INTRODUCTION
B. Holding Version of Corporate Organization
IV. POLITICS OF ADJUSTMENT
African leaders as blame and ideology has given way to pragmatism and problem solving. Recent World Bank reports have shown a more moderate wing of the IFI community willing to accept the shared responsibility of failure while Afri- canists have shunned some of the more leftist rhetoric of years past for a more pragmatic problem-solving approach.39
This has opened up the dialogue to include heretofore underrepresented perspectives including the potential of NGO-state partnerships based on local projects aimed at sustainable development. While the exact nature of NGO-state relations is ambiguous and potentially combative (IFI-state relations) the argu- ment rests on the assumption that by developing locally defined goals and explor- ing ways that NGOs and states can work together to satisfy them, true develop- mental progress can be made.40 This argument is particularly persuasive when examined at the grassroots level, where community development and empow- erment are fostered by NGO work in selected states. This builds on the more pragmatic voices emerging in both the IFI and African communities.
sociopolitical coalitions to support continued economic reform.’’44Good gover- nance or political conditionality as it’s referred to, was highlighted by the World Bank in its report Sub-Saharan Africa: from Crisis to Sustainable Growth, in which it stressed the importance of good governance as a key lesson of the adjust- ment process.45 It is our assessment, and the conclusion of many scholars who criticize the SAR, that this supposed lesson of the adjustment era fundamentally undermines the entire developmental process and the credibility of the IFIs. Es- sentially, the inherent conflict of interest that political reform and economic re- structuring pose for a developing nation-state, can cause the balancing of both measures for a preference for the status quo that benefits primarily IFIs and TNCs.
In addition, there is no guarantee that political liberalization leads to new ac- tors predisposed toward either democratic development or sustained economic growth.
The neoliberals downplay or omit large dimensions of political economy that go to the heart of development in Africa and indeed throughout the Third World.46This inevitably leads IFIs to base their policies and approaches on their own flawed and alien sociopolitical assumptions. The ramifications of not fac- toring in the political process or the role of the state in the developmental ap- proach can be disastrous. There is a need for a clearly defined role for the state within the economic sphere. In a young economic market with little free-flowing capital, the state can be instrumental in effectively operating and assisting the market in its growth and management. But IFIs, following neoliberal thinking, ensure that the state is distanced from the economic markets and limited in its powers of control or persuasion. Such policies ignore the need for embryonic African states to take responsibility in the developmental capitalist process. The lessons of development from the NICs, Japan, and even to some extent the West- ern world, clearly indicate the need for a strong apparatus that can lay the neces- sary foundation for the growth and the continued perseverance of capitalism. As Barnet and Cavanagh point out, ‘‘So far only those developing countries with governments strong enough to set their own priorities have succeeded in becom- ing industrial nations.’’47
This continued denial of a state role within the African economy is based on the neoliberal bias against the state that has gained such credence in the wave of recession, failed domestic social policies, and flourishing corporate power since the 1970s. Neoliberals increasingly downplay the potential for supportive partnership arrangements between state and market.48The examples of successful state roles in the economy are voluminous (China, Japan, South Korea, Taiwan, parts of Europe, and North America). But why is it that in Africa the state is limited in the role it is allowed to play? IFIs indicate that the political instability of African regimes and their institutions requires a de-linking of the two struc- tures. But what is to suggest that a young market can survive in a highly competi- tive international arena without any guidance and assistance by the government?
As Callaghy points out:
Ultimately, it is not just a question of finding the ‘‘precarious balance’’ be- tween state and market or state and society, but rather searching for the pre- carious trialectic between state, market and the international arena. Such a precarious trialectic can be very difficult to achieve, however, as domestic politics and the international arena have a habit of presenting new and unex- pected challenges for African rulers.49
Arguably, the establishment of market principles in Africa would need all the support of the government to provide political stability and legitimacy as well as a partial shield for the domestic market from the domination of the interna- tional sector. However, the reflex-like neoliberal fear of the state underlies a funda- mentally paternalistic Western assumption that African governments do not have the administrative capacity, leadership sophistication, or self-discipline to solve complex economic and political problems.50Consequently, IFIs see political liber- alization as a necessary ‘‘growth step’’ in order for SAPs to succeed. Yet, as Manor eloquently points out, ‘‘It makes one wonder whether the tendency of some neo- liberals to exclude things political from their analyses is not intended to distract attention from the inconveniently draconian implication of their prescriptions.’’51 The neoliberal approach further argues that it is precisely previous state intervention that accounts for Africa’s deep economic crisis. For example, conservative/orthodox elements in the World Bank are adamant in their ‘‘view that the chief cause of Africa’s problems lies in the market distortions that have been generated by internal political forces using state policies to serve their own short term interests.’’52But such classic neoliberal thinking is criticized by Robert H. Bates, who concedes ‘‘some validity in the neo-liberal view that political activity imposes economic costs upon society, but this idea so dominates the analysis that it obscures deeper political questions.’’53 What is the role of the state? Can neoliberalism provide the answers to the political questions that it ignores? What is the proper role of the state vis-a`-vis both international and do- mestic NGOs? The focus on the economic sphere is a fundamental part of IFI development analysis, yet the underlying political equation is nonchalantly ig- nored. As Bates remarks, neoliberals display, in their theories, ‘‘their disinclina- tion to engage in serious analysis of things beyond their narrow economic con- cerns.’’54 Charles Harvey further ‘‘calls attention to the compelling array of political difficulties which assail attempts by African states to implement struc- tural adjustment programs and which the neo-liberals tend to ignore.’’55 This continued disregard of the political implications of their economic policies only clarifies the fundamental problem with neoliberalism, which is that policy pre- scriptions are often highly specific and artificially compartmentalized thus ignor- ing the realities of political economy in an international context.
Not only has the conditionality attached to the aid and financing increased but the introduction of the concept of good governance and political reforms has only further exposed the shortcomings of the neoliberal approach. The SAR has served to increase political tension and decay thus creating a very real and stark
contradiction. Miles Kahler, writing about Cameroon, labeled this contradiction as the ‘‘orthodox paradox’’: ‘‘the expectation that governments will implement reform programs that undermine the foundations of their political support and that a capable state is necessary to implement a neo-classical strategy of economic adjustment.’’56The application of SAPs has proven to be politically problematic and their impact seems to increase (and not decrease) the need for a stronger state at the helm of government and the economy.
The example of Ghana is illustrative here. Ghana is consistently offered as the IFI/World Bank success story and proof of the viability of SAPs.57Ironi- cally, Ghana has managed to see some strong economic growth of late and devel- opmental achievements under the lengthy and quasi-authoritarian tutelage of Jerry Rawlings. This is the same Jerry Rawlings who was branded a leftist by the West, undermined by the Western intelligence agencies, and castigated for his strong statist bias during his first tenure as ruler of Ghana. Arguably, Ghana’s success can be attributed as much to his authoritarianism in the midst of signifi- cant political and economic reform as to the strength of adjustment policies. The contradiction of using Ghana as the prime example with the neoliberal arguments regarding political and economic liberalization is stark.
The tension between committed reformers and those resistant to the reform process has been extreme. The apparent belief that governments will implement reform programs that will jeopardize their political existence seems to be an ac- ceptable cost for the IFIs even though logic dictates that this reality will only serve to decrease the chances for success.58Most politicians understand the need for economic development, albeit defined in different terms, yet the immediacy of political realities (i.e., coalition building, ethnic balancing, bureaucratic inertia, and the like) often pushes developmental decisions to the background (witness Nigeria and Zambia). It is not the intention or the desire of African regimes to become increasingly dependent on the IFIs and Western donors, but political conditionality has only increased their dependence on external actors asking for widespread reform in exchange for limited concessions.
Can political and economic liberalization coexist? Can Africa pioneer suc- cessful changes in its economies and political systems? One area that has drawn IFI attention and perhaps has the seeds of answers to these questions has been the agricultural sector. IFIs have promoted economic reforms that would benefit the agricultural industry hoping that success would prompt the creation of an agricultural elite sparking political constituencies that would champion their own interests. The World Bank’s focus on agriculture was evident in the Berg Report in which it stressed that ‘‘agricultural output is the single most important determi- nant of overall economic growth’’ and attributed it as ‘‘the principal factor under- lying the poor economic performance of the countries of the region.’’59Conse- quently, IFI policies hoped to foster the creation of an agricultural elite that would take the political challenge, protect their interests, and subsequently, under the capitalist credo, reap political as well as economic benefits.
However, once again, a lack of understanding of agricultural interests and their various political, social, and ethnic cleavages left the political empowerment of agricultural constituencies unrealized.60 African farmers have been unable to form any significant interest groups or effectively challenge the political struc- ture.61Within the majority of Africa the political impact of agrarian societies is limited due to the ‘‘very high transaction costs (e.g., to peasants in the rural areas) that prevent certain constituencies from mobilizing to support a government that has embarked on significant reforms to help agriculture.’’62Robert H. Bates di- vides the blame for the political weakness of the agrarian producers between the African state and its urban bias and the ‘‘atomistic’’ and isolated nature of rural producers.63
Overall, the success of these agricultural policies, aimed at increasing the output of the economies and catering toward what the World Bank feels is the comparative advantage of the African economies in the commodity markets, has failed. The IFIs placed incredible importance on the need for higher prices for agricultural products which in turn would stimulate long-term agricultural growth.
But Africa’s collective experience brought about ‘‘universal agreement that non- price factors such as inadequate infrastructure, lack of availability of key inputs such as irrigation or fertilizers, and unproductive research and extension services are significant constraints on supply.’’64The increased incomes of the farmers, a direct result of the increase in production prices, had a limited impact since con- sumer product development and availability did not keep pace.65In addition, West- ern agricultural products heavily subsidized by their governments are routinely dumped on the world market undercutting local producers, artificially lowering the market value and flooding local African markets with cheaper alternatives.
Overall, the IFIs focus on increasing commodity prices worldwide has not achieved the desired results.66African governments find it increasingly difficult to offer higher prices to stimulate production growth. Critics of the World Bank’s policies had ‘‘warned against the fallacy of composition in the [Bank’s] prescrip- tions: the argument that what is good for one country acting individually is not necessary beneficial if a number of countries simultaneously pursue the same policy.’’67Masterminded by the World Bank, output across the world has risen while the consumption is unable to keep pace. This basic misconception chal- lenges the sociopolitical culture of the World Bank, the neoliberal approach that advocates standardized policies for all nations and highlights the needs for a new approach that realizes the impact such fundamentally flawed policies can have on Africa’s political economy.