Hostname: page-component-78c5997874-g7gxr Total loading time: 0 Render date: 2024-11-02T22:54:22.981Z Has data issue: false hasContentIssue false
  • English
  • Français

Multinational enterprises, political institutions, and violence: a case study from Mozambique

Published online by Cambridge University Press:  30 July 2020

Carlos Mairoce ,
Magdalene Silberberger  and
Joachim Zweynert
Carlos Mairoce
Affiliation:
Department of Capacity Development, Monitoring and Evaluation, PLASOC, Chimoio, Mozambique
Magdalene Silberberger
Affiliation:
Department of Philosophy, Politics, and Economics, Institute for Social and Institutional Change (ISIC), Witten/Herdecke University, Witten, Germany
Joachim Zweynert*
Affiliation:
Department of Philosophy, Politics, and Economics, Institute for Social and Institutional Change (ISIC), Witten/Herdecke University, Witten, Germany
*
*Corresponding author. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Based on the concept of limited and open access orders (LAO/OAO), this paper explains what appears to be a paradox: how was it possible that a former civil war country, Mozambique, which had been extremely successful in attracting foreign direct investment (FDI) and which the International Monetary Fund praised as a great Sub-Sahara African success story in 2007, only a few years later found itself on the brink of a new civil war? We argue that the destabilization of the country was the result of a toxic mix of domestic politics and a massive inflow of FDI. FDI provided rents to an increasingly dominant state party, FRELIMO, which could be appropriated one-sidedly. It then used these rents to oppress RENAMO, its previous civil war enemy and currently its main opposition party, to monopolize power. This strategy seemed to be successful until RENAMO, faced with the risk of being politically marginalized (and of losing its rents accordingly), returned to armed conflict in 2013. By analyzing the links between the macro-level of national politics and the micro-level of an enterprise and by embedding the interplay between polity and economy into an international context, the paper also makes a theoretical contribution to the LAO/OAO concept.

Keywords

FDImultinational enterprisespolitical institutionscivil warlimited/open access ordersextractive institutions
Type
Research Article
Information
Journal of Institutional Economics , Volume 17 , Issue 1 , February 2021 , pp. 133 - 151
Copyright
Copyright © Millennium Economics Ltd 2020

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adedokun, A. (2017), ‘Emerging Challenges to Long-term Peace and Security in Mozambique’, The Journal of Social Encounters, 1(1): 37–53.Google Scholar
Advisory (2013), ‘Mozambique – The Emergence of a Giant in Natural Gas. SPTEC Advisory –2012 Country Review’, http://www.sptec-advisory.com/SPTEC_Advisory-Mozambique-The_Emergence_of_a_giant_in_Natural_Gas.pdf (accessed February 2019).Google Scholar
AIM (2016a), ‘RENAMO Attacks Coal Train in Nampula, Mozambique – AIM Report’, https://clubofmozambique.com/news/renamo-attacks-coal-train-nampula-mozambique-aim-report/ (accessed January 2019).Google Scholar
AIM (2016b), ‘Not True That RENAMO “Won Six Provinces” Says Nyusi’, https://clubofmozambique.com/news/not-true-renamo-won-six-provinces-says-nyusi/ (accessed September 2019).Google Scholar
Arndt, C., Jones, E. S., Mahrt, K., Salvucci, V. and Tarp, F. (2017), ‘A Review of Consumption Poverty Estimation for Mozambique’, in Channing, A. and Tarp, F. (eds), Measuring Poverty and Wellbeing in Developing Countries, Oxford: Oxford University Press, pp. 108–120.Google Scholar
Baez Ramirez, J. E. and Olinto, P. (2016), ‘Accelerating Poverty Reduction in Mozambique: Challenges and Opportunities’, World Bank Working Paper, No. 110868, Washington, DC: World Bank.Google Scholar
Baez Ramirez, J. E., Caruso, G. D., Niu, Ch. and Myers, C. A. (2018), Mozambique Poverty Assessment : Strong But Not Broadly Shared Growth, Washington, DC: World Bank Group. http://documents.worldbank.org/curated/en/377881540320229995/Overview.Google Scholar
Balancing Act (2008), ‘New Shareholder for Vodacom Mozambique’, Balancing Act – Telecoms, Internet and Broadcast in Africa, https://www.balancingact-africa.com/news/telecoms-en/3132/new-shareholder-for-vodacom-mozambique (accessed September 2019).Google Scholar
Brümmer, S. (2007a),‘Vodacom Dials #1 in Moz’, The Mail & Guardian, https://mg.co.za/article/2007-03-30-vodacom-dials-1-in-moz (accessed September 2019).Google Scholar
Brümmer, S. (2007b), ‘Vodacom's Elite Network’, The Mail & Guardian, https://mg.co.za/article/2007-04-13-vodacoms-elite-network (accessed September 2019).Google Scholar
Caldeira, A. (2018), ‘Authors’ Interview with Aldérito Caldeira’, 5th August 2018, transcript available from the authors.Google Scholar
Canal de Moçambique (2007), ‘Incompatibilidades e os negócios do cidadão-presidente Armando Guebuza’, http://macua.blogs.com/moambique_para_todos/2007/03/incompatibilida.html (accessed September 2019).Google Scholar
Carmona, F. (2007), ‘Guebuza entra na Vodacom (Recordando) Através da Intelec Holding’, http://macua.blogs.com/moambique_para_todos/2016/05/guebuza-entra-na-vodacomrecordando.html (accessed September 2019).Google Scholar
Carmona, F. (2018), ‘Authors’ Interview with Francisco Carmona’, 3rd August 2018, transcript available from the authors.Google Scholar
Centro de Integridade Pública (2014), ‘Migração Digital entregue à Empresa da Família Presidencial’, http://www.verdade.co.mz/destaques/democracia/45439-migracao-digital-entregue-a-empresa-da-familia-presidencial (accessed July 2019).Google Scholar
Chivangue, A and Cortez, E. (2015), ‘An Analysis of Mozambique's Political and Economic Networks’, CEsA Working Paper 136/2015.Google Scholar
Collier, P. (1999), ‘On the Economic Consequences of Civil War’, Oxford Economic Papers, 51(1): 168–183.CrossRefGoogle Scholar
DW (2016a). ‘Mediadores de paz em Moçambique apresentam proposta de cessar-fogo imediato’, https://www.dw.com/pt-002/mediadores-de-paz-em-mo%C3%A7ambique-apresentam-proposta-de-cessar-fogo-imediato/a-19493715 (accessed February 2020).Google Scholar
DW (2016b), ‘Cronologia do conflito entre a RENAMO e o Governo de Moçambique’, https://www.dw.com/pt-002/cronologia-do-conflito-entre-a-renamo-e-o-governo-de-mo%C3%A7ambique/a-19105846 (accessed September 2019).Google Scholar
Emerson, S. A. (2014), The Battle for Mozambique: The FRELIMO–RENAMO Struggle, 1977–1992 (1st ed.), West Midlands: Helion & Company Ltd.Google Scholar
Frankema, E. and Masé, A. (2014), ‘An Island Drifting Apart. Why Haiti is Mired in Poverty While the Dominican Republic Forges Ahead’, Journal of International Development, 26(1): 128–148.CrossRefGoogle Scholar
Ghobarah, H. A., Huth, P. and Russett, B. (2003), ‘Civil Wars Kill and Maim People-Long after the Shooting Stops’, The American Political Science Review, 97(2): 189–202.CrossRefGoogle Scholar
Grimmer-Solem, E. (2015), ‘The Mature Limited Access Order at the Doorstep: Imperial Germany and Contemporary China in transition’, Constitutional Political Economy, 26(1): 103–120.CrossRefGoogle Scholar
IMF (2007), ‘IMF Country Report No. 07/36. Republic of Mozambique: Fifth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, and Financing Assurances Review – Staff Report; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for the Republic of Mozambique’, https://www.imf.org/external/pubs/ft/scr/2007/cr0736.pdf (accessed January 2019).CrossRefGoogle Scholar
IMF (2014), ‘Africa Rising – Building to the Future, Keynote Address by Christine Lagarde, Managing Director, IMF’, https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp052914 (accessed January 2019).Google Scholar
IREX (2017), ‘Media Sustainability Index 2017. The Development of Sustainable Independent Media in Mozambique’, https://www.irex.org/sites/default/files/pdf/media-sustainability-index-africa-2017-mozambique.pdf (accessed February 2019).Google Scholar
Joseph, J. (1998), ‘Africa, 1990–1997: From Abertura to Closure’, Journal of Democracy, 9(2): 3–17.CrossRefGoogle Scholar
Kluge, J. N. (2017), ‘Foreign Direct Investment, Political Risk and the Limited Access Order’, New Political Economy, 22(1): 109–127.CrossRefGoogle Scholar
Levy, B. (2013), ‘Seeking the Elusive Developmental Knife Edge: Zambia and Mozambique – A Tale of Two Countries’, in North, D.C., Wallis, J.J., Webb, S. and Weingast, B.R. (eds.), In the Shadow of Violence: Politics, Economics, and the Problems of Development, Cambridge: Cambridge University Press, pp. 112–148.Google Scholar
Lopes, M. (2013), ‘UPDATE 2-Mozambique's RENAMO Threatens to Paralyse Vital Coal Railway’, Reuters Basic Materials, https://www.reuters.com/article/mozambique-renamo-idUSL5N0EV1SD20130619 (accessed January 2019).Google Scholar
Machel, M. (2011), ‘Um negócio da China para a família Guebuza’, Centro de Integridade Publica (CIP) Newsletter #11. This online source is no longer available and was kindly made available to us by Luis Nhachote via email. The corresponding document can be obtained from the authors.Google Scholar
Macuane, J. J. (2018), ‘Mozambique's Private Sector in the Context of Conflict. International Growth Centre (IGC) Working Paper’, https://www.theigc.org/wp-content/uploads/2018/10/Mozambique-case-study.pdf (accessed October 2019).Google Scholar
Manning, C. (2010), ‘Mozambique's Slide into One-Party Rule’, Journal of Democracy, 21(2): 151–165.CrossRefGoogle Scholar
Ministério da Indústria e Comércio (2018), ‘Selo “Orgulho Moçambique”. Made in Mozambique’, http://www.mic.gov.mz/por/Industria/Made-in-Mozambique/Selo-ORGULHO-MOCAMBIQUE.MADE-IN-MOZAMBIQUE (accessed August 2019).Google Scholar
Mosse, M. (2005), ‘Can Mozambique's New President Lead the Fight Against Corruption?’, Review of African Political Economy, 32(104/105): 431–436.Google Scholar
Nhachote, L. (2012), ‘Mozambique's “Mr Guebusiness”’, The Mail & Guardian, https://mg.co.za/article/2012-01-06-mozambiques-mr-guebusiness (accessed September 2019).Google Scholar
Nhachote, L. (2014), ‘Mozambique: The Business Interests of the Guebuza Family On Extractive Industry’, Verdade, 22 October 2014, http://www.verdade.co.mz/artigos-em-ingles/democracy/49761-mozambique-the-business-interests-of-the-guebuza-family-on-extractive-industry (accessed November 2019).Google Scholar
Nhachote, L. (2015), ‘Parentes do Presidente da República despontam no “Nyusibusiness”’, Verdade, http://www.verdade.co.mz/tema-de-fundo/35-themadefundo/53320-parentes-do-presidente-da-republica-despontam-no-nyusibussiness (accessed July 2019).Google Scholar
North, D. C., Wallis, J. J. and Weingast, B. R. (2009), Violence and Social Orders. A Conceptual Framework for Interpreting Recorded Human History, New York: Cambridge University Press.CrossRefGoogle Scholar
North, D. C., Wallis, J. J., Webb, S. B. and Weingast, B. R. (2007), ‘Limited Access Orders in the Developing World: A New Approach to the Problems of Development’, Policy Research Working Paper, No. 4359, Washington, DC: World Bank.CrossRefGoogle Scholar
North, D. C., Wallis, J. J., Webb, S. B. and Weingast, B. R. (eds) (2013), In the Shadow of Violence: Politics, Economics, and the Problems of Development, New York: Cambridge University Press.Google Scholar
Orre, A. J. and Ronning, H. (2017), ‘Mozambique: A Political Economy Analysis, Bergen NUPI (NUPI Political Economy Reports)’, https://www.cmi.no/publications/6366-mozambique-a-political-economy-analysis (accessed October 2019).Google Scholar
Pereira, J. C. (2009), ‘The Impact of Democracy in Mozambique: Assessing Political, Social and Economic Developments since the Dawn of Democracy’, Research Report 2018, Johannesburg: W.K. Kellogg Foundation.Google Scholar
Pretoria News (2018), ‘Accords Pave Way for Polls, Peace in Mozambique’, https://www.iol.co.za/pretoria-news/accords-pave-way-for-polls-peace-in-mozambique-16457505 (accessed September 2019).Google Scholar
Puddington, A. (2010), ‘The Erosion Accelerates’, Journal of Democracy, 21(2): 136–150.CrossRefGoogle Scholar
Regalia, S. (2017), ‘The Resurgence of Conflict in Mozambique. Ghosts from the Past and Brakes to Peaceful Democracy’, IFRI, Note no. 14.Google Scholar
Rønning, H. (2011), ‘The FRELIMO State, Paper Presented at the Conference on Legitimacy of Power’, Possibilities of Opposition, May 30th–June 1st, 2011, in Jinja, Uganda, https://www.cmi.no/file/?1323 (accessed January 2019).Google Scholar
Rønning, H. (2016), ‘How Much Soft Power Does China Have in Africa?’, in Zhang, X., Wasserman, H. and Mano, W. (eds.), China's Media and Soft Power in Africa Promotion and Perceptions, New York: Palgrave Macmillan, pp. 65–78.Google Scholar
Roque, P.C. (2009), ‘China in Mozambique: A Cautious Approach Country Case Study. South African Institute of International Affairs’, Occasional Paper No. 23, https://www.saiia.org.za/wp-content/uploads/2013/06/saia_sop_23_roque_20090218_en.pdf (accessed October 2019).Google Scholar
Stewart, R. M. (2008), ‘Vodafone Seeks Majority Control of Vodacom’, The Wall Street Journal, https://www.wsj.com/articles/SB122596655256404705 (accessed November 2019).Google Scholar
Sumich, J. (2010), ‘The Party and the State: FRELIMO and Social Stratification in Post-Socialist Mozambique’, Development and Change, 41(4): 679–698.CrossRefGoogle Scholar
Sun, L. S., Peng, M. W., Lee, R. P. and Tan, W. (2015), ‘Institutional Open Access at Home and Outward Internationalization’, Journal of World Business, 50(1): 234–246.CrossRefGoogle Scholar
Turner, G., Mathiason, N. and Doward, J. (2017), ‘Revealed: How Vodafone Allowed Elites to Reap Profits of Africa's Mobile Boom’, The Guardian, November 12, 2017, https://www.theguardian.com/world/2017/nov/12/vodafone-wealthy-elites-mobile-phones-africa (accessed September 2019).Google Scholar
Van Bavel, B., Ansink, E. and van Besouw, B. (2017), ‘Understanding the Economics of Limited Access Orders: Incentives, Organizations and the Chronology of Developments’, Journal of Institutional Economics, 13(1): 109–131.CrossRefGoogle Scholar
Vines, A. (2017), ‘Alfonso Dhlkama and RENAMO's Return to Armed Conflict Since 2013: The Politics of Reintegration in Mozambique’, in Themnér, A. (ed.), Warlord Democrats in Africa: Ex-Military Leaders and Electoral Politics, London: Zed Books, pp. 121–155.Google Scholar
Vines, A. (2019), ‘Prospects for Sustainable Elite Bargain in Mozambique. Third Time Lucky?’, Chatham House Research Paper.Google Scholar
Vodacom Group (2004), ‘Annual Report 2004’, http://www.vodacom.com/pdf/integrated-reports/annual-report-2004/ar-full.pdf (accessed September 2019).Google Scholar
Vodacom Group (2006), ‘Annual Report 2006’, http://www.vodacom.com/integrated-reports.php (accessed September 2019).Google Scholar
Vodacom Group (2007a), ‘Annual Report 2007’, www.vodacom.com/pdf/integrated-reports/annual-report-2007/ar-full.pdf (accessed September 2019).Google Scholar
Vodacom Group (2007b), ‘Press Release of 8th March 2007’, https://www.vodacom.com/news-article.php?articleID=121&pid=press-releases (accessed February 2019).Google Scholar
Vodacom Group (2012), ‘Integrated Report 2012’, www.vodacom.com/pdf/integrated-reports/integrated-report-2012/iar-full.pdf (accessed September 2019).Google Scholar
Vodacom Group (2019), ‘Annual Results 2019’, https://www.vodacom.com/pdf/annual-results/2019/annual-results-presentation-fy19-latest.pdf (accessed September 2019).Google Scholar
Wallis, J. J. (2011), ‘Institutions, Organizations, Impersonality, and Interests: The Dynamics of institutions’, Journal of Economic Behavior & Organization, 79(1): 48–64.CrossRefGoogle Scholar
Whitfield, L., Therkildsen, O., Buur, L. and Kjær, A. M. (2015), The Politics of African Industrial Policy: A Comparative Perspective, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
World Bank (2019a), World Development Indicators, Washington, DC: The World Bank, Available at: https://datacatalog.worldbank.org/dataset/world-development-indicators (accessed January 2020).Google Scholar
World Bank (2019b), ‘Poverty & Equity Brief, Mozambique’, https://databank.worldbank.org/data/download/poverty/33EF03BB-9722-4AE2-ABC7-AA2972D68AFE/Archives-2019/Global_POVEQ_MOZ.pdf (accessed February 2020).Google Scholar
World Economic Forum (2019), ‘Networked Readiness Index’, https://networkreadinessindex.org/nri-2019-countries/ (accessed February 2020).Google Scholar