Trying to get Africa right
reviews a recent book on the economic development of Africa.
AFRICA: WHY Economists Get It Wrong provides a critical review of the recent economic history of Africa. Author Morten Jervis argues that for most of the past two decades, mainstream economists have been trying to explain the chronic failure of economic growth in Africa.
During the 1950s, 1960s and even into the 1970s, many African economies actually grew rapidly, but this development was subsequently overshadowed by the economic problems of the 1980s and 1990s. In recent years, this pessimism has changed to the undue optimism of "Africa Rising," with economic growth that is unlikely to be replicated or sustained for very long.
However, per capita GDP in Africa is still way below that of industrialized countries. The dominant reason for this is held to be bad governance and poor institutions, but this argument rings false. For example, the Chinese economy has clearly expanded massively in recent years without good governance in the Western sense.
Morten's main message is quite simple. He argues that we "need to rephrase the central research question about African economic growth. The question is not 'Why has Africa failed?' but 'Why did African economies grow and then decline, only to grow again?'"
The encouragement for a critical historic reading of African economic is useful, but Morton doesn't go far enough. He recognizes that the "GDP numbers tell us too little about what has really happened or about whether living conditions on the African continent are improving." But then he says little to differentiate between average economic growth of a region and its impact on the 99 Percent, or even the bottom 50 percent of the population.
Recent economic growth in Africa has taken place in societies that are significantly more unequal than they were in the 1960s. As a result, most of the recent growth has been grabbed by an already rich ruling elite. Many Africans are still living in chronic poverty that is not significantly better than when many gained independence in the 1960s. Redistribution of wealth and income resulting from collective action by the working class and other poor people of Africa would actually achieve significant poverty reduction, something that the economic growth of recent years has not achieved.
Morten also points out that the economic data on Africa is relatively sparse and inaccurate, but then uses this as an excuse for little real action having been taken on poverty reduction. As a result of this poor data, poor theories are developed, especially about the poor of the continent.
Morten does acknowledge that some of the supposed causes of poor economic growth are better seen as symptoms of growing poverty. The real value of public servants' salaries reduced significantly in the 1980s across many African countries, for example, leading to increased corruption and a deterioration in governance.
MORTEN PROVIDES a very useful explanation of why Western policies and technological development cannot simply be grafted onto the current reality of Africa. Was it really poor political institutions that explain why the plow, for example, was not adopted more widely and more quickly across Africa?
Morten answers with three simple propositions. First, trypanosomiasis--sleeping sickness, carried by the tsetse fly--is endemic to large areas of sub-Saharan Africa except for South Africa. At least in the core tropical forest zone, its prevalence made it impossible to keep cattle, and so the plow was not efficient.
Second, land was relatively abundant, and so shifting cultivation was still possible, and there was no incentive to adopt labor-intensive practices like plowing.
Finally, tropical soils are fertile only to a shallow depth and the risk of erosion is significantly increased through the adoption of plowing. A similar effect was dramatically shown in the Great Plains of the U.S. in the 1930s, when millions of acres of natural grassland was plowed to plant wheat. The result was the Dust Bowl.
This is an important lesson which many aid agencies have yet to learn. There are no simple or standard answers--like the calls for "good governance" to be adopted across sub-Saharan Africa. Successful reform is complex and has to fit and be appropriate for local conditions.
As Biodun Olamosu and I outlined in our recent paper on the economic history of Africa since independence, Morten accepts that Africa's economic growth failure in the 1980s and 1990s happened because of a combination of external economic shocks and (as he understates) "a less-than-perfect policy response."
The result, as Morton accepts, was a series of misguided structural adjustment policies. Dependence on world markets for primary commodity exports led to a convergence of negative economic performance in the 1980s, with only a few exceptions. African economies embarked on relatively homogeneous policies that were not suited to heterogeneous country conditions.
Morten dismisses Karl Marx by saying that Marx wrote that "the more developed countries showed the least developed the image of their own future" and this interpretation of economic development has been debunked.
Despite this, there is much that we can learn from Morten's short book, especially his encouragement for non-economists to read economics more critically and the need to analyze the specific conditions of individual African, economies rather than generalizing from the European experience.
We have to properly understand actual economic history and how and why different institutions have developed and the subtle nuances between them. As Morten concludes, we should focus on how African economies work, rather than only explaining why they don't.
However, this book is only a step in the right direction--we still need to develop a deeper understanding of African economies from the point of view of the poor and working classes and how their collective action could help to bring about the fundamental change and redistribution of wealth and power that is so badly needed.