- Email: [email protected]
Our Continent, our Future: African Perspectives on Structural Adjustment
Food Policy 25 (2000) 623–627 www.elsevier.com/locate/foodpol
Book review Our Continent, our Future: African Perspectives on Structural Adjustment Thandika Mkandawire and Charles C. Soludo; Codesria, Dakar, IDRC, Ottawa, and Africa World Press, Trenton NJ and Asmara, 1999, pp. 176+xiv, ISBN 2-86978074-5. This volume is a synthesis of 30 case studies which have been carried out mainly by African researchers, on the effects of structural adjustment in Sub-Saharan Africa. A companion volume of the case studies will follow. The authors call for an African perspective on structural adjustment and for an African policy solution rather than one which is effectively imposed by the Bretton Woods Institutions. The authors argue that it is important to start with initial conditions. They therefore begin with a review of Africa’s economic performance since the early 1960s. They argue that Africa’s post independence performance was in many ways relatively good in the early years and that for most countries the deterioration set in with the oil crisis of 1973–4 and the droughts of the same period. They point to three important distinguishing characteristics of African economies: first their extreme vulnerability to changes in world trade conditions; secondly their vulnerability to climatic extremes, and thirdly, the ‘prevalence of civil strife and wars’. However, they also note that domestic policies towards agriculture, and the particular form of import substitution industrialisation which most countries adopted, left these economies even more vulnerable to disturbances in the world economy. The authors then go on to look at the diagnoses of Africa’s subsequent poor performance and the prescriptions which have been offered. They quite rightly complain about the narrowness of diagnosis and prescription, largely based on neoclassical economic theory. However, even the attempts at the new political economy which recognises the importance of institutions and interest groups in economic decisionmaking, are also largely derided. The excessive amount of blame which has landed on the shoulders of state bureaucracies, has left civil servants demoralised, and unlikely to generate an efficient state. The authors wryly note the contradiction between the early exclusion of domestic public servants from structural adjustment policymaking and the later assertion by the international institutions that local states should ‘own’ these policies in which they had no part in framing. The third part of the book overviews the experiences of adjustment for those countries that adopted structural adjustment packages. Most of this chapter covers by now well trodden ground. All the inconsistencies of the World Bank’s approach to assessing its adjustment policies are exposed and it is clear that there is little evidence to suggest that structural adjustment has been a success, even where satisfactory measures of success can be identified. If adjustment policies are working
624
Book review / Food Policy 25 (2000) 623–627
then it might be expected that in the short run, GDP growth declines and the balance of payments worsens. However, what tends to happen is that in the short-run aid predicated on the adoption of adjustment policies induces increased growth and an improved balance of payments, thus suggesting the rapid success of policies. This instant success is also helped by some of the policies—for example, formerly smuggled cash crops are exported legally as producer prices are increased. In the longer run these effects fade and growth slows down. As the authors note, World Bank ‘success stories’ later disappear from the picture and are replaced by other ‘successes’ until they too fade away. For the authors, it is the failure to sustain recovery that requires some explanation. The authors propose a set of policies which break out of the ‘narrow fundamentals’ of the neoclassical framework by combining both state intervention and market economy. They argue for an investment-based strategy based on competitive markets. They argue for an efficient state, directing development strategy, raising educational attainment, and channelling credit to agriculture to make a ‘green revolution’ and to industry, where the state ‘picks winners’ in export markets. They oppose exportled strategies which rely on traditional export crops (in spite of calls for a productivity increasing ‘green revolution’) because this leaves the economies overly vulnerable to world market changes. This element of ‘export pessimism’ pervades the volume, although declining terms of trade and fluctuating prices have always been a feature of the markets even during the relatively successful period of Africa’s post-independence development. This volume is a useful and highly readable account of Africa’s post-independence development and adjustment experience. However, there are several problems with the approach taken by the authors. First, it is difficult to find much in the analysis of the adjustment experience that is new or particularly ‘African’. The discourse is that of orthodox ‘western’ economics, while the sources used (with the exception of those to be published in the companion volume) are predominantly non-African. Similarly, the discussion of what needs to be done in the areas of human capital development, fiscal capacity, civil service reform, debt reduction, and governance, for example, would not find itself much at odds with a lot of current World Bank thinking. Secondly, the problem is therefore not of what needs to be done but of how to do it. While it is true that an efficient state with strong capacity is more likely to generate an export-led industrialisation than a weak state, the discussion begs the question of why strong states with a high level of technological capacity are missing from the continent. This requires a more historical approach than is taken here, and a more multidisciplinary one, looking at ‘initial conditions’ much further back than the point taken by the authors. Finally, not all African countries had the same post-independence ‘initial conditions’, not only in terms of GDP, but also as regards the range of institutions bequeathed to them by the colonial regimes. Although many African countries face the same kinds of problems, it might be more useful to look at some of the differences in their specific histories and performance rather than seek some continent-wide explanation and prescription. Peter Lawrence
Book review / Food Policy 25 (2000) 623–627
625
Department of Economics, Keele University, Keele, Newcastle ST5 5BG, UK E-mail address: [email protected] PII: S 0 3 0 6 - 9 1 9 2 ( 9 9 ) 0 0 0 8 4 - 6
Food Security. Factors that Could Affect Progress Toward Meeting World Food Summit Goals夽 Report of Congressional Requesters; United States General Accounting Office, Washington, D.C., pp. 101, GAO/NSIAD-99-15, March 1999 The United States General Accounting Office (GAO) produced this report at the request of two United States senators and one congressman. It reviews the outcomes of the 1996 World Food Summit and comments on some of the key factors that could affect progress toward achieving the summit’s goal ‘to achieve food security for all and to an ongoing effort to eradicate hunger in all countries, with an immediate view to reducing the number of undernourished people to half their present level (estimated at more then 800 million) no later than 2015’, and the implementation of summit’s action plan that includes seven broadly stated commitments, 27 objectives and 181 specific actions (FAO, 1997). The report is based on analysis and synthesis of information ‘from a wide variety of primary and secondary sources’. This is a worrying report, which has a generally negative tone. It is especially concerning as it comes from a country that should have a major role to play if the summit’s action plan is to be implemented and its goal achieved. Among the factors that may affect the realisation of the summit’s goal, the report focuses on trade reforms, conflicts, agricultural production, and safety net programmes and food aid. The need to develop a food security information system, to monitor and evaluate implementation of the summit’s action plan, and to co-ordinate international cooperation, are stressed. The report has a number of useful appendices which contain data on recent trends. On the current status of global food security, the report finds that the method employed by FAO to estimate the prevalence of chronic undernourishment at the country level to be ‘subject to a number of weaknesses’. FAO estimates are based on a minimum level of energy requirements that allows for only light physical activity (1,720 to 1,960 calories a day). A study by the Economics Research Service of the U.S. Department of Agriculture in 1997, based on a higher standard of 2,000 to 2,200 calories a day, estimates the number of people who could not meet their 夽
One copy of the report can be obtained free of charge. Additional copies are $2 each. Orders by mail: U.S. General Accounting Office, P.O. Box 37050, Washington, D.C. 20013 or on INTERNET: [email protected]
Book review Our Continent, our Future: African Perspectives on Structural Adjustment Thandika Mkandawire and Charles C. Soludo; Codesria, Dakar, IDRC, Ottawa, and Africa World Press, Trenton NJ and Asmara, 1999, pp. 176+xiv, ISBN 2-86978074-5. This volume is a synthesis of 30 case studies which have been carried out mainly by African researchers, on the effects of structural adjustment in Sub-Saharan Africa. A companion volume of the case studies will follow. The authors call for an African perspective on structural adjustment and for an African policy solution rather than one which is effectively imposed by the Bretton Woods Institutions. The authors argue that it is important to start with initial conditions. They therefore begin with a review of Africa’s economic performance since the early 1960s. They argue that Africa’s post independence performance was in many ways relatively good in the early years and that for most countries the deterioration set in with the oil crisis of 1973–4 and the droughts of the same period. They point to three important distinguishing characteristics of African economies: first their extreme vulnerability to changes in world trade conditions; secondly their vulnerability to climatic extremes, and thirdly, the ‘prevalence of civil strife and wars’. However, they also note that domestic policies towards agriculture, and the particular form of import substitution industrialisation which most countries adopted, left these economies even more vulnerable to disturbances in the world economy. The authors then go on to look at the diagnoses of Africa’s subsequent poor performance and the prescriptions which have been offered. They quite rightly complain about the narrowness of diagnosis and prescription, largely based on neoclassical economic theory. However, even the attempts at the new political economy which recognises the importance of institutions and interest groups in economic decisionmaking, are also largely derided. The excessive amount of blame which has landed on the shoulders of state bureaucracies, has left civil servants demoralised, and unlikely to generate an efficient state. The authors wryly note the contradiction between the early exclusion of domestic public servants from structural adjustment policymaking and the later assertion by the international institutions that local states should ‘own’ these policies in which they had no part in framing. The third part of the book overviews the experiences of adjustment for those countries that adopted structural adjustment packages. Most of this chapter covers by now well trodden ground. All the inconsistencies of the World Bank’s approach to assessing its adjustment policies are exposed and it is clear that there is little evidence to suggest that structural adjustment has been a success, even where satisfactory measures of success can be identified. If adjustment policies are working
624
Book review / Food Policy 25 (2000) 623–627
then it might be expected that in the short run, GDP growth declines and the balance of payments worsens. However, what tends to happen is that in the short-run aid predicated on the adoption of adjustment policies induces increased growth and an improved balance of payments, thus suggesting the rapid success of policies. This instant success is also helped by some of the policies—for example, formerly smuggled cash crops are exported legally as producer prices are increased. In the longer run these effects fade and growth slows down. As the authors note, World Bank ‘success stories’ later disappear from the picture and are replaced by other ‘successes’ until they too fade away. For the authors, it is the failure to sustain recovery that requires some explanation. The authors propose a set of policies which break out of the ‘narrow fundamentals’ of the neoclassical framework by combining both state intervention and market economy. They argue for an investment-based strategy based on competitive markets. They argue for an efficient state, directing development strategy, raising educational attainment, and channelling credit to agriculture to make a ‘green revolution’ and to industry, where the state ‘picks winners’ in export markets. They oppose exportled strategies which rely on traditional export crops (in spite of calls for a productivity increasing ‘green revolution’) because this leaves the economies overly vulnerable to world market changes. This element of ‘export pessimism’ pervades the volume, although declining terms of trade and fluctuating prices have always been a feature of the markets even during the relatively successful period of Africa’s post-independence development. This volume is a useful and highly readable account of Africa’s post-independence development and adjustment experience. However, there are several problems with the approach taken by the authors. First, it is difficult to find much in the analysis of the adjustment experience that is new or particularly ‘African’. The discourse is that of orthodox ‘western’ economics, while the sources used (with the exception of those to be published in the companion volume) are predominantly non-African. Similarly, the discussion of what needs to be done in the areas of human capital development, fiscal capacity, civil service reform, debt reduction, and governance, for example, would not find itself much at odds with a lot of current World Bank thinking. Secondly, the problem is therefore not of what needs to be done but of how to do it. While it is true that an efficient state with strong capacity is more likely to generate an export-led industrialisation than a weak state, the discussion begs the question of why strong states with a high level of technological capacity are missing from the continent. This requires a more historical approach than is taken here, and a more multidisciplinary one, looking at ‘initial conditions’ much further back than the point taken by the authors. Finally, not all African countries had the same post-independence ‘initial conditions’, not only in terms of GDP, but also as regards the range of institutions bequeathed to them by the colonial regimes. Although many African countries face the same kinds of problems, it might be more useful to look at some of the differences in their specific histories and performance rather than seek some continent-wide explanation and prescription. Peter Lawrence
Book review / Food Policy 25 (2000) 623–627
625
Department of Economics, Keele University, Keele, Newcastle ST5 5BG, UK E-mail address: [email protected] PII: S 0 3 0 6 - 9 1 9 2 ( 9 9 ) 0 0 0 8 4 - 6
Food Security. Factors that Could Affect Progress Toward Meeting World Food Summit Goals夽 Report of Congressional Requesters; United States General Accounting Office, Washington, D.C., pp. 101, GAO/NSIAD-99-15, March 1999 The United States General Accounting Office (GAO) produced this report at the request of two United States senators and one congressman. It reviews the outcomes of the 1996 World Food Summit and comments on some of the key factors that could affect progress toward achieving the summit’s goal ‘to achieve food security for all and to an ongoing effort to eradicate hunger in all countries, with an immediate view to reducing the number of undernourished people to half their present level (estimated at more then 800 million) no later than 2015’, and the implementation of summit’s action plan that includes seven broadly stated commitments, 27 objectives and 181 specific actions (FAO, 1997). The report is based on analysis and synthesis of information ‘from a wide variety of primary and secondary sources’. This is a worrying report, which has a generally negative tone. It is especially concerning as it comes from a country that should have a major role to play if the summit’s action plan is to be implemented and its goal achieved. Among the factors that may affect the realisation of the summit’s goal, the report focuses on trade reforms, conflicts, agricultural production, and safety net programmes and food aid. The need to develop a food security information system, to monitor and evaluate implementation of the summit’s action plan, and to co-ordinate international cooperation, are stressed. The report has a number of useful appendices which contain data on recent trends. On the current status of global food security, the report finds that the method employed by FAO to estimate the prevalence of chronic undernourishment at the country level to be ‘subject to a number of weaknesses’. FAO estimates are based on a minimum level of energy requirements that allows for only light physical activity (1,720 to 1,960 calories a day). A study by the Economics Research Service of the U.S. Department of Agriculture in 1997, based on a higher standard of 2,000 to 2,200 calories a day, estimates the number of people who could not meet their 夽
One copy of the report can be obtained free of charge. Additional copies are $2 each. Orders by mail: U.S. General Accounting Office, P.O. Box 37050, Washington, D.C. 20013 or on INTERNET: [email protected]