1. 3. INSTITUTIONAL ‘CHOICES’ State Formation, the Labour ‘Problem’ and Property Systems, C1500-present
Gareth Austin 4/10/2012

2. Introduction: Institutional ‘choices’ in African history
From resources (factor endowments) to institutions: a second broad perspective on long-term African development
Conceptions & definition of ‘institutions
Rational-choice ‘new institutionalist’ definition: rules, formal & informal (the structures surrounding economic behaviour)
Context of SSA, well into C20th:
low population densities; labour scarce/land abundant

3. Changing Assessments of African Institutions as Frameworks for Economic Development
‘Traditional’ view of African ‘customs’ as a hindrance on entrepreneurship & efficiency
Post-Independence revisionism: indigenous institutions seen as efficient, pro-market, not a constraint on economic growth
More recent ‘Afro-pessimism’: partial revival of pessimistic views

4. Especially the dominant one: Rational-choice
Part One THEORETICAL PERSPECTIVES ON INSTITUTIONS IN AFRICA AND GENERALLY
Especially the dominant one: Rational-choice

5. Changing Theoretical Approaches
Older institutional perspectives
Substantivism (Karl Polanyi, 1950s-e60s): discredited by the market historiography of 1960s-90s
‘Modes of production’ (French marxists, 1970s): died of exhaustion, c1981
The ‘New Institutionalism’: rational choice
Entered African Studies via Robert Bates’s political science, early 1980s
RC Political Economy has been the dominant framework in economics, pol sci, economic history studies of Africa as elsewhere since the 1980s
Recent examples include Acemoglu & Johnson 2010

6. Basics of Rational-Choice Institutionalism
Project: extending the economizing logic of relative scarcity from the purely economic to explain the structures (rules) conditioning economic activity
Rules reduce ‘uncertainty by providing a stable (but not necessarily efficient) structure to human interaction’ (North 1990: 6)

7. Characteristic concerns of New Institutionalism
Problems of making contracts
in contexts (so common in reality, i.e. in history) where information is asymmetric, transactions costly, & property rights insecure
How institutions change
theory of induced institutional innovation (that they change in response to shifts in relative prices)
in political context (there may be more than one equilibrium)

8. RC Institutionalism and the Study of African Development
‘Dominant’ approach, but a diversity of views possible within it
Consider it in relation to each substantive topic we discuss
Can we improve on it, empirically or theoretically?
Now to some key substantive institutional issues in African development …

9. Part Two PROBLEMS OF STATE FORMATION & CAPACITY IN AFRICAN HISTORY

10. STATE FORMATION: DIFFICULTY
Traditional argument that political centralization was difficult in SSA
(Goody, Coquery-Vidrovitch, Herbst)
Why? (a) Low population density, relative ease of escaping tax collectors
(esp Herbst):
(b) Lack of substantial agricultural surpluses
Ethiopia the exception that ‘proves’ the rule (strong and enduring state)

11. Yet Longevity of Political Centralization in Certain Areas
Ethiopia
Great Lakes
Niger Bend (Timbuctu, Jenne etc)
Zimbabwe
BUT the frequency and scale of state formation increased only gradually, if at all, over the centuries
E.g. into forest zones
Gradualness confirmed difficulty of state formation
Large minority, at least, of Africans in late precolonial period lived in ‘chiefdoms’ or ‘city states’ or outside states; cf map of West Africa 1850

13. C20th Century States in Africa
From demographic to International Relations constraint: at the beginning and just after the end of the colonial era (Herbst)
Problem of limited capacity to raise revenue, and even to know how many subjects/citizens they had or have

14. Part Three MARKETS AMID LAND ABUNDANCE
Historic Problem And Paradox Of African Economic History

15. Land abundance as a constraint on markets
Self-sufficiency reduces incentive to produce for sale
Universal access to land suggests labour expensive, even unaffordable, on a free market – the Nieboer-Domar problem

16. Yet Markets Remarkably Important in Precolonial Economies, notably in West Africa (e.g. 1600-1890)
Albeit, not based on grain surpluses
Ecological specialisation (as in salt, kola nuts, pastoralists/sedentary farmers)
Based on ‘absolute advantage’
But comparative advantage mattered too
And consumer taste e.g. cloth caravans passing in opposite directions
Commodity currencies: regional differences
Significance of the fact that currency materials imported during the Atlantic trade (cowries above all; also iron bars, certain kinds of cloth) were not re-exported
Principal-agent problems in long-distance trade: overcome by religious-ethnic trading diasporas e.g. Hausa in ‘Central Sudan’

17. The Labour ‘Problem’: Coercive Solutions (a) precolonial
Political as well as economic requirements for coercion
Nieboer problem severe:
Mungo Park, describing his travels in Senegambia and Mali in the 1790s: ‘Hired servants, by which I mean persons of free condition, voluntarily working for pay, are unknown in Africa ...’
Slavery (and pawning) in precolonial Africa: grew in response to derived demand from commodity production, especially in C19th
grain on coast in C19 East Africa, cotton textiles within C19 West Africa, ‘legitimate commerce’ from C19 West Africa)
Growth of internal slavery in WA facilitated by closing of external demand (see graph)

19. The Labour ‘Problem’: Coercive Solutions (b) Colonial
Where slavery existed: frequently, a ‘Slow Death’ (Lovejoy & Hogendorn’s phrase)
Where colonial administrations could not afford free labour: coercion, esp. French corvée system (abolished 1945)
Settler economies: early C20th policies of trying to drive Africans out of the produce market and so on to the labour market

20. The Labour Problem: Post-Coercion(?)
Eventually: migrant voluntary labour replaced internal slave trade in West & East Africa
Population growth and constraints of labour ‘reserves’ generated supply of cheap labour moving (illegally, in case of apartheid South Africa) to the towns
Labour and Decolonization: the feared costs of the ‘universal’ worker (Cooper)

21. Indigenous Land Tenure Systems: an obstacle to economic efficiency?
Optimistic evaluations from 1960s-80s research: indigenous land tenure efficient and capable of change where needed
Problem of colonial intervention: widely sought to freeze ‘customary’ land tenure
Goldstein & Udry’s partial reassessment for Ghana, now that land is no longer abundant
What about extreme land-scarcity, in parts of East Africa, e.g. Rwanda, parts of Kenya?

22. Part Four INSTITUTIONS AS A CONSTRAINT ON MARKETS
Further Examples of the Debate

23. Attitudes to Individual Accumulation of Wealth
Platteau revives this old issue
Zero-sum view of wealth in equatorial Africa (e.g. Harms for C19th)
But conditional approval (very strong) for individual economic success in much of West Africa, in all recorded periods
Example of witchcraft accusations: the newly rich as accused or accusor

24. Family firms in Africa: institutional constraints upon them?
How to interpret the rarity of trans-generational family firms?

25. CONCLUDING QUESTION TO THINK ABOUT
How well does the rational-choice framework account for both the economic efficiencies and inefficiencies of institutions in Africa?