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Public Corporations in Single–Country and Regional Settings: Kenya and the East African Community

Published online by Cambridge University Press:  22 May 2009

Dennis L. Dresang  and
Ira Sharkansky
Dennis L. Dresang
Affiliation:
Dennis Dresang and Ira Sharkansky are members of the Department of Political Science at the University of Wisconsin, Madison.
Ira Sharkansky
Affiliation:
Dennis Dresang and Ira Sharkansky are members of the Department of Political Science at the University of Wisconsin, Madison.
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Extract

This essay draws from the experience of Kenya and the East African Community to ascertain the impact of single–country or regional ownership on the commercial performance of public enterprises. The advantages of the larger resource base of a regional community are mooted by the problems of mobilizing those resources. A fledgling public corporation can secure assistance most readily when owned by one state. It is also clear that traits of a corporation independent of its regional or single–country status affect commercial success. The essay concludes with a discussion of the limited contribution public corporations make to further levels of regional integration.

Type
Articles
Information
International Organization , Volume 27 , Issue 3 , Summer 1973 , pp. 303 - 328
Copyright
Copyright © The IO Foundation 1973

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References

1 For a discussion of public corporations and economic development, see Hanson, A. H., Public Enterprises and Economic Development (London: Routledge and Keegan Paul, 1965)Google Scholar; Prakash, O. M., The Theory and Working of State Corporations (London: George Allen and Unwin, 1962)Google Scholar; Coombes, David, State Enterprise: Business of Politics? (London: George Allen and Unwin, 1971)Google Scholar!; and United Nations, Measures for Improving the Performance of Public Enterprises in Developing Countries (New York: UN ST/TAO/M/49 1969).Google Scholar For general discussions of regional integration in East Africa, see: Donald, Rothchild (ed.), Politics of Integration (Nairobi: East African Publishing House, 1968)Google Scholar; Colin, Leys and Peter, Robson (eds.), Federation in East Africa (Nairobi: Oxford University Press, 1963)Google Scholar; Nye, Joseph, Pan–Africanism and East African Integration (Cambridge: Harvard University Press, 1965)CrossRefGoogle Scholar and Nye, , “Patterns and Catalysts in Regional Integration,” International Organization, Autumn, 1965, (Vol. 19, No. 4).CrossRefGoogle Scholar

2 East African Posts and Telecommunications, East African Harbours, East African Airways, East African Railways, and East African Development Bank.

3 Kenya Meat Commission, Maize and Produce Board, Kenya Tea Development Authority, Agricultural Finance Corporation, Agricultural Development Corporation, and Industrial and Commercial Development Corporation. These public enterprises were selected from the 31 bodies in Kenya because they represent a variety of economic activities, economic sectors, commercial records, and political interests.

4 For a report on research on public corporations in Uganda conducted in spite of these difficulties, see Glentworth, Garth and Wozei, Mulozi, “The Role of Public Corporations in National Development: Case Studies of the Uganda Development Corporation and the Uganda Electricity Board,” The African Review, 01, 1972 (Vol. 1, No. 3), pp. 54–90.Google Scholar

5 See Csagoly, F., “Profits are Socialist,” Jenga (journal of the Tanzanian National Development Corporation), 1972 (No. 12), pp. 2–5.Google Scholar Also: Basil Mramba and Bismarck Mwansasu, “Management for Socialist Development in Tanzania: The Case of the National Development Corporation in Tanzania,” and Penrose, Edith, “Some Problems of Policy in the Management of the Parastatal Sector in Tanzania: A Comment,” both in The African Review, 01, 1972 (Vol. 1, No. 3), pp. 29–53.Google Scholar

6 di Delupis, Ingrid Doimi, The East African Community and Common Market (London: Longman, 1970).Google Scholar

7 Tandon, Yashpal, “The East African Common Market: A Perspective from 1971,” (Paper No. 25, 1971 Universities Social Sciences Council Conference, Makerere, 12 14–17, 1971), p. 11.Google Scholar

8 Rothchild, Donald, “Ethnic Inequalities in Kenya,” in Olorunsola, Victor A. (ed.), The Politics of Cultural Sub–Nationalism in Africa (Garden City, New York: Doubleday, 1972)Google Scholar. Also see Maris, Peter and Somerset, Anthony, African Businessmen (Nairobi: East African Publishing House, 1971), pp. 55–76 and 179–205.Google Scholar

9 Sharkansky, Ira and Dresang, Dennis L., “Politics in Public Corporations: Kenya and the East African Community,” (Staff Evening Seminar Paper, Department of Government, University of Nairobi, 07, 1972).Google Scholar

10 For an analysis demonstrating this, see Hyden, Goran, “Social Structure Bureaucracy and Development Administration in Kenya,” The African Review, 01, 1972 (Vol. 1, No. 3), pp. 188–199.Google Scholar

11 For an example of this, see Aldington, T. J. and Wilson, F. A., The Marketing of Beef in Kenya (Occasional Paper No. 3, 09, 1968, Nairobi, Institute for Development Studies), pp. 200–214.Google Scholar

12 The most detailed public record of this can be found in Republic of Kenya, Commission of Inquiry into the Maize Board (10 volumes), (Naibori: Government Printer, 1966).Google Scholar We discuss the trends noted here in greater detail in another paper.

13 Daily Nation, 02 3, 1972, p. 12.Google Scholar

14 Dresang, Dennis L. and Sharkansky, Ira, “Sequences of Change and the Political Economy of Public Corporations: Kenya,” (Mimeo Madison, Wisconsin, 1973).Google Scholar

15 Partner states in the East African Community do not exchange ambassadors or conduct interstate relations with each other in the usual manner. Since members of the Community do not maintain diplomatic representatives in each other's capitals, the question of recalling or downgrading diplomatic teams does not arise. Instead, hostility and distrust among partner states takes the form of inaction and noncooperation with the Community organizations.

16 1968 is used as the base year simply because that is the first year for which figures are available for all the corporations. It should also be noted that although the Agricultural Finance Corporation was included in our study, we have not Listed this corporation on either table 2 or 3. There has been no public annual report on this corporation since its inception, and the information we have gathered from internal documents is not in a form that allows usage here. Suffice it to say that the AFC has been in serious difficulty and has confronted problems of political involvement.

17 If, for instance, one uses the index of pounds of tea collected per Kenya Tea Development Authority field employee, there has been a steady decline in productivity from 155,000 lbs. per field staff member in 1967–68 to 105,200 lbs. in 1970–71. While it can be argued that there have been improvements in the quality of leaf delivered to the factory during this period, the increase in quality may not match the decline in quantity. The increase in the index shown in table 2 reflects, in large part, increases in the price paid for Kenya tea internationally and not only a qualitative improvement in the output of KTDA.

18 The Kenya Tea Development Authority has been omitted from table 3 because it includes capital expenditures in current accounts. It is not possible to extract from available figures an annual profit–loss statement comparable to the data on other corporations. The Authority has been able to meet all of its commitments and is generally regarded as one of Kenya's most successful public enterprises.

19 Nabudere, D. Wadada, “The Transportation System in East Africa,” (Paper No. 56, 1971 Universities Social Sciences Council Conference, Makerere, 12 14–17, 1972)Google Scholar, and Hazlewood, Arthur, Rail and Road in East Africa (Oxford: Basil Blackwell, 1964).Google Scholar

20 Aldington, and Wilson, , The Marketing of Beef in Kenya, pp. 68–83.Google Scholar

21 Due to better husbandry practices and the use of hybrid seed, Kenya is entering a period of maize surplus. Political forces inhibit the Board from either lowering producer prices or raising consumer prices much more, and so the Board management is confronted with the task of finding more domestic uses for maize, such as stockfeed and starch products, and of prompting farmers to divert some of their resources from maize to other crops.

22 For a discussion of three major schools of thought regarding regional integration —federalism, functionalism, and neo–functionalism— see Nye, J. S., Peace in Parts: Integration and Conflict in Regional Organization (Boston: Little, Brown and Company, 1971), pp. 48–54.Google Scholar

23 Mitrany, David, A Working Peace System (Chicago: Quadrangle, 1966)Google Scholar and Sewell, J. P., Functionalism and World Politics (Princeton: Princeton University Press, 1966).CrossRefGoogle Scholar

24 Haas, Ernst B. and Schmitter, Philippe, “Economics and Differential Patterns of Political Integration: Projections about Unity in Latin America,” International Organization, Autumn, 1964 (Vol. 18, No. 4), p. 707.CrossRefGoogle Scholar

25 The analysis by Lindberg and Scheingold uses the experiences of the European Common Market to extend the Haas–Schmitter statement. Lindberg, Leon N. and Scheingold, Stuart A., Europe's Would–Be Polity. Patterns of Change in the European Community (Englewood Cliffs: Prentice–Hall, 1970).Google Scholar

26 Nye, , Peace in Parts, pp. 97–107.Google Scholar

27 See the discussion on the break–up of the East African Tourist Travel Association in Rothchild, , Politics of Integration, pp. 267–278.Google Scholar

28 Cited in Rothchild, Donald, “Experiment in Functional Integration,” Africa Report, 04, 1968, p. 43.Google Scholar

29 Tandan, , “The East African Common Market,” pp. 34 and 35Google Scholar; Nabudere, D. Wadada, “The Transportation System in East Africa,” (Paper No. 56, 1971 Universities Social Sciences Council Conference, Makerere, 12 14–17, 1971)Google Scholar.