By David Ruach Tang,
March 24, 2016(Nyamilepedia) —– Sudan is the youngest country in Africa and in the world. It has many lessons to learn from the rest of the world and also opportunities to develop its economy. It should not re-invent the wheels. As a country which has just emerged out of protracted civil war and inherited development problems from the old Sudan, it should strive to promote and sustain its economic development. Development in this context is understood as the combination of steady and high rates of economic growth and structural change in the productive system, both domestically and in its relationship with the international economy. South Sudan needs to adopt an economic paradigm that can help its citizenry alleviate poverty and backwardness. It can learn from developmental state economic paradigm adopted by some African and South -East Asian countries.
International political economy scholars refer to state-led macroeconomic planning in South East Asia as developmental state or ‘hard state’. These countries- Japan , South Korea, Singapore –City State, Hong Kong Taiwan and Malaysia , sometimes known as ‘Asian Tigers’. Some or most of these countries were initially impoverished and product of conflict and war, like the case of, Japan, Taiwan and South Korea. Nevertheless, they later made a tremendous leapfrog in economic growth and steady development that ranked them amongst the top emerging economies in the twentieth first century.Thier economic success is attributed to their exceptional capacities to implement industrial and economic policies leading to phenomenal economic growth.
This author embarks on reviewing the development economic paradigm hoping that it can offer a hopeful solution to South Sudan’s economic yearnings. South Sudan does not have substantial economic model to follow, this is the argument of the author of this article. As a result, it ended up in failure and misguided economic path. Thus, the country has enormous development challenges to which I refer to as economic grievances of South Sudan. My second thesis here is that free market economy as alleged by the World Bank and International Monterey Fund (IMF) has failed African countries and South Sudan in particular. Development state economic model as started and implemented by some African countries, although not panacea, can offer a better economic return for the impoverished and conflict–ridden South Sudan. It can have a lesson learn and benchmark best experiences from countries with similar experience emerging out of protracted conflict and abject poverty.
Concept of Developmental State economic Paradigm and Asian Tigers experience.
Different scholars in the field of international political economy have put up three economic paradigms namely neo-classical or neo-liberalism, dependency theory and developmental state economic models. Amongst the three economic models, the paper attempts to deal with in-depth discussion only on developmental state economic paradigm and slightly touches on the other economic models.
Developmental State Economic Paradigm.
The development state economic model in international political economy was first coined by Chalmers Johnson in late 1960s (Leftwich Adrain, 1994). Citing Japan as an example, he focused on the state’s economic development policy measures of far-sighted intervention by bureaucrats to accomplish that objective. Japan had itself led the industrialization drive- i.e. the developmental functions (Meredith, 1999). Specifically, developmental state means a government with sufficient organization and power to achieve its developmental goals. This qualifies the state to be able to prove consistent economic guidance, rational and efficient organization, and the power to back up its long- term economic policies.
Johnson defines ‘developmental’ state as that in which the state directly intervenes to influence the direction and pace of economic development process. For the allocation of economic resources, it does not rely on the uncoordinated influence of the market forces, like neoliberal economic model.
This developmental state economic paradigm suggests a starkly opposite message to the neo-liberalism. According to the experience in selected East Asian countries- the tiger economies, achieved miracles by not selecting and disciplining industries as advised by the World Bank. Developmental state intervenes directly in the economy to promote growth of new industries and to reduce the dislocations caused by shifts in investment. The poor are becoming less poorer when the state directs the economic growth.
Characteristics of the Developmental State are:-
- Emphasis on the market share over profit
- Economic nationalism and focus on long term economic programme
- Protection of fledging domestic industries
- Focus on foreign technology transfer
- Large government bureaucracy ( Technocrats led economic growth and development by establishing specialize institutions the economic growth )
- Rationality , meritocracy , and professional bureaucracy
- Improved infrastructure for business by state
- Enhancing Public –Private partnership in development
- Foreign Direct investment and
- An Export –oriented policy.
- Prioritization of economic growth over political reform
- Legitimacy and performance oriented governance
- Skepticism of neoliberal and the Washington Consensus
- Emphasis on technical and vocational education
- Alliance between the state , labour and industry, called corporatism
- Institutional encouragement for saving and strategic credit and .
- Emphasis on human resources development and capacity building.
In reference to above characteristics, the central formulation of developmental state theory can be summarized as follows: – firstly, a particular industrial policy is required to rapidly transform the ‘‘easy stage’’ of import-substituting industrialization to export-oriented industrialization (EOI). This industrial policy requires that promising industries and sectors are selected and then protected, subsidized, and disciplined. Secondly, the state needs a strong capacity to implement and sustain ‘‘big push’’ programmes. The state must also have an ability to insulate itself from particular interests in society. State capacity and insulation are two pillars of state autonomy, and usually they are embodied in a bureaucratic nodal agency that can coordinate policies.
Finally, the state is both autonomous and also embedded in society. There is a tight network of informal institutional linkages between economic planners in the state and business sectors in society. For the development state to produce economic miracles it is necessary to set industrial policies characterized by Export Oriented Industry (EOI), state autonomy (capacity and insulation), bureaucratic coordination institutions and embeddedness. This embeddedness helps the state to adopt optimal industrial policies that maximize industrial interests of the nation and its people.
Developmental state theory however has been so successful in explaining the remarkable East Asian economic performances that even the World Bank the centre of neo-liberal doctrine, has come to admit the role of the state and to incorporate some of its elements in its recommendations to other developing countries. In fact, state directed industrial policy is not just an East Asian phenomenon; it has a strong affinity with some European countries’ mercantilism in the early nineteenth century. As explained by Chang (2002) state intervention in the economy was not a specific historical response in East Asia. It is rather a universal feature common to all of the successful economies- Britain and the USA, at their early stage of industrialization, followed developmental state economic model. It is currently hailed by liberal market advocates as a paragon of success.
Fundamental Features of Developmental State Economies
The basic requirements for developmental state in South East Asia countries could as well be applicable in African political economy as happened in Botswana and Mauritius. One believes that South Sudan needs developmental state economy policy because of its poverty and underdevelopment.
- Development‐Oriented Political Leadership
Numerous analysts highlight the essentiality of development‐orientated political leadership bound together by a powerful economic and political ideology focused on development. In the case of the East Asian developmental, we states have observed that the political elites in these countries were able to devise functional state institutions that facilitated both political stability and economic development. These elites gave the bureaucracy sufficient scope to take initiatives and act authoritatively in pursuit of the desired development goals (Weiss 2003: 24; Wade 1990). Deyo observes that the unique capacity of the East Asian states was rooted in the political alliances, domestic authoritarian rule, and effective economic institutions – resulting in the effectiveness of state intervention in the market place (Deyo 1987). As aptly captured by Wade:
“While the bureaucrats ‘rule’, politicians ‘reign’. Their function is not to make policy but to create space for the bureaucracy to manoeuvre in while also acting as a ‘safety valve’ by forcing the bureaucracies to respond to the needs of the groups upon which the stability of the system rests: that is, to maintain the relative autonomy of the state while preserving political stability” (Wade 1990: 26).
Circumstances which give rise to a development‐oriented political leadership can be quite diverse. Based on the initial experiences of East Asian countries Johnson and other analysts link the origin of such political leadership to conditions of “systemic vulnerability” comprising three major elements, namely a broad coalitional commitment, scarce resource endowment, abject poverty and severe security threats (Doner et al. 2005: 329; Woo‐Cumings 1999: 9; Castells 1992: 57).According to Waldner, this leadership grows out of a political context characterized by the virtual absence of pressure to incorporate popular classes and engage in state‐based side payments (populist side payments), thereby giving these leaders scope to provide institutions conducive to economic development. Basically, he argues that in developmental states state‐building and institutional arrangements precede incorporation of the lower classes (Waldner 1999:2).
Other analysts for example ( Weiss 2000; Madrone 1990; Pempel 1999: 139, 175) suggest that a development‐oriented leadership evolves from a clear consensus within the governing elites, both administrative and political, over the scope and direction of development .As a result of their high levels of acumen and sufficient economic credibility, these political elites were able to win the trust and cooperation of the bureaucrats as well the private sector (Huff et al. 2001). Finally, Amsden and Wade argue that interests of political survival and legitimacy propelled political elites towards a developmental state orientation (Amsden 1989, Wade 1990). It is also claimed that these leaders were either relatively uncorrupt, non‐predatory or had limited personal gains, and thus did not impede investments but rather facilitated the expansion of national productivity. On the basis of these observations, it be concluded that state‐directed development under the developmental state approach is not just about policy but, more importantly, it is about sustained political will to govern the market in accordance with development aspirations.
Adrian Leftwich (2004 : 52) introduced both a theory and model of the developmental state that is centrally premised on political considerations. He emphasizes that politics is the dominant variable which determines the concept of the developmental state as well as the developmental success or failure in all human societies. To use his own phrase, “development is inescapably political” (Leftwich 2000: 4). As he puts it, “… the explanation for the different development capacities and records of (.Third World democracies turns crucially on the primary role of politics in shaping the character and capacity of the state” (Leftwich 1998: 55). In his view, appropriate politics in the sense of context, dynamics and purpose have been central in shaping the structures of developmental states, their development aims as well as their impressive performance (Leftwich2000: 169).
According to Leftwich, the emergence and consolidation of a developmental state is conditioned by the following fifth major factors (Leftwich 2000: 160‐65). First, the developmental state is governed by political elites which is developmentally‐oriented and which demonstrates high levels of commitment and will in attaining economic growth. The state must possess sufficient capacity to influence, direct and set the terms of operation for private capital (Leftwich 2000: 163‐4). Second, the developmental state is managed by a powerful, professional, highly competent, and insulated with career‐based bureaucracy. Third, the emergence of developmental states is associated with social contexts in which the presence and role of civil society has been weak, negligible and subordinate. Fourth, developmental states exhibit high levels of capacity for effective economic management of both domestic and foreign private economic interests. For instance, in the cases analyzed economic bureaucratic institutions were entrusted with policy authority and the responsibility of managing the interaction between the state and key economic actors. Fifth, the legitimacy of the political elite to govern is tightly linked to the state’s ability to perform. He observes that while most of the regimes in developmental states were undemocratic, they tended to be sufficiently developmental (Leftwich 2000: 174).
2 Autonomous and Effective Bureaucracy
Compared to other developing regions the autonomy, capability and effectiveness of the bureaucracy in the East Asian developmental states is outstanding (Clapham 1996: 162; Wong 2004; Booth 1999: 305). This is traced back to the presence of bureaucracy in the Weberian tradition which prioritizes meritocratic recruitment, provides promotion incentives, shows rationality and guarantees high levels of prestige and legitimacy to bureaucratic officials (Johnson 1982:). Onis supports this observation:
“Rigorous standards of entry not only ensured a high degree of bureaucratic capability, but also generated a sense of unity and common identity on the part of the bureaucratic elite. Hence the bureaucrats were imbued with a sense of mission and identified themselves with national goals which derived from a position of leadership in society” (Onis 991).
Long‐term career rewards created commitment and a sense of “corporate coherence” that gave the bureaucratic apparatuses a certain kind of autonomy (Evans 1995: 12‐13, 48‐9). Moreover, the bureaucracy was able to exhibit such uncommon levels of autonomy and effectiveness when they were effectively insulated by the political elites from unproductive interference (Pempel 1999:144). As a result, decision‐makers and technocrats were able to effectively formulate economic policy, forge business alliances and direct state interventions in the economy (Aryeetey 2003). Most notably, the bureaucracy were not only able to protect itself from particularistic private sector interests but it was also strong enough to cooperate with the same in a productive manner (Beeson 2004: 29). These bureaucracies were also able to construct markets as well as promote actors to operate in these markets. They also set the performance criteria and disciplined the private sector firms that did not measure up to the set standards of performance (Booth 1999: 305). By using “carrots” and “sticks”, in other words, the bureaucracy was able to influence the industries’ decision‐making (Leftwich 1995: 412). More crucial, the state itself was disciplined in a manner that prevented predatory, disruptive rent‐seeking behaviour or the abuse of power (Admen 1989: 148).
Amsden argues, in conclusion, that the responsibilities assumed by the bureaucracy “provide supporting evidence for the proposition that economic expansion depends on state intervention to create price distortions that direct economic activity toward greater investment” (Amsden 1992: 14).
3 Production‐Oriented Private Sector
A production‐oriented private sector has been at the centre of the rapid progress of industrialization and modernization that occurred in the East Asian developmental states (Akuyz 1999: 1; Booth 1999: 306). Delivering high economic performance with necessary speed and flexibility was set as the overarching development goal by these states (Amsden 1989: 316). As observed by Amsden, state intervention in the East Asian developmental states marked a different type of capitalism, in which the primary purpose of intervention was to promote the interests of the business sector, create conditions for capital accumulation and productivity improvement (Amsden 1989). In pursuit of this goal, the state utilized a wide range of institutional instruments to poke and prod domestic firms to meet domestic and international business standards, productivity levels, and organisational and technical capacities.These instruments included selective and strategic use of protectionism, provision of industrial subsidies and programmes tied to performance standards and targets, and the creation of business coalitions amongst industrial capital and financial capital and the state (Wong 2004: 350).
Based on long‐term institutionalized alliances among political power, financial and industrial capital, these state‐private sector partnerships were crafted on the principle of reciprocity, such as connecting subsidies to performance, and acted as an incentive for productivity (Wade 2000; Woo‐ Cunnings 1999: 15). For instance, the use of exports as a criterion for allocating credit and the provision of subsidies encouraged the adoption of international standards, and accelerated the diffusion of technology (Amsden 1989: 143‐44). The state was not only able to secure the survival and the ability of the private sector to compete at any level but, more crucially, was able to “create” and “reward” in addition to “picking” good performers as well as “punishing” bad ones (Wade 1990; Amsden 1989: 16). In this way, the state was able to promote long‐term investments among the industrial elites that resulted in sustained industrial development in East Asian countries (Low 2004: 5).
4 Performance‐Oriented Governance.
Developmental states are found to enjoy the support of their constituencies because they are associated with promoting rapid economic growth and providing economic benefits to both the ruling elites and the general citizenry (Weiss 2000: 26; Chang 2003d; Leftwich 2002: 270). This approach to development has commonly been referred to as “growth with equity”. As observed by Chang:
“…the achievements of the region’s economies did not stop at income growth. Their records in terms of improvements in infant mortality, life expectancy, educational achievements and other indicators of ‘human development’ have also been very impressive, even considering their income growth” (Chang 2006: 1).
There are two major issues worth noting with regard to the governance orientation of the developmental state. First, the ruling elites in these countries demonstrated high levels of commitment to poverty reduction. They began to address equity concerns from the early stages of the transformation process on (Booth 1999: 304; Akuyz et al. 1999: 43; Hort/Kuhlne 2000: 167‐168).20 As a result, the rapid industrial growth in East Asia was paralleled by a favourable pattern of income equality, low unemployment and the near elimination of grinding poverty (Deyo 1987: 2).
Second, successful economic performance was the primary source of political legitimacy. Political elites largely depended on delivering growth with equity as a means of strengthening their legitimacy and support base (Kwon 1999; Yang 2000; Koo/Kim 1992: 125; Kim 2007: 120). Haggard observes that fast economic development generated a broader “growth coalition” and supportive policies which sustained an institutional and political framework, and this success became the survival basis and legitimacy of the regimes in East Asia, (Haggard 1989; 1990). As aptly put by Johnson:
“The source of authority in the developmental state is not one of Weber’s ‘holy trinity’ of traditional, rational‐legal, and charismatic sources of authority. It is, rather, revolutionary authority: the authority of a people committed to the transformation of their social, political, or economic order. Legitimation occurs from the state’s achievements, not from the way it came to power” (Johnson 199: 53).
Berger concludes that the experience of East Asian developmental states is “a case of successful industrialization that combines growth with equity from the beginning of the modernization process” (Berger 1987: 163).
Developmental State in African Countries and South Sudan lessons.
The usefulness of the “Developmental state” concept, in relation to African politico- economic conditions, has aroused interest in academic as well as development cooperation circles.
Meyns and Musamba ( 2010) for example posit that the success of state‐led economic development in East Asia during 1970s and 1980s made the developmental state approach a new perspective in the development discourse. The concept of the “developmental state” became the theoretical underpinning of their success. The looming question for South Sudan and many African countries is whether they can learn from the East Asian experiences and thereby emulate the achievements to overcome Africa’s persistent development problems.
It is not that African countries had not embarked on development endeavour of their own since gaining political independence in the 1960s and ‘70s. Rather their early years of independence were characterized by state‐led developmentalism that led to short-run economic growth and improvement of social infrastructure. But this ultimately failed to provide sustainable progress. This failure was attributed to the vicissitudes of world markets, the predatory nature of the state in many cases, and the statist develop mentalism of the 1980s had led to economic demise and enduring poverty crisis. Those post‐colonial experiences are today regarded as developmental failures (Meyns and Musama, 2010).
The economic demise made many African countries run into debt crisis that forced them to embark on structural adjustment programmes (SAPs) in order to access new credits from the International Monetary Fund (IMF) and World Bank as well as bilateral donors. These SAPs completely made a turnaround of economic policies from the post-colonial period statist approaches to the market‐oriented reforms of the 1980s and ‘90s. However, the expected outcome did not materialize. The SAP‐inspired decades in Africa became the “lost decades”.The persistence of the poverty crisis moved the international donors to refocus their aid programmes to debt relief‐funded poverty reduction strategies (Menysn and Musama, 2010).
By end of 1990s, the failure of SAPs reopened the search for viable development strategies which led to the current developmental state debate in Africa (Johnson,2004). It was widely agreed that there could be no question of simply returning to post‐colonial developmentalism (Meyns and Musma, 2010). Henceforth, attention was directed to the successful development experiences of East Asian countries that were in comparable levels of development in 1960 (but are now marching far ahead) with African countries. The starting point for the new debate is those significant experiences. Chalmers Johnson strongly emphasized that the East Asian countries’ achievements were neither based on Soviet‐type command economies nor on laissez‐faire free‐market economies, but on “market‐conforming methods of state intervention”, i.e. a “capitalist developmental state” (Johnson 2004 : 199).
Developmental States of Africa.
Botswana and Mauritius were the two African countries in sub-Saharan Africa that embarked on development trajectories soon after they gained independence in the 1960s. Both countries have been accordingly described as developmental states (Johnson, 1982). They were held to be exceptions to the rule but the bulk of sub-Saharan African countries were seen to lack the determined focus on development needed to establish a developmental state. The post‐colonial states were controlled by patronage oriented political rulers who were seen not solving the development challenges but were themselves hindering development. Because of lack of development leadership in many African countries, the states were characterized as “the predatory state”, “the weak state”, “the neo‐patrimonial state” etc. These two sub-Saharan African countries- Botswana and Mauritius, have witnessed tremendous economic growth. That economic growth earned Botswana to become one of the few countries in Africa to join middle income countries in the world. However, many could attribute Botswana’s steady economic growth to natural resources it has, rather than effective political leadership and development plan programme.
The developmental state debate is gaining positive understanding among some African governments but that does not prove the existence of a developmental state. It is Botswana that has been referred to in the academic literature (Kunzler 2004, Lockwood 2006), as being a “democratic developmental state” (Leftwich 2000: 131, 154, 172, Mkandawire 2001: 310). Botswana is therefore a suitable example in closely looking at the problems and prospects of establishing a developmental state in an African country.
- Botswana. When Botswana gained political independence in 1966, it seemed an unlikely candidate to become a successful developmental state. It was one of the poorest countries in Africa, its expansive territory (nearly twice the size of Germany) consisted largely of semi‐arid desert land, its small population (only approx. 600,000 at the time) represented a population density of just 1 per square km, and it was a landlocked country surrounded by hostile white settler‐dominated neighbours (South Africa, South West Africa/Namibia, and Rhodesia/Zimbabwe). Edge aptly summarized its situation that: “At independence in 1966 Botswana was struggling with issues of basic survival, with some observers regarding the country as a non‐viable entity” (Edge 1998:335).
Embarking on independent nationhood under these circumstances presented an enormous challenge to the new government of Botswana. Promoting the socio‐economic development of the country and establishing democratic system were the two pillars of Botswana’s post‐independence trajectory. Given its situation as one of the poorest countries in Africa at independence, with a per capita income of just US$ 60 per year, and its vulnerability as a landlocked nation surrounded by hostile neighbours, Botswana’s economic growth in the past four decades has been astonishing, and stands in marked contrast to most other sub‐Saharan African countries. By 1991 its income per capita had reached US$ 2583 (Edge 1998: 337) and by 2008 had risen further to the level of US$ 6470.1 Today Botswana is ranked by the World Bank as an upper middle income country, together with only few other sub‐Saharan African countries.
Against the background of developmental failures in many sub‐Saharan African countries, Botswana has been set apart as an “African growth economy” (Hartland‐Thunberg 1978). Other analysts have even spoken of “an African miracle” (Samatar 1999). Critical commentators have pointed to the one‐sided structure of the economy and autocratic features of the polity (Good 2008; Hillbom 2008). The issue of equity is argued that although Botswana has done much to improve social infrastructure, poverty levels still remain high. The discrepancy between the country’s impressive GNI per capita and its Human Development Index (HDI) rank at 0.694 (2007) is in the medium human development range and above most other African countries. This is well below Botswana’s own GNI per capita ranking. Its HDI rank is 125, while its GNI per capita rank is 60 – a difference of 65, which is a clear indicator of existing income inequalities. All this development comes about because of its marvelous economic policy- the developmental state economic paradigm coupled with the natural resources such as diamonds and boom agricultural produce and cattle export such as meat product.
- Ethiopia. Another recent focus of the developmental state debate in Africa has been Ethiopia. After the Ethiopian People’s Revolutionary Democratic Front (EPRDF) overthrew the dictatorial regime of Mengistu Haile -Mariam in 1991, Ethiopia embarked on developmental state economic policy. As a result of this economic policy, it achieved an immense economic growth. Ethiopia, known by its poverty and famine, is now enjoying tremendous economic growth because of the effective economic policy its leadership had adopted. Millions of Ethiopians who lived under poverty line during 80s&90s are now lifted out of abject poverty. The country has since then been enjoying a tremendous steady economic growth between 7%- 11.5% for the last 10 years.
III. South Africa. South Africa is another country in Africa which has recently started introducing developmental state economic policy into its development programme. The theme emerged in the political arena in the run‐up to the national elections in 2004. The ruling African National Congress (ANC) was anxious to instill new purpose into its “tripartite alliance” with the more radical Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP). To retain the vote of their supporters, ANC introduced the developmental state economic policy to its campaign programme and subsequent party documents. The short‐term aim of serving “as an ideological glue to hold the alliance together” was achieved (Southall 2006: 251). However, there have been lively debates on the problems and prospects of applying the concept to South Africa. In his introduction to the 2005‐2006 edition of the South African Yearbook “State of the Nation,” Southall identified divergent positions in the country with regard to the developmental state. He expressed some doubts as to whether South Africa had adequate state capacity for the establishment of a developmental state. Nevertheless, he asserted that important lessons can be learnt from the East Asian experiences of developmental states .
The debate on the developmental state in Africa has revealed two different positions. One view posits that the conditions which facilitated the successful East Asian developmental state experiences do not exist in Africa. The other argues that following the failure of post‐colonial state developmentalism and subsequent market‐oriented structural adjustment. Africa only needs a “democratic, developmental and socially inclusive” strategy perspective (Mkandawire 2005: 47).
Lesson for South Sudan
South Sudan has a country emerging our of internment conflict need to adopt developmental state economic model. It should follow the suit of the rest of African and South East Asian countries that have embarked on development state economic paradigm path to emancipate its people from abject poverty and massive undervdelopment.
David Ruach Tang is an academic and a member of the SPLM/SPLA- IO Advance Team. His areas of research interests include education, civil service reforms and develop-mental state political economy. He can be reached with the following email address: email@example.com
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