I remember a time when I did not understand the fascination with economists, especially in the development space. I got it but I also did not. In my feeble attempt at a defence, I would say, “we’ve left development with them for so long and look how far we’ve come”. I said that very sarcastically. There is some truth to that; but, it is also so much more than that. This is me sharing a thrilling discovery by putting a spotlight on politics and economics and how development delicately rests at the intersection of both.
Post Map
It’s more than economics
What I find increasingly interesting – and perhaps what I was trying to say but didn’t have the right words to say – is that economics doesn’t always get things right. (To be fair, it is perhaps naive to think otherwise.)
There are a lot of reasons why.
And I don’t know them all.
But, on numerous occasions in my line of work, one keeps surfacing…The major influencing factor in how things turn out largely depends on the role of politics.
How states turn out is more than getting the external formula right, even if this formula is based on “analysing past data”. It’s really about the intersection of politics and economics, and how this plays out at different times, in different contexts and for different reasons.
By me 😉
As a student, I wasn’t always satisfied with single-dimensional responses. I needed more. Subconsciously, it may be why I have found the political economy lens of analyses more appealing.
Being able to pull in the political context into understanding why and how certain decisions were made, made sense.
Makes sense*.
Now, whenever I hear that a situation is “complex“, for me, that’s code for “messy, politically”. Getting to the root of that almost always requires probing how politics affects economics. It is the defining answer.
Let’s think about Botswana for instance.
Botswana – how politics and economics intersect for growth
Botswana is a sparsely populated, landlocked country in Southern Africa. At independence, it was one of the poorest countries in the world, with an estimated per capita income of $70 per year. There was only 12 km of paved roads in the country and 40% of its GDP was from agriculture (mostly cattle farming for beef production).
At independence, life expectancy at birth was 37 years and by 1990 it was 60, 10 years above the African average. By 2007 Botswana had 7,000 km of paved roads and a per capita income of $6,100, making the country an upper-middle-income country. Similarly, in the first few years of independence, about 60% of current government expenditure consisted of international development assistance. Now, it’s less than 3%, and agriculture currently accounts for only about 2.5% of GDP.
Talk about a shakeup…
Botswana’s successful transition from a poor agrarian economy to the fastest growing economy in the world until 2004 was largely attributable to the Botswana Democratic Party (BDP).
The ruling party created a broad and stable political coalition during the first decades of independence. This coalition favoured and encouraged the adoption of pro-growth policies and institutions. The BDP even brought together groups with potentially dissimilar interests by focusing, and building, on economic interdependencies, neutralized political competition among rival groups, and above all, side-lined radical domestic parties. No detractors and distractions.
Botswana’s reliance on political stability for economic growth, and economic growth, in turn, validating political stability did it for them. It allowed them to avoid rentier politics, the resource curse and Dutch disease. Instead, it resulted in the laudable and prudent management of the county’s diamond wealth.
Botswana is not without its issues – they have many. But the idea that they escaped the resource curse that countries like Nigeria, DRC and Angola are still dealing with is instructive. The reasons why they differed from the norm comes down to politics and how it was managed.
The exception to the rule?
Maybe and maybe not. Regardless, they have shown that it can be done. That how politics intersects with economics makes a major difference.
In previous articles, I have danced on the edge of this connection (see here, here, and here). And now, I am excited to learn more about, and explore, the ‘and so what?’ question. I am not saying this is the be all end all but it is an interesting path to go down.
This understanding can help make some better long-lasting and sweeping changes. The kind necessary for the levels of growth and development Africa needs. If we understand how the political sphere works and how and why decisions are made, or not made, we can perhaps do, and incentivize, so much more.
Moving forward: managing the politics and economics of growth and development
In Ghana, for instance, historical research shows that one of the main reasons why such a relatively cohesive coalition did not emerge was the lack of trust in the system.
The political elite feared that by promoting development without effective constraints on the opposition, they would be empowered to mobilize resources and become an effective instrument against the then incumbent government. Controlling who could amass wealth was a way to control the threat. Short-sighted if you ask me! But, perhaps logical given the divisive and vengeful political arena our founding leaders allowed to unfold in the early 1940s.
Botswana’s (relative) success with diamonds, at independence, tells us one thing. Which is, natural resources do not inherently have to be a curse or source of devastation. Nor are they automatically a blessing. It is the institutions that govern them, the political environment within which they are managed, and the incentives and accountability mechanisms they create, that ultimately foster or deter economic growth and development.
Nevertheless, Seretse Khama really did well by them. Without going into the depths of its history, Botswana’s ability to combine the legitimacy of the traditional way of doing things with some inspiration from the educated and “modern” class really made the difference. Kind of reminds me of Somaliland…
The elephant in the room…
Obviously, the elephant in the room is that Botswana got this right at independence. Many African countries are far off from that now and systems appear to be solidified. How can African countries today change the political arena so that growth becomes the focal point? That’s the trillion Euro question.
Education?
That’s long-term but definitely one way to create a more involved political class. One that knows what they deserve, how to ask for it and when to demand it. In this case, initiatives like Oby Ezekwesili’s FixPolitics come to mind. The idea behind #fixPolitics is to “elevate the Office of the Citizen to its rightful place…and develop a political class of servant leaders”. So, the more people know, the more empowered and engaged they will be. As they know more about how to better, they will develop a servant-leadership style of service. And thus a value-based class of political leaders, a process that can reform the overall political arena in countries. It’s a great idea.
Major political disruption?
We saw what happened with the Arab Spring. How a lack of focus, lack of uniformity on next steps and in some cases ill-preparation to take over led to more chaos. Some of these countries are yet to show they are better off; the chaos that ensued further deepened the socio-economic woes of citizens. One may argue it gets worse before it gets better but do we need it to? It’s a fine line and most people do not quite get it right with political implosions.
A good leader?
We can only hope for them. Yoweri Museveni was a revolutionary as a young man; it did not stay that way for long. And so was Mugabe… We are beyond hoping for a good ‘leader’, especially when our institutions do not show the level of autonomy needed for checks and balances.
What are some other options? Thoughts?
PS: I drafted this as a mental note to myself. The idea to write this came from doing some background work for an upcoming project; reading an old World Bank report, and an old blogpost from Shanta Devarajan.
Love a well-read belle.
Noelle Wonders
Latest posts by Noelle Wonders (see all)
- Deciphering Chaos: Provocative Insights from a day at Victoria Station - December 1, 2023
- Can social impact bonds improve employment? - January 11, 2023
- No, setting more grandiose goals won’t bring us development - December 3, 2022