Читать книгу The Political Economy of Economic Performance - Voxi Heinrich Amavilah - Страница 9
ОглавлениеThis introduction is a sales pitch for the gains that SSACs made just before the Great Global Recession (GGR) of 2007–2010. This chapter demonstrates that these countries have sufficient capability to reverse their misfortunes and they have done so remarkably in recent years. Whether or not the Great Global Recession (GGR) itself have caused irreparable harm is an interesting and important question, but one that needs a separate analysis. The empirical evidence presented here all points to an SSA that has fared quite well, especially relative to its performance history.
African countries have done relatively well since the mid-1990s. However, little is well understood about how that performance came about. The goal of this book is to enhance the understanding of the recent economic performance of SSACs. To accomplish the goal, I set six manageable objectives and pursue them as the chapters in this book. Empirical and analytical evidence from that pursuit suggests a discernible reversal of misfortunes for these countries. Whether the reversal itself is sustainable (permanent), or the 2008–2010 global recession has already ended the party for these countries are difficult questions to answer. Assuming that SSACs had sufficient capability for good performance before the GGR, even if the recession was a party spoiler, there are at least two things that can be done to revive the party. I outline those issues in the last two chapters, before I conclude.
Economic Performance of SSACs
In its Summer 1999 issue, the Journal of Economic Perspectives (JEP) published a collection of symposium papers on “Slow Growth in Africa.” The collection added volume to Africa’s literature on the subject. 1 However, the different opinions the papers expressed left a gap in our understanding of Africa’s performance. All, but one, JEP papers are generally negative and they paint very different pictures of the same object—Africa. The painting creates an inaccurate impression that Africa’s situation is irreversibly hopeless, and that there is nothing anyone can do as these countries cannot even learn from each other. For example, to Paul Collier and Jan Gunning, Africa’s performance is a function of external and internal destinies and policies—both permanent curses. Among destinies, the authors include geography and ethnolinguistics. While they stay clear of strong conclusions about the effects of destinies on economic performance, Collier and Gunning clearly conclude that external policies in Africa have improved in recent years, but that domestic policies, especially those relating to private investment, remain the key constraints on economic performance there. Calling out SSACs to own up to their responsibilities rather than blaming external circumstances for their problems is a good thing. Nonetheless, the study fails to acknowledge sufficiently the progress SSACs and other developing countries were making (see, Desai 2008).
In the same collection, Angus Deaton, and Ndulu and O’Connell tell two other stories. Deaton documents a strong relationship between economic growth and historical commodity prices. From that documentation, he concludes that price booms and busts have been important to the economic performance of SSACs. However, the “roots of Africa’s slow development almost certainly lie elsewhere, in poor investment appraisal—whether financed from commodity exports or not—and in the quality of governance” (Deaton 1999, 39). Ndulu and O’Connell pick up on the effects of governance on growth in SSACs. Their discussion observes that postcolonial African governments endorsed inward-looking and state-led industrialization policies, and the path they chose simply led them to authoritarianism, fiscal and monetary imbalances, economic decline, and ultimately per capita misfortunes for all their people.
John Sender takes a different tact and a refreshing tone of voice. In reading his piece, one is reminded of Colin M. Turnbull’s (1968) The Lonely African, whose voice, however loud and clear it might be, is ultimately drowned out by the Africa dilemma itself. The dilemma is not really Sender’s, because his critique of the Washington Consensus is crystal clear. He is equally clear about the tragic optimism that development within a capitalist system is an uneven, painful, and costly process that succeeds only when it has domestic political support. The dilemma is that while individually each chapter adds something important to Africa’s growth literature, taken together the five pictures the collection paints are astonishingly and irritatingly different to be convincing. Again with the exception of John Sender, the chapters say about SSACs what has always been said about Africa (cf. Stamp 1953; Junod 1962), and it compares rather peculiarly to contemporary microeconomic evidence (Mahajan 2008; Stiglitz 2010; Fosu 2009; Robinson 2009; Subramanian 2009). 2 For instance, the growth-destiny notion that Collier and Gunning espouse is an old-fashioned fatalism, already available in Andrew M. Kamarck (1976, 1977). Yes, geography is important to economic performance. However, the tropics are a wide area and SSA is not the only tropical region in the world. Thus, while soil fertility is necessary for agricultural productivity, it is not sufficient for the economic performance of many SSACs whose comparative advantages are in the minerals sectors. Indeed, even Kamarck has reconsidered the tropics as a curse per se, because he too acknowledges that the “velocity of change could be harnessed by research” to offset the effects of geography (Kamarck 2000, 235–36).
Similar arguments can be advanced against the claim that SSACs have a higher number of ethnolinguistic groupings than other regions. Of 6,000 or so world languages, only twenty percent (1,200 languages) are African languages. Twenty percent sounds like a lot until one recognizes that three of the major African family of languages are spoken by 400 million people, which means each language group is spoken by 133.3 million people, a number more than the population of any single African country, including the most populous Nigeria. 3 It would seem that the problem is not ethno-linguistics but rather ethno-fragmentation and the lingering effects of the slave trade, both direct results of colonization and colonialism (Rodney 1973; Johnson 1974; Nunn 2008, 2012). As a matter of fact, in South America all ethno-linguistic heterogeneity was eliminated many years ago and replaced by the Spanish and Portuguese languages. Yet, it still remains unclear that language homogeneity reduced ethno-fragmentation or led to economic growth there. Moreover, at its height and prior, the British Empire grew faster than Great Britain in spite of language homogeneity in the latter instance and heterogeneity in the former. One may say that homogeneous South Korea does better than heterogeneous Tanzania, but what is the difference in real performance between Tanzania and Burma, where the latter is more homogeneous than the former?
Available evidence points out that natural resources (including language) are necessary but insufficient growth factors. Indeed, research on the nexus between growth and natural resource continues to produce mixed results; equally resourceful countries have often performed differentially, and some resource-poor nations have indeed done better than their resource-rich counterparts, see, for example, Sachs and Wagner (1999), Rodriguez and Sachs (1999), Auty (1993), and Gylfason and Zoega (2002). Clearly something other than destinies and policies is missing from analysis, and economists would do better searching for the missing link rather than just “translating [their] prejudices into respectable numerals,” as E. J. Mishan (1974, 93–94) has charged.
Also unimpressive is the argument that SSACs have had more growth-retarding dictatorships and conflicts. Evidence shows that all African wars and armed conflicts since the 1700s killed fewer than twenty-four percent of the 84.3 million who died in World War II alone. Of 23.4 million people who died in major genocides, ethnic cleansings, and massacres in the period 1939–1945, only 9.12 percent were African, with about sixty-two percent of that taking place in Rwanda, Burundi, and Zanzinbar. War crimes in Africa affected only 5.9454 million people since 1923, an average of 66,060 per annum over ninety years. That number is miniscule compared to 140,000 deaths in the former Yugoslavia over a much shorter time period. The estimated death toll by leader in African from 1885 to 1998 (that including colonial leaders) is only 12.39 million, which pales compared to the 20 million under Stalin in a span of thirty years. Human-caused and aggravated famines and diseases of all recorded time in Africa is only 12.9 percent of those caused by World Wars I and II alone. African riots and political unrests of significance caused only an equivalent of 36.2 percent of the number of people who died during the Hindi-Muslim conflicts in India since 1950 and less than a percent of the two million who perished during the partitioning of India and Pakistan. Only forced labor, slavery, slave trade, and worker abuse present a significant and long-lasting shock. Other conflicts simply measure the weakness or absence of institutions for mitigating conflicts, not the number or severity of conflicts. Hence, the assertion that the South Africa pre-independence in 1994 is the same South Africa post-independence is simply incorrect. In terms of income levels, the old South Africa appears to have outperformed the new South Africa only because the old South African economy excluded the majority of its people. Regarding growth, to those who were excluded even zero growth with inclusion has meant improvement. Thus, generalized cross-sectional emphases of macro-economic variables simply understate the rate of improvement implicit in micro-economic variables. In fact, in reading the historical accounts of the first Europeans to make contact with Southern Africans, like Dr. David Livingstone, for instance, one cannot escape noticing that African countries made unbelievable progress. 4 Wherever one looks, Africa has seen most development in the shortest time period compared to other regions of the world—no question about that! What is interesting (for me) is how African countries developed so much with so little and sporadic economic growth. That assertion represents a fertile research area waiting for intellectual ploughing. Unfortunately Africa is the region where careful studies are rarely carried out. Worse still, and perhaps because of the lack of careful studies, one often hears of the conditions of SSACs inferred from the conditions of other countries, in recent years from the conditions of East Asian countries. In these inferences, observers say of Africa whatever they found to be untrue of other regions. Hence, the “stew” of cross-sectional studies which Ed Leamer (2001) deplores is the worst for African countries, which is a shame because the same experts seem to suggest that Africa needs help the most.
The progress SSACs have made over the years is not discernible because current research often represents Africa by all African poor performers. By contrast, Asia, Europe, and America are almost always defined by the high performers. For instance, in rationalizing the making and essence of the so-called East Asian growth miracles, the World Bank (1993) claims that “from 1965 to 1990 the twenty-three economies of East Asia grew faster than all regions” (1). However, emphasis ends up almost entirely on the eight high-performing economies of Japan, Hong Kong, South Korea, Singapore, Taiwan, Indonesia, Malaysia, and Thailand. How did the rest of the region fare? Would growth have been that spectacular if the poor performers were included? That is an important question to raise because when referring to Africa, the same study excludes Botswana from its discussion on condition that Botswana is a mono-commodity economy. One is then left to wonder what the purpose of comparison in all circumstances is, since nearly all African countries are mono-commodity economies anyway!
I am convinced that by using these arbitrary approaches anyone can just as easily show SSA outperforming other regions in any year; it all depends on which economies one picks to represent that region. If one chooses to represent Africa with Botswana and Asia with Burma, then Africa has grown faster than Asia for more than forty years. If Africa is South Africa (even under Apartheid) and Asia is Afghanistan (even during its calmest years), then Africa is many years more technologically advanced than Asia. Clearly the running of regressions before the data has even been collected seems so wrong (a moral judgment on my part, I know) to continue, but it does continue. Such exercises are a waste of time; they are for the economics profession what IQ debates are for psychology; they generate a lot of interesting information, but little insight. Hence, until researchers begin to study SSACs rather than inferring their situations from other countries, policy-making in Africa will not benefit from recent advances in the economics of growth and technological change.
Take one more example. In an influential IMF paper, Ghura and Hadjimichael (1996) modify Mankiw, Romer, and Weil (1992) to examine the economic growth of a number of SSACs over the period 1981–1992. However, the endogenous aspects of the model motivated in the theoretical part of the paper are ultimately not tested. Hence, the results of the paper lack the prescriptive guts that one would expect from it. Thus, the paper says too much about the poor performance of SSACs and too little about what must be done, and leaves individual countries in the cold (once again). This is a contradiction in terms because unlike purely academic institutions, the IMF and the World Bank’s mandates are to support effective policy-making.
Two Themes
The usual excuse for the absence of study of SSACs is the lack of data—the false claim that careful studies of African countries are difficult (costly and impossible) to carry out because of the unavailability of data. Despite Yaw Nyarko and William Easterly’s (2007) analysis that development is an experimental problem-solving process, and hence “the lacunas in Southern African historical knowledge cannot be attributed to a dearth of data” (Thompson 1969, 3)—, the problem is they are consequences of unfocused research efforts. After all data does not speak for itself in spite of the popular saying. What is needed is understanding rather than knowledge of information, and for that no country has to start from scratch. This means that much of the knowledge required for a decent standard of living anywhere by anyone on earth has already been invented. It is somewhere ready for transfer to where it is needed. The two problems standing in the way are (a) appropriate rules on either side of the transfer channel as Paul Romer (2010) has recently stressed, and (b) lack or limited understanding of knowledge available for transfer. 5 There is no need to reinvent the wheel, and SSACs may finally have found things that make growth work for them.
I exhibit the evidence in two broad themes. The first theme is about the factors and forces behind Africa’s recent positive performance. This theme starts with the argument that recent economic performance in Africa has depended upon the intensity of technology use—mainly the newer technologies of internet and mobile (cell) phone. Working silently in support of the intensive use of technology is the technological knowledge of a general nature that has been accumulating over the years in these countries. I demonstrate that fact with annual publications data for Botswana, Namibia, and South Africa for the period 1976–2004. An interesting question that arises is: Why is all this happening now, and is it too little and too late? Part of the answer, it turns out, is external influences like openness and globalization, and the other part is improvement in the quality of local institutions. I show this with two related essays to end the first theme.
The second theme of the book is about how the performance trajectory can be maintained with increasing speed and vitality. If I am correct that the observed reversal of misfortune in SSACs is due to newer technologies made possible by the specialized knowledge that has accumulated over the years, improved quality of institutions, and globalization, then it means in the past the major obstacle to performance was of a technological nature, but it was not the absence of relevant technological innovations! Instead, it was due to inhibited spread of technological innovations (cf. Arrow 1969; Mansfield 1971; Rogers 2003). One obvious inhibitor was the spread of knowledge. The sixth chapter describes some problems with conventional models of the diffusion of innovation and proposes simple modifications. A further obstacle to the diffusion of technological change, which has significant implications for long-run economic growth, is the negligence of resource intra-actions and interactions. Standing on the shoulders of Sir W. Arthur Lewis (1965) and Paul M. Romer (1990, 1993, 1994), I show that resource intra-actions and interactions are important for technological change, and hence for economic growth. Economies with strong positive resource intra- and interactions produce more output than others. In fact, intra- and interactive economies are characterized by economies of scale and would produce twice as much output as others, and their rates of growth and change are high because of it.
Concluding Remarks
Pre-GGR, the economic performance of SSACs depended on the intensity of use of newer technologies mainly the internet and mobile phone. These technologies are productive because the general knowledge required to make them productive has been accumulating quietly for years. Also over the years, a deeper integration of African countries into the world economy and improving quality of institutions have aided the performance observed since mid-1992. Whether or not the GGR was a “party pooper” for the SSACs is not as important as the fact that these countries can sustain growth, and the spread of technological innovations and intra-active and interactive use of resources remain crucial. The chapters that follow seek to demonstrate this concluding remark.
NOTES
1. In fact, much of this material was written in response to that collection. I shared my comments with Timothy Taylor, Managing Editor of JEP, and I gratefully acknowledge the brief conversation we had.
2. Professor A. Fosu’s two volume Development Success Historical Accounts from More Advanced Countries (2012), and Achieving Development Success: Strategies and Lessons from the Developing World (2013) both by Oxford University Press clarify these issues in a more balanced way.
3. The third largest number of speakers after Indo-European speakers, see World Fact Book, Inc., 1999.
4. Henri A. Junod’s The Life of a South African Tribe, Volume II, Mental Life. University Books, Inc., New Hyde Park, New York, 1962 shows that life was very different only fifty years ago. To claim that Africa has undergone the least change in the world is just untrue!
5. I am aware of the argument in which the knowledge transfer process is not always Pareto optimal due to resistance to change and other special group self-interests as put forward by Boyan Jovanovic and Yaw Nyarko (1995) in their paper “The transfer of human capital.”
