Our Continent, Our Future: African Perspectives on Structural Adjustment - Softcover

Mkandawire, Thandika; Soludo, Charles Chukwuma

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9780865437050: Our Continent, Our Future: African Perspectives on Structural Adjustment

Softcover

ISBN 10: 086543705X ISBN 13: 9780865437050

Publisher: Conseil Pour Le Developement De LA, 2001

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For decades now, many African countries have implemented the structural adjustment programs of the Bretton Woods Institutions. The results, however, have been less than sterling. Extreme poverty and underdevelopment continue to plague what is becoming the world's "forgotten continent," and it is now generally agreed that a new approach is urgently required. Our Continent, Our Future presents the emerging African perspective on this complex issue. The authors use as background their own extensive experience and a collection of 30 individual studies, 25 of which were from African economists, to summarize this African perspective and articulate a path for the future. They underscore the need to be sensitive to each country's unique history and current condition. They argue for a broader policy agenda and for a much more active role for the state within what is largely a market economy. Our Continent, Our Future is the very first publication to present the African perspective on the Bretton Woods approach to structural adjustment, and it does so with the input and support of top economists and scholars from every corner of Africa. This important book should be read by all people concerned with the future of Africa and issues of sustainable and equitable development.

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About the Author:

Thandika Mkandawire served as Executive Secretary of the Council for the Development of Social Science Research in Africa (CODESRIA) in Dakar, Senegal, from 1986 until 1996. He is currently the Director of the United Nations Research Institute for Social Development (UNRISD) in Geneva, Switzerland.

Charles C. Soludo is a senior lecturer in the department of Economics at the University of Nigeria in Nsukka, Nigeria. Dr. Soludo is an Elected Member of the Governing Council of the Nigerian Economic Society.

From Chapter 1:

Economists have generally identified "path dependence" as one of the important features of the growth process--that is, what eventually happens to an economy depends greatly on the point of departure. There is mounting evidence that large qualitative differences in outcomes can arise from small (and perhaps accidental) differences in initial conditions or events (Hurwicz 1995). In other words, the scope for and the direction and magnitude of change that a society can undertake depend critically on its prevailing objective conditions and the constellation of sociopolitical and institutional factors that have shaped these conditions.

For specific economies, the initial conditions affecting economic growth include levels of per capita income; the development of human capital; the natural-resource base; the levels and structure of production; the degree of the economy's openness and its form of integration into the world system; the development of physical infrastructure; and institutional variables such as governance, land tenure, and property rights. One might add here the nature of colonial rule and the institutional arrangements it bequethed the former colonies, the decolonization process, and the economic interests and policies of the erstwhile colonial masters.

Wrongly specifying these initial conditions can undermine policy intitatives. Gvoernment polices are not simply a matter of choice made without historical or socioeconomic preconditions. Further, a sensitive appreciation of the differences and similarities in the initial conditions is important if one is to avoid some of the invidious comparisons one runs into today and the naive volunatrism that policymakers exhibit when they declare that their particular countries are about to become the "New Tigers" of Africa. Such mindless comparisons and self-description actually make the process of learning from others more costly because they start the learning process off on a wrong foot.

The Bretton Woods institutions (BWIs) have held two not always mutually compatible positions on the initial conditions of African economies. At times, they have pointed to how initial conditions in a number of African countries were the same as or even better than those in the subsequently more successful Asian cases. At other times, they have argued, in a "back-to-the-future" mode of thinking, that because the conditions in Africa today are comparable to those of the Asian economies more than 30 years ago, Africa is now ready for an Asian-type takeoff.

Although cross-regional or cross-country comparisons are inevitable in economic analysis, choosing the "right" countries, periods, and appropriate statistics to compare is often problematic. A comparison between two countries or regions based on a snapshot of conditons at a particular time can be grossly misleading. For example, although the Russian Federation can be compared in terms of per capita income to many developing countries, its stock of scientific and technological capability can hardly be compared with that of any developing country. Such differences in the quality of labour force and stock of knowledge can make monumental differnces in the acceleration of the growth process. An alternative (sometimes complementary) comparison is between counties' current and past performance or initial conditions. We emphasize more the latter and also employ cross-regional comparisons where relevant.

In this chapter, we have devoted considerable space to recounting postcolonial economic history, objective conditions, and context of policy-making. This provides a context for a meaningful diagnosis of the African crisis. The analysis of the initial conditions emphasizes mainly the precrisis period--from independence in the early 1960s through the late 1970s.

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