
One of the articles in which he made these points (Nyamnjoh, Reference Nyamnjoh2012b) drew prompt responses (or more precisely “defenses” of anthropology) from his fellow anthropologists (see, for example, Gordon, Reference Gordon2013, Niehaus, Reference Niehaus2013, Teppo, Reference Teppo2013). However, as Nyamnjoh (Reference Nyamnjoh2013) pointed out, they did not engage the cultural tokenism, mystification, and romanticization that, to this day, characterizes most anthropology of Africa.
Furthermore, the neoclassical conception of human capital problem – widely shared and promoted by the World Bank – manifests in the analysis of how Africa’s mineral resources are governed. Here, the typical claim is that not only do Africans lack education but they also lack experience to govern their resources. It is in this sense that many African states are being directed to adopt “local content” in their minerals policy (see Chapter 4).
Within this framework, transnational resource corporations are the preferred governance institution for African resources. However, these corporations are required to support learning programs in the extractive industries and offer employment to this new cadre of specialists. In this way, such transnational corporations provide not only education but also experience to Africans in order to enhance the quantity and quality of human capital on the continent (Ovadia, Reference Ovadia2016a).
According to the standard narrative, Africa’s “capital problems” are mutually reinforcing. While different in their proximate theories, there are some crossovers. For example, the premises of conventional public choice theory are shared by economists and political scientists. More fundamentally, these approaches are influenced, more or less, by the intertwining theories of John Locke, Garrett Hardin, and Robert Lucas.
Locke’s labor theory of property states that when land is not put to its highest and best use through private property investment and large-scale commercial agriculture (of the kind not historically typical in African societies), we should expect poverty and economic stagnation (Andrew, Reference Andrew2012). For Hardin, the consequences of common land are degradation, pollution, and social chaos. Robert Lucas, the Nobel Prize winner in economics, famously argued that capital is not moving to poorer regions through trade and hence the regions are stagnating and falling behind other regions because of low levels of human capital and a culture of property relations that is too communal (Lucas, Reference Lucas1990). Indeed, such regions could lose the limited human capital to richer regions and hence become even more disadvantaged because of inadequate human capital. Centrally focused on national, not global, factors, the Lucas model gives no room to explain international inequalities based on initial historical conditions. Rather, the incomes of economies with similar levels of human capital are expected to converge (Darity & Davis, Reference Darity and Davis2005). These prescriptions require additional comments to flesh them out.
Centered on a three-way emphasis on “local content” minerals policy, an expanded role for transnational corporations (and free trade), and the formalization of land, advocates of mainstream prescriptions claim that these economic reforms – diagrammed in Figure I.2 – will deliver Africa from its crippling poverty and inequality problems.
Figure I.2 Mainstream prescriptions
Designed as a rapprochement between Euro-American mission of “helping” Africa and “preserving” Afro African culture, the spirit behind this range of prescriptions is quite similar to the indirect rule system developed by imperial Britain. However, whether this mode of governance promotes “integration” or “assimilation,” it resembles the French colonial policies around such genre (Njoh, Reference Njoh2007; see also Chapter 5).
For example, Europeanized African land reforms export the practices of the “successful” Western countries to the poor Africans, keeping Africans in charge through institutions such as customary land secretariats. This system of land tenure relations, the argument goes, explains the success of those economies. If Westernized, the argument continues, African countries will escape from poverty and close the gap between their material conditions and those of the West (de Soto, Reference De Soto2000). The characteristics of these Euro-American tenurial arrangements include formal title registration, regarding land as an asset that must be traded to be efficiently managed, and subdividing customary land. Variations of these ideas, incorporating state planning, and intended to enhance the operation of land markets, have also been advocated (Lai & Lorne, Reference Lai and Lorne2006). I shall revisit these characteristics in Chapter 3.
Challenging the Mainstream?
Conceptual and empirical research in a variety of contexts (e.g., Darity & Williams, Reference Darity and Williams1985; Folbre, Reference Folbre2012; Basu, Reference Basu2017) provide a strong challenge to the mainstream lines of analyses in (development) economics. Their insights suggest that Africans may lack human capital, but mere credentialization does not eliminate discrimination based on color. Reasons for such discrimination vary. They include stereotyping, informed by past and continuing discourses about the backwardness of Africans, and deliberate biases intended to privilege non-Africans. Whatever the reasons, discrimination shapes agreements with Africans and informs assumptions about African practices and institutions. In turn, the conditions of Africans contradict the neoclassical view that markets only reward merit or human capital. Because social hierarchy, the divergence in wealth, the different and differential experiences among Africans (e.g., women and men; and Africans of different ethnicities) and between Africans and others, are shaped by social contexts and institutions, not only is the neoclassical human capital discourse not empirically verifiable, it also diverts attention from social provisioning and impedes efforts to interrupt the social contexts which reproduce disadvantage.
A rich body of literature challenges the idea of a “resource curse” on several grounds. Aspects of this body of work show that the nature of the neoliberal economic reforms imposed on African countries in the 1980s systematically led to a weakening of African states, the destruction of their social policies, and the creation of a generous tax climate for transnational corporations that led to a transfer of rent from producers to rentiers (Nwoke, Reference Nwoke1984a, Reference Nwoke1984b; Adésínà, Reference Adésínà and Hujo2012). In this sense, neoliberalism and neoliberalization could be seen as drivers of the resource curse rather than the panacea that its advocates contend they are.
Yet, it is a particular neocolonial type of neoliberalism that is in question here. Patterned after neocolonialism and imperialism, the reforms of the property rights system have privileged Western institutions and firms, giving them rights to exclude Africans from their own natural resources. With greater economic power and a global system that can shield powerful actors (compared with weakened African states) from being accountable, it is transnational forces and the institutions that support them rather than natural resources per se that create and sustain the present conditions in Africa (Rodney, Reference Rodney1972/2011; Harrison, Reference Harrison2008; Duchrow & Hinkelammert, Reference Duchrow and Hinkelammert2010). The far more propitious experiences of resource-rich economies in the Global North give additional weight to the argument that a different set of institutions and property systems generate quite different outcomes.
Relying on the idea of “good governance,” Paul Collier (Reference Collier2009a, Reference Collier2009b), for example, argues that because strong institutions in the countries in the Global North were built before such countries discovered oil, they have tended to be blessed rather than cursed by oil. From this perspective, weak institutions are further weakened when economies become resource rich, a process which, in turn, creates a “natural resource trap”. What is puzzling is that the Global North has benefitted substantially from these cursed minerals, allegedly because they have better institutions. Indeed, in contrast to the “natural resource traps” in Africa, countries with already strong institutions are said to be better able to govern fortuitous resources. Thus, some analysts have sought to argue that it is precisely the staples of mineral-rich economies such as Australia, Norway, and particularly Canada that best explain their higher standards of living (Watkins, Reference Watkins1963). These claims and Africanist responses are further explained in Chapters 5 and 8.
Yet, there is a danger in jumping from resource curse to resource blessing. Whether in Canada or Australia, resource optimism does not address the problems of resource pessimism. Historic and continuing dispossession of Indigenous or First Nations peoples, disastrous economic busts, wealth inequalities, and ecocide in these economies and the role of the extractive sector in this “accumulation by dispossession” (Harvey, Reference Harvey2003) cannot all be swept under the carpet of resource blessing (Rahnema & Howlett, Reference Rahnema and Howlett2002; Dow & Dow, Reference Dow and Dow2004; Cahill & Stilwell, Reference Cahill and Stilwell2008; Mills & Sweeney, Reference Mills and Sweeney2013). The nature of the institutions governing natural resources and how these institutions have been created, or are evolving within path dependencies established by historical processes, could be a more fruitful area of investigation.
However, the account of history in the conventional wisdom is far from satisfactory. Take the historical aspect of culture, as an example. Common to most of these analyses is a notion of history as “past” or as a “moment.” In this view, the continuing and cumulative influences of historical processes, either in terms of shaping current and future institutions or in terms of their effect on the psychology of present-day society and its peoples, take the form of an equivalent ailment to “post traumatic slavery syndrome/disorder” (Darity, Reference Darity2009). Indeed, with respect to Africa at least, New York University professor of history Frederick Cooper has shown that the “history” in cultural approaches is highly superficial and too short term. Cooper shows that the history is read in such a way that mimicking Western institutions becomes the only salvation (Cooper, Reference Cooper2014). Such historical approaches tend to have both weak predictive and weak explanatory power in the sense that they are not able to explain the heterogeneity in the trajectory of groups that have experienced similar past trauma. Just as critically, such approaches tend to neglect contemporary and ongoing discrimination and the crucial question of which past events are more damaging. Even more fundamentally, such historical approaches struggle to illuminate how historical forces intermingle with present-day, ongoing political economic processes of marginalization (Green & Darity, Reference Green and Darity2010). This history is not only “compressed,” it is also based on highly problematic data-sets (Jerven, Reference Jerven2013, Reference Jerven2014, Reference Jerven2015).
While the challenge to mainstream development economics has been extensive so far, it has not as yet answered several important questions. Of these, three are particularly important because they raise fundamental issues about the structure of African economies. These questions are (1) how are rents generated and distributed, (2) what institutions maintain the current system, and (3) how best to recapture appropriated rents through expropriation of land, exploitation, and exclusion of black labor, particularly women and other minorities (e.g., migrants)? In short, as Rachel Kranton (2016) asks, “where do social distinctions and norms come from?”
The attempts to address these questions are unsatisfactory. Take the case of the economics of identity. As Ben Fine (Reference Fine2009) has shown, the nature of mainstream economics has clouded its vision and undermined its answers. The problem is that the economics of identity reduces fundamental questions to a narrow theory of social identity in which individuals select among identities without considering the social and economic structures and contexts within which such “free choice” must be made. Whether one of the sticks in the bundle of options is what is to be chosen or whether the choice is to be exercised over several bundles of choices, this approach to addressing the identity question is fundamentally flawed. A liberal alternative is to accept the status quo and the continuing production of inequality, social disadvantage, and poverty, and tax the advantaged classes for the purpose of redistributing their incomes to the marginalized. According to proponents, this approach is advantageous because it will ensure high levels of productivity, as only the best will be employed (Basu, Reference Basu2017).
While an improvement over the economics of identity approach, this liberal alternative has the grave demerit of reinforcing the perception of inferiority of Africans, overlooking the grave psychological cost of unemployment, especially for women (Diette et al., Reference Diette, Goldsmith, Hamilton and Darity2015), and leaving unaddressed widespread inequalities in wealth between Africans and the rest and among Africans themselves. More fundamentally, these critical alternatives do not address the question of weak and strong sustainable development. Weak sustainable development is what is advocated by the mainstream. Informed by the idea of substitutability, the depletion of African resources is not a problem, as long as new technologies can be found and the externalities of ecocide can be internalized through putting a price on nature (Daly et al., Reference Daly and Cobb1994).
Yet, as Table I.1 and Figure I.2 suggest, this approach is highly inappropriate for studying Africa, not only because of the centrality of land to the identity of Africans and their economic systems, but also because of its inability to help in revealing the dramatic loss of biodiversity on the continent and its deleterious consequences for economy and society. Additional, more detailed and more nuanced analyses supporting these conclusions can be found in Chapters 3, 5, and 6, which go beyond the standard explanations of “Why development economics fails Africa” to which I now turn.
Why Development Economics Fails Africa?
It is commonly claimed that development economics has failed because of problems intrinsic to economics (see, for example, Keen, Reference Keen, Stilwell and Argyrous2003) or because of the problematic practices of economists (see, for example, Mäki, Reference Mäki2018). A more comprehensive position, contending that the reasons why development economics fails Africa is a bit of both, is developed by Polly Hill and Morten Jerven.
Polly Hill’s principal challenge to development economics is both conceptual and pragmatic. For Hill, development economics tends to make conceptual mistakes, tends to over-rely on official statistics, and tends to neglect inequalities. In her words, she sought “to expose what I see as the old-fashioned, stereotyped, Western-biased, overgeneralized crudity and conceptual falsity of so many conventional economic premises, as well as economists’ complacent attitude to bad official statistics” (Hill, Reference Hill1986, p. xi).
Conceptual mistakes are fundamental to Hill’s critique. Consider the idea of “peasant”. If it is conceived as someone struggling, then, according to Hill, the idea does not apply to most of the people called peasants because they have much income from non-agrarian sources, which they combine with incomes from agrarian activities. Likewise, peasants are so diverse that their presumed shared objection to a common enemy is not often apparent.
The notion of “debt” is another conceptual faux pas. It is common to think of traditional money lenders as seeking to “rip off” other community members. However, Hill argues that, in many African communities, people tend to be simultaneously creditors and debtors. When a harvest is good, it is expected that one gives out credit in the form of seeds, for example. Also, even if there may be usurious conditions, much debt is not on usurious terms, as the debt relation is usually between friends, family members, and even lovers. It would help to have an estimate of the proportion of debt that is usurious to better understand the magnitude of the conceptual problem in the mainstream thinking. However, beyond expressions such as “invariably very high,” Hill provides no clearer estimates. She notes that such exactness is itself problematic:
As for the number of debtors, this is invariably very high … as I have just said, people often borrow with one hand (for one purpose) and lend with another … the tendency to differentiate negates any urge to aggregate in order to arrive at net indebtedness, which means that the bald terms debtor and creditor are often meaningless. This is one of many reasons (three others being the secretiveness of creditors, the short-term nature of much credit, and the likelihood of default) why, as I have earlier insisted, the incidence of … “indebtedness” cannot be measured.
This conceptual critique of development economics leads to Hill’s second concern: development economists’ blind faith in statistics and the techniques for analyzing it. For Hill, the concepts used by statisticians are usually meaningless and they often misrepresent the landless and the powerless in Africa either by overlooking, or by undercounting, such groups (see, for example, Hill, Reference Hill1986, pp. 43 and 48). In essence, the available official statistical information is not reliable. If this is so, regardless of the rigor in the technique for analyzing the data, the results are likely to be questionable. Indeed, Hill argues that the more sophisticated the techniques, the less meaningful the results. In her words:
It is not fanciful to insist that as the sophistication of “data processing” increases, so the quality of the finished statistical product declines. Increasingly, so far as the rural third world is concerned, the power lies with those who have become so astoundingly proficient in manipulating the figures they receive “from below” – with the eager people who derive so much enjoyment from the advanced electronics. Infatuated by their technology, it is beneath their dignity to contemplate the inherent unreliability of their “basic data” – and their resultant impotence is never contemplated. Consequently, all the commands come from above, and the less ambitious, and far less clever, “data collectors” cower underneath. How can the international world be persuaded that the problems of collecting statistics, and allied material, at the ground level in the third world, are just as intellectually challenging, and far more important, than mere mathematical processing?
Hill is neither against econometrics per se nor is she against the use of data. Both are necessary for policy making and research. While modern political economists such as Ben Fine (Reference Fine, Decker, Elsner and Flechtner2019) argue that, in practice, the elevation of big data and the use of econometrics as “better” research strategies lead to the crowding out of other strategies, what concerned Hill was rather different. She was against the reliance on problematic concepts, inadequately measured, and analyzed. As this problematic research design forms the basis of bold claims by those who know little or nothing about the African social context, this is a serious concern.
In developing this critique, Hill offers additional grounds for her analysis. She points out that the idea of “household” used in development economics is flawed fundamentally. Her reasoning is that there is substantial heterogeneity within the household. For example, Hill notes that in West African and South East Asian countries, even the standard definition that a household entails a group of people related by eating from the same bowl is mythical. Neither is the idea that everyone knows everything about other people in the household plausible because wives do maintain separate accounts, have separate economic activities, and sometimes live separately. In turn, the concept of perfect information, that belies much neoclassical development economics, is problematic. Indeed, in real-world households in Africa, information asymmetries can be regarded as the norm.
Long before Päivi Mattila-Wiro’s (Reference Mattila-Wiro1999) review of the “economic theories of the household,” Hill had shown that development economics tends to neglect (a) heterogenous complexities within the household, (b) the study of inheritance and the transmission of wealth, and (c) the peculiarities and complexities of women’s experiences, including with land, men, and other women. Today, much research in home economics questions the unitary model of the household often associated with the economics of Gary Becker, but the resulting “new” models, such as the bargaining models, consensual models, and independent individual models (see Grossbard, Reference Grossbard2010 for a detailed discussion), do not address the totality of Hill’s critique, including the issue of wealth transmission. In this sense, development economics is centrally focused on growth, typically elides intergroup inequality, and obfuscates the nature of colonialism, neocolonialism, and imperialism, especially how their impacts are transmitted through generations.
Another serious defect of development economics is “The Golden Age Fallacy.” This latter problem – elaborated in Chapter 6 of Development Economics on Trial – is what Hill calls “Aboriginal equilibrium” or the idea that there was “equality at the base” or that there was a pristine moment in the history of the poorer nations in which everyone was equal in rural society. Sometimes known alternatively as “the myth of Merrie Africa” (Hopkins, Reference Hopkins1973, p. 10), this problematic explanation of African history (Emeagwali, Reference Emeagwali1980) leads neoclassical economists to suggest that it is not useful to study inequalities in rural areas because they do not exist, while Marxist economists only claim that, under precapitalist conditions, inequalities in rural areas are imposed by external factors.
The consequences of these conceptual and pragmatic problems are serious enough to unsettle society and economy. Hill identifies problems such as research that takes us nowhere, economics that misinforms or hides reality by neglecting it, and policies that make bad situations worse (see, for example, Hill, Reference Hill1986, chapters 2–4). Development economics also peddles much misinformation, including the misleading claim that rural economies are entirely agrarian when, in fact, there are non-agrarian economic activities in such economies.
The policy mistakes identified by Hill are also important, particularly because they have had a more direct impact on Africans. For example, the bias of mainstream economists for mechanical farming – based on assumptions that small-scale farming is inefficient (Hill, Reference Hill1986, chapter 2) – has led policy makers to neglect and to reject small-scale farming. Yet, as Hill (Reference Hill1963, Reference Hill1966, Reference Hill1986) shows, such farms can be – and often are – socially efficient. Indeed, cocoa farming of West Africa is done on a small-scale basis but it is able to supply the world’s cocoa needs as well as meet the needs of the cocoa farmers.
Hill’s criticisms (1) that mainstream development economics does not provide an effective approach to studying inequality, (2) that it is both Eurocentric and America-centric in both its concepts and vision of the good society, and (3) that these problems have contributed to worsening social conditions in Africa deserve the attention I have given them. They show the historical and continuing conceptual and epistemological limitations of development economics, a field that has supplied significant directions for policy-making in Africa.
However, Hill’s diagnosis of the problems is limited. The problem is not just that the mainstream relies on problematic concepts and unreliable official statistics. Hill neglects questions about rent, space, and energy, overlooking how they are problematically treated in existing knowledge on stratification and, hence, treats lightly crucial conveyer belts of stratification in Africa (Mabogunje, Reference Mabogunje1980; Obeng-Odoom, Reference Obeng-Odoom2013b, Reference Obeng-Odoom2014a). Indeed, although modeled on the physics of energy (Mirowski, Reference Mirowski1988a, Reference Mirowski1988b), neoclassical economics has been unsuccessful in systematically theorizing energy, even in terms of narrow concerns about growth (Ayres et al., Reference Ayres, van den Bergh, Lindenberger and Warr2013) with much less to contribute about energy–space–rent and stratification interlinkages (Obeng-Odoom, Reference Obeng-Odoom2014a). To neglect all these, as Hill does, is akin to discussing Catholicism without analyzing the papacy.
So, I caution against Hill’s preference for an “indigenous economics” that is merely a marriage between anthropology and economics. While much stronger on analyzing entire economic systems (Marxist and old institutional economics versions), adapting methodological individualism to transaction costs (new institutional economics versions), and indeed addressing some of the problems identified by Hill (example, drawing on anthropological studies), it does not succeed in probing inter-group inequalities shaped by multiple identities such as race, class, and gender and how these mould ecologically sustainable and inclusive development in poorer regions and among peoples of color.
Similar problems characterize the book that answers the second question: Morten Jerven’s (Reference Jerven2015) Africa: Why Economists Get It Wrong. According to Jerven (Reference Jerven2015), economists are entirely mistaken in their analyses of what is happening in Africa. Not only is their statistical information contrived, but also their description is wrong, their explanation is worse, and their policy advice is grotesquely awry. While this argument is not new, Jerven’s book is the most recent, most extensive, and, perhaps, the most visible of the body of work that addresses these two interrelated questions, namely: the wrongs with development economics, especially in the African context, and why development economists get Africa so wrong.
Unfortunately, Jerven’s contribution has been misunderstood. Some scholars, sensing his challenge to mainstream economics, confusingly regard his impressive oeuvre as Marxist or a rejection of market-based economic development. Others claim that even if his work is not Marxist, the book is a fundamental challenge to mainstream economics in its application to Africa (see Burbidge, Reference Burbidge2016). Two contrasting interpretations of Jerven’s book are common. On the one hand, some claim that Jerven’s book “dismisses Karl Marx” (Wynne & Olamosu, Reference Wynne and Olamosu2015), but others such as Alfred Zack-Williams (Reference Zack-Williams2016) suggest that Jerven’s work is Marxist, indeed equating it to the work of Andre Gunder Frank. Granted that Frank was influenced by Marx, it is debatable whether dependency theory, as constructed by Frank, was, in fact, Marxist.
Zack-Williams (Reference Zack-Williams2016) also suggests that Jerven’s book is a radical green critique by pointing to some similarities with the work of René Dumont (see, for example, Dumont, Reference Dumont1966). Indeed, for the same book, some have interpreted it as showing that “if we can get the numbers right, we can help more people” (Gates, Reference Gates2013), while others contend that Jerven’s argument is “nice models … do not tell the whole story” (Woodson, Reference Woodson2016, p. 579). Many others, who have correctly interpreted the book, have missed the political-economic context of his work, including Jerven himself (Jerven 2013b).
Therefore, it is important to set the record straight and provide a political-economic assessment of the book. According to Jerven, economists have been seeking to explain two things: first, a chronic failure of growth (first generation of economic growth literature, pre-2000s) and, second, slow growth trends (second generation of growth literature, post-2000s). By implication, they have been trying to explain uneven growth trends and the consequent “uneven development.” However, neither of these trends is applicable to the African case in practice. In fact, Jerven argues, economists are chasing something that never happened. African economies grew recurrently after the continent gained independence (especially in the 1950s and 1960s) from various colonial regimes and, largely, have continued to grow since the 1990s. What economists frequently have done is use data collected in the late 1970s and 1980s (the period for which data are available and neoclassical economics became ascendant) and form impressions about Africa based on data sets that cover two decades when Africa experienced a major recession. Indeed, Jerven (Reference Jerven2015, p. 4) argues that the first generation of economics literature confused the effects of the 1980s recession with an alleged general problem of slow African growth.
For Jerven, economists get Africa wrong because, although they pick ideas from history, they cherry-pick history and hence do not really understand the totality of African experiences. They seek, instead, to use shortcuts to become African experts but, depending on downloaded data sets often without knowing either the contexts within which the data were generated or the processes that are captured in the data, they become, instead, empty barrels.
Relying on unreliable data concerning countries they know little about and, hence, are unable to determine how much confidence to put in the data, their models are also ahistorical. They do not conduct detailed, careful long-term studies; they ask the wrong questions; and they err in interpreting social and economic phenomena. Even worse, these problems cannot be remedied easily because they are structural to the field. Unless economists are prepared to abandon years of perfecting a flawed approach, Jerven argues, the problems can only get worse.
Indeed, for Jerven (Reference Jerven2015, p. 8), addressing the problem is only possible if the grand question asked about Africa changes. The question needs to move from why Africa has not grown/has grown slowly to how Africa grows and why African economies first grew, declined, and have regained growth. This reframing gets the history right, which, in turn, leads to focusing on the right contemporary policy issues. The focus for this rebirth of development economics should be on approaching Africa as a continent experiencing recurring growth, not newly occurring growth. And, of course, growth is not necessarily development.
Jerven (Reference Jerven2015, p. 10) seeks to challenge African development economics by questioning its assumptions, evidence, interpretations, and the plausibility of the resulting “technical” economic advice. While non-economists will find Jerven’s book helpful in empowering them to judge the work of the development economists, economists also will gain from reading this book, especially if they will take the author’s advice: economists need to show “a bit more humility; in particular, a better understanding of the limits of their own datasets and statistical testing” (Jerven, Reference Jerven2015, p. 10). Indeed, economists and non-economists alike will learn that “A useful piece of general advice for cross-disciplinary work is that assumptions, data points and observations should roughly match the state of knowledge in other disciplines. It could be argued that this is not only useful advice but a fundamental principle” (Jerven, Reference Jerven2015, p. 70).
Political economists may well say, “we told you so,” however, they would recoil at the near total absence of “the political economy of growth,” to use Paul Baran’s (Reference Baran1957) expression, from the analysis in Jerven’s book. The book gives little attention to whether social progress is, in fact, accurately measured by GDP, in what ways GDP actually leads to a devaluation of labor given large informal economies in many African societies, the widespread existence of social enterprises whose activities are undervalued by an emphasis on growth or devalued by growth, and the direct link between GDP addiction and the brazen destruction of the environment in Africa (Fioramonti, 2013, Reference Fioramonti2014, Reference Fioramonti2017). Even worse, the book overlooks the invention of GDP as a springboard to enhance the power of Western countries, to force Africa to open its doors to plunder by transnational corporations, and massive displacements in Africa owing to the promotion of “growthmania,” an idea developed at length in E. J. Mishan’s (Reference Mishan1967) book, The Costs of Economic Growth, let alone engage the debates generated by such ecological concerns, including Africanist concerns about “just transition” (Agyeman, Reference Agyeman2013).
There is little discussion of the growing inequality within Africa and much less discussion of inequality between Africa and the global economy. Indeed, even in Jerven’s own narrow framework of technical, data-based analysis of GDP, neither the limited contribution of Africa to global GDP nor its implications for society, economy, and environment are analyzed. In fact, as Matthias Schmelzer (Reference Schmelzer2016) shows in his book, The Hegemony of Growth, the history of GDP says something completely different. There is nothing African about the political manipulation of GDP statistics nor the political manipulation of the conditions generating actual levels of GDP. This political number has always been manipulated to win wars, to maintain imperial power, to include some in, and to exclude others from, powerful clubs. The manipulation of the conditions that generate actual levels of GDP distract attention from pressing issues that confront power structures, as Lorenzo Fioramonti discusses in his book, Gross Domestic Problem (Reference Fioramonti2015). Instead, Jerven’s book adopts an idealist and technocratic epistemology that neglects materialist and historical concerns. In turn, it seeks paradigmatic change on the assumption that better quality technical power and quality numbers alone can save Africa.
The evidence, however, shows that growth – indeed the entire economics establishment – owes its success not to its superiority of ideas or methodology at all. Economics has attained its imperial status not just because of strong and rigorous methodology or even its better use of data, but also because it serves an ideological role of obfuscating interests such as class, race, and gender. As Michel de Vroey (Reference de Vroey1975, p. 416) famously noted: “in a class society, the ruling class cannot be indifferent to the type of social science developing in the society in which it holds power.” This point has also been established systematically by Krisha Bharadwaj (Reference Bharadwaj1986) in his book, Classical Political Economy and the Rise to Dominace of Supply and Demand Theories. More recently, John Weeks (Reference Weeks2014) has put the case against economics differently, as expressed in the title of his book, The Economics of the 1%, emphasizing how the application of economic doctrines reinforces the wealth divide in favor of the owners of capital. It is, of course, important to study technical quality and Jerven does so brilliantly, but technical acuteness cannot be fully understood without an analysis of the political economy of measurement or of ideas more generally.
The far sightedness of Jerven is eclipsed by two cataracts. First, he does not link the turn to institutions and good governance in the 2000s to the rise of new institutional economics. In turn, he makes no analytical distinction between what Boettke, Fink, and Smith (Reference Boettke, Fink and Smith2012) have called mainstream (neoclassical) and mainline (new institutional) economics, in turn, between the economics of individual choice and the economics of institutional exchange respectively. So, he conflates orthodoxy and heterodoxy in the form of new institutional economics. In this sense, the book does not succeed in showing that what has been happening in the economics of Africa is echoed in what is happening in the economics discipline more generally, as the account of Harold Demsetz (Reference Demsetz2002), a leading new institutional economist, suggests. The cataract is an unwillingness to extend his analysis from the doxy (orthodoxy of neoclassical economics and the so-called heterodoxy of new institutional economics) to the doxa (real world political economy), to use Pierre Bourdieu’s nomenclature recently utilized for the analysis of global trade by Bill Dunn (Reference Dunn2015).
Chapter 3 of Jerven’s book, which is supposed “to focus less on aggregate growth and more on the political economy of growth, asking who benefits” (Jerven, Reference Jerven2015, p. 4), is centrally focused on growth with no analysis of inequality at all. Chapter 4 (p. 102) promises to go deeper than statistical issues, but the analysis remains data- and technique-driven – without attention to conceptual matters. Pertinent issues such as whether to take the ecological critique of growth seriously and deduct environmental bads (and other bads) from the gross measure to arrive at a net national product (NNP) are overlooked entirely. More fundamentally, the meaning of progress, its measurement, and how congruent it is with well-being are not even contemplated. Yet, as argued elsewhere (Obeng-Odoom, Reference Obeng-Odoom2013a), these issues constitute crucial pieces in the jigsaw of analyzing African economies.
These concerns, in the wider context of the Global South, led scholars, such as Amartya Sen, Gustav Ranis, and Paul Streeten, working under UNDP Project Director, Mahbub ul Haq, to construct a human development index (HDI) (United National Development Programme [UNDP], 1990). Sen was later to develop the conceptual foundations of the HDI in the book, Development as Freedom (Sen, Reference Sen1999). Nevertheless, this effort generated further questions about the measurement of economic performance. Indeed, writers such as Charles Gore (Reference Gore1997) suggest that many of the weaknesses that were raised against the GDP oozed into the estimation of HDI. Indeed, a critical ingredient in the estimation of the HDI is the GDP.
It is certainly important to deal with the statistical limits of GDP, but equally important are three additional aspects of GDP: first, its conceptual underpinnings; second, its philosophical basis; and, third, its historical journey to becoming what Fioramonti (Reference Fioramonti2015) calls “the world’s most powerful number.” Trying to resolve these issues leads to questions about the relationship between GDP and inequality, GDP and poverty, GDP and environment, indeed GDP and happiness; and GDP and the structure of African urban economies, especially the dominance of informal economies (Obeng-Odoom, Reference Obeng-Odoom2013a).
By ignoring the conceptual aspects of GDP, Jerven’s work misrepresents the structure of African economies, especially the prevalence of informal economies. He misses how the most comprehensive improvement in techniques, benchmarks, and data quality in formal economies will overlook such economies and hence contribute to further misrepresenting African economies. Indeed, these neglected issues necessarily mean that we will need to focus on GDP and the idea of economic development itself, how it has evolved, and in what ways it has been measured over time.
Why did development change from being regarded as a colonial project to exploit resources in Africa to becoming a methodologically nationalist project for countrywide change? What led to this shift from being too economic to being socioeconomic?
Some of these issues are raised in H. W. Arndt’s (Reference Arndt1987) book, Economic Development: a History of an Idea, and, in more recent work (Rist, Reference Rist2008; Obeng-Odoom Reference Obeng-Odoom2013a), so Jerven had much work on which to build. Yet, he made a conscious choice that leads to the view that the growth problem is technical in nature. Questions of power, imperialism, patriarchy, and racism, even Eurocentrism, are missing in the book.
Not surprisingly, Jerven’s reading list is seriously wanting in political economy research in Africa. There is little engagement with research in political economy journals – the exceptions being few indeed: two New Left Review articles by Arrighi (Reference Arrighi2002) and Lawrence (Reference Lawrence2010), and one Cambridge Journal of Economics article by Mkandawire (Reference Mkandawire2001). Research published in such journals as Review of African Political Economy and the Review of Black Political Economy do not get even a polite nod. There are a few references to the work of political economists such as Fantu Cheru, Cyril Obi, Frederick Cooper, Walter Rodney, and Mahmood Mamdani, but no preponderance toward political economy or even postcolonial analysis.
So, the question arises about where Jerven is going with his critique? He makes no appeal to justice or oppression. In turn, his critique is open to many interpretations. For instance, African statisticians worry that Jerven’s work is aimed at dismissing the effort of African professionals in the many statistical bodies in Africa. Indeed, some African institutions have had to issue public statements against Jerven’s work and, at least in one case, Jerven has been prevented from travelling to Africa by power brokers on the continent (Jerven, Reference Jerven2015, pp. 121–123). Part of the reason is, of course, that Jerven’s book is centrally focused on state capacity – without acknowledging any significant improvement and certainly without looking at the structure of African economies (importantly, informal economies).
However, any claim that Jerven’s intentions are to undermine African statistical bodies will also need to take into account some crucial observations he makes: for instance, on page 111, where he explicitly makes the case against those Bretton Woods institutions responsible for reducing the capacity of African institutions and, at the same time, asks them to work more effectively, while implicitly suggesting that the statistical authorities require more support.
Similarly, Jerven (Reference Jerven2015, p. 125) also notes, “Africa’s growth failure happened because of a combination of external economic shocks and a less-than-perfect policy response, from both international donors and national economic policy makers. But laying the blame solely on institutions and policies was a costly mistake.”
However, many mainstream economists make similar claims. Daron Acemoglu, for example, makes the Eurocentric new institutional economics claim that settler colonies have developed precisely because of colonialism, while neo-colonial societies in which extractivism was the key focus of the colonialists, have lagged behind. Even if Acemoglu seeks to place the explanatory emphasis on how settler colonialism triggers incentives for investment rather than on the identity of the colonizers themselves, by prioritizing institutions of private property, allegedly the driver of greater economic development in the West, while downplaying the effects of slavery on draining Africa of its resources which helped build the West, Acemoglu’s analysis is Eurocentric (for a detailed discussion, see Darity & Triplett, Reference Darity, Triplett, Dutt and Ros2008, pp. 266–270).
Some of this Eurocentricism can be found in Jerven’s own analysis. For example, he argues that Africa struggles because of colonial problems. However, it appears that, in his earlier book, Poor Numbers (Jerven 2013a), Jerven singled out, or focused almost entirely, on what, in his extensive review of that book, Michael Lipton summarizes as “Africa’s national-accounts mess.” Jerven critiques national institutions on the grounds that they are not sufficiently independent, the statisticians are poorly trained, and the other members of staff are not up-to-date on the use of the latest software, among others (see Lipton Reference Lipton2013 for a detailed review). So, in the book under discussion, Jerven might really be seeking to shut the stable doors when the horses have already bolted! That is why a clearer political commitment is needed from him. Yet, it is interesting to read how Jerven himself thinks the struggle can be won, including “getting African economies right”:
The solution is to refocus the study of economics on the study of economies. The increasing distance between the observers and the observed has created a growing knowledge problem. With the move to cross-country studies based on macro-analysis, country-level nuances have been lost. In other words, cross-country growth regressions can take us only so far. [pp. 130–131] … It is the job of scholars to give tempered assessments that navigate between what is make believe and what passes as plausible evidence. That’s how you avoid a statistical tragedy.
Similarly, he states, “I hope I have shown that simply by asking questions – How good are the numbers? What are the assumptions? How convincing is the story? – one can engage critically with mainstream economics” (p. 132).
So, for Jerven, there is no place for power and ideology. Here, we see a non-materialist, positivist basis for social ideas: the view that ideas rise and fall only because they are “true.” Yet, there are ideological elements in, for example, the fall of Ricardian economics (as Michael Reich showed in his work published in the Review of Radical Political Economics in 1980) and ideological elements in the rise of neoclassical economics (see, for example, the work of Mason Gaffney and his editor Fred Harrison in The Corruption of Economics, Reference Gaffney and Harrison1994).
Another example is the idea of the resource curse. As noted earlier, Jerven is critical of this concept. He says:
When I wrote my own master’s thesis at the London School of Economics in 2003–04, I was struck by the focus thus far on explaining only lack of growth, but I thought it was just a legacy of the 1990s. I was surprised to find that in 2007, three years later, major publications such as The Bottom Billion still stuck with the old line – there is no growth to explain here.
Jerven continues, commenting “The bottom line is that there is no “bottom billion.” The evidence shows that the so-called traps are escapable and the so-called curses are not destiny” (Jerven, Reference Jerven2015, p. 132).
But the real problem with the idea of a resource curse is not so much that the calculations are wrong – important as that is. Rather, the idea – drawing on the metaphor of metaphysical forces of a curse and hence the impossibility of nations being able to do much about it – diverts attention from property and class relations as well as rent capture by transnational forces and corporations, the challenges of globalization, and the nature of uneven and unequal exchange, even imperialism (Emmanuel, Reference Emmanuel1972; Elhadary and Obeng-Odoom, Reference Obeng-Odoom2012; Njoh, Reference Njoh2013; Obeng-Odoom, Reference Obeng-Odoom2014d, Reference Obeng-Odoom2015b). The resource curse analysis, in effect, is a grand scheme to undermine national authority and mercantilism, and it calls for more and more deepening of neoliberal globalization.
Of course, it is crucial to know why economists get Africa wrong. However, stopping at this stage without a radical political-economic analysis of the foundations of Africa’s past, present, or future prosperity is insufficient. Jerven focuses on technical arguments, but GDP is more a political tool than a technical measure. The GDP has always been manipulated and contested for that reason. The Soviet Union was a victim of GDP manipulation, as Lorenzo Fioramonti shows in Gross Domestic Problem (Fioramonti, Reference Fioramonti2015, pp. 33–40). China, the USA, and others have all manipulated or refrained from correcting their GDP calculation for political reasons rather than technical ones.
The issue with the GDP is, therefore, not only technical, but also political. Africa’s development has not always been tied to GDP: it has evolved from one matrix to another – for political-economic reasons intricately interwoven with matters of expediency. The GDP anoints the globalization turn, it promulgates a particular vision of progress, and it institutionalizes a particular type of power. This foundational focus is necessary to understand and transcend the roots of the complex social conditions in Africa. There are certainly more structural issues, including the appropriation of the African commons, the dynamics of the vast informal economies in Africa and their insertion into the global economy, and the growing inequalities within Africa and between Africa and the rest of the world. Neglecting these foundational matters and fine-tuning GDP only endorses – indeed worsens – the ongoing world order which tries to spit Africa out to the margins and tie it there. The technical, databased analysis of GDP can – indeed should – be part of a holistic political-economic critique of mainstream economics, especially in its deployment to understand Africa.
In short, although economic ideas are largely political, spread and sustained by various interests ((Schmelzer, Reference Schmelzer2016), leading J. K. Galbraith (Reference Galbraith1979) to once claim that development economics emerged as a field to legitimize certain interests in Western nations, both Polly Hill and Morten Jerven provide idealist critiques, assuming that ideas are free-floating, unattached to any organizations, institutions, or interests. Analytically, this idealism is problematic because, as Michel de Vroey (Reference de Vroey1975, p. 416) famously noted, “in a class society, the ruling class cannot be indifferent to the type of social science developing in the society in which it holds power.” Alternatives, beyond currently existing ones, are needed.
Mainstream development economics, conceptualized in this book as neoclassical development economics and its variants such as new institutional economics, is clearly limited. However, existing Marxist alternatives provide no panacea either. Both treat inter group and intra group stratification problematically. Both hide serious institutional processes with the mask of culture, as Eiman Zein-Elabdin’s (Reference Zein-Elabdin2016) book, Economics, Culture, and Development, shows; and both neglect, or treat superficially, the questions of space, rent, gender and energy (see, for example, Obeng-Odoom, Reference Obeng-Odoom2009, Reference Obeng-Odoom2014a, Reference Obeng-Odoom2014e, Reference Obeng-Odoom2014f; Gore, Reference Gore2017). The solution to these problems, however, cannot be further stretching the favored, but already over-stretched, explanatory framework, what J. K. Gibson Graham (Reference Gibson-Graham1996/2006) called “capitalocentricism.” Ironically, it is this capitalocentric framework that guides the latest books on African political economy, including Lee Wengraf’s (Reference Wengraf2018) excellent book, Extracting Profit: Imperialism, Neoliberalism and The New Scramble for Africa.
“The Beautyful Ones Are Not Yet Born”
The state of the literature, then, demonstrates the Ayi Kwei Armah paradox. During the decolonization period, there was much hope for a new Global South. Revolutionary leaders arose, promising a new world, and offering powerful ideas. Yet, colonial compartmentalization remained and, in many cases, birthed neoliberal compartmentalization. The reason was that the social relations bequeathed by the colonizer’s philosopher (slavery, feudalism, capitalism, and imperialism) had not been repudiated. Instead, the logic was that the more that legacy or outgrowth of its roots in the form of capitalist and other modes of production could be embraced through forces of modernization/denied through “villagization” projects, the more developed/post-developed the ex-colonies would be. It is this limitation that the novelist Ayi Kwei Armah captured in his now classic novel, The Beautyful Ones Are Not Yet Born (Reference Armah1968).
The real problem of the existing knowledge on stratification in Africa is not that it fails in its exposition, but that it succeeds in obfuscating reality. It conveniently overlooks what R. T. Ely called “the ground under our feet.” It strenuously claims that we now live in an era when fundamental questions about land and rent no longer matter; such an emphasis, we are told, is “too narrow.” In short, it obfuscates the crime of stratification.
Like other crimes, deflecting attention is a defensive strategy of the crime of stratification. The appeal to culture is to mask shocking forms of rentierism, the view of Africa rising serves to legitimize the status quo, while the stubborn insistence on only capital serves as a strategy by both the left and the right, progressive and mainstream writers, to hide their complicity as beneficiaries of the historical and ongoing system of land, property, and rent appropriation.
It is insufficient to call for a change. What is needed is not just change; but a just change. I propose stratification economics as one route toward that change. Pioneered by black economists and other economists of color, the field aspires to be a formidable alternative to both the orthodoxy and existing heterodoxies (Darity et al., 2015). The nature of this sub-field together with its features is discussed in the next chapter.