The Developmental State in Africa: Big buzz, little traction?

Last Thursday, 18 February 2016, I read a paper at New York University's Africa House, where I was a Visiting Scholar, on the subject of the Developmental State in Africa, which is attracting much debate in policy circles on the continent and beyond. The talk was an extension of some of the arguments I made in Abuja, in August 2015, on the occasion of a 50th Anniversary Lecture for the Nigerian Economic Society. In both cases, the point of departure was that after decades of inadequate growth, Africa is, with the new growth impetus, now looking for ways to ensure inclusive and sustainable development. But how can countries ensure that the recent growth leads to economic transformation? What role should the state play in the new dispensation?

The arguments are, first, that governments in other parts of the world, notably Asia and Latin America, have worked hand in hand with other stakeholders in their countries to promote growth and enhance economic development. Notably, governments counteracted market failures which are pervasive in developing countries and development would have been impossible without the deep involvement and guiding hand of the state.  Second, that a developmental state does not emerge by proclamation but through good planning, allowing for economic competition and "clever" regulation, and a motivated and competent civil service. The goal is, above all, to ensure that states are able to align the incentives of the stakeholders for national development. Is this a tall order for Africa? Will African countries and their leaders be able to go beyond aspiration and achieve the goals inherent in the developmental state model?

Today, African economies are much less dependent on the traditional donor community, that is aid from bilateral donors in the West and the multilateral agencies, than in the past. As a result "conditionality" is not as onerous as before, given availability of alternatives, including domestic resource mobilization. But most important, the recent growth episode has boosted the confidence of African policymakers, and provided them space to experiment, to think out of the box and search for alternative models for development.

However, I argued at New York University, and in Abuja before it, that the real impediment to development in Africa is not lack of ideas or even models. Recent African history indicates that there was never a shortage of the latter. Indeed the post-independence 1960s flourished with much radical thinking revolving around the capacity of the state to eradicate poverty, ignorance and disease. The ideas were so persuasive that they were given the collective name of "African socialism." However, on the whole the post-independence leaders failed to change their economies for the better. There was indeed very little growth, everything considered. Africa then went through decades of structural adjustment policies, supported by the international community, which also had meagre results.

Ultimately, development lies in going beyond the rhetoric and dealing with the implementation deficit. African countries have been fond of writing long and detailed development plans and visions, but few of which are ever implemented. They are produced regularly and referred to in policy statements, but remain largely "works of fiction." Aspiration and implementation remained very distant cousins.

Ethiopia's late Prime Minister, Meles Zenawi, argued that a developmental state must eschew the "Watchman role" and must get to grips with the serious challenges of development, which includes mobilizing the population. It must allow markets to function, but must be ready to intervene to make things right. This raises the issue of how much power such states should be accorded, and how to deal with government overreach. Can a powerful developmental state be democratic as well? What agencies of restraints are required to ensure that developmental leaders don't morph into dictators? Only the future will tell.