Hemmed In: Responses to Africa's Economic Decline

Thomas M. Callaghy and John Ravenhill, editors

New York

Columbia University Press

1993

Bibliographic Data

13. How Hemmed In? Lessons and Prospects of Africa's Responses to Decline

T HOMAS M. C ALLAGHY AND J OHN R AVENHILL

Introduction: A New Leader's Challenge

On November 2, 1991, Frederick Chiluba was sworn in as Zambia's newly elected president. An eloquent labor leader who had passionately opposed an IMF/World Bank economic reform effort in 1985-87, Chiluba is truly a democratic leader. Yet he was one well aware of the challenges that face him and his country, for few African countries have declined as seriously as Zambia. As a result, his inauguration speech is worth quoting at some length:

The stream of democracy--damned up for 27 years--is finally free to run its course as a mighty African river. Not because of arms, not because of bullets, not because of any other time, but the patience of Zambia with corruption, repression, and dictatorship had run out. The voice of the Zambian people, weak as it was at one stage, faint against the thunder of one party and one man, is once again strong, a roar asserting itself. But let us not forget that we cannot replace the tyranny of an elite with the tyranny of the many. The Zambia we inherit is destitute--ravaged by the excesses, ineptitude and straight corruption of a party and a people who have been in power for too long. When our first President stood up to address you 27 years ago, he was addressing a country full of hope and glory. A country fresh with the power of youth, and a full and rich dowry. Now the coffers are empty. The people are poor. The misery endless. The economic ills we suffer have come upon us over several decades. They will not go away in days, weeks or months. But we are determined that they will go away. They will go away because we as Zambians have the will to apply ourselves to do whatever needs to be done to rebuild this glorious country. In this present crisis, government alone is not the solution to our problems. For too long, government was the problem. The crisis needs discipline, hard work, honesty, clean government and a determination to grit our teeth, to look our problems squarely in the face, and to tackle them head-on. . . . We have the right to dream heroic dreams. But more importantly, we have the obligation to make them come true. For we know what works--freedom works. We know what is right--democracy is right. But what exactly is to be done? I believe we ought to concentrate on the basics. Our priorities must be the basic needs of the people of Zambia. One such priority is education. . . . Another is health care. . . . But most important of all is the need to create a sustained confidence in the socio-political stability of our country. . . . In our time of need, we will look to the world. Not for hand-outs, but for help to stand on our own feet again. To get well. . . . Zambia is not the center of the universe, but Zambia is the center of our universe. . . . Let's do whatever we can, every day to slowly pull ourselves through our sweat and toil, out of mud and to build a new Zambia where prosperity, decency, [and] Human rights are normal parts of life. 1

Chiluba clearly has a vision. He believes that Zambia is not hemmed in, but knows that difficult tasks lie ahead. Is Zambia, or the rest of Africa, hemmed in? ₂ If so, how and how much? Can it become less so? Can it pull itself out of the mud to become less hemmed in? And do it with democracy and outside help? After nearly thirty years of decline, can Zambia start over or will old logics, dilemmas, and tensions once again tear it to shreds? Can it, for example, switch from distributionist logics to productionist ones? What lessons have the chapters in this book elucidated as possible answers to these questions? The most obvious is that it will not be easy for Chiluba or other reform-minded leaders to break through the constraints they face.

Lessons: Can Africa Become Less Hemmed In?

Intractability and "Laundry Lists"

Few signs of economic recovery exist as Africa moves well into the 1990s. As several of the authors in this volume have stressed, the track record of attempts at economic stabilization and structural adjustment over the 1980s is very modest indeed. There were very few cases of successful "large reform," such as Ghana, and while there have been many cases of "small reform" the impact has been negligible on the overall economy. Is this the fault of the externally sponsored strategy? That depends on the expectations attached to it. The international financial institutions believed that altering the policy framework would bring relatively rapid improvement. They were wrong. As a result, they now talk quietly among themselves about Africa's "intractability," while cheerleading those seriously attempting economic reform in order to combat an increasingly prevalent "Afro-pessimism." Is there is a "better" counterfactual strategy, one more suited to African realities, out there somewhere just waiting to be discovered? Our answer, elaborated below, is a qualified no, itself a striking reflection of the degree to which Africa is "hemmed in" and of the fact that everybody's expectations have been unduly high given the complexity of African conditions.

As a result of this "intractability" in the face of policy change, the IMF and the World Bank have developed an increasingly long "laundry list" of relevant variables, ranging from defending the fragile ecology to protecting property rights via good "governance." In Africa, the Fund and the Bank have been learning by doing, and often experimenting without buffering much of the negative consequences of their often creative efforts. This laundry list is most evident in the World Bank's 1989 long-term perspective study, Sub-Saharan Africa: From Crisis to Sustainable Growth. ₃ Most of these variables are not easily susceptible to the effects of policy change. External actors have discovered that many things are necessary but not sufficient--correct policies that "get the prices right," investment, aid, voluntary lending, debt relief, political will and stability, accountability, decent levels of state capacity, and institutional and attitudinal change, for example. In a sense, this expanding laundry list is a "wish list" not generically unlike the one contained in the OAU's Lagos Plan of Action, which the Fund and the Bank criticized so strongly.

Consequently, the projected time frame for reform has moved, first from three to ten years and now from ten to twenty years. But as Green points out, the international financial institutions do not really know how to operate in such a lengthened time frame. Learning lessons and being able to apply them are different things. The IMF and the World Bank, and all other major actors, have their own capacity problems; they lack the detailed knowledge and data, analytical frameworks, institutional structures, and resources to implement the new lessons, especially since the larger contextual variables are both diffuse and daunting. The inability of the international financial institutions (IFIs) to come up with a clear and operational definition of "governance" is but one vivid example. ₄ In addition, the laundry list is now so long and broad that it is difficult to decide which items to work on first, how to go about doing so, and how to allocate scarce resources.

Thus, as Ravenhill points out in the opening chapter, there exist both a growing realization of complexity and a growing uncertainty about what to do. Creeping conditionality is but one indicator of this situation. The neoclassical economic strategy is elegant and parsimonious, a tight analytical framework; it is also off target in its expectations about what it calls "supply response." It is so because it has assumed the prior existence of a panoply of contextual factors that were linked to the rise of capitalism in Europe, and more recently in East Asia and selected parts of Latin America. These variables are the result of long-run historical processes that cannot be easily or quickly "built" through short-term policy manipulation. In short, neoclassical policy prescriptions have been extracted from the sociopolitical contexts in which they were historically embedded. Many Africans also see the task as daunting and the neoclassical prescription of linkage to the world economy as dangerous. They are quite understandably shaken by Africa's simultaneously accelerating marginalization and dependence. As a result, a "fear-flight" reaction sets in, which sends many of them running from the world economy in search of a less daunting and dangerous counterfactual strategy. Events around the world over the last several decades do not breed encouragement about the existence of a strikingly different counterfactual appropriate to African conditions. A modified, more statist one may exist, but whether African countries have the "laundry list" of factors that might make it work is another question. The track record of the 1980s and the early 1990s illustrates how little anybody, African or non-African, knows about how African political economies function, much less how to improve them. The basic data base is still quite thin and unreliable, although improving rapidly.

All of this is greatly complicated by high social costs, weak or nonexistent societal coalitions supporting reform, slow and shallow learning by political actors, a long time lag before major benefits appear, donor fatigue, and the failure of the implicit bargain, especially as new demands and opportunities emerged in Eastern Europe and the old Soviet empire, and now the pressures and dilemmas of political liberalization. It should not be surprising then that there is little consensus between African and external actors about how to proceed--what Green describes as "a dialogue of the mutually deaf" or "two prophets speaking at each other in tongues." As a result, the ritual dances of economic reform go round and round, leaving few grounds for optimism about major recovery. Adjustment, planned or unplanned, will come eventually, but unplanned adjustment may be far worse than economic reform now. As we shall see below, some African learning has taken place in a few cases; but it remains a question of who learns-technocrats, rulers, leaders of organized groups in a reemergent "civil society" or a newly reconstituted mass electorate-and with what consequences.

"Back to the Future"?

What then is this strategy or vision that Western actors have insisted that African countries follow? As it emerged and was modified over the course of the 1980s, it can be characterized as a "back to the future" strategy. It is an attempt to take African countries back to the 1960s, both economically and now politically, in order to start the development process over and do it right this time. On the economic side, it means rehabilitating primary product export economies and making them work properly, without the pernicious effects of countervailing political logics and weak capabilities. From this reestablished revenue platform, slow and careful moves can be made in the direction of expanding a manufacturing base via new investment, privatization, and parastatal reform. By creating a new "enabling environment" and policy framework, it is also hoped that the entrepreneurial talents of the now greatly expanded informal economy can be relinked to the domestic formal economy and through it to the world economy. In the process, the hope is to eliminate the "missing middle" problem that has plagued Africa since the 1960s, that is, the absence of a vital domestic private business sector in the formal economy between the parastatals and the multinationals on the one hand and the informal sector on the other. On the political side, the back to the future strategy means resurrecting democracy and making it survive this time and in the process turning predatory, rent-seeking governments into developmental ones. The Western vision asserts that the economic and political sides of this effort will mutually reinforce each other.

The critics of the economic part of the back to the future strategy assert that is not an optimum strategy appropriate to African conditions. True enough; but other than focusing on its very real social costs, they really do not have a viable counterfactual strategy. Even when correctly and powerfully describing the social costs of the back to the future strategy, critics do not explain where the resources might come from to ameliorate these costs. Nor have they articulated alternative policies that would avoid them. Given the fallacy of composition problem that haunts it, the back to the future strategy is clearly a weak option, with only limited potential, especially since Africa may already be closer to its production frontiers than anybody wants to admit. But nobody has been able to generate a more viable strategy for Africa, in large part because the state capabilities necessary for an alternative, heavily statist, strategy along East Asian lines, simply do not exist. So it appears that back to the future is the only viable alternative, albeit one about which there should be greatly lowered expectations. In this sense Africa really is "hemmed in," as it tries to navigate between weak states and weak markets and do so with more open political structures. But the hope is that by attempting to go back Africa will not go forward to the OAU's "nightmare scenario." ₅ The viability of this minimalist strategy is one of the central questions of this book.

The Limits of External Actors

One of the key factors affecting the viability of the back to the future strategy is the limited ability of external actors to implement it in Africa, hence their sense of the intractability of African reality. As Gordon, Green, and Martin point out, two of the central limitations on external actors are the constraints of African debt and the weakness of conditionality. Gordon notes that the IFIs are caught in a trap of their own design because they are simultaneously creditors and reformers. Debt itself is a source of reform because it creates financial leverage for Western actors, while it acts as a serious constraint on reform given the scarcity of resources the continent faces. To insist that African countries meet their debt repayments weakens reform, but not to enforce arrangements weakens the IFIs as creditor agencies. Given these ambiguities, the new world context, and the political sensitivities of Western industrial publics, Gordon argues that major new debt relief for Africa is not likely. The absence of such relief might be mitigated somewhat by creative new mechanisms such as the "rights accumulation" procedure used to cope with Zambia's problems that he and Martin discuss.

Financial leverage permits conditionality, and it can be powerful in initiating reform efforts, especially, as Lofchie points out for Tanzania, when it is linked to economic learning. Over time, however, as conditionality proliferates in the face of intractability, financial leverage becomes more apparent than real. In large part, this is because, as creditors, the IFIs need both to lend and collect. In addition, the IFIs do not really have the capabilities to monitor proliferating conditionality; Herbst's proposal to greatly expand the field presence of the World Bank is probably not a practical idea from a political point of view nor is it likely to solve the Bank's own capacity problems. Conditions are fudged, and the "conditionality game" becomes just one major aspect of the ritual dances of reform, as van de Walle demonstrates for Cameroon. Thus, withholding resources systematically becomes increasingly difficult and conditionality harder to "enforce." Countries have incentives to start (and restart) reform because of the associated improved access to resources, but fewer incentives to sustain reform efforts. Gordon also notes that the model of pure conditionality has failed because it has not acted to "catalyze" private resource flows; hence the failure of what Callaghy calls the implicit bargain between African governments and Western sources of finance.

Despite these limitations, both Gordon and Lofchie argue that the IFIs and other Western actors do have intellectual influence, that they are the conduit of new ideas. While we agree that this is certainly one avenue of influence, we believe that it is still a relatively modest one in Africa. The question becomes influence with whom-technocrats, rulers, government officials, politicians, leaders of groups in civil society or the mass electorate under democratic conditions? This becomes an increasingly important question with the widespread political liberalization moves of the early 1990s. Callaghy's discussion of Senegal and Nigeria should give pause to those who see a simple linkage between the influence of international financial institutions and policy outcomes. Lofchie makes a case for the role of influence and learning in Tanzania, especially among technocrats and some government officials, but he also attests to their halting and uneven nature and potential fragility. This learning certainly has not yet been tested in democratic elections, and we do not share Lofchie's optimism about such an outcome. His view shares too many of the overly mechanistic linkages between presumed economic gain and actual political practice that are at the core of the neoclassical view of economic reform examined by Callaghy. Nevertheless, the argument made by Lofchie and Gordon that we need to focus on the interplay of financial, intellectual, and political influences is an important one.

Gordon underscores the fragility and limits of these processes of influence, pointing to a "new dependency syndrome" and to the fact that the donors "have 'hemmed in' Africa in a very peculiar way; not by imposing inappropriate strategies or policies, but by substituting external pressure and financial resources for domestic leadership and an indigenous process." Callaghy also observes that much of the public debate in Africa about economic reform has been externalized by blaming the IFIs for Africa's problems and that there are few mass agencies that can restrain traditional rent-seeking behavior in Africa's new democracies.

For some countries such as Nigeria effective mass learning may come only after several more rounds of democracy, failed economic reform, and accelerated economic decline. In such cases external actors might actually facilitate learning by staying out until democratized polities have learned these hard lessons, for ultimately, as Gordon remarks, "the main initiatives for African development must come from Africans themselves." This point is particularly true under conditions of political liberalization.

Many of the points made by Green and Gordon about negotiating with the IFIs, especially those about the nature and limitations of conditionality, are nicely illustrated by Martin's two cases studies of Ghana and Zambia. The international financial institutions are not, by nature, humble organizations, and Martin argues that the manner in which they have negotiated with African governments is another limitation affecting the viability of their strategy. In particular, he stresses the lack of flexibility and dialogue and the quite striking inattention early on to how their policy preferences would be implemented. He also notes how quite crude political assessments by IFI officials can limit the impact of their own efforts. Zambia is a clear case in this regard. Beginning in the middle of the 1980s, the Fund and the Bank did revamp some of their negotiating practices and did so in time to help Ghana but not Zambia (whose adjustment program was probably doomed in any event by the lack of domestic political commitment). Martin argues properly, however, that there is still considerable room for further improvement. One would hope that such additional improvement will come in time to help President Chiluba. Although Martin notes that "the past experience of both countries is that political liberalization has tended to undermine reform by increasing the demands on government for expansionary policies," he asserts that "at the moment, both countries are well-placed to sever this connection." We only hope that he is correct.

Reform in Agriculture and Manufacturing

One of the lessons of the 1980s is that under certain conditions farmers will respond to price incentives, but that there are clear limitations to this response in terms of aggregate supply, especially a quick one. The structural and behavioral constraints on a systematic and sustained response to price incentives are considerable. This reinforces the point that while the back to the future strategy may be the only viable one for now, it still has distinct limits as a means of economic transformation. This underscores just how "hemmed in" Africa is.

Taking a longer-range historical perspective, Berry shows how African smallholder producers have responded over time to economic change, instability, and volatility. By focusing on struggles to gain access to the means of agricultural production, she shows how African farmers use a wide array of social networks and different production strategies in seeking liquidity and flexibility. Over time claims on resources from such networks have multiplied and become increasingly complex. Without the full commercialization of the means of production, investing in a variety of social networks is a rational strategy for coping with confusion, but it also limits sustained, major, medium-term investment in agricultural production that might allow a major response to changes in price incentives. The instability of the late 1970s and 1980s reinforced these older patterns of response, negatively affecting the ability of the new price incentives that are central to reforms aimed at generating a significantly increased supply. As Berry, Herbst, and Widner all stress, many other factors constrain farmers' responses to price incentives; these include the limited availability of improved crop strains, pointing to the poor returns from post-independence investment in agricultural research, the scarcity of viable agricultural support and outreach infrastructure, and the deterioration of the transportation network. These are a direct product of weak state capabilities and the import strangulation that has accompanied structural adjustment. All of the indicators suggest that the overall price elasticity of supply in Africa is low; without research breakthroughs and substantially improved availability of key inputs to go beyond price reform, Africa may be closer to its production frontier than many observers believe.

In the manufacturing sector, Africa is really "hemmed in." As Riddell shows, IMF-World Bank reform programs have had very negative consequences for the manufacturing sector. If the back to the future strategy is fully implemented systematically across the continent, deindustrialization might be a real phenomenon from an already small base. The "harsh withdrawal" thrust to these reforms is considerable, as has been the IFI's opposition to any form of "benign interventionism." To their dismay, the Fund and the Bank have discovered that privatization is not likely to have a major impact in Africa, that parastatal reform is very difficult, and that major new investment, domestic or foreign, is not taking place. The result is that the "missing middle" is still missing despite a vibrant informal sector. While the negative consequences and limitations of the IFI's back to the future strategy for manufacturing are significant, the constraints for the strategy of "benign interventionism" that Riddell proposes are much more serious. Given the limited technical, policy, administrative, and infrastructure capabilities that plagued parastatal efforts in the first three decades of independence, where is the ability to implement such policies going to come from? His answer is that the help will have to come from external sources. Ultimately, he notes that "the environment of the 1990s provides little optimism that any policy to promote and accelerate the development of the manufacturing sector is going to be easy" and that "most countries . . . are going to continue to be 'hemmed in' by a range of factors that will dampen demand, and thus limit the pace of industrial expansion and the scope for diversifying the manufacturing base." Can African countries do what Korea and other East Asian countries have managed to do? ₆ As we will argue below, the answer for now is quite clearly no, once again reinforcing the fact that Africa is "hemmed in" between weak markets and weak states. We also argue, however, that Africa needs to work in that direction, albeit slowly and carefully this time.

Politics and the Limits to Reform

As Herbst argues, it will take a favorable political system to begin to lessen the structural constraints affecting agricultural production, including those discussed by Berry, Green, and Ravenhill. The key questions become what kind of political system and how is it achieved. Clearly it takes one with important administrative and technical capabilities and one that reflects agricultural interests. The discussion of Kenya by Herbst and Lofchie demonstrates the historical complexity of the factors needed for sustained and effective representation of agricultural interests--especially elite responsiveness, institutionalized linkages that can deliver resources and support infrastructure, and relatively stable participatory elections over time. Their discussion also indicates that even long-standing productive political economies can be amazingly fragile when confronted with counterproductive political logics. In Kenya, for example, it remains unclear whether the old consensus that supported policies favorable to agricultural growth can be re-created in a post-Moi democratic Kenya. Herbst stresses that elections by themselves are not likely to be sufficient, raising doubts about the positive effect of political liberalization for economic reform, at least in the short run. He observes that democratic political structures need to "last long enough for a tradition of accountability through elections to develop." Thus, even assuming that agricultural interests are well organized (a point we shall return to shortly), democratic political logics of electoral punishment for policy failure need to become well rooted; this takes time and basic political stability. As he points out, democratic regimes in Ghana and Nigeria "failed to enhance the influence of the entire farming community," the one social group that can potentially benefit the most from structural adjustment.

In his discussion of Zimbabwe, Herbst also underscores the historical roots of effective patterns of representation. Since elections are not sufficient, this requires the development of "real institutional conduits that connect the state and the vast majority in the countryside." Much of the current thinking about political liberalization in Africa implies that "institutional conduits" will develop via the emergence of stronger "civil societies." As a result, successful economic reform requires not only increased levels of state capacity but also higher levels of "civil society capacity," that is, the effective and sustained organization of social interests over time. Callaghy stresses the initial "transaction costs" of effective organization, but the difficuties of sustaining capacity are even higher as the history of failed agricultural cooperatives in Africa all too vividly illustrates. Herbst points to the National Farmers Association of Zimbabwe as a possible model, yet he notes that it is "weak at both the bottom and top" with "only tenuous ties with many of its own constituents in the countryside" and "only the most limited ability to conduct competent economic analysis that might impress the government bureaucracy."

Civil society capacity is therefore a major issue in assessing the effects of political liberalization on economic reform in Africa. As with state capacity, it cannot be assumed to exist. This again points to the limits of any mechanistic view of the link between presumed economic benefit and political outcome. Herbst concludes that ultimately "it is unlikely that the political structures most likely to evolve in African countries will result in an unambiguous increase in the political power of farmers." Thus, while his three country examples are analytically interesting, they are not likely to represent major trends in Africa in the foreseeable future. Given this situation, he proposes that the external actors, particularly the World Bank, play a more intrusive role in helping agricultural interests organize themselves. While this is an intriguing proposal, it is not likely to be adopted, and would be unlikely to succeed even if it were. Thus, the structural limitations to systematic and sustained responses to price incentives are likely to remain strong, again diminishing the viability of a back to the future strategy.

In her detailed case study of the agricultural "proto-politics" in Côte d'Ivoire generated by a very serious agricultural crisis, Widner illustrates points made by both Berry and Herbst. She demonstrates both that small farmers are able to organize politically to defend their interests and that these efforts can have quite distinct limitations. She notes that these "beginnings of collective action" in Côte d'Ivoire become possible precisely because many of the older coping strategies discussed by Berry did not work well in the villages she studied, particularly because of the closure of the land frontier. The propensity to "discover politics" varies, however, having to do with the structure of local politics, the presence of leadership and resources, available models, and changes in the structure of national-level politics. All of these factors affect the transaction costs of collective action. Sustained collective action, however, was both unusual and relatively ineffectual (garnering "lots of promises"), vividly illustrating the difficulties of generating highly organized collective action over time. In short, "delegations and strikes do not programmatic politics make." She also indicates that national electoral politics, in and of itself, is not likely to further small farmer interests, at least in the short run. She indicates that in the 1990 Côte d'Ivoire elections, "the major parties made little effort (or could afford little) to influence rural voters." The "could afford little" is particularly important as political parties and major civil society groups also require solid economic bases. Hence, as in the 1960s, political liberalization is still likely to be largely an urban phenomenon with weak backward linkages to rural areas.

In her epilogue, however, Widner ends on a more optimistic note by pointing to the creation in 1991 of the Syndicat des Agriculteurs de Côte d'Ivoire (SYNAGCI) with help from the head of a newly created political party. It resulted from widespread discontent about the corrupt manner in which the Caisse de Stabilisation had functioned under President Houphout-Boigny. She links this to the experience of southeast Asian countries such as Malaysia and Indonesia where it was clear that "policy choices mattered." These countries can cope with price fluctuations "as long as yields improve constantly," this "requires information, research, and improved extension, however." In short, "one way to try to avoid becoming 'hemmed in' in the international economy was to organize to make governors more accountable for the choice of investment targets." Hence, effective and sustained agricultural reform requires proper policy choices, state capacity for research and extension support, and civil society capacity for effective representation, as elections are clearly not enough. The degree to which SYNAGCI will be able to perform its representation functions effectively over time remains open to question. It may, as Herbst notes for NFAZ in Zimbabwe, "suffer from many of the same organization problems that other farmer groups do across Africa."

Policy choices in agriculture and other sectors thus do matter as the southeast Asian cases demonstrate, but, as these chapters indicate, any positive correlation between economic and political liberalization entails a number of crucial "ifs." It requires a fragile, long-linked chain of conditions and events. Farmers need to put pressure on governments to make proper policy choices and provide the extension support to make them effective; this presumes organization of farmer interests and the civil society's capacity to make such organization efficacious over time. The government must believe that it has to respond to farmer pressure; this presumes sufficiently rooted repetititive electoral cycles to ensure that pressure is credible. The government must then have both the resources and the state capability to make the right policy choices and provide the necessary support infrastructure consistently in the medium to long term to compete effectively in the world economy with countries that have already proved themselves capable of doing so. Similar long-linked chains exist for other major groups that are presumed to benefit from structural adjustment.

In short, the discussion in the chapters by Berry, Herbst, and Widner indicates the naiveté of those who see democratization as a panacea for Africa's economic problems. A far more nuanced understanding, rooted in careful empirical work at the village and town as well as national levels, illustrates powerful constraints on collective action and the improbability that democratization will work to the benefit of rural interests in many countries in any major way.

While Africa's economic decline and halting attempts at reform were going on in the 1970s and 1980s, other powerful socioeconomic and political processes were emerging underneath the formal facades of both the state and the economy. Of particular importance were the striking growth and spread of the informal economy as the formal one weakened. These were accompanied by an enriched associational life which emerged as effective central political control diminished despite efforts to prevent it, constituting what Kohli and Shue call "increasing centralization with powerlessness." ₇ Yet, as Chazan and Rothchild argue, this expanded informal sphere, with its economic and political aspects and coping mechanisms, was highly fragmented. It "accentuated protest but did not usually point to any nonstatist models of power restructuring," although it certainly limited the impact of formal attempts to engage in neoclassical economic reform.

Chazan and Rothchild sketch an evolving relationship between the formal and informal sectors over the course of the 1980s and early 1990s. The first half of the 1980s was dominated by patterns of informal disengagement from both the state and the formal economy. The latter half of the decade witnessed a halting and uneven partial reengagement, leading to resurgent and more aggressive "civil societies." With continued economic decline and the very real costs of attempted economic reform, the 1990s opened with vigorous political struggles over political liberalization in a significant number of countries. Chazan and Rothchild note that economic decline and political ferment, often fueled by attempts at economic reform, helped to rearrange power concentrations in Africa.

Although they stress the "fragility of political reform," Chazan and Rothchild do assert that "if future African governments can implement political liberalization measures, they will greatly enhance the capacity of the state to establish the routines and institutions for sustained economic reform." While "more regularized responsiveness to the demands of civil society" is seen as the key, they do not rule out less sanguine outcomes. These range from "a kind of enforced self-reliance," characterized by "destructive internal conflict" and continued economic decline whereby countries "are involuntarily de-linked for all intents and purposes from the international community" to a more likely continuation of the clientelistic practices and "expansion of informal social and economic activities at the expense of the political center" that were characteristic of the 1980s. As Callaghy illustrates, this is precisely what happened in Senegal, the one case that clearly linked attempted economic reform with political liberalization.

As van de Walle illustrates with Cameroon, one of the major responses to economic decline in Africa, even in the late 1980s, was nonreform. Zaire, Zambia, and a host of other countries fit into this category-those that choreograph the ritual dances of reform play the conditionality game, and do so without any positive economic impact. As Zaire has demonstrated since the 1970s, the impact of nonreform is cumulative, and when political change finally comes, the effects can be devastating, both politically and economically.

Nonreform in Cameroon was the result of elite opposition because real reform threatened its "hegemonic alliance," leading to a synergy between weak, ambivalent commitment and very limited implementation capability. Like Moi in Kenya, President Biya found that consolidating his inherited political position was very costly especially in the middle of an economic downturn. Biya attempted to manage retrenchment and failed, seriously damaging the functioning of the state in the process and forcing a turn toward the more extensive use of coercion and the ritual dances of political liberalization. The latter permitted external actors to provide more resources for the government, which partly mitigated the effect of a weakening economy and a seriously declining revenue base. Any positive influence of external actors was very limited, however, and economic conditionally was largely illusory, illustrating points made by Gordon and others in this volume. Biya benefited from external acquiescence justified by the ritual dances of political liberalization. Under such conditions, it is possible for a regime to survive--a point also illustrated by Senegal where the continuation of older political logics seriously weakened the revenue base and administrative functioning of the state. A resurgent but fragmented civil society in Cameroon led to rampant incivisme fiscale, where opposition groups worked systematically to keep revenue out of the hands of the state. ₈

Much of the opposition in Cameroon remained quite ambivalent about the need for economic reform, however, a point echoed by Gordon for other countries. One position, for example, was that "policy reform was essentially unnecessary as long as governmental corruption was eliminated"! Nonetheless, van de Walle concludes that "it would be naive and historically incorrect to suggest that greater pluralism is a sufficient condition for sustained economic growth. On the other hand, it is probably a necessary condition, at least in the African context." If one links the ambivalence of the opposition about economic reform to his central point that there is a negative synergy between weak commitment to reform and weak implementation capacity, his necessary but not sufficient assertion about political liberalization rings less true. As Senegal demonstrates, political liberalization is likely to strengthen the patrimonial features of African states. Hence, this negative synergy is likely to be intensified by political liberalization. As van de Walle observes, "the patrimonial logic on which the state is built subverts implementation capacity and lowers the internal discipline of the state apparatus." In addition, despite all the rhetoric about accountability, efforts at structural adjustment have done little to control corruption; the same is also likely to hold true for political liberalization. This was certainly true for Nigeria's Second Republic and is likely to be so for its Third Republic as well, despite the early progress made by the Babangida military regime on economic reform, and there are already indications of this under Chiluba in Zambia.

As Lofchie indicates with Tanzania, while it is possible to shift ruling coalitions, the process is an extremely difficult, uncertain, and fragile one. Such a shift may be most feasible where there is a generational change in leadership, as occurred in Tanzania, or where the economy has deteriorated to such an extent that there is a widespread belief that something has to be done, as in Ghana. In such circumstances, leaders may enjoy a honeymoon period that gives them a certain amount of temporary autonomy, enabling them both to refashion the governing coalition and reorient economic policies. Whether new leaders who emerge through the democratization process will really benefit from such honeymoons in many cases in Africa remains to be seen. They will be under immense pressure for rapid improvement in living standards, yet leaders can expect significant opposition to meaningful reform from the "old guard," organized labor, and other groups. The logics of politics do not disappear just because economic reform is required--as President Chiluba is finding out in Zambia. So will any successors to Mobutu in Zaire, be they authoritarian or democratic.

Lofchie thus makes an interesting, important, and more hopeful argument about the African political roots of reform in two polar cases--Kenya, which had relatively good policy all along (despite being relatively statist), and Tanzania, which violated almost every neoclassical policy rule in the book. In some ways, his argument parallels that of Gordon about the importance of intellectual influence and learning. Reform can be imposed without a supporting societal coalition, as Ghana demonstrates, or it can result from the emergence of a relatively supportive coalition that develops over time. This "internal origins" thesis about the development of a productive political economy "as a product of domestic political forces" holds for both Kenya under Jomo Kenyatta and Tanzania after Julius Nyerere. Kenya demonstrates the rare benefits of a stable and workable, if not perfect, political economy over time. It also illustrates, however, that even such a consolidated one can be shredded by new negative political logics with amazing ease and speed. Increasingly over time, Moi's attempts to consolidate his political position weakened the basic supports of Kenya's prolonged progress, especially general macroeconomic management, culminating in a major domestic and international crisis in 1991-93. This crisis precipitated the first major use of simultaneous economic and political conditionality by external actors.

Tanzania, on the other hand, illustrates the ability of a government to respond to the terrible costs of prolonged economic decline and external pressure to quietly build a new coalition willing to support major economic reform. As Lofchie argues, this coalition appeared slowly, haltingly, and unevenly, with important consequences for the lurching quality of the implementation of new policies. And it did so despite the "profound mistrust, deep misunderstanding, and fundamental dissensus" of the "tortured," "politically charged," and "ideologically accusatory" relations between Tanzania and the IFIs. One of the factors facilitating this coalitional shift from the "socialists" to the "pragmatists" was the long-term stability of the government, a factor not yet tested by free electoral competition.

After making this more hopeful "internal origins" domestic coalition argument about the possibility of economic reform in Africa, Lofchie vigorously defends the current Western position which sees economic and political liberalization as positively reinforcing phenomena. As already indicated, we are skeptical of Lofchie's overly mechanistic view of the positive link between presumed economic benefit and political action in democratic contexts. It assumes the existence of a sizeable potential support coalition and makes unwarranted assumptions about the necessary connections between perceived economic interest, social learning, political organization, and policy outcome. This viewpoint also greatly underestimates the degree to which economic reform can be "hollowed out" by patrimonial political logics under democratic conditions.

Our skepticism is reinforced by a telling argument Lofchie himself makes about the relationship between political uncertainty, credibility, and economic reform. He calls "the factor of credibility the supremely political aspect of the connection between policy change and economic recovery." Thus, "the factor of credibility is of overriding importance in areas of economic liberalization that require individuals and organizations to invest resources and skills in the reform process in sectors of the economy where whole institutions must be reformed or created in order to generate an economic response." Lofchie observes correctly that the long-term struggle between Tanzania's "socialists" and "pragmatists" created a high level of uncertainty about the sustainability of the new and fragile reform orientation. In turn, this weakened the credibility of reform and dampened both domestic and external interest in the medium-term investment that is so necessary to a supply response strong enough to sustain the reform effort. He points out that the importance of credibility has long been underestimated by many proponents of structural adjustment who make an "implicit assumption . . . that once significant reforms have been introduced, private sector actors that have been patiently waiting on the sidelines will become actively involved and buoy the process of economic recovery." He indicates that this has rarely occurred and identifies uncertainty as the key: "Where credibility of a reform effort is uncertain, it is to be expected that such sectors will exhibit an especially slow response to a reform program."

The post-Nyerere Tanzanian government thus suffered from an "ongoing credibility constraint" which, Lofchie argues, might begin to be resolved by upcoming multiparty elections. He notes that in 1992 "a vast proliferation of more than a dozen opposition organizations" sought to position themselves for the elections, and he concludes that "since some of the parties seem certain to oppose economic reform, the credibility constraint posed by a reformist government coexisting uncomfortably with a socialist party may not be resolved until that time." Unfortunately, however, the elections might not end the problem, as uncertainty about policies is often pervasive in new democracies. This is a major problem in Eastern Europe now, for example, especially in Poland. ₉

The Tanzanian case has major implications for the tasks that confront President Chiluba in Zambia. Is such a shift possible there, especially given the advent of democracy in late 1991 and the need to consolidate power while engaging in major economic reform? As Callaghy points out, the experience of Senegal is not encouraging. The question raised earlier of who learns and how much they learn is central here. Another issue raised by the Tanzanian case with applicability to Zambia is how such "learning" processes and coalitional shifts get started and how they are sustained. One argument is that, as in Tanzania, change will not come until things become so bad that serious internal political economy debates and struggles are precipitated by the terrible nature of social conditions. A fear generated by this argument is that if one waits too long, the economic situation will be so devastating that altering it will be extremely difficult, if not virtually impossible. Zaire may be such a case. Lofchie does point to the negative consequences of the duration and tightly interrelated nature of Tanzania's policy errors, which makes altering them even more demanding. In addition, the decline of Tanzania's economy was so steep that repairing the damage raises the level of effort, and resources, required. These facts are seen in the halting and "mixed" nature of Tanzanian adjustment to date. Under such conditions, the maintenance of political stability is central, something not yet tested in Tanzania and to be sorely tried in Zambia.

Drawing on experience elsewhere in the Third World and that of Ghana, Nigeria, and Senegal in Africa, Callaghy makes a probabilistic institutionalist argument that the reverse relationship holds: that increased participation in the formal political arena usually, but not always, makes systematic economic reform more difficult. In the process, he challenges the political half of the back to the future strategy and the current Western vision. Given the wave of political liberalization in Africa in the early 1990s, the limits on successful economic reform may be even greater in the last decade of the century than they were in the 1960s or the 1980s. In 1992, as Martin observes, "Zambia is if anything more 'hemmed in,' because of a combination of intermittent reform and foreign exchange shortage," while "Ghana is much less 'hemmed in,' because of its economic policy reforms, although these remained dependent on large volumes of aid and imports." Democratization is thus difficult under the best of circumstances; democratization with a diminished and still shrinking economic base is a haunting challenge.

In short, President Chiluba faces a Herculean task, given resurgent political logics and the very uneven learning curves of technocrats, officials, politicians, groups in civil society, and the mass electorate. Callaghy begins to explore institutional arrangements and agencies of restraint that might facilitate the maintenance of sound economic policy under democratic conditions. He stresses, however, that just because such structures are needed is no guarantee that they will be produced because institutions are the result of concrete political struggles the outcome of which are intrinsically unpredictable. Older political and economic logics may not be dead, and new learning patterns can be swamped easily.

While in Geneva in June 1992 in search of new investment, debt relief, and understanding to support Zambia's new attempt at IMF-sponsored economic reform, President Chiluba observed that, "The thrill of victory was soon replaced by an ominous realization that the country was not only run down and ravaged by mismanagement, but indeed also that the treasury was bare." ₁₀ At the same time, he was confronted by a devastating regional drought, a serious AIDS crisis, political conflict with the former ruling party, and strikes from labor groups opposing 200 percent increases in staple food prices and plans for extensive privatization, both of which were demanded by external actors as the price of a new and innovative debt-relief plan. Chiluba noted that the strikes reflected "some excitement and some abuse, now that we are all free." He was also aware of a key obstacle: "But again I must admit that there has been a genuine feeling of disappointment, because generally when we started, an atmosphere was generated that created a crisis of expectations. Some people, in spite of what we told them, still felt that relief would come overnight, and when we said we have to show more responsibility, they thought we were running way from the promised way of life." Chiluba continued to believe, however, that "the people will learn that democracy is their own creation and that they don't have to destroy their own baby." ₁₁ But will this learning come soon enough? Or will the IMF economic reform program once again "sow the seeds of unrest and undermine the spirit and unity of the nation" as former President Kenneth Kaunda put it in 1987, ₁₂ and lead Zambia's new civil society to use its new found democracy to choose of its own free will to end the IMF program, as some of Chiluba's opponents hope?

External actors, as Martin notes, will share major responsibility because "it will be impossible to sustain this combination of economic and political liberalization without major changes in the way reform programs and external finance are negotiated." It is far from clear that such changes will be forthcoming, given the current international conjucture. Can Chiluba then take Zambia back to the future? The lessons of this book do not lead to optimism. As Green observes, most African governments "have few degrees of freedom left. They are 'hemmed in' by present resource levels, by poor external economic environment prospects and limited probability of large net resource inflow increases--as well as by the need to deliver perceived benefits to voters." In the process, Africa becomes even more disadvantaged relative to other regions of the world.

Current Conjuncture: African Performance in Comparative Perspective

As the World Bank correctly points out, "the 1980s saw a sharp divergence in economic performance across developing regions," and these "regional disparities in growth will continue." ₁₃ A continuum, representing an enormous chasm, runs from East Asia, down through Latin America, Eastern Europe, the Middle East, and South Asia to Africa. The disparities between these regions preceded the 1980s, but they were seriously aggravated by "the lost decade." See tables 13.1 and 13.2 for data on the 1965-1989 period.

The average annual aggregate per capita real GNP for developing countries increased 2. 5% between 1965 and 1989, but in East Asia it grew 5.2% a year while in Africa it "increased" at only 0.4% a year. Thus, some regions have performed better than others, and some countries in each region have outperformed others in the same area.

Despite the diversity of these regions and countries, the key seems to be linkages to the world economy: "a recognition of the importance of international trade and finance for improving growth and per capita incomes. . . . Economies that chose to limit their links with the world economy have not fared as well." Countries that stressed linkages also "tended to do better during the turbulent 1980s than did others." ₁₄ This held particularly for East Asia, including Korea, Taiwan, Thailand, and Malaysia, for several countries in Latin America, especially Mexico and Chile, and even for a couple of countries in Africa-Ghana and Botswana. As we shall see, however, outward orientation does not have to be of the "liberal," minimal state-variety recommended by the IMF and the World Bank. In fact, explaining differentiation and its speed requires taking into account much more than externally oriented policies and the international economic environment. Stateness (administrative and technical capability), cosmopolitanism (the degree of sophisticated knowledge about how the international political economy works), regime type, politico-strategic linkages, overall level of development, and historical context all play a key role.

Recent developments are not encouraging, but need to be disaggregated by region and country. In 1989 the overall GDP growth rate for developing countries was 2.9%; it fell to 2.3 in 1990. In East Asia, however, it rose from 5.5% in 1989 to 6.7 in 1990; in Latin America, without Brazil, it rose from -0.2% to 2.0%; in the Middle East it increased from 2.6 to 3.2%. These increases were counterbalanced, however, by significant drops in Brazil, Eastern Europe, much of Africa, and, above all, what used to be the Soviet Union.

While the World Bank correctly expects these disparities to grow, its assessments have often been overly optimistic. This has long been the case for the weakest of the regions--Africa. In 1991 the Bank for the first time candidly admitted in the World Development Report that many of its past projections, even the low-case ones, were overly optimistic. The Bank forthrightly declared that it had been "generally too hopeful about growth in the 1980s." Except for East Asia, the high cases were too favorable, with the low cases being "much closer to the mark." For Latin America, however, "even the low-case projections were too optimistic." For Africa, both the high and low cases "were revised downward" over time to a "fairly significant" degree as a result of "sharp economic deterioration." Why such undue optimism? Projections of world trade levels and inflows of capital were way too high, real interest rates did not come down as expected; and the "potential severity of the debt crisis" was underestimated, especially "the large negative transfer of resources from developing countries after the mid-1980s." Finally, and "perhaps most important," was the fact that "domestic policy weakness" was underestimated. ₁₅

The Bank is now carefully hedging its assessments for Africa. In 1991 it saw "the first tentative signs" of a "fragile" economic recovery, with many economies remaining in "precarious" conditions. But, for the countries that it saw as reforming, it was much more optimistic. They were "expected to grow relatively fast in the 1990s and to show significant improvement in performance over the 1980s." The "ifs" were quite substantial, however:

Such sustained growth could be achieved if these countries maintain steady progress in implementing structural reforms, if their terms of trade do not deteriorate significantly, and if gross disbursements of official development assistance increase by about 4 percent a year in real terms. Much depends on the supply response induced by these conditions. So far, supply has responded hesitantly because of inadequate infrastructure and little confidence in the permanence of the reforms. 16

The Bank's assessment for Africa's nonreformers is more likely to hold for the continent as a whole, precisely because reform is so very difficult: "these economies can expect significant deterioration in coming years. . . . They have become estranged from the world economy, and their isolation is expected to grow in the coming decade unless their domestic political and economic policy situations turn around significantly and international efforts to support growth in these economies are renewed." Unfortunately, "the composition of Africa's sources of external finance reinforces the composition of its production, exports, and debt in limiting Africa's opportunities in the medium term." ₁₇

The East Asia to Sub-Saharan Africa continuum thus constitutes an enormous chasm, especially as to the existence of effective linkages to the world economy, and this chasm is growing, not shrinking. This can be illustrated vividly by noting the response in the end point regions of the continuum to a one percentage point a year rise in OECD growth. For the developing countries as a whole it would bring a 0.7% increase in growth, but for Africa it would be only 0.5% while for East Asia it would be 1.0%. Can Africa do significantly better? Can it begin to perform like the East Asian "tigers," for example?

If Korea Can Do It, Why Not Africa? Or: Limited Current Relevance But Possible Future Model

In the late 1980s, a working group of senior African policy advisors examined the experience of the newly industrialized countries (NICs), particularly the Republic of Korea, "to see if there were any peculiar attributes in the social and political leadership that underlay these countries' success." The conclusion of this group was that "other than favorable economic conditions prevailing at the time most newly industrializing countries embarked on their development paths, nothing suggests that the social and political regimes existing were much different from other countries." ₁₈

As disappointment grows with Africa's economic record and with the lack of transformation brought about by structural adjustment programs, the East Asian NICs have come under increasing scrutiny in an attempt to derive lessons that might be applied in the African context. Politics cannot of course be abstracted from the historical and institutional context in which they were successful and be expected to work with similar effect elsewhere. Nevertheless, a study of the East Asian NICs is a useful exercise because lessons can indeed be learned--although their content may not be pleasing to many (including the African policy advisors quoted above who seem to interpret the East Asian experience so woefully) as they identify the crucial role of such factors as specific forms of political and socioeconomic structures and relationships that are missing from Africa.

South Korea is the obvious point of comparison. In 1950 it had a per capita income of $146 (in 1974 US dollars), less than that of Nigeria ($150) and only slightly more than those of Kenya ($129) and many other African countries. ₁₉ Forty years later, Korea had become an impressive economic and industrial power-a transformation of quite startling speed and scope. Nigeria and Kenya, on the other hand, while among the better-performing African economies, had not achieved significant transformation despite, in the Nigerian case, considerable oil wealth. In 1989, the respective GNP per capita figures (in current dollars) and their average annual growth rates for 1965-89 were: Korea $4,400 and 7.0%; Nigeria $250 and 0.2%; and Kenya $360 and 2.0%. Comparable transformation has simply not taken place anywhere in Africa

Korea is almost the paradigmatic case of economic transformation in the Cold War era. It is also a case around which swirls a considerable debate, in large part because it does not match the neoclassical liberal prescriptions of the IMF and the World Bank. ₂₀ These two institutions have finally begun to confront the implications of the Korean case, a point we shall return to in the conclusion.

In the years immediately after the Second World War, Korea was governed by a U.S. occupying administration which appeared to lack any clear sense of direction, and it subsequently fell victim to the personalized, corrupt administration of Syngman Rhee. In its rent-seeking and pursuit of patronage politics, and the subordination of economic rationality to short-term political gain, the Rhee regime was similar to many of the governments that have hastened Africa's economic decline in the last three decades. Under Rhee, Korea pursued import-substitution policies based on an overvalued exchange rate and political control of foreign exchange and imports (including the substantial volume of goods made available under the U.S. aid program). Access to foreign exchange and imports was an important source of rents which were employed to buy the loyalty of the army, the bureaucracy, and the emerging middle class.

Despite these problems, Korea's starting point on its path to economic development in the 1950s was not the same as that of Africa in the 1990s. The Japanese colonization of Korea in the years 1910-45 laid far stronger foundations for future economic growth than did the Western colonial powers in their much longer occupation of Africa. The Japanese administration introduced land reform and modernized agricultural production, built a strong centralized state apparatus around a well-educated colonial bureaucracy and a large police and military apparatus, and developed the country's transport and communications infrastructures. Although Korea was initially used primarily as an exporter of agricultural products, the Japanese also built a substantial industrial capacity, particularly after the invasion of Manchuria.

In the 1950s, the economy was saved from the worst depredations of a rent-seeking polity by massive inflows of foreign assistance. USAID contributed close to $6 billion to Korea which also benefitted from about $7 billion in U.S. military assistance; most of this was in grant form. ₂₁ Foreign aid financed "70%" of all of Korea's imports in the years 1953-62; the sum was equivalent to 75% of the country's total fixed capital formation. ₂₂ Industry grew quite rapidly in the Rhee years (more than 11% annually) benefiting both from high tariff barriers and the effect of aid inflows in considerably reducing foreign exchange constraints. ₂₃ But the overall rate of economic growth was modest (an annual average of 4.2% in 1953-62). ₂₄ Rhee resisted the efforts of U.S. advisers to push for more rational economic policies--decreased government expenditures, higher taxes, and lower exchange rates--because they would have posed a threat to the government's patronage system. And despite his dependence on U.S. assistance, Rhee was able to do this successfully by playing on the country's geostrategic importance.

By the end of the 1950s Korea had failed to capitalize on the strong foundations for economic growth inherited from the Japanese. In a survey of 74 Third World countries conducted by Adelman and Morris, Korea displayed the biggest discrepancy between per capita income achieved and a composite indicator of sociopolitical development. Whereas Korea ranked 60th in 1961 in per capita income, it was ranked 14th on the composite indicator, which included "size of traditional sector, extend of dualism, character of basic social organization, size of the indigenous middle class, extent of social mobility, extent of mass communication, crude fertility rate, and the degree of modernization of outlook." ₂₅ However imperfect such quantitative indicators, Korea was clearly a country of significant unfulfilled potential.

A restructuring of the state and its relations with society was necessary; to unlock this potential the state and its relations with society had to be restructured. And this is where the African policy advisers quoted at the beginning of this section are so wrong. While the Korean state under Rhee may have been very similar to many contemporary African states; that which evolved after the military coup of 1961 was very different. The military leadership that seized power justified its move as necessary for ending corruption and for achieving real economic development. It set out to eradicate the old crony networks and the rentier predatory state. Pivotal to this effort was the centralization of political power, the gaining of autonomy from pressures from societal groups, and the institutionalization of centralized decision-making by technocrats who again enjoyed substantial autonomy from societal pressures.

The military moved quickly to curtail political pluralism and participation, temporarily banning more than 4,000 politicians. It also purged the bureaucracy and the military, using as its main instrument the powerful newly created Korean Central Intelligence Agency. All major social groups, especially peasants, students, and above all, labor, were kept at bay via coercion and institutional control structures. There was, however, important societal opposition, and it was quite consistent; but it was tightly contained by the government's coercive apparatus.

On seizing power, the military arrested most leading businessmen but exempted them from prosecution for their previous corrupt activities provided they agreed to establish new industrial firms and donate shares to the state. The military realized that its own legitimacy rested on success in fostering rapid economic growth, and that this was ultimately dependent on the performance of the private sector. ₂₆ The government provided the large business groups, the chaebol, with credit, subsidies, information, logistical assistance, protection, and controlled labor. But although it recognized the necessity of creating an economy conducive to business success, the government was never captive to any particular business interest. By making its support to companies conditional on performance criteria, very often success in expanding exports, the government was able to force business out of rent-seeking into productive activities. Companies that failed to meet government expectations were allowed to go bankrupt and their assets taken over by better performers. There may have been a partnership between business and government in Korea but government was the dominant partner. ₂₇

To manage this new structure of benign mercantilism an institutional revolution of economic centralization was carried out that allowed a major role for insulated technocratic endeavor and external advice aimed at the very top of the presidential political structure. Of key importance in this new policy framework were the Economic Planning Board, staffed by technocrats many of whom were educated overseas, and extensive external economic advice, primarily from the U.S. and the World Bank. These changes built on the halting, but ineffective reform efforts that the Rhee government had undertaken in order to pacify the American government. ₂₈ The new economic institutions used and reshaped the existing bureaucracy, thereby increasing its status and power, and eliminated any significant opposition within the administration to economic reform.

While corruption and rent-seeking were never fully eliminated and were often the substance of opposition charges, they were significantly reduced. And while government encouraged the accumulation of wealth, it acted to direct the uses to which private accumulation could be put. The state was no longer the predatory one of the Rhee era; it was becoming a developmental state, albeit a harsh one. ₂₉ Both the overall rate of economic growth and the rate of growth of industry more than doubled after the military coup.

Of course the Korean success story was engineered within a specific historical context. Rapid growth of exports began in a period in which world trade was expanding rapidly and there were relatively few barriers to exports of manufactures. Korea continued to benefit from significant amounts of U.S. assistance; the country's geostrategic importance caused the U.S. to turn a blind eye to its predatory, mercantilist trading policies. Based on substantial societal and cultural integration, relatively high levels of educational achievement, and low dependence on foreign direct investment, the Koreans managed to achieve higher levels of both stateness and cosmopolitanism than other developing countries. They aggressively sought to build links to the world economy; they ventured out to acquire and master new technologies, knowledge and institutions, to build local capacities, to understand, use and manipulate the world economy--in other words, to manage and transform their dependence.

Much more might be written about the lessons of the Korean experience for Africa. Korea consciously engaged the world economy rather than fleeing from it. The Korean case underlies the false dichotomy that is often drawn between import-substituting industrialization and export-oriented industrialization. The Korean government deliberately set about "getting prices wrong" in order to foster rapid industrialization; ₃₀ its role was not confined to creating an "enabling environment" but extended to what Wade has termed "big leadership"-taking the initiative to push industry in a particular direction. ₃₁ The structure of incentives it created, however, certainly did not discriminate against exporting activities and, for the most part, fostered them while forcing firms to adjust to international market signals. Government support to industry was conditional on performance criteria, especially the expansion of exports. Limitations were placed on the role of foreign direct investment; the activities of transnational corporations were harnessed for national advantage. Clearly Korea does not conform to the laissez faire model beloved by neoclassical economists in general and by the IMF and the World Bank in particular.

Yet perhaps the most significant lessons of Korea for Africa lie in the political realm: the necessity for relative political stability; the necessity to curtail rent-seeking and corruption; the importance of a well-educated corps of economic technocrats who play a central role in policy-making and enjoy a substantial degree of autonomy from societal groups. In other words, the Korean case underlines the central importance of stateness and cosmopolitanism, both of which most African countries currently lack. Identifying these factors is one thing; engineering them is another matter. ₃₂ As Green puts it, "The chances of Sub-Saharan Africa breaking out into Asian NIC-type economic dynamism by the year 2000 are nil. Even one such case would be surprising." But, as Gordon observes, "In both Asian and Latin American countries, fundamental reform took place only when domestic leaders put in place programs that went far beyond anything suggested by the IMF and the World Bank. This has not yet happened anywhere in Africa." Having said this, however, to rule out moving slowly and carefully in this direction, as the current Fund/Bank back to the future strategy does, would do Africa a great disservice and keep it distinctly "hemmed in" over the long haul.

The Need to Mitigate External Constraints

How can the industrial countries assist Africa to become less hemmed in? Ultimately, the reversal of economic decline will depend largely on African countries' own efforts. But if they do not receive significant assistance from the international community (which has yet to fulfill its part of the implicit structural adjustment compact), their efforts may well come to naught no matter what strategy is used. Such external aid is yet another factor that is necessary but not sufficient to ensure that countries will become less "hemmed in." External assistance in itself, however massive, will not bring about the necessary transformation unless accompanied by sustained domestic adjustment, and, in case of systematic nonreform, external actors should cease all support until a real commitment to reform is evident. On the other hand, countries that are proceeding along the difficult path of domestic adjustment will stumble, as occurred in Zambia in 1986-87, unless the international community acts effectively to smooth their way, a fact stressed by several authors in this volume.

Industrial countries and the international financial institutions need to display more flexibility in designing and implementing structural adjustment programs. Martin's article (chapter 4) illustrates the unnecessary problems that arise from an overly rigid approach to negotiations on adjustment programs. An important dimension of this is the attitude toward the role of state. While we would be the last to suggest that the performance of most African states in the quarter century after independence was anything less than disastrous, the lesson to be learned from Korea and other East Asian NICs is that the state is central rather than irrelevant to economic success. The focus should not be on removing the state completely from the economic arena, but on building effective state apparatuses that are technically proficient, run on meritocratic lines, and seek to engage with rather than flee from the world economy. As we shall see, it is encouraging that the Bank's recent reports appear to endorse this approach, even if timidly so.

The most immediate external constraint that Africa faces, however, is the debt crisis. Some have argued that the crisis is not of great import since creditors and borrowers alike recognize that African countries simply will not service and repay the debt, thereby reducing the problem to a paper abstraction. This view, however, ignores the considerable damage that the debt overhang does to economies through its impact on the psychology of investors. The possibility that a large proportion of future export earnings will have to be devoted to debt repayment inevitably has a deterrent effect on potential investors; it will also have a similar effect on African reformers, especially in an era of political liberalization.

The measures agreed by the major industrialized countries at the 1988 Toronto economic summit for the official debts (export credits) of low-income African countries have offered some temporary relief at best and merely postpone the day of reckoning. They are more significant for establishing a precedent of writing off export credits (donors in the past had only been willing to forgive development loans) than for the actual relief provided. UNCTAD estimates that the savings on interest will amount to no more than two percent of debt service payments. ₃₃ The failure of the London economic summit in 1991 to go beyond the Toronto measures by adopting Prime Minister Major's Trinidad terms was particularly disappointing.

Having established the principle of writing off export credits, industrialized countries should now follow the recommendations of the Wass Report ₃₄ -written by an advisory group of bankers, officials, and academics under UN sponsorship-and convert them into loans on terms similar to those available from the International Development Association (IDA), that is, annual rates of interest of 0.5% over forty years with a ten-year grace period.

The experience of Ghana, the only African country that sustained a rigorous adjustment program throughout 1980s, and of Korea and Taiwan demonstrates that a massive inflow of resources is necessary if structural adjustment is to be successful. This is even more the case if attention is to be given-as it should be-to protecting poorer groups of the population from the adverse effects of adjustment and to laying the human foundations for sustained economic growth. Ghana, however, has shown the negative effects of being a large-scale recipient of international lending on currently available terms--a worrying trend toward greater indebtedness. Its significant borrowing from the IMF--more than $1.2 billion in commitments in the period 1983-88-means, even with some money being on SAF and ESAF terms, that there is a bunching of repayments in the early and mid 1990s. The potential for a number of "successfully adjusting" countries to experience difficulties in servicing their debts to the IFIs in the next few years suggests the need for another facility that makes finance available on IDA terms.

A second general area in which industrialized countries could take supportive action is trade. Two dimensions of Africa's needs in the next decade immediately come to mind: (1) security of access for commodities and manufactured products alike, and (2) remunerative prices for African commodity exports.

Most African commodities enter their principal markets duty-free. The exceptions are certain agricultural products which compete with Northern-hemisphere domestic agriculture, e.g. beef, sugar, tomatoes, and cut flowers. In their most important market, the European Community, some African commodities enjoy a tariff advantage over those of other exporters by virtue of the provisions of the Lomé Convention. If the Uruguay Round of international trade negotiations is eventually successful, the preferential margin in the EC market on a number of tropical products will be reduced. To some extent this would be compensated by improved access for African agricultural exports to markets in other industrialized countries and by increased consumption if some of the absurdities of the current agricultural policies of industrialized countries are abandoned. The net impact is difficult to forecast; indeed, in an era of floating exchange rates, the advantages offered by tariff preferences may be of little consequence. But it is clear that Africa's commodity export prospects increasingly will depend on competitive marketing. Here industrialized countries could help by providing additional finance to assist African countries in setting up trade-promoting organizations and participating in trade fairs.

In attempting to increase exports of processed and manufacturing goods, Africa faces a number of formidable disadvantages, including inferior and expensive external transport links, unreliable infrastructure, lack of knowledge of markets, and a poorly trained and relatively expensive work force. If export-oriented manufacturing is to be attracted to Africa, it will need the incentives not only of a secure domestic working environment but also security of access to overseas markets. In Africa's relations with Europe this was supposed to have been provided through the trade provisions of the Lomé Convention; in reality this has proved not to be the case, as African suppliers of textiles to the European market were threatened with the use of the Convention's safeguard clause in an effort to force them to agree to voluntary export restraints. ₃₅ The impact of the European Community's short-sighted policy was to cast doubt in the minds of all potential investors about the prospects for secure access.

If industrialized countries are sincere in their support for diversification of African economies and in their demands for a secure environment for foreign investment, they should provide a guarantee of market access for the nontraditional exports of African countries. The ideal would be a commitment that no African exports would be subject to voluntary export restraints or other non-tariff or tariff barriers for an extended period, say fifteen years. This would be offered provided such exports complied with reasonable "rules of origin" (which specify how much value must be added locally for the export to be counted as a product of the country, thereby avoiding the problem of goods merely being transshipped through Africa from third countries to exploit the privileged access to industrialized markets). The world is gradually waking up to the uniqueness of Africa's economic problems. Just as special measures are necessary for these states in the financial sphere, similar special treatment is essential on trade issues.

The second major trade problem that Africa faces is the unstable and generally declining prices in the world markets for its principal commodity exports. Industrialized countries should cooperate with Southern countries in attempting to revive international commodity agreements. The depression of non-fuel commodity prices in the last decade deprived not only producing countries of income but also industrialized countries of markets for their exports. Successful agreements will almost certainly require industrialized countries to enforce production quotas (through application of import quotas) given the present overproduction and conflict of interest between Southern suppliers. For the NICs such as Brazil and Malaysia to be encouraged to reduce their investment in commodity production, liberalization of access for their manufactured goods to the markets of industrialized countries will be required as will more action on debt relief for the heavily indebted countries. Only if these issues are tackled globally will the current fallacy of composition problems inherent in the back to the future strategy be avoided.

There is also a good case for the introduction of a global system to stabilize the commodity export earnings of African countries, an improved and extended version of the STABEX scheme that is part of the Lomé Convention. ₃₆ A scheme of this type can help countries cope with the problems of severe fluctuations in their export earnings. The problem with such arrangements, however, is that typically they merely offer compensation for earnings that have fallen below a trend average. In a period of falling commodity prices, they stabilize earnings around a declining trajectory (and thus need to be supplemented by international commodity agreements that attempt to maintain price levels).

The measures listed here are feasible steps that industrialized countries could take to create an external "enabling environment" for African adjustment. Many more measures might be listed, ranging from improved technical cooperation to support for African efforts to build regional economic cooperation schemes. Since adjustment on the part of African states is necessary, it is reasonable for industrialized countries to make access to benefits conditional on African governments agreeing to reform programs-but ones that are flexible enough to take into account changes in the external environment and avoid the proliferation of conditions that accompanied Fund and Bank programs in the late 1980s. Given mounting demands elsewhere in the world and the increasing preoccupation of industrialized countries with their own problems, it is not at all clear how many of these "feasible" steps will be taken. If they are not, it will be that much more difficult for African countries to become less "hemmed in."

Conclusion: Vision and Politics in the Transformation of Political Economies

The now "triumphant" industrial democracies have a brilliant vision of global transformation via the magic of the market and the ballot box, including a special back to the future version for Africa, but it is a flawed vision. It is flawed in three majors ways: (1) it underestimates the role of the state in economic transformation; (2) it misperceives the link between economic transformation and type of political regime by assuming that economic reform requires simultaneous political liberalization or democratization; and (3) it seriously underestimates the role and importance of larger contextual factors, that is, the institutions, knowledge, attitudes, and infrastructure that underpin states, markets, and regimes. These flaws and misperceptions mean that the vision is not likely to be realized in very many places in Africa or in the Third and former Second Worlds more generally, and, thus, that differentiation rather than convergence between regions and countries will mark the coming decade with confrontational rather than harmonious consequences. Each of these flaws and their consequences will be examined briefly in this concluding section.

Role of the State

While it correctly captures the fundamental importance of linkages to the world economy, the Western liberal vision has underestimated the role of the state in economic transformation in three major ways: by failing to perceive (1) the existence of the orthodox paradox, that is, that even neoclassical economic reform requires a relatively capable and important state structure; (2) that any state, authoritarian or democratic, but especially the latter, needs to buffer the sociopolitical consequences of transformation, and (3) that the liberal vision of economic transformation itself, especially its stress on minimalist states, the power of markets, and correct policy packages, might not be the only possible path to transformation, or even the most common one.

Throughout the 1980s, Western actors responded to each of these three problem areas in partial ways. For the first problem area, they stressed the non-regime-type aspects of "governance," e.g. administrative probity and efficiency; effective legal, judicial, and regulatory mechanisms, especially for property rights and contracts; and informational and policy openness or "transparency," including such things as a relatively free press. The "laundry list" of relevant factors is now quite long. Each one of these elements probably is important but, as the list continues to grow, it is difficult to know which one to target or how to do it. For the second problem area, external actors have increasingly focused on the salience of the social costs of adjustment and policies to deal with them, particularly the creation of a social "safety net" for the most adversely affected groups. For the third problem area, they have recently made a quite interesting but still hesitant about-face, in large part by finally beginning to come to terms with the reality of Korea and other heavily statist cases of transformation: they now admit the possible importance of "market-friendly" forms of state intervention. Each of these responses constitutes an important form of learning, but it remains unclear how centrally and consistently this learning will be reflected in the programs and policies of the major Western governments and the IMF and World Bank and whether the resources exist to support new approaches.

Since the third change is particularly important, it needs to be explored a little more fully. In its reports on Africa in the late 1980s, the World Bank began to admit tacitly more of a role for the state in economic transformation. With the 1991 World Development Report, however, the shift became more explicit. Referring to "the remarkable achievements of the East Asian economies, or with the earlier achievements of Japan," the report asks, "Why, in these economies, were interventions in the markets such as infant-industry protection and credit subsidies associated with success, not failure?" The Bank's answer, in short, is that these "market-friendly" state interventions were "carried out competently, pragmatically, and flexibly," were terminated if they failed or outlasted their usefulness, did not distort relative prices "unduly," and were export-oriented, "moderate" rather than all encompassing, undertaken reluctantly and openly, and constantly disciplined by international and domestic markets. In sum, according to the Bank, these "market-friendly" forms of state intervention "refute the case for thoroughgoing dirigisme as convincingly as they refute the case for laissez-faire." ₃₇ Until quite recently Western reaction to Third and Second World statism has been what Tony Killick has aptly called "a reaction too far," ₃₈ especially when Western behavior belies its own rhetoric, as Callaghy showed in his discussion of embedded liberalism. Effective outward-oriented transformation can quite clearly be achieved without following all the liberal economic mantras of the IMF and the World Bank. While the capabilities of African countries are weak at the moment, they need to work in this direction, however slowly and carefully.

In fact, this new view of the World Bank still significantly underestimates the type and degree of state intervention in cases such as Korea, but it does represent a major shift toward a more balanced tension between state and market, one that has long been evident in the "embedded liberal" practice, if not the rhetoric, of Northern industrial democracies. It is not a view fully shared so far by the IMF or some Western governments, however. ₃₉ It is also not a view shared by many longtime critics of the World Bank, those seeking a "new political economy of development" which continues to stress the state over the market. This is indicated by the book title of a recent representative attack on Western "neo-liberalism": States or Markets? Neo-Liberalism and the Development Policy Debate. ₄₀ A more balanced viewpoint would be States and Markets.

While all sides still need to seek a proper balanced tension between state and market, admitting the need for it is an important first step. It does, however, open up a major Pandora's box that Western actors have wanted to keep closed. Once you concede a serious, nonliberal role for the state, you then must decide on specific types and instances of state intervention. This is an enormously difficult thing to accomplish and clearly constitutes the current policy frontier. The elegant parsimony of the neoclassical vision has been replaced by messy ambiguity and relativity. Such an admission does not, however, imply that the state capabilities necessary to engage successfully in such intervention will exist when and where they are needed.

Economic and Political Liberalization

The cases presented in this volume, we believe, do not support the current Western faith in a tight and simultaneous link between economic and political liberalization. Our pessimism on this matter is in contrast to more optimistic views held by some of our contributors. We have seen that insulation, delegation, and buffering have been central to success at economic transformation. There appears to be a clear historical correlation between authoritarian rule and the ability to engage in major economic restructuring, but not a necessary theoretical one. The search then becomes one for what might be called "effective and sustainable democratic functional equivalents." Institutions and processes of delegation and insulation can exist under democratic conditions, as indicated in Callaghy's chapter, but they are difficult to achieve, and, above all, to sustain over time. If they are to be found, they will need to be supported by relatively high levels of resources. Even then the outcome may be very difficult to sustain, and it will depend on unpredictable political struggles, especially electoral ones, and on larger contextual factors.

Contextual Factors

As the last major flaw, the Western liberal vision has seriously underestimated the importance of larger contextual factors beyond policy change that facilitate transformation, that is, the institutions, knowledge, attitudes, and infrastructure which underpin states, markets, and regimes. ₄₁ This powerful vision is an amazingly parsimonious one; it asserts that the magic of the market and the ballot box can be achieved by merely changing economic policy and allowing more political participation. It is also an amazingly apolitical vision as it fails to see many of the difficulties of implementation and process over time. As a result, it has significantly underestimated the time frame and costs of transformation. Clearly Western actors suffer from the "faults of analytic and policy hurry."

Because of these flaws and misperceptions in the Western liberal vision, plus the failure of the implicit bargain, the concomitant officialization and politicization of resource flows, and continued difficulties with the openness of trade, it is not likely that the vision will be realized in very many places, especially in Africa. The result will be increasing differentiation between countries and regions of Africa and elsewhere rather than accelerating convergence. This vision emerged out of the core of the international political economy-the Northern industrial democracies-and it is deeply rooted in their sociopolitical realities, dynamics, and weltanschauungs. As such, it is also deeply rooted in the international hierarchy of power, but in its contact with the Third World generally, and Africa in particular, the vision confronts local and regional realities, logics, struggles, politics, and histories and is frequently deflected by them.

The trajectory of individual African countries will be affected by a series of interlinked internal and external factors. On the internal side, relatively high degrees of stateness and cosmopolitanism are central to position a country better in the international political economy, especially the ability to monitor changes in the world economy and to bargain in a sophisticated way with all types of actors-private business groups, states, international financial institutions, and private voluntary organizations. This is particularly true for trade and credit, as the international political economy has always been more statist in these areas than most analysts are willing to admit.

Whether increased stateness and cosmopolitanism will emerge in many places in Africa, however, is very questionable, but Africa needs to work in this direction so that it can eventually go beyond the back to the future strategy. Certainly local and regional political and social dynamics will affect attempts to achieve a productive balanced tension between state and market, state and society, and state and the international arena. At bottom it is still a self-help world, and nobody should wait for external miracles that will restructure the international political economy to make it more fair or equitable. Despite all the rhetoric to the contrary, very few Western actors believe they owe Africa a living. A pervasive view among Western actors is that if the IMF and the World Bank can pull off miracles in the Africa, fine; if not, so be it: there are other places to go.

Although it is largely a self-help world, external factors are very important in determining country trajectories. These factors revolve largely around the degree of openness of the world trading order, the extent to which the implicit bargain is fulfilled, and the stability of the overall politico-strategic environment. The first two are very much in doubt, while the third depends greatly on the functioning of the new "unipolarity without hegemony" as it responds to emerging challenges.

Over the course of the 1980s, the IMF, the World Bank, and the major Western countries learned important lessons about the difficulties of implementing the liberal vision in Africa. While many more remain to be learned, these lessons now need to be applied systematically so that the gap between the vision and reality may be narrowed. This is particularly true for lessons about the implicit bargain, the need to buffer adjustment costs, the enormous challenges of simultaneous economic and political liberalization, the importance of a balanced tension between state and market, and centrality of stateness, cosmopolitanism, and larger contextual factors. If these lessons are not learned and applied, then the brilliant Western liberal vision will remained seriously flawed, in large part by the powerful realities of politics, and Africa will remain badly "hemmed in."

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Note 1: Frederick Chiluba, "Inauguration Speech of Frederick Chiluba, November 2, 1991," typed manuscript, pp. 1-4. Back.

Note 2: As indicated in the introduction to this volume, by "hemmed in" we mean a situation in which the viable policy alternatives, and the capacities and resources needed to implement them, available to African governments are severely constrained as a consequence inter alia of volatile politics, weak states, weak markets, debt problems, and an unfavorable international environment. Back.

Note 3: World Bank, Sub-Saharan Africa: From Crisis to Sustainable Growth (Washington, D.C.: World Bank, 1989); also see Harvey Glickman, ed., The Crisis and Challenge of African Development (Westport, CT: Greenwood Press, 1988). Back.

Note 4: On governance, see Deborah Brautigam, "Governance and Economy: A Review," Working Paper, Policy and Review Department, World Bank, Washington, D.C., December 1991. Back.

Note 5: On the "nightmare scenario," see Economic Commission for Africa, "ECA and Africa's Development: 1983-2008," Addis Ababa, April 1983, and "Beyond Recovery: ECA-Revised Perspective of Africa's Development, 1988-2008," Addis Ababa, March 1988. Back.

Note 6: See Howard Stein, ed., Asian Industrialization: Lessons for Africa (London: Macmillan, forthcoming), especially the chapter by Deborah Brautigam, "The State as Agent: Industrialization in Taiwan 1895-1976 and Lessons for Sub-Saharan Africa." Back.

Note 7: Atul Kohli and Vivienne Shue, "State Power and Social Forces: On Political Contention and Accommodation in the Third World" in Joel S. Migdal, Atul Kohli, and Vivienne Shue, eds., State Power and Social Forces: Domination and Transformation in the Third World (New York: Cambridge University Press, forthcoming). Back.

Note 8: Based on discussion with Janet Roitman in September 1992 about ongoing research in northern Cameroon. Back.

Note 9: On democracy, uncertainty, and credibility, see Adam Przeworski, Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America (New York: Cambridge University Press, 1991), and Alberto Alesina, "Political Models of Macroeconomic Policy and Fiscal Reforms," paper for a World Bank conference on "The Political Economy of Structural Adjustment in New Democracies," Washington, D.C., May 1992. Back.

Note 10: Quoted in "The Cupboard is Bare," Africa News, June 22-July 5, 1992, p. 16. Back.

Note 11: Ibid. and Margaret A. Novicki, "Frederick Chiluba, Champion of Zambia's Democracy," Africa Report 38, 1 (Jaunuary-February 1993): 37. Back.

Note 12: Foreign Broadcast Information Service, May 4, 1987, p. U9. Back.

Note 13: The data in this section are from two companion reports: World Bank, Global Economic Prospects and the Developing Countries (Washington, D.C.: World Bank, May 1991) and World Bank, World Development Report 1991: The Challenge of Development (New York: Oxford University Press, 1991); the focus of the latter for 1991 is the record of attempted economic reform in the 1980s. Back.

Note 14: World Bank, Global Economic Prospects, p. 17. Back.

Note 15: World Bank, World Development Report 1991, pp. 28-29. Back.

Note 16: World Bank, Global Economic Prospects, pp. 6, 58 (emphases added). Back.

Note 17: Ibid., pp. 58, 4. Back.

Note 18: Quoted in Cadman Atta Mills, Structural Adjustment in Sub-Saharan Africa: Report on a Series of Five Senior Policy Seminars Held in Africa 1987-88 (Washington, D.C.: World Bank EDI Policy Seminar Report No. 18, 1989), p. 23. Back.

Note 19: Cited in Chalmers Johnson, "Political Institutions and Economic Performance" in Frederic C. Deyo, ed., The Political Economy of the New Asian Industrialism (Ithaca: Cornell University Press, 1987), p. 136. On the expanding comparative literature on the East Asian and Latin American NICs, see Stephan Haggard, Pathways from the Periphery (Ithaca: Cornell University Press, 1990); Peter B. Evans, "Class, State and Dependence in East Asia: Lessons for Latin Americanists" in Deyo, ed. The Political Economy of the New Asian Industrialism, pp. 203-26; Gary Gereffi and Donald L. Wyman, eds., Manufacturing Miracles: Paths of Industrialization in Latin America and East Asia (Princeton: Princeton University Press, 1990); Robert Wade, Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization (Princeton: Princeton University Press, 1990); and Ziya Onis, "The Logic of the Developmental State," Comparative Politics 24, 1 (October 1991): 109-126. On Korea, in addition to the above citations, see Stephan Haggard and Chung-in Moon, "The South Korean State in the International Economy: Liberal, Dependent, or Mercantile?" in Ruggie, ed., The Antinomies of Interdependence, pp. 131-189; Alice H. Amsden, Asia's Next Giant: South Korea and Late Industrialization (New York: Oxford University Press, 1989); Larry E. Westphal, "Industrial Policy in an Export-Propelled Economy: Lessons from South Korea's Experience," Journal of Economic Perspectives 4, 3 (1990): 41-59; Il SaKong, Korea and the World Economy, (Washington, D.C.: Institute for International Economics, forthcoming; Jung-En Woo, Race to the Swift: State and Finance in Korean Industrialization (New York: Cambridge University Press, 1991); Ji-Hong Kim, "Korea: Adjustment in Developing Industries, Government Assistance in Troubled Economies" in Hugh T. Patrick, ed., Pacific Basin Industries in Distress: Structural Adjustment and Trade Policy in Nine Industrialized Economies (New York: Columbia University Press, 1991), pp. 357-417. Back.

Note 20: See Robert Wade, "East Asia's Economic Success: Conflicting Perspectives, Partial Insights, Shaky Evidence," World Politics 44, 2 (January 1992): 270-320. Back.

Note 21: Edward S. Mason, "Preface" in Leroy P. Jones and Il SaKong, eds., Government, Business and Entrepreneurship in Economic Development: The Korean Case (Cambridge: Harvard University Press, 1980) p.vi. Back.

Note 22: Stephen Haggard, Pathways from the Periphery, p.55. Back.

Note 23: Alice Amsden, Asia's Next Giant. Back.

Note 24: Jones and SaKong, eds., Government, Business and Entrepreneurship, p. 1. Back.

Note 25: Irma Adelman and Cynthia Taft Morris, "Society, Politics and Economic Development: A Quantitative Approach" quoted in ibid. Back.

Note 26: Although there was substantial public sector involvement in Korean growth in the 1960s and 1970s, the government was formally committed to a private enterprise economy. Back.

Note 27: Jones and Sakong, eds., Government, Business and Entrepreneurship, p. 67. Back.

Note 28: A Ministry of Reconstruction was founded in 1955, and an Economic Development Council was formed under its auspices in 1958. Back.

Note 29: See Peter B. Evans, "The State as Problem and Solution: Predation, Embedded Autonomy, and Structural Change" in Stephan Haggard and Robert Kaufman, eds., The Politics of Economic Adjustment (Princeton: Princeton University Press, 1992), pp. 139-181. Back.

Note 30: The theme of Amsden, Asia's Next Giant, but also a major part of the argument of Jones and SaKong, Government, Business and Entrepreneurship . Back.

Note 31: Wade, Governing the Market. Back.

Note 32: See Brautigam, "The State as Agent: Industrialization in Taiwan 1985-1976 and Lessons for Africa" and "Regional Industrialization in Eastern Nigeria," report prepared for Nigeria Country Operations, West Africa Region, World Bank, Washington, D.C., 1992. Back.

Note 33: UNCTAD Bulletin (May-June 1990): p. 11. Back.

Note 34: Financing Africa's Recovery (New York: United Nations, 1988). For further discussion of the debt issue, see G. K. Helleiner, "International Policy Issues Posed by Sub-Saharan African Debt," The World Economy 12, 3 (September 1989): 315-324. Back.

Note 35: See John Ravenhill, Collective Clientelism: The Lomé Convention and North-South Relations (New York: Columbia University Press, 1985). Back.

Note 36: For details of the STABEX scheme and its shortcomings, see John Ravenhill, "What is to be Done for Third World Commodity Producers? An Evaluation of the STABEX Scheme," International Organization, 38, 3 (Summer 1984), pp. 537-574. Back.

Note 37: World Bank, World Development Report 1991, p. 5, also see pp. 39-40. Back.

Note 38: Tony Killick, A Reaction Too Far (Boulder: Westview Press, 1990). Back.

Note 39: The Japanese have begun to push the IMF and the World Bank to allow more market-friendly state interventionism in their prescriptions for reforming countries. Back.

Note 40: Christopher Colclough and James Manor, eds., States or Markets? Neo-Liberalism and the Development Policy Debate (New York: Oxford University Press, 1991). Back.

Note 41: For a theoretical argument about contextual factors, which draws on Max Weber, see Thomas M. Callaghy, "The State and the Development of Capitalism in Africa: Theoretical, Historical, and Comparative Reflections" in Donald Rothchild and Naomi Chazan, eds., The Precarious Balance: State and Society in Africa (Boulder: Westview Press, 1988), pp. 67-99. Back.