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Hemmed In: Responses to Africa's Economic Decline
Thomas M. Callaghy and John Ravenhill, editors
New York
1993
Introduction
Vision, Politics, and Structure: Afro-Optimism, Afro-Pessimism or Realism?
T HOMAS M. C ALLAGHY AND J OHN R AVENHILL
| Only with the emergence of African states that foster individual freedoms and market economies with complementary public sectors will the continent receive the attention it deserves. African societies might then graduate from being passive recipients of charity to full actors in gobal politics and economics. |
| Michael Chege, "Remembering Africa" |
| Africa's lag vis-à-vis the rest of the world is astronomical. We need good governance--that is meaningful participation by our people in the political process, transparent and accountable governmental systems with sensitivity to the sufferings of our people. When our people are motivated by good governance and fair rewards for their labors, African economies will then begin to grow at a pace which will ultimately see us catching up with the rest of the world or at least bridging the yawning gap. The continent of Africa is now so marginalized. |
| Fredick Chiluba, President of Zambia 1 |
These views, expressed here by a leading African scholar and a newly elected president, also double as a hope, and are now heard with increasing frequency from a wider range of Africans. As a vibrant form of Afro-optimism, they certainly represent a striking change from a decade ago, and, since the late 1980s, they have also become a prominent mantra of Western countries and international financial institutions (IFIs). Yet in the face of this hope, this vision, Africa remains distinctly "hemmed in" by its problems of decline. The 1980s were a lost decade for development in Africa. Per capita income in most African countries has now regressed to the levels prevailing at independence, more than thirty years ago. One of the few positive factors to emerge from this decade of economic decline was the recognition by many African governments of the errors of previous policies, and the necessity to reorient their economic strategies. In varying degrees and ways, they have attempted to respond to decline. A significant impetus for this redirection of policy came from the need to reach agreement with Western donors on structural adjustment programs in order to secure badly needed external funding. At one time or another, the vast majority of African governments in the 1980s entered into structural adjustment agreements with the International Monetary Fund (IMF) and/or the World Bank, agreements that were implemented with varying degrees of enthusiasm and sincerity. Then, in the early 1990s, important democratization movements emerged in a wide range of African countries, posing new challenges for economic adjustment.
This volume surveys the major economic, political, and social aspects of Africa's first decade plus of adjustment to decline to derive lessons for African governments, the international financial institutions, bilateral donors, and all those who have an interest in the welfare of Africa's rapidly growing population, in short, for those concerned with Africa becoming less "hemmed in." 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 of volatile politics, weak states, weak markets, debt problems, and an unfavorable international environment. This volume will not, however, examine several other factors that also hem Africa in, and, in fact, intensify the ones investigated here-demographic, health, and ecological problems, drought and migration, and civil wars and interstate violence.
We believe that a realistic, hardheaded analysis of African conditions is in order, both for improved understanding and for better policy. Commentators representing a wide range of viewpoints often tend to pull back from important but difficult conclusions. Many Africans are still attempting to find "shortcuts" out of their problems, while many Western Africanists stretch to find optimistic conclusions in order to counteract negative views of the continent and what they see as unwarranted Afro-pessimism. At the same time, officials of the IMF, the World Bank, and the major Western donors often take an upbeat, almost "cheerleading" stance in order to encourage continued attempts at externally sponsored reforms they believe will bring major transformation. A realistic, even if not always agreeable, assessment-one that takes into account the synergy between the vision (and the policies that flow from it), politics and structure, one that avoids unproductive illusions but does so without underestimating or undervaluing the creativity of human agency-does better service to Africans as they confront their serious problems and to those outsiders who want to help them. An eventual backlash to varied false hopes and failed illusions might generate more Afro-pessimism than would a more realistic analysis of all positions now.
This volume consists of original essays, written by economists and political scientists but inevitably interdisciplinary in nature, which address a series of core questions. What are the economic and political factors that underlie Africa's economic decline? What are the political consequences of economic decline? How effective has the conditionality imposed by the international financial institutions and Western donors been in effecting a change in the policies of African governments? In what circumstances is policy reversal most likely to occur? What factors-and in particular, what political structures and coalitions-are necessary for adjustment to be sustained? To what extent has sufficient external support for African adjustment efforts been forthcoming? Will new domestic and external pressures for democratization facilitate or undermine adjustment efforts?
The chapters include both country case studies and sectoral studies. John Ravenhill and Reginald Green (chapters 1 and 2) provide overviews of the first decade of adjustment. David Gordon (chapter 3) focuses on how effective the conditionality used by the international financial institutions as part of structural adjustment programs has been. This issue is taken up in Matthew Martin's comparative study (chapter 4) of the effectiveness of IMF programs in Ghana and Zambia. Naomi Chazan and Donald Rothchild (chapter 5) review the political factors associated with economic decline, and the impact that structural adjustment programs have had on the political systems of Africa. Roger Riddell's contribution (chapter 6) is a study of manufacturing, in particular how this sector has been neglected in structural adjustment programs. The chapters by Sara Berry and Jennifer Widner (chapters 7 and 8) examine how farmers have responded to loss of income in poor economic times. Failures in the agricultural sector-in the production of export and food crops alike-are at the heart of Africa's recent economic decline. In the midst of widespread agricultural failure, there have, however, been some success stories. Jeffrey Herbst (chapter 9) looks at three cases where the agricultural sector has either performed reasonably well or where important pro-agriculture reforms have been undertaken-Kenya, Zimbabwe, and Ghana. He reviews the reasons underlying their success and the implications for other countries. The essays by Michael Lofchie (chapter 10) and Nicolas van de Walle (chapter 11) are detailed case studies that illustrate the reasons why adjustment has been more successful in some countries than others. Finally (in chapter 12), Callaghy places the African experience with adjustment in comparative perspective and examines the relationship between economic and political liberalization.
John Ravenhill's chapter introduces a number of the themes that recur throughout the volume. In particular, he notes that the keywords emerging from the first decade of adjustment have been complexity and uncertainty. Early optimism on the part of the international financial institutions that African economies could be revitalized through the application of a short, sharp shock treatment disappeared as the intractability of Africa's malaise become apparent. Increasingly, the complexity of the task of addressing Africa's problems was acknowledged. The World Bank's agenda for Africa has become much lengthier, has evolved to embrace issues of political as well as economic reform, and has moved from an emphasis on short-term measures to a medium- and long-term perspective. The cost of the new recognition of complexity, however, is a strong sense of uncertainty. The Bank and other external actors appear to be floundering in a sea of problems, uncertain as to how they might best be resolved and which should be given priority. Meanwhile, the debt overhang, unfavorable global economic conditions, and insufficient response from industrialized donors countries all limit the prospects for a sustained reversal of Africa's economic decline, to its becoming less "hemmed in."
Green's chapter is particularly concerned with the extent to which the major players in economic reform-the IMF, the World Bank, and African governments (and their continental representatives, the Organization of African Unity and the Economic Commission for Africa)-have learned from the first decade of attempted adjustment. Green notes that the Fund has failed to "structurally adjust" its approach to meet changing circumstances in Africa in the 1980s with the consequence that not only has it been in conflict with African governments but also that its stabilization programs have increasingly been in "antagonistic contradiction" to the World Bank's emphasis on adjustment with growth. The Bank, Green argues, is less monolithic and far more pragmatic than the Fund. It has learned from experience, and has changed course (which some critics have failed to acknowledge). Bank programs continue, however, to be characterized by dogmatism on issues such as user fees for social services, by inadequate analysis, and by overoptimism both on the funding reform programs require and on what will be provided by industrialized countries.
To date, the results of structural adjustment programs remain unclear; they have not been running long enough nor taken seriously enough in many countries for definitive conclusions to be reached. Nevertheless, Green asserts, there is no alternative to adjustment; the only debate can be over different emphases, timing, and the move to a longer-term focus on structural transformation. Although African organizations have helped to shape the agenda to focus increasingly on the longer-term and on basic needs, they have not produced a viable alternative strategy to the one advocated by the IMF and the World Bank.
Gordon's chapter begins by examining how African countries have come to depend so heavily on the international financial institutions (IFIs) for external finance. He argues that Africa's debt crisis had its origins in the failure of African countries after the first round of oil price increases in 1973-74 to use the foreign exchange they borrowed productively. In particular, and in contrast to Latin America, few of the funds were invested to increase export capacity. Consequently, when commodity prices slumped in the early 1980s, African countries were unable to service their debts, and entered into a vicious downward spiral of debt, decline, and rescheduling.
This cycle of decline provided the opening for the IFIs to become involved in shaping African governments's policy choices through attaching conditions to the debt relief that they provided. The role of the IFIs increased after it became obvious that the expectation of a quick revival of African economies was unrealistic. Reinforced by "policy dialogues," conditionality was widened in scope and changed from the IMF's emphasis on aggregate targets to a new focus on negotiating specific policy changes.
With the proliferation of required policy changes, Gordon argues, conditionality has become less effective, a view shared by Martin in his study of Ghana and Zambia. In part this is because the IFIs have failed to keep their part of the implicit conditionality compact to provide a substantial increase in external financing-both from their own resources and by acting as a catalyst for other official and private sources of foreign exchange. In addition, governments have discovered that most often few sanctions are imposed if they comply only partially with policy conditions. One reason for this is that the IFIs themselves came to have major institutional interests in proclaiming the apparent "success" of the reforms. Another reason is that the IFIs had insufficient capacity to monitor the proliferating conditions. Lastly, the IFIs are constrained by the fact that they are both instruments of reform and creditors with a vested interest in not declaring the countries to be in default.
Besides the prospect that African governments may well escape with only partial compliance, there are a number of other reasons why the prescribed reforms may not be fully implemented. First is the politics of reform coalitions: the likelihood that losers from structural adjustment are likely to mobilize more quickly and effectively than potential winners. Second, programs may not be implemented because of the limited technical skills available or because of bureaucratic obstruction. Third, in many instances African governments simply do not accept the technical analysis on which policy conditions were based. Like other authors in the volume, Gordon concludes that conditionality has worked most successfully where economic decline has been accompanied by regime change and, in particular, where the IFIs have been able to convince a group of influential technocrats and politicians or military officers of the value of the reform program.
Martin's comparative case study includes Ghana, the country most often held up as the success story of sustained, multisector adjustment, and Zambia, where economic reform was very limited and external financing for adjustment was dramatically canceled following disagreement over the implementation of an adjustment program. Martin's chapter seeks to explain why the effort in Ghana was broadly successful whereas the one in Zambia decidedly was not. He finds that the explanation lies in four groups of factors.
First are the differences in domestic politics between the two countries. Whereas the Jerry Rawlings military government enjoyed substantial autonomy as a consequence of the disorganized and disunited opposition, was pragmatic, and able to take rapid decisions, Kenneth Kaunda's long-lasting government was constrained by sectional groups and, in a country with (for Africa) an unusually urbanized population, feared that the implementation of some elements of the adjustment package, such as the reduction of food subsidies, would cause large-scale political protest. Zambian politics, Martin suggests, ultimately could not cope with the pace of adjustment.
A second factor was the design and implementation of the adjustment programs themselves. Although Martin finds fault in program design in both countries, the faults in the Zambian program were especially damaging. In particular, the Zambian program contained incorrect sequencing of adjustment measures, and proliferating (and often conflicting) conditions. A third difference lay in the capacity of the countries to adjust, in particular, the differential supply responses for their major export commodities. Here Zambia's dependence for the majority of its export earnings on copper mines that were coming toward the end of their profitable lives, coupled with the depressed state of the international copper market, constrained the possibilities for a swift increase in export earnings.
Finally, there was a crucial difference in the availability of foreign exchange in support of the two programs. Whereas Western donors eventually warmed to the Rawlings regime and were relatively generous in their support, the hostility and suspicion with which Kaunda's Zambia was viewed in international circles ensured that there was only grudging and inadequate external support for the Zambian adjustment program. As a result the Zambian program collapsed in part from import strangulation.
Martin concludes by drawing a number of lessons from the two cases for the design and implementation of adjustment programs. There is substantial room, he argues, for improvement in the negotiating process. All parties need to be better prepared for the talks, a larger role should be found for governments in program design, implementation should be more flexible, and there is a great need for additional and more timely external finance.
Chazan and Rothchild address the political factors underlying the economic crisis. The postcolonial African state, they argue, was characterized by hegemonic pretensions but an inability to penetrate society and extract resources from it. Overburdened state institutions were also unresponsive to popular demands. "Politics" was driven underground to be expressed primarily in the informal realm.
Excessive statism helped to bring on the economic decline of the 1980s. By the end of the second decade of independence, governments that were alternately too detached from society or too porous to societal demands were barely supported by weak, overextended, costly, and inefficient state structures. As the resources available to sustain a pattern of clientelist politics declined so popular unrest grew. The survival strategies pursued by social groups included disengagement from the state, a move which further curtailed the state's penetrative abilities.
Chazan and Rothchild note that state decline and, in some cases, attempted economic reform, facilitated straddling between the formal and informal sectors and permitted the emergence of entrepreneurs with sources of accumulation independent of the state. All of these processes helped to pluralize the institutional terrain, strengthened "civil society," and, in the late 1980s and early 1990s, generated major movements for democratization of Africa's long-standing authoritarian political structures.
Since agriculture has usually been made the centerpiece of structural adjustment programs (SAPs), manufacturing has often been neglected or relegated to a distinctly inferior position. Riddell tries to correct this imbalance; he suggests that policies toward manufacturing have moved from a radical pro-industry approach that was popular with many African governments immediately after independence to the polar opposite of the "harsh withdrawal" characteristic of SAPs. Neither approach, Riddell believes, is optimal for industrial promotion in Africa.
For Riddell, the "harsh withdrawal" advocated by the IFIs as part of the adjustment package is based on a faulty understanding of the manufacturing record in Africa. Although the level and share of manufacturing in GDP in Sub-Saharan Africa remained low, the rate of growth (albeit from a small base) in the 1960s and 1970s was higher than that of other developing countries. Africa's performance, if not startling, was at least respectable. A detailed examination of the data leads Riddell to conclude, first, that the manufacturing problem in Africa should not be treated in a fundamentally different way than in other developing countries; in other words, it should not be regarded as a lost cause. Second, the intercounty variations in performance suggest the need to tailor policies for specific countries. Success comes from the sustained provision of a supportive environment, but this environment has taken a number of forms, some of which have included substantial government intervention. Manufacturing in a few countries has remained internationally competitive despite an increase in protectionism.
Riddell suggests that the "harsh withdrawal" policies characteristic of many adjustment programs are fundamentally misguided. An increase in the level of manufactured exports will not be achieved merely by removing protection and exposing domestic manufacturers to the chill winds of international competition. If trade liberalization in itself is insufficient, so is privatization. The public sector is not necessarily less efficient than the private one; it all depends on the domestic environment. As structural adjustment programs have ignored supportive policies specific to the manufacturing sector, they, together with the recessions that they have induced, have led to "contraction without restructuring" in manufacturing. There is no evidence from the case studies that Riddell reviews of a link between adoption of structural adjustment programs and increased exports of manufactures.
Rather than "harsh withdrawal," Riddell suggests an alternative approach of "benign intervention." This is premised on the argument that in a era when low wages in themselves are of reduced significance in attracting manufacturing investment, the key to industrial development is to provide a stable environment and an expanding domestic production base. The implication is that SAPs should be concerned more with the medium- and long-term policies needed to promote industrial diversification and increasing competition among domestic companies. Riddell argues that while structural adjustment is necessary, programs must be adapted to include a variety of policies specifically designed to promote industry. Among these are short-term subsidies to production and consumption, and selected export incentives. Furthermore, the pace of trade liberalization should be far more gradual than that of existing adjustment programs; Riddell notes that a sheltered regional market has facilitated industrialization in some countries. Other factors important in providing an "enabling environment" include the encouragement of high levels of competency in management, engineering, and other skills. But the very clear message is that policies must be tailored to the circumstances of the individual country undergoing adjustment.
While much has been written about the need to revive agriculture as the foundation for renewed economic growth, we actually know relatively little about how farmers have responded to the problems generated by economic decline in the last two decades. This issue is addressed in the chapters by Berry and Widner.
Berry's starting point is to trace how social identities and access to land in Africa have been changed by colonialism, by commercialization, and by government action after independence. She argues that none of these influences has led to a revolution in African agriculture. Although all of them have increased the ambiguities of both social identity and the right of access to land, social identity and status within the community remain important as means of gaining wealth and power. Responses by farmers to the rural crisis, therefore, are constrained by their need to continue to make significant investments in acquiring or validating membership in key social networks.
Berry identifies four principal strategies farmers have used to cope with the uncertainties induced by economic decline. First, they have sought to increase off-farm income through such means as laboring for others, becoming traders, and engaging in other non-farm rural enterprise; or through migration. But in a period of general economic decline, non-farm income-generating opportunities may be scarce-a point emphasized by Widner, who argues that optimism about the opportunities offered by the informal sector can be misplaced. People require capital to enter many informal sector activities such as trading or establishing small workshops, and they need customers.
Second, farmers may attempt to reduce their vulnerability by planting crops that are more "liquid" (that is, those that are readily saleable and/or mature relatively quickly), or which make more flexible demands on their labor. A third strategy is also intended to increase flexibility in income generation and labor utilization: making changes in the techniques of production such as staggering times of planting and harvesting. Finally, farmers may change the patterns of investment, again to reduce risk. This may include more investment in tradable commodities rather than capital goods, and more investment in social networks (although Berry notes that in times of crisis these cannot be expected to provide an adequate safety net).
Berry concludes by arguing that the instability that has characterized rural production in the last two decades weakens farmers' incentives and ability to think about the long term. Inevitably they focus on more liquid assets and tend to move toward production based on smaller farming units. The emphasis on immediate income tends to drive down crop prices (as farmers attempt to sell a larger proportion of their output), and wages (as more people seek off-farm employment) with the result being further impoverishment.
Widner extends Berry's analysis by examining how cocoa farmers in Côte d'Ivoire have responded politically to rural economic decline and, in particular, the factors that determine whether farmers will respond by engaging in organized political activities. Agrarian interests have typically been viewed as divided by various cleavages, of being incapable of exerting an effective influence on policy-making, and of more often pursuing, in Albert Hirschman's terminology, the "exit" rather than the "voice" option. 2
Like Berry, Widner emphasizes that Africa's farmers face a narrowing range of options as a consequence of increasing land shortages and the breakdown of extended households. Farmers' frustrations at the obstacles they faced to diversification, and their lack of access to credit, led to a move from loyalty to the ruling Parti Démocratique de Côte d'Ivoire to an increasing resort to political voice. But the propensity to engage in political activities varied substantially among regions.
The increasing politicization of farmers was also precipitated by the decline in world cocoa prices in the second half of the 1980s which forced the Ivorian government to reduce farmgate prices in 1989. This was ironic, of course, because the World Bank was advocating across Africa that farmers should receive higher prices for their output. Unfortunately, the options available to farmers were strictly limited. The simultaneous fall in prices for other cash crops left little scope for diversification, and, while income was falling, farmers also faced higher prices for inputs for their crops. A retreat into subsistence production was impossible because of the households' need for cash to pay for items such as school fees. Borrowing money and off-farm employment were not options at a time of general economic decline.
Widner finds that farmers blamed government economic mismanagement for their plight, believing that the political elite's inept and often corrupt overinvestment in plantations had exacerbated the problem. Farmers increasingly sought new means of communicating their concerns to the administration, and a larger role in policy-making. Some farmers reorganized the largely defunct cooperatives for their own ends; others attempted to have a more direct input into policy-making by participating in grower delegations to Abidjan.
A combination of factors, Widner finds, explains differential rates of political activism. The most active areas were characterized by villages with ineffective chiefs, with "notables" who were on average younger and from more diverse cultural backgrounds, with more highly educated people, with a number of young men who had returned to the villages from urban areas, and with more interest in and access to local and national news. Widner argues, however, that there is little systematic evidence yet that the increased political activism of farmers is likely to be represented in party political form. The new political parties set up to contest the Ivorian elections had extremely limited resources and were not capable of systematically penetrating the countryside. Farmers remain a group that is difficult to mobilize for political purposes, although Widner expresses cautious optimism about a new national farmers union created in 1991.
How, then, can the necessary political support be generated to sustain a program of structural adjustment that puts agricultural revival at its core? This is the central question addressed by Herbst's chapter. He argues that the early World Bank emphasis on getting prices right has proved to be insufficient for reviving agriculture. To achieve this objective, a reform of economic institutions and the rebuilding of infrastructure are required. But for this to occur there must be a political system that favors agricultural interests.
Herbst suggests that there have been three principal examples in Africa of political systems that have provided sustained support for agricultural development-Kenya, Zimbabwe, and Ghana under Rawlings. In Kenya the principal factors leading to agriculture's favorable political treatment have been the ownership of farms by politicians, an electoral system that has held politicians accountable to their constituents, and the Harambee system. In Zimbabwe, agriculture has been well-treated in part because of the Robert Mugabe government's commitment to the rural sector forged during the guerrilla war, and because of the existence of a well-organized, well-informed white farmer group that has long enjoyed influence in a highly structured bargaining process with the government on agricultural prices. Finally, in Ghana, although agricultural interests have had no institutionalized representation in the policy-making process, the government's belief in the necessity of reinvigorating the agricultural sector and the conditionality imposed by the international financial institutions have ensured that favorable policies toward agriculture were implemented.
Can the experience of Kenya and Zimbabwe be replicated elsewhere in Africa? Herbst thinks not. Accordingly, favorable agricultural policies will likely depend on the influence of the international financial institutions in promoting agriculture and the empowerment of farmers. For this to be done more effectively, Herbst suggests, the World Bank needs to establish a larger local presence in African counties. Like Widner, Herbst is skeptical about the prospects for farmers being empowered by democratization given the transaction costs of organizing coalitions.
Two chapters follow which present detailed case studies of structural adjustment. The case of Cameroon, examined by van de Walle, is, like Zambia, an example of failed adjustment or nonreform. For van de Walle, the principal problem in Cameroon is what Miles Kahler has identified as the "orthodox paradox": the expectation that governments will implement reform programs that undermine the foundations of their political support and that a capable state is necessary to implement a neoclassical strategy of economic adjustment. 3 In Cameroon, the "hegemonic alliance" opposed reforms that threatened its control over state resources and rent-seeking activities, and it controlled a state apparatus with very weak capabilities. The country's oil wealth had obscured its fundamental economic problems, which included a costly and ineffective state sector. The decline in oil prices in the 1980s threatened the politics of elite accommodation at a time when recently installed President Paul Biya was attempting to consolidate his power. The regime's legitimacy and power ultimately were dependent on control over state resources, a control that would be undermined if the structural adjustment program were fully implemented.
Van de Walle argues that the regime survived by engaging in token implementation and the ritual games of political liberalization. In accordance with the comments made by Gordon in his review of conditionality, van de Walle found that the Cameroon government was able to play donors off against one another so that conditionality remained largely illusory. Although the token implementation of policies enabled the regime to buy time, it has had to rely increasingly on coercion and lacks any capacity for seriously implementing a structural adjustment program.
Lofchie's chapter compares two countries that have quite divergent economic records in the 1970s and 1980s-Kenya and Tanzania. Kenya, Lofchie argues, had a much more impressive economic record than its southern neighbor until the mid-1980s, largely because of its better agricultural performance. It consistently paid a larger share of world market prices to its agricultural producers than did Tanzania, and its currency was also much less overvalued. The reason for Kenya's relatively favorable treatment of export agriculture (although, Lofchie acknowledges, this was less so for food crops) was that identified by Herbst-concern for and investment in farming by political and bureaucratic elites. Favorable policies toward agriculture were facilitated by the proximity of Nairobi to the best farming land in the country, by the long tradition of private land ownership, and by the government's electoral and organizational accountability to smallholder interests. In contrast, Tanzania prevented public servants and politicians from purchasing land, and the best growing land was a long distance from the political center.
Lofchie argues that the difference in the economic records of the two countries is also explained by their differing attitudes toward economic policy and reform. Kenya, he suggests, had essentially been a structural adjuster on a voluntary basis since independence and often took the initiative in proposing policies to the international financial institutions. Tanzania, on the other hand, for a long time viewed the IFIs as "adversarial institutions," and sought their assistance only after prolonged economic decline. By the late 1980s, however, the two countries began to "trade places." New political logics in Kenya began to undermine economic performance, and a turnaround occurred in Tanzania as the balance of power in the government shifted from "socialists" to "pragmatists" because of the accumulated effects of decline and the influence of new ideas. Subsequently, devaluation, trade liberalization, and the reform of parastatals offered some prospect for economic recovery in Tanzania, although this remains constrained by the steepness of the country's decline, the breakdown of infrastructure, and the absence of private sector actors able to step in to replace government agencies.
Callaghy's chapter investigates the relationship between economic and political reform. Using experience from elsewhere in the Third World as a guide, he analyzes the political and institutional structures that have facilitated major economic transformation. These structures have been largely, but not exclusively, authoritarian. After sketching Africa's increasing marginalization and dependence, he examines three African cases-Ghana under Jerry Rawlings, Nigeria under Ibrahim Babangida, and Senegal under Abdou Diouf. These three cases range across a continuum from an authoritarian military regime that started economic reform well before initiating political liberalization (Ghana) to an authoritarian military regime that attempted economic reform while simultaneously carrying out a protracted, highly structured, and multistaged political liberalization process (Nigeria) to a civilian regime that attempted economic reform after important democratization had already been secured (Senegal). Ghana achieved considerable economic progress, at least by African standards; Nigeria made initial progress on economic reform and then faltered badly as the political transition approached; Senegal was unable to implement an economic reform program, but remained democratic.
Challenging the optimistic expectations of the current Western and African visions about the need for simultaneous economic and political change, Callaghy stresses the obstacles to both economic and political reform and argues that political liberalization might actually make economic reform even more difficult than it already is. He does, however, begin to explore the sequencing of reform and institutional arrangements that might facilitate the maintenance of sound economic policy under democratic conditions.
A number of themes emerge clearly from the chapters that point to fallacies in the conventional wisdom expressed by the IMF, the World Bank, and other external actors. Some of these have now been conceded by them-the fallacy that adjustment could quickly resolve Africa's economic woes, for instance. Beside the well-known fallacy of composition (the idea that what is good for one county acting alone is not necessarily beneficial if all countries pursue the same policy simultaneously), the chapters reveal the fallacy of a frictionless, flexible economy-the idea that resources and actors can move effortlessly into new and reformed sectors and that the private sector will step in to play the roles previously performed inefficiently by government agencies. Berry and Widner show that it is often not possible for farmers to move into nonrural activities because they lack the skill and capital to do so, especially in a time of general economic decline. Lofchie points out that in Tanzania, private actors are often not available to pick up the functions previously performed by parastatal organizations, and that there is a need to strike the right balance between public and private sectors if economic recovery is to succeed.
Another fallacy is that the pressure of competition-the "magic of the marketplace"- will succeed in forcing African manufacturing industries to become more efficient. Both Lofchie and Riddell argue that the current emphasis on trade liberalization has produced de-industrialization. Again, a less dogmatic approach is called for, a direction in which the World Bank appears to be heading in recent reports but which has yet to be implemented in the field.
A further fallacy is that democratization will inevitably lead to the empowerment of groups that benefit from economic reform and thus provide the political support necessary to sustain adjustment programs. It is far from certain that such support coalitions will emerge as the supply response may be much weaker than expected and the transaction costs of organizing such coalitions are formidable; some regimes have proved remarkably adaptable in the face of pressures for democratization. In addition, in the one clear case of attempted economic reform under democratic conditions, Senegal, the regime survived but economic reform failed, with the state seriously weakened in the process.
These and other fallacies are examined in the concluding chapter which attempts to assess just how "hemmed in" African countries really are, and does so from a larger comparative perspective. It integrates and evaluates the findings of the preceding chapters, in some cases providing a different interpretation of the material presented in order to provide as realistic an assessment as possible of Africa's prospects and the major lessons of the 1980s and the early 1990s.
The contributions to this volume make available a great deal of information about how African economies and polities have responded to serious conditions of decline. Our hope is that an improved knowledge base and a realistic assessment of these responses will help avoid some of the mistakes made in the first decade plus of Africa's adjustment to decline so that there is a better chance that the 1990s will not be a second "lost decade." If so, then Africa might become less "hemmed in" and move eventually to fulfill the visions of Michael Chege and Frederick Chiluba with which we started this introduction-something the region so greatly desires and deserves. In the short run, however, there may be more tension between fostering individual freedoms and good governance on the one hand and creating rapidly growing market economies on the other than many people might like to admit.
Note 1: Michael Chege, "Remembering Africa," Foreign Affairs, 71, 1 (1992): 146; Frederick Chiluba, quoted in " 'No One Else Will Solve Our Problems,' Chiluba Tells OAU," Africa News, 36, 7 (August 3-16, 1992): 6. Africa is used here and in the rest of the book to mean Sub-Saharan Africa minus South Africa. Back.
Note 2: Albert O. Hirschman, Exit, Voice and Loyalty (Cambridge: Harvard University Press, 1970). Back.
Note 3: Miles Kahler, "Orthodoxy and Its Alternatives: Explaining Approaches to Stabilization and Adjustment," in Joan M. Nelson, ed., Economic Crisis and Policy Choice (Princeton: Princeton University Press, 1990), pp. 33-61. Back.
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