Revisiting the developmental state 6: towards ‘developmental regimes’ in Africa?

David Booth - Principal Research Fellow, Overseas Development Institute, London

In particular, which kinds of political regimes, if any, are capable of managing this transition?

Are available ‘developmental state’ concepts useful in answering that question?

I would argue that the extant concepts are more confusing than helpful.  They bear too many of the birth-marks of a very specific debate from the 1980s about the then ‘newly industrialising countries’ of East Asia.  A much richer body of comparative evidence is now available on both Asia and Sub-Saharan Africa.  We should, in fact, be tackling the whole question afresh, trying to identify those features of country regimes that appear to be regularly associated with exceptional development performance.

Let me emphasise this: the discussion should be about regimes, not states.  State formation – the construction of centralised bureaucratic organisations that effectively control definite territories and their inhabitants – is a cumulative and relatively long-term historical process, as Fukuyama reminds us.  The amount of state capacity a country enjoys is undoubtedly an important factor influencing what development results it can achieve.  However, for practical purposes the question that matters is how much is being done to improve the inherited state institutions of the country by those currently exercising state power within it – in other words, by the political regime.  In short, the most relevant issue for Africa is which kinds of regimes can achieve worthwhile economic and social progress even whilst state capacity continues to be limited.

Of course, the famous East Asia literature was interested in the state in the particular context of a debate between neoliberal economists, on the one hand, and supporters of active industrial policies, on the other.  A central question was whether or not states should intervene in markets.  Three decades on, that debate is largely settled.  The big public policy question of today is not whether African governments should be pursuing deliberate industrial policies, but rather which ones have the institutional capacity to do so.

We need a concept of developmental regime that helps in answering this kind of question. The concept should be widely applicable and parsimonious, by which I mean it should capture the two or three features that, on present evidence, seem particularly crucial.

As a first step, I have suggested that we need to pay attention to the features of regimes at three levels: (i) the soundness of their policies; (ii) the quality of the prevailing policy processes; and (iii) the underlying political settlement.  I also maintain that the variations observed at these three levels are linked in a loose causal hierarchy.  In other words, sound policies tend to be the product of particular types of policy process, and this is most easily achieved when the political settlement is of a certain type.

The evidence on the importance of sound policies is overwhelming.  The brilliant Africa/Southeast Asia comparisons by David Henley and the wonderful synthesis of East and Southeast Asian experience by Joe Studwell are particularly compelling.  There are subtle disagreements among these sources – for example, around whether policies to achieve broad-based agricultural transformation necessarily precede employment-intensive manufacturing growth or are better pursued simultaneously.  But certain points are as well established as any in development policy:

1. Successful economic transformation in countries other than city-states builds on broad-based improvements in rural productivity – a proposition uncontested as well as regularly updated since its first formulation in 1961.

2. Countries break through into transformative development by acquiring technological capabilities that generate ‘increasing returns’, which means building a manufacturing base – beginning with the main resource to hand, which is a trainable labour force.

If a regime is not even trying to do these things, I suggest that it doesn’t even qualify as developmental.

There is, of course, a view that developing countries face limited ‘policy space’, meaning that they are not in practice free to pursue these objectives. But such constraints are often exaggerated.  Most policy weaknesses in most countries have domestic causes.  The trouble is that sound policies are the product of particular kinds of policy process.

The research led by Henley concluded that the poverty-reducing rural development that distinguished Southeast Asian from African policies from the 1960s onwards was about political priorities.  For a variety of reasons, leaders and their technocrats were interested in improving the economic and social lot of the masses as quickly as possible, and they were pragmatic about how they did this.  Urgency, outreach and expediency were the watchwords.  Generalising further, the main significant commonality across success stories of national development in Asia, including China, is the focus on urgent action to address perceived major challenges and a willingness to employ a great deal of trial and error in the search for solutions.

Surveys of success and failure in public policy-making increasingly highlight the value of problem-driven iterative learning processes.  Good policies are seen to be the result not so much of intellectual conversion as of searching for solutions to urgent problems.  This suggests that a developmental regime, as well as being one that pursues sound policies, also practises some form of problem-driven iterative adaptation (PDIA) in its approach to policy making.

This invites the question as to what kinds of regimes can practise PDIA – and that leads on to the issue of the ‘political settlement’.  The political settlement approach – now in the mainstream thanks to the 2017 World Development Report – argues that progress is not just about acquiring the right institutions.  It’s about the way power configurations influence the way institutions function (and thus how policies are made).

Some types of political settlement enable better outcomes by relieving elites of the pressure to govern only with a view to the short term.  All settlements in developing countries are clientelist in one way or another.  However, the degree to which policy is driven by the need to use rents in a discretionary way to buy the loyalty of elite factions and pay off political debts varies considerably.  This affects the state’s ability to provide the public goods and solve the collective action problems that are the key to economic transformation.  It also affects its ability to pursue goals through a problem-driven discovery process.

In sum, the three issues on which I have focused here – the political settlement, the quality of the prevailing policy processes and the soundness of the policies, all linked in a loose causal hierarchy – are central to the building of a developmental regime that works for Africa in the early 21st century.  As examples from places like Ethiopia and Rwanda are showing, this is only a first step in identifying the ingredients of effective economic transformation, but at least it provides a solid starting-point.

This article is the sixth in a new SPERI Comment series on revisiting the developmental state.