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The World Bank's Fundamental Misconception in Africa

Published online by Cambridge University Press:  11 November 2008

Sayre P. Schatz
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In an earlier article in this Journal, ‘Structural Adjustment in Africa: a failing grade so far’, Vol. 32, No. 4, December 1994, pp. 679–92, I scrutinised the World Bank's major attempt to demonstrate the efficacy of its set of programmes known as ‘structural adjustment’. By relying solely on data selected and arranged in Adjustment in Africa: reforms, results, and the road ahead (New York, 1994), and using the categories and ratings of reform performance in that policy research report (hereinafter referred to as AIA), I showed that they not only failed to support its conclusions but actually bolstered the contrary thesis: namely, that implementation of structural adjustment most often causes poorer performance.

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Articles
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The Journal of Modern African Studies , Volume 34 , Issue 2 , June 1996 , pp. 239 - 247
Copyright
Copyright © Cambridge University Press 1996

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References

1 Evans, Peter, ‘The States as Problem and Solution: predation, embedded autonomy, and structural change’, in Haggard, Stephan and Kaufman, R. R. (eds.), The Politics of Economic Adjustment (Princeton, NJ, 1992), p. 176.Google Scholar

2 World Bank, Accelerated Development in Sub-Saharan Africa: an agenda for action (Washington, DC, 1981), often referred to as the Berg report.Google Scholar

3 Mkandawire, Thandika, ‘Adjustment, Political Conditionality and Democratisation in Africa’, in Cornia, Giovanni Andrea and Helleiner, Gerald K. (eds.), From Adjustment to Development in Africa: conflict, controversy, convergerne, consensus (London, 1994), p. 166, dismisses the World Bank approach as one in which ‘the state is seen as essentially a rent-allocating agent’, and speaks of ‘the empirical vacuity of [such] assertions about how policy is actually made in Africa’.Google Scholar

4 Streeten, Paul, ‘Markets and States: against minimalism’ in World Development (Oxford), 21, 8, 08 1993, p. 1289,Google Scholar quoting Lewis, John P., ‘Government and National Economic Development’, in Sutton, Francis X. (ed.), A World to Make: development in practice (New Brunswick, NJ, 1990).Google Scholar

5 Some recent articles incorporating this approach include: Chazan, Naomi and Rothchild, Donald, ‘The Political Repercussions of Economic Malaise’, in Callaghy, Thomas M. and Ravenhill, John (eds.), Hemmed In: responses to Africa's economic decline (New York, 1993), pp. 180–214;Google ScholarBates, Robert H., ‘The Impulse to Reform in Africa’, in Widner, Jennifer A. (ed.), Economic Change and Political Liberalization in Sub-Saharan Africa (Baltimore, and London, 1994), pp. 13–28;Google Scholar Barbara Grosh, ‘Through the Structural Adjustment Minefield: politics in an era of economic liberalization’, in ibid. pp. 29–46; and Crawford Young, ‘Democratization in Africa: the contradictions of a political imperative’, in ibid. pp. 230–50. See also, Lal, Deepak, The Poverty of ‘Development Economics’ (Cambridge, MA, 1985).Google Scholar

6 See Schatz, Sayre P., ‘Pirate Capitalism and the Inert Economy of Nigeria’, in The Journal of Modern African Studies (Cambridge), 22, 1, 03 1984, pp. 45–57.CrossRefGoogle Scholar

7 Grabowski, Richard, ‘The Successful Development State: where does it come from?’, in World Development, 22, 3, 1994, pp. 413–22, also sets forth an economics-as-cause thesis for most less development economies, although his arguments differ from those presented above.Google Scholar

8 Oshikoya, T.W., ‘Macroeconomic Adjustment, Uncertainty and Domestic Private Investment in Selected African Countries’, in Cornia, and Helleiner, (eds.), op. cit. pp. 137–51.Google Scholar

9 Schatz, Sayre P., ‘Capital Shortage Illusion’, in Oxford Economic Papers, 17, July 1965,Google Scholar and Nigerian Capitalism, (Berkeley, 1977), ch. 4.Google Scholar

10 World Bank, Sub-Saharan Africa. From Crisis to Sustainable Growth: a long-term perspective study (Washington, DC, 1989), p. 221.Google Scholar

11 See Schatz, Sayre P., ‘African Capitalism and African Economic Performance’, in Glickman, Harvey (ed.), The Crisis and Challenge of African Development (New York, 1988), p. 62.Google Scholar

12 Helleiner, Gerald, ‘External Resource Flows, Debt Relief and Economic Development in Sub-Saharan Africa’, in Cornia, and Helleiner, (eds.), op. cit. p. 332.Google Scholar For corroboration on the dominant importance of the economic environment, see World Bank, Sub-Saharan Africa, pp. 25–30;Google ScholarMeier, Gerald M. and Steel, William F. (eds.), Industrial Adjustment in Sub-Saharan Africa (Oxford, 1989), pp. 5–9;Google Scholar and Riddell, Roger, ‘The Future of the Manufacturing Sector in Sub-Saharan Africa’, in Callaghy, and Ravenhill, (eds.), op. cit. p. 243.Google Scholar

13 ‘Deep down’, reliance upon the free market for generating economic development ‘is almost as much a political judgement as an economic one’, according to Perkins, Dwight and Roemer, Michael (eds.), Reforming Economic Systems in Developing Countries (Cambridge, MA, 1991), Harvard Institute for International Affairs, p. 4.Google Scholar Roemer and Steven C. Radelet, ‘Macroeconomic Reforms in Developing Countries’, in ibid. p. 65, find that the case for market reliance in international trade ‘depends heavily on a few country examples and models which are suggestive rather than totally convincing’.

14 An almost universal example is public education, a service which could be sold privately only to those willing and able to pay profitable prices for it. Governments, however, acting on the belief that such restriction of education would injure societal interests, operate money-losing state-owned educational enterprises.Google Scholar

15 In Streeten's, Paul ‘commonsense theory’ of the state, loc. cit. p. 1290, governments are ‘not impervious to pressures for rational and altruistic polices’. Roger Riddell favours ‘benign intervention’ over ‘harsh with drawal’, and discusses in loc. cit. p. 232–43, a range of interventionist policies for promoting manufacturing in Africa.Google Scholar

16 For example, Lipumba, Nguyuru H. I., Africa Beyond Adjustment (Washington, DC, 1994), p. 4,Google Scholar sees a developmental state as a ‘linchpin’ for promoting long-run economic growth. Mkandawire, loc. cit. pp. 166–9, belives that African states can and do work for the general welfare.

17 Sklar, Richard L., ‘Development Democracy’, in Comparative Studies in Society and History (Cambridge), 29, 4, 10 1987, p. 709.Google Scholar