By Sitati Wasilwa
For starters, developmental state is a term that refers to the leading role taken by the state with the main aim of promoting economic growth and thereafter economic development. This means that the overall planning of the economy, with respect to the macroeconomic policies, is fundamentally carried out by the state. Hence, in view of this model of economic development, the private sector is at the periphery of the socio-economic planning process and in some cases, it plays no role in the formulation of the social and economic policies.
The origin of this term that has gained popularity in international political economy and economic development circles can be traced to East Asia and Southeast Asia where the respective states were effective in formulating and implementing economic development blueprints. Scholars, academics and practitioners of development economics and political economy continuously engage in discourses to ascertain if the developing economies and/or least developed countries especially in Africa should adopt this economic model or not.
To clearly understand the concept of the developmental state, it is imperative that the term should not be interpreted to refer to the command economy or the socialist economy which resonated with the ideological doctrines of communism and socialism. In as much as the term under review is associated with the Asian Tiger economies, it cannot be disputed that this economic model was also fashionable in several African states immediately after they attained independence.
Independence for the African states not only meant political independence but also economic independence. The latter informed the wave of an Africanized developmental consciousness, commonly known as African Socialism, which advocated for an Afro-centric approach to the continent’s economic growth and development. This edifice of African Socialism was documented in various development plans/blueprints across Africa. For instance, in Kenya there was the famous Sessional Paper No.10 of 1965 on African Socialism and its Application to Planning in Kenya formulated under the auspices of Jomo Kenyatta’s presidency; Ujamaa in Tanzania under the stewardship of Julius Nyerere; the Common Man’s Charter in Uganda under the guidance of Milton Obote; Consciencism in Ghana under Kwame Nkrumah; Humanism in Zambia under the leadership of Kenneth Kaunda.
The common denominator of these national development plans formulated in line with the principles of African Socialism is the active role that the state was supposed to play in the distribution of resources through a “guided development” process. This is highly similar to the path taken by the Asian Tiger economies characterized by the “guided development” mantra.
Economic destitution experienced by African states in the 1980s necessitated a paradigm shift in economic management. As the African states solicited for financial assistance from the IMF and the World Bank, they were forced to institute economic and political “reforms” through the implementation of the Structural Adjustment Programmes (SAPs). SAPs are a set of economic policies based on market fundamentalism, that is, the free market mechanism. It includes policies such as economic liberalization and deregulation. This economic model advocates for the distribution of resources through the market and abhors the state’s involvement in economic management.
There is no doubt that the SAPs registered more failures than success for the African states at a time when the East and Southeast Asian economies recorded high rates of economic growth and experienced structural transformation. The establishment of the free market economies in Africa with development being based on the market mechanism was an exercise in futility. Failure of the SAPs was as a result of the inherent differences and imbalances that exist among different economies. SAPs were a Westernized set of economic policies not based on the economic realities of the African states hence the disjuncture.
Contemporary Development in Africa (Selective States)
In recent times, several African states have registered impressive rates of economic growth primarily driven by the state through the formulation and implementation of national development plans. These states include Botswana, Ethiopia, Rwanda, Kenya, and Tanzania among others. Botswana is one of the few African states considered to be a middle-income economy and its growth has been engineered by the mining, processing and selling of diamonds.
Botswana’s development was initially based on the ideals and aspirations of the manifesto of the Botswana Democratic Party (the country’s ruling party since independence) in line with the maxim of “guided development”. In 1965, under the leadership of Sir Seretse Khama and the Botswana Democratic Party, the country’s first national development plan known as the Transitional Plan for Social and Economic Development was formulated. In 1996, another long-term development plan, Vision 2016: Towards Prosperity for All, was formulated.
The successful implementation of these development plans in Botswana narrows down to an effective political system. The ruling party has dominated the political scene since independence though periodical elections are held in the country. A number of human rights entities and the opposition always criticize the government’s human rights record and unfairness in the electoral process. The parliamentary system has ensured that the politics of the state is controlled hence the prioritization of social and economic development.
Ethiopia’s double digit growth rate for the last 6 years is a result of development planning. The country’s first Growth and Transformation Plan was implemented between 2010 and 2015 with the second Growth and Transformation Plan set for implementation in the 2016-2020 period. Meles Zenawi, the late Prime Minister of Ethiopia, initiated the formulation of the country’s first Growth and Transformation Plan. Ethiopia’s politics is highly controlled by the state and in fact members of the opposition parties and other critics tend to be arrested and detained when they criticize the government.
Rwanda’s impressive growth has been fueled by the execution of the country’s national development plan, Vision 2020 formulated in the year 2000. Its formalization as a policy document for national development came at a time when Paul Kagame took over as the country’s president. Though criticized and condemned for cracking down on his political opponents, Paul Kagame has initiated a number of social and economic programs that have greatly contributed to the country’s recent spurt in economic growth.
Tanzania, reeling from the vestiges of the Ujamaa policy, has registered an average growth rate of 6-7% for nearly a decade. The growth rate is a positive effect of the consistent implementation of the Tanzania Development Vision 2025. Tanzania’s political space is considered to be democratic with the ruling party, Chama Cha Mapinduzi, dominating the nation’s politics since its formation in 1977. Lately, though, concerns have been raised by members of the opposition on the high-handedness by the current regime under the leadership of President John Magufuli.
Kenya, East Africa’s largest and most sophisticated economy, has registered relatively higher rates of economic growth rate since 2003 except in 2008 when the country experienced the post-election violence. Between 2003 and 2007, the country’s impressive economic performance was guided by a national development blueprint known as the Economic Recovery Strategy for Wealth and Employment Creation. Thereafter, in 2008, a long-term national development plan known as Vision 2030 was formulated. Though Kenya’s democratic space is more open in comparison with her peers, there is general consensus that the country’s high octane politics has played a significant role in suppressing the economy’s potential.
Concerns & the Future
I hold the view that politics precedes economics and the political system at play determines the economic organization of a state. Concerns have been raised whether priority should be given to the political rights or the economic rights and whether states need to embrace economic development before allowing “democracy” to take root or the other way round. In his book, Dead Ends & New Beginnings, the late Meles Zenawi (former Ethiopian Prime Minister) documents that “developmental policy is unlikely to transform a poor country into a developed one within the time frame of a typical election cycle”. His dismissal of democracy and penchant for a developmental state is clearly evident in this book where he states that “the developmental state will have to be undemocratic in order to stay in power long enough to carry out successful development”.
Dambisa Moyo, a Zambian-born development economist, argues that African states and developing countries in general should prioritize economic rights over the political rights. A lot of caution needs to be exercised by the political leadership of the developmental state so as not to interfere with the operations of the markets which may eventually stifle the private sector. Chalmers Johnson, a pioneer scholar/intellectual of the concept of the developmental state acknowledges the inherent challenge (s) of this development paradigm. He states that “the fundamental problem of the state-guided high growth system is that of the relationship between the state bureaucracy and privately owned business”.
With the emergence of China as Africa’s leading investment and development partner majority of the African countries may highly consider adopting the Chinese economic model that is based on the developmental state. This, to a greater extent, means that the developmental state may be the model that will define the economic trajectories of the African states. Adoption of the model is welcome but it should be modified in accordance with a country’s politico-economic system and structures. Lewis Thompson Preston, the 8th president of the World Bank stated at one time that “economic policies and policy-advice must be country specific if they are to be effective” and hence a blanket adoption of an economic model or a set of economic policies by African states should resonate with the prevailing politico-economic and social conditions. The developmental state can be Africa’s path to the virtuous circle of prosperity only if the extant domestic conditions are factored in.
Sitati Wasilwa is an economist and consultant at Savic Consultants’ Centre for Economic & Public Policy Analysis (CEPPA), Nairobi.