INTRODUCTION
B. Holding Version of Corporate Organization
V. THE SAR AND THE FAILURE OF NEOLIBERALISM
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.
are required ‘‘to live up both to people’s expectations, raised by old and new populist policies, and to IMF conditionalities—at the same time!’’68 Political reforms are being used as criteria for the continued aid or assistance from the IFIs and the donor community. The blanket application of this policy disregards the dilemma ‘‘that sound economic policy is inconsistent with consolidating the political legitimacy, particularly of countries in the process of transforming disin- tegrating dictatorships into some kind of pluralist democracies.’’69 The crisis in development is a clear indication of a political crises of the sovereign nation- state. Neo-liberal theory advocates a limited role for the state yet, the application of its policies that have grave economic and political ramifications presupposes a strong state that can face the resolve of its people. The introduction of political reforms that question the legitimacy of the very government that is responsible for the economic reforms is a clear formula for political instability. Concomi- tantly, IFI policies incite the nationalistic feelings of the indigenous people by introducing reforms that are ethno-centric, foreign and have an immediate nega- tive impact on their economic prosperity while questioning the credibility and legitimacy of the government in power that attempts to enforce their reform pack- ages. Are the IFIs not undermining their own success?
Let’s disregard the nature of the political regimes in Africa and their relative desire for political liberalization. The underlying assumption of IFI policy is that intrusive, exploitative authoritarianism in Africa caused its economic decline and only economic restructuring and political liberalization will alleviate it. This ex- tension of neoliberal economic logic is further based on the presupposition that the African state is homogenous and autonomous from other internal and external actors as well as formally in control of the mechanisms of power, i.e., it is a sovereign state in the Western-centric model. As Herbst points out, these theories
cannot make a substantive contribution to the demarcation of the African state because these theories are . . . incapable of taking account of African realities. Only an eclectic mix of guidelines which are grounded in the reali- ties of how the economy and the state actually work . . . will usefully suggest what the state should do for whom.70
Therefore, IFIs need to reexamine the nature and role of the state in the African political and social context and in the international environment. This involves a fundamental reworking of development theory along with theories of state sovereignty already providing fruitful results.71 Before a constructive ap- proach can be deployed in Africa, the role of the state needs to be redefined within this political and economic climate. Also, NGO-state-market relationships need explication based on the assumption that economic development is part of a planned partnership between these groups and forces and not a competitive, artificial division between them. As Bienfeld points out in his analysis of the African crisis with adjustment, IFI ‘‘policy prescriptions do not inspire confi-
dence. Not only are the policies that are now proposed as solutions for Africa essentially the same policies that have led to the present debacle, but they also contain internal contradictions which undermine their plausibility and reveal fatal flaws in the underlying analysis.’’72
The continued failure of SAPs stresses the need to reform those policies and shift our focus and assumptions to actors that may be crucial in the developmental process. For example, the role of tribes in Africa has been downplayed and ig- nored in the Western developmental model. For centuries tribes have been an integral part of African society and culture. They have enjoyed power, prestige, and the respect of their followers and the recognition of their counterparts. ‘‘In the absence of strong nation-states and national political structures, the tribe may be an effective intermediary association providing services and brokering rela- tions between the individual, family or clan and the national government.’’73In the SAR, the role of the indigenous people is relegated to spectators or, more accurately, individualized consumers. The inclusion and extended empowerment of these groups may add credibility to the developmental process and help to develop more indigenous, grassroots solutions to local economic issues. In the face of constant criticism and rejection, IFIs need to abandon their ethnocentric policy domination and consider the implication their sociopolitical culture has on the developmental process.74 Vrajenda Raj Mehta unequivocally rejects the conceptualization of a single and universal pattern of development. He suggests an ‘‘indigenous process of change attuned to the needs of individual societies:
A welcome process of social change in all societies is a process towards increas- ing self-awareness in terms of certain normatively-defined goals in each case, and that the direction of the process and the definition of ends is largely defined by the society’s own distinct history and the way of life.’’75
Wiarda goes on to argue:
Hence, we need to see local indigenous institutions not necessarily as dys- functional or doomed to history’s ash cans but frequently as viable and neces- sary in the society we are studying, as filters and winnowers of the modern- ization process, as agencies of transition between traditional and modern, and as a means for reconciling and blending the global with the indigenous, the nationalist with the international.76
Therefore IFIs need to Africanize their agenda and minimize their own sociopolit- ical culture that is breaking down IFI policy prescriptions and severely affecting the future development of Africa.
In an attempt to provide more complex and indigenous plans for economic reform and increase the true dialogue between IFIs and African regimes, the United Nations Economic Commission for Africa (UNECA) has created an alter- native framework to SAPs.77Their document, African Alternative Framework to SAPs (AAF-SAP), was created in an effort to counter the IFIs prescriptions.78
The functionalist attitude of the ECA which gathers its policy advisors from all over Africa is criticized as vague and too conservative in some respects, yet it still attempts to bridge the gap between orthodox viewpoints on both sides and therefore fits within a more pragmatic school of thought.
The ECA contends that the ‘‘center of the alternative framework is the human dimension,’’ something the World Bank has ignored till recently.79The three major characteristics of the framework directly counter the approaches ad- vocated by the neoliberal school of thought. First, the framework is not univer- sally applicable. Rather the ECA’s framework relies on the individual characteris- tics of the respective countries and their peculiarities. The goal is to design country-specific programs selecting appropriate policy instruments. Second, ‘‘as a human-centered framework, [the framework] implies full democratization of all aspects of economic and social activities and in all stages from decision- making to implementation.’’80Finally, in line with the past emphasis on economic unity and integration, the framework advocates intercountry cooperation and co- ordination of developmental policies and adjustment programs aimed at trans- forming the economies.81
Unfortunately, the differences between the ECA and the IFIs continue. Can there be a compromise in their policies? Will the IFIs consider the ECA a partner in the process toward the development of Africa or will the ECA continue to search for credibility and legitimacy within international financial circles? As the failure of SAPs becomes clear in Africa, the role of the ECA as an agency repre- senting the interests of Africans from a neutral standing becomes increasingly important. The IFIs need to establish a working relationship between all parties;
the states, the ECA and other NGOs, and the people that will bear the brunt of their changes. A better-coordinated approach with increased input will help in the creation of realistic policy prescriptions that could be more effective and create the foundation for growth and sustained development. They ‘‘must find a proper balance between global, holistic and interdisciplinary approaches on the one hand, and studies on economic sectors, individual countries and particular issues on the other hand.’’82
VI. CONCLUSION
‘‘There can be no instantaneity, no quick fix. Our friends from the West often forget that true democracy became a reality in most of their countries only re- cently. A holier-than-thou attitude with harsh conditionalities will only abort the process.’’83SAPs have failed for a variety of reasons. Despite debates about spe- cific policies and unique examples and conditions, it can be argued that the SAR was doomed from the very outset due to its sociopolitical culture, flawed neolib- eral approach, and the undermining effects of linking political and economic liber-
alism. Amidst this reality, external support from donors and the IFIs has been limited and well below the required amount to sustain SAPs. Further, the interna- tional climate is not very forgiving. In an age where the neoliberal approach is basking in its hegemony, as evidenced by the lack of a contradictory approach, Africa is hostage to its worst excesses while facing increasing marginalization.
By critiquing the double barrel approach of political and economic liberal- ization, it is not our intention to discount the values of democracy, good gover- nance, or political responsibility. Africa and its people can benefit from the imple- mentation of such values within their own distinct sociocultural framework. Our argument is that by linking economic reforms with political liberalization, IFIs are undermining the very goals they purport to embrace. Democracy is not for the faint of heart and if competing pressures are not properly balanced, polariza- tion and conflict will surely result. African countries need to decide their own priorities and fashion strategies that are mutually reinforcing of both political and economic development goals. This may involve concurrent reform strategies or perhaps more the promotion of one over the other. That decision is certainly best left to local decision makers.
Through a balanced analysis of the effects of conditionality, one must ac- cept that a change in policy assumptions and prescriptions is in order. The need for economic development is still necessary. But the persistent linking of both political and economic reforms has to be questioned. ‘‘Any justification of demo- cratic regimes that relies on their development capabilities is at best weak . . . assertions by external factors to the effect that economic liberalization requires political liberalization ring more than a little hollow.’’84External actors need to understand the constraints on Africa better and realize the impact of these hollow restrictions. They also need to examine and ultimately embrace the unique part- nerships that must evolve among NGOs, state governments, and IFI/TNC entities based on mutual responsibility and pragmatism. If a new understanding on the part of IFIs is not achieved and a new dialogue is not developed, then marginaliza- tion, political decay, and social upheaval will prevail. The responsibility for that phase in Africa’s development will most surely be a shared one.
ENDNOTES
1. IMF. Sub-Saharan Africa-Growth, Savings and Investment, 1986–1993. M.T. Had- jimichael, D. Ghura, M. Muhleisen, R. Nord, and E.M. Ucer. Washington: IMF Occasional Paper 118, January 1995:1.
2. Nyirabu, C.M. (1986). A view from Africa: 2. In G.K. Helleiner (ed.), Africa and the IMF. Washington: IMF, 1986:32.
3. For an overview see Ravenhill, J. (1993). A second decade of adjustment: greater complexity, greater uncertainty. In T.M. Callaghy and J. Ravenhill (eds.), Hemmed
In: Responses to Africa’s Economic Decline. New York: Columbia University Press.
Commins, S.K. (ed.). (1988). Africa’s Development Challenges and the World Bank.
Boulder, CO: Rienner. Ghai, D. (ed.). (1991). The IMF and the South—The Social Impact of Adjustment. London: UN Research Institute for Social Development. Oni- mode, B. (ed.). (1989). The IMF, The World Bank and The African Debt: The Social and Political Perspectives. London: Institute for African Alternatives/Zed Books.
Clapham, C. (1996). Africa and the International System: The Politics of State Sur- vival. New York: Cambridge University Press.
4. Many would argue that its roots are colonial in nature and much literature exists to support that thesis. For the purposes of this paper we will concern ourselves only with the postindependence period beginning with the decade of the seventies.
5. Chazan, N., Mortimer, R., Ravenhill, J. and Rothchild, D. (1992). Politics and Soci- ety in Contemporary Africa, 250–267. Boulder, CO: Lynne Rienner Publishers.
6. Ibid., pp. 258–267.
7. UNIDO. (1985). Africa in Figures. New York: UNIDO/LS517. Riddell, R. (ed.).
(1990). Manufacturing in Africa, 250–258. London: James Currey. Chazan, pp. 250–258.
8. Gordon, D.F. (1993). Debt, conditionality, and reform. In T.M. Callaghy and J. Ra- venhill (eds.), Hemmed In: Responses to Africa’s Economic Decline, 97. New York:
Columbia University Press.
9. McCarthy, S. (1994). Africa: The Challenge of Transformation, 139. London: I.B.
Tauris & Co. Sachs, J. (ed.). (1989). Developing Country Debt and Economic Perfor- mance. Chicago: University of Chicago Press. Humphreys, C. and Underwood, J.
(1989). The external debt difficulties of low-income Africa. In I. Husain and I. Diwan (eds.), Dealing with the Debt Crisis. Washington: World Bank.
10. Gordon, p. 95.
11. Ibid., pp. 95–96.
12. World Bank. (1981). Accelerated Development in Sub-Saharan Africa: An Agenda for Action. Washington: World Bank.
13. Gordon, p. 105.
14. IMF. The IMF—Its evolution, organisations and activities. A.W. Hooke. Washing- ton: IMF Pamphlet Series No. 37, 2nd ed., p. 12.
15. World Bank. (1981). Accelerated Development in Sub-Saharan Africa: An Agenda for Action. Washington: World Bank. Adjustment in Africa: Reform, Results and the Road Ahead. Washington: World Bank. Adjustment Lending—An Evaluation of Ten Years of Experience. Washington: World Bank.
16. Ibid.
17. Green, R.H. (1993). The IMF and the World Bank in Africa. In T.M. Callaghy, and J. Ravenhill (eds.), Hemmed In: Responses to Africa’s Economic Decline, 58. New York: Columbia University Press.
18. Erb, R.D. (1986). A view from the Fund. In G.K. Helleiner (ed.), Africa and the IMF, 23. Washington: IMF.
19. See Schatz, S.P. (1996). The World Bank’s fundamental misconception in Africa.
Journal of Modern African Studies 34(1):239–247, Schatz, S.P. (1994). Structural adjustment in Africa: a failing grade so far. Journal of Modern African Studies 32(4):
679–697. Clapham, 1996, pp. 163–186. Evans, P. (1992). The state as problem and
solution: predation, embedded autonomy, and structural change. In S. Haggard and R.R. Kaufman (eds.), The Politics of Economic Adjustment. Princeton: Princeton University Press.
20. Data for 1970s from Accelerated Development in Sub-Saharan Africa. (1991).
Washington: World Bank. Data for 1980–1989 from World Development Report 1990. New York: Oxford University Press. Projected figures from World Develop- ment Report 1992, 32. New York: Oxford University Press.
21. Data from the International Monetary Fund. (1991). World Economic Outlook May 1991, 16. Washington: IMF.
22. McCarthy, p. 139.
23. UNECA. (1994). Biennial Report of the Executive Secretary 1992–1993. E/ECA/
CM.20/4, April, p. viii.
24. UNECA. (1994). Economic Report on Africa 1994. E/ECA/CM.20/2, April, p. 3.
25. UNECA. (1995). Report on the economic and social situation in Africa, 1995.
E/ECA/CM.21/3, March, p. 2.
26. McCarthy, pp. 137–140.
27. Loxley, J. (1984a). The IMF and the Poorest Countries. Ottawa: North-South Insti- tute.
28. Zulu, J.B. and Nsouli, S.M. (1984). Adjustment programs in Africa. Finance and Development 21(1):5–9.
29. Loxley, J. (1986). Alternatives approaches to stabilization in Africa. In G.K. Hel- leiner (ed.), Africa and the IMF, 117–147. Washington: IMF.
30. Schatz, p. 684.
31. Sandbrook, R. (1991). Economic crises, structural adjustment and the state in sub- Saharan Africa. In D. Ghai (ed.), The IMF and the South—The Social Impact of Adjustment, 95. London: UN Research Institute for Social Development.
32. World Bank. World Bank Development Report, 1994, pp. 202–203.
33. ‘‘The economic regression has lasted far too long in the African region without real recovery or accelerated upturn for it to be explained only in terms of political instability, ethnic conflicts, the unfavorable international economic environment or fluctuations in weather-constrained agricultural output. See UNECA. (1995). Re- port on the economic and social situation in Africa, 1995, E/ECA/CM.21/3, March, p. 3.
34. UNECA. (1994). Economic Report on Africa 1994. E/ECA/CM.20/2, April, p. 2.
35. World Bank. (1994). Adjustment in Africa: Reforms, Results and the Road Ahead, 2. Washington: World Bank.
36. UNECA. (1995). Report on the Economic and Social Situation in Africa, 1995.
E/ECA/CM.21/3, March, p. 4.
37. Ravenhill, J. (1993). A second decade of adjustment: greater complexity, greater uncertainty. In T.M. Callaghy and J. Ravenhill (eds.), Hemmed In: Responses to Africa’s Economic Decline, 19. New York: Columbia University Press. Dorraj, M.
(1995). The Changing Political Economy of the Third World, 85–114. Boulder, CO:
Lynne Rienner Publishers.
38. Callaghy, T.M. (1993). Political passions and economic interests: economic reform and political structure in Africa. In T.M. Callaghy and J. Ravenhill (eds.), Hemmed In: Responses to Africa’s Decline, 464–471. New York: Columbia University Press.
39. World Bank. (1989). Sub-Saharan Africa: From Crisis to Sustainable Growth.
Washington: World Bank.
40. For discussions of this see Fowler, A. (1991). The role of NGOs in changing state- society relations: perspectives from Eastern and Southern Africa. Development Pol- icy Review 9(1), 53–84. Gibbon, P. (1992). The World Bank and African poverty 1973–1991. Journal of Modern African Studies 30(2), 216–220.
41. Some of the masters of this game included Mobutu of Zaire, Numeri of the Sudan, Hassan of Morocco, and of course the Afrikaner regime of South Africa.
42. Callaghy, T.M. (1994). Africa: falling off the map? Current History p. 31.
43. For a discussion of this perspective and those that have espoused it see Kohli, A.
(1986). Democracy, and Development. In J.P. Lewis and V. Kallab (eds.), Develop- ment Strategies Reconsidered. New Brunswick, NJ: Transaction Books. Ruesche- meyer, D., Stephens, E.H., and Stephens, J.D. (1992). Capitalist Development and Democracy. Chicago: University of Chicago Press.
44. Callaghy, 1994, p. 34.
45. World Bank. (1989). Sub-Saharan Africa from Crisis to Sustainable Growth: Long Term Perspective Study. Washington: World Bank.
46. Manor, J. (1991). Politics and neo-liberals. In C. Colclough and J. Manor (eds.), State and Markets—Neo-Liberalism and the Development Policy Debate, 308. Oxford:
Clarendon.
47. Barnet, R.J. and Cavanagh, J. (1994). Global Dreams, Imperial Corporations and the New World Order, 354–355. New York: Simon & Schuster.
48. Ibid., p. 312.
49. Callaghy, T.M. (1993). Political passions and economic interests: economic reform and political structure in Africa. In Callaghy and Ravenhill (eds.), Hemmed In: Re- sponses to Africa’s Economic Decline, 477. New York: Columbia University Press.
50. Ibid., p. 313.
51. Ibid., p. 314.
52. Bienfeld, M. (1988). Dependency theory and the political economy of Africa’s crisis.
Review of African Political Economy 43, 69.
53. Bates, R.H. (1988). Macro-Political Economy in the Field of Development. Working paper 40, Duke University Program in International Political Economy, Durham, NC.
54. Ibid., p. 23.
55. Manor J. (1991). Politics and neo-liberals. In C. Colclough and J. Manor (eds.), State and Markets—Neo-Liberalism and the Development Policy Debate, 318. Oxford:
Clarendon.
56. Kahler, M. (1990). Orthodoxy and its alternatives: explaining approaches to stabili- zation and adjustment. In J.M. Nelson (ed.), Economic Crises and Policy Choice, 33–61. Princeton: Princeton University Press.
57. For discussions of Ghana as success story, see Chand, S.K. and van Til, R. (1988).
Ghana: toward successful stabilisation and recovery. Finance and Development 25(1), 32–35. Hodges, T. (1988). Ghana’s strategy for adjustment with growth. Af- rica Recovery 2(3). Rothchild, D. (ed.). (1991). Ghana: The Political Economy of Recovery. Baltimore: Johns Hopkins University Press.
58. Callaghy, T. (1993). Political passions and economic interests: economic reform and