THE FUTURE OF THE DEVELOPMENTAL STATE In Africa PIA 2574

Author of the Week- Robert Bates Markets and States in Tropical Africa Important influence on rational choice theory THESIS- Need to consider markets and how they can be distorted by state decisions in terms of producers and prices, consumer goods and factors of production

Robert Bates  Government policy subsidizes urban dwellers  Agricultural production used (or misused) to fund urban capital accumulation and/or capital flight  The state, in effect taxes farmers for state sponsored “crony capitalism” and excessive access “rents”

Robert Bates  The result is the depression of prices for cash crops  The key to understanding the economic system in Africa is in historical patterns of prices depression that goes back to the colonial period. Monsopsonies- use of state agencies (often called marketing boards) to control marketing and sales of agricultural products.

Robert Bates  The state distorts agricultural marketing structures to divert gains to be had from commercial agriculture to other interest groups (the organizational bourgeoisie) employed in the state and in state controlled industries.  Result: the “Exit Option” for rural dwellers  Result- Structural Adjustment

Structural Adjustment  Thee problem of debt  Stabilization vs. Conditionality  Public Sector Reform- Policy Reform

Debt as a problem- Issues:  The concepts of market and productivity  International systemic hegemony  International competition within markets  Complementarities and non-flexible prices

Technical Assistance  Bias to international trade  Back to the future- get the LDC economy back to the 1950s  Dependent development- is it dependent and is it development

Stabilization  Food prices meet market conditions  Trade Liberalization  Currency deregulation-auction  Bridging Loans

The Current State of Financial Management 1. IMF Stabilization- key: currency reform, auctions and trade liberalization 2. World Bank and UNDP "Management"- Opposing views to SAPs 3. Absence of recurrent budgets

The Current State of Financial Management 4. Activity (economy) driven by technical assistance projects - the only game in town 5. Loans and grants- major source of international involvement 6. Conditionality-

Structural Adjustment Loans and Grants a. Bridging Loans b. Sectoral Loans and Grants c. Project Grants d. International Requirements vs. domestic political response

The International Regime  IMF vs. World Bank vs. Bilateral Donors vs. UNDP  Terms: a. Neo-Orthodoxy b. heterodoxy c. Stabilization and the IMF d. Conditionality- World Bank e. The Use of social funds

Conditionality: The Big Three a. privatization b. Civil Service reform c. Reduction in the size of government

Privatization of the economy a. divestiture b. contracting out c. liquidation d. sell off public private partnership shares

Problem: Privatization of the bureaucracy a. Individuals work with investments and the service/commercial sector b. Departments sell their services- eg. statistics in Zaire/DRC c. Sub-economic salaries- offices and telephones- buying soap and selling chickens

Solution: Privatization of the bureaucracy d. International conditions for "good" bureaucrats, eg. World Bank in Uganda- special salaries for those on contract with the project e. Overall Goal: Return to the recurrent budgeting process of the 1950s. End debt and deficits

Discussion  What are the Major Issues Effecting African Development?

Questions  What argument does each of our authors make about the nature of the African crisis? Critique our authors.  What picture of northern influence over African states does the reading give us? Critique our authors.  What picture of African influence over structural adjustment does the reading give us? Critique each of our authors.

More Questions  Defend the Western Style multi-party system of government. Critique military regimes.  Defend military intervention in politics. Critique one party regimes.  Asess the positive and negative impact of what Picard calls "the administrative State."

And More  What argument does each of our authors make about the nature of the African crisis? Critique our authors.  What picture does northern infulence over African states does the reading give us?  What picture of African infuence over structural adjustment does the reading give us?  What is the best model of development for Africa? Which comes first? Economic Development or Political Development?

And Finally?  What argument does each of our authors make about the nature of colonialism? What picture of European influence over Africa does the reading give us? What major similarities and differences do you see between and among our authors.  What picture of African resistance and strength does the reading give us? Critique each of our authors our authors. Are there regional differences in Africa with regard to colonialism?  How much of "traditional" Africa survived in terms of social, economic and political patterns? Critique our readings on this issue.