The Political Economy of Economic Performance. Voxi Heinrich Amavilah
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a collection of symposium papers on “Slow Growth in Africa.” The collection added volume to Africa’s literature on the subject. 1 However, the different opinions the papers expressed left a gap in our understanding of Africa’s performance. All, but one, JEP papers are generally negative and they paint very different pictures of the same object—Africa. The painting creates an inaccurate impression that Africa’s situation is irreversibly hopeless, and that there is nothing anyone can do as these countries cannot even learn from each other. For example, to Paul Collier and Jan Gunning, Africa’s performance is a function of external and internal destinies and policies—both permanent curses. Among destinies, the authors include geography and ethnolinguistics. While they stay clear of strong conclusions about the effects of destinies on economic performance, Collier and Gunning clearly conclude that external policies in Africa have improved in recent years, but that domestic policies, especially those relating to private investment, remain the key constraints on economic performance there. Calling out SSACs to own up to their responsibilities rather than blaming external circumstances for their problems is a good thing. Nonetheless, the study fails to acknowledge sufficiently the progress SSACs and other developing countries were making (see, Desai 2008).
In the same collection, Angus Deaton, and Ndulu and O’Connell tell two other stories. Deaton documents a strong relationship between economic growth and historical commodity prices. From that documentation, he concludes that price booms and busts have been important to the economic performance of SSACs. However, the “roots of Africa’s slow development almost certainly lie elsewhere, in poor investment appraisal—whether financed from commodity exports or not—and in the quality of governance” (Deaton 1999, 39). Ndulu and O’Connell pick up on the effects of governance on growth in SSACs. Their discussion observes that postcolonial African governments endorsed inward-looking and state-led industrialization policies, and the path they chose simply led them to authoritarianism, fiscal and monetary imbalances, economic decline, and ultimately per capita misfortunes for all their people.
John Sender takes a different tact and a refreshing tone of voice. In reading his piece, one is reminded of Colin M. Turnbull’s (1968) The Lonely African, whose voice, however loud and clear it might be, is ultimately drowned out by the Africa dilemma itself. The dilemma is not really Sender’s, because his critique of the Washington Consensus is crystal clear. He is equally clear about the tragic optimism that development within a capitalist system is an uneven, painful, and costly process that succeeds only when it has domestic political support. The dilemma is that while individually each chapter adds something important to Africa’s growth literature, taken together the five pictures the collection paints are astonishingly and irritatingly different to be convincing. Again with the exception of John Sender, the chapters say about SSACs what has always been said about Africa (cf. Stamp 1953; Junod 1962), and it compares rather peculiarly to contemporary microeconomic evidence (Mahajan 2008; Stiglitz 2010; Fosu 2009; Robinson 2009; Subramanian 2009). 2 For instance, the growth-destiny notion that Collier and Gunning espouse is an old-fashioned fatalism, already available in Andrew M. Kamarck (1976, 1977). Yes, geography is important to economic performance. However, the tropics are a wide area and SSA is not the only tropical region in the world. Thus, while soil fertility is necessary for agricultural productivity, it is not sufficient for the economic performance of many SSACs whose comparative advantages are in the minerals sectors. Indeed, even Kamarck has reconsidered the tropics as a curse per se, because he too acknowledges that the “velocity of change could be harnessed by research” to offset the effects of geography (Kamarck 2000, 235–36).
Similar arguments can be advanced against the claim that SSACs have a higher number of ethnolinguistic groupings than other regions. Of 6,000 or so world languages, only twenty percent (1,200 languages) are African languages. Twenty percent sounds like a lot until one recognizes that three of the major African family of languages are spoken by 400 million people, which means each language group is spoken by 133.3 million people, a number more than the population of any single African country, including the most populous Nigeria. 3 It would seem that the problem is not ethno-linguistics but rather ethno-fragmentation and the lingering effects of the slave trade, both direct results of colonization and colonialism (Rodney 1973; Johnson 1974; Nunn 2008, 2012). As a matter of fact, in South America all ethno-linguistic heterogeneity was eliminated many years ago and replaced by the Spanish and Portuguese languages. Yet, it still remains unclear that language homogeneity reduced ethno-fragmentation or led to economic growth there. Moreover, at its height and prior, the British Empire grew faster than Great Britain in spite of language homogeneity in the latter instance and heterogeneity in the former. One may say that homogeneous South Korea does better than heterogeneous Tanzania, but what is the difference in real performance between Tanzania and Burma, where the latter is more homogeneous than the former?
Available evidence points out that natural resources (including language) are necessary but insufficient growth factors. Indeed, research on the nexus between growth and natural resource continues to produce mixed results; equally resourceful countries have often performed differentially, and some resource-poor nations have indeed done better than their resource-rich counterparts, see, for example, Sachs and Wagner (1999), Rodriguez and Sachs (1999), Auty (1993), and Gylfason and Zoega (2002). Clearly something other than destinies and policies is missing from analysis, and economists would do better searching for the missing link rather than just “translating [their] prejudices into respectable numerals,” as E. J. Mishan (1974, 93–94) has charged.
Also unimpressive is the argument that SSACs have had more growth-retarding dictatorships and conflicts. Evidence shows that all African wars and armed conflicts since the 1700s killed fewer than twenty-four percent of the 84.3 million who died in World War II alone. Of 23.4 million people who died in major genocides, ethnic cleansings, and massacres in the period 1939–1945, only 9.12 percent were African, with about sixty-two percent of that taking place in Rwanda, Burundi, and Zanzinbar. War crimes in Africa affected only 5.9454 million people since 1923, an average of 66,060 per annum over ninety years. That number is miniscule compared to 140,000 deaths in the former Yugoslavia over a much shorter time period. The estimated death toll by leader in African from 1885 to 1998 (that including colonial leaders) is only 12.39 million, which pales compared to the 20 million under Stalin in a span of thirty years. Human-caused and aggravated famines and diseases of all recorded time in Africa is only 12.9 percent of those caused by World Wars I and II alone. African riots and political unrests of significance caused only an equivalent of 36.2 percent of the number of people who died during the Hindi-Muslim conflicts in India since 1950 and less than a percent of the two million who perished during the partitioning of India and Pakistan. Only forced labor, slavery, slave trade, and worker abuse present a significant and long-lasting shock. Other conflicts simply measure the weakness or absence of institutions for mitigating conflicts, not the number or severity of conflicts. Hence, the assertion that the South Africa pre-independence in 1994 is the same South Africa post-independence is simply incorrect. In terms of income levels, the old South Africa appears to have outperformed the new South Africa only because the old South African economy excluded the majority of its people. Regarding growth, to those who were excluded even zero growth with inclusion has meant improvement. Thus, generalized cross-sectional emphases of macro-economic variables simply understate the rate of improvement implicit in micro-economic variables. In fact, in reading the historical accounts of the first Europeans to make contact with Southern Africans, like Dr. David Livingstone, for instance, one cannot escape noticing that African countries made unbelievable progress. 4 Wherever one looks, Africa has seen most development in the shortest time period compared to other regions of the world—no question about that! What is interesting (for me) is how African countries developed so much with so little and sporadic economic growth. That assertion represents a fertile research area waiting for intellectual ploughing. Unfortunately Africa is the region where careful studies are rarely carried out. Worse still, and perhaps because of the lack of careful studies, one often hears of the conditions of SSACs inferred from the conditions of other countries, in recent years from the conditions of East Asian countries. In these inferences, observers say of Africa whatever they found to be untrue of other regions. Hence, the “stew” of cross-sectional studies which Ed Leamer (2001) deplores is the worst for African countries, which is a shame because the same experts seem to suggest that