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April 6, 2008
David Warsh, Proprietor


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Might the Worst Be Over for Africa?

At first glance, the news from Zimbabwe last week seems bleak: armed guards, police squads marching in the streets, army veterans threatening to deploy in defense of a dictator Robert Mugabe, whose 28-year-rule unexpectedly has been threatened by the ballot box. Granted, the situation is not as disappointing as in Kenya last winter, where ethnic fighting broke following the disputed election in that nation. Kenya has long been held to be one of Africa’s success stories, whereas Zimbabwe, the once-prosperous Rhodesia, has been in increasingly steep decline ever since hand-over of power from a all-white regime in 1980. Still, the atmosphere in its capital, Harare, is being described by the correspondents there as thundery, at best.

 

A longer, broader perspective suggests that things may be on the verge turning up for Africa – that, indeed, the election in Zimbabwe may even be a token of just such change. That is the possibility raised by an intriguing paper by Robert Bates and Jeffrey Williamson, of Harvard University, and John Coatsworth, of Columbia University. Published since by the Economic History Review, the working paper from the National Bureau of Economic Research makes fascinating reading for anyone who likes comparative political economy.

 

Latin America, too, suffered fifty years of internecine warfare, political instability and economic stagnation, they say, after it gained independence from European rule in the first half of the nineteenth century. At a certain point it stabilized and began to grow. Africa’s experience may turn out to be the same, for many of the same reasons.  Indeed, the possibility exists that Africa’s evolution could avoid some of the worst side effects of Latin America’s successful transition, they say.

 

There can be no doubt that it’s been a bad forty years for Africa. Ever since colonial handovers began in the 1950s (Tunisia was the first, in 1956), most of the continent has failed to keep pace with the economic growth of the rest of the world. In their introduction to the newly-published The Political Economy of Economic Growth in Africa 1960-2000, the most comprehensive and authoritative assessment yet made of the differential growth of sub-Saharan African nations in the years since independence, Benno Ndulu, of the World Bank, and Stephen O’Connell, of Swarthmore College, survey the situation and conclude that it is somewhat worse than generally thought.

 

Conventional cross-country comparisons tell a story of modest progress, they note. United Nations’ human development indicators show “decided improvement.” Real GDP per capita rose by 60 percent. But the rest of the world grew much faster during those years, with the result that African incomes fell by 35 percent compared to other developing regions, and fifty percent relative to industrial nations. What’s more, such averages conceal alarming rates of outright deprivation. When the new millennium began, half the population of sub-Saharan African was living below the global poverty rate of $1.50 a day (adjusted to reflect roughly equal purchasing power), up from 35 percent in 1970.  The poverty rate in the rest of the world declined to 7 percent from 20 percent during the same period. Thus, “the record is profoundly unsettling,” write Ndulu and O’Connell.

 

But then, Bates, Coatsworth and Williamson point out, Latin America suffered five post-imperial “lost decades” after 1820, too.

 

In each case, Latin America and African subjugation brought a certain amount of stability and economic integration.  European nations might battle each other furiously on their home grounds, but for the most part they left each others’ colonies alone.  Fostering trade was a main object of imperialism, so customs units and currency zones were common. Colonial offices also sought to tamp down internal challenges to their rule, whether from warring tribes, European settlers or, in the case of Latin America, rebellious slaves.

 

The biggest difference in colonial expansions was demographic:  the European arrival in the New World brought epidemics that caused indigenous populations to collapse (from some 50 million in 1492 to as few three or four million a century later, according to one estimate). Nothing on that scale occurred in Africa.  Instead, some nine million persons were enslaved.

 

In each case, it was war in Europe that brought about colonial collapse.  The Napoleonic Wars put an end to the Spanish and Portuguese empires in the New World. (Napoleon put his brother on the Spanish throne while the Portuguese king decamped to Brazil.) World War II weakened the European powers sufficiently that they were unwilling or unable to resist African demands for independence.

 

Again, there was a key difference:  the Spanish tried in vain to re-conquer their lost possessions in Latin America, whereas France, Belgium and Britain invested in their former colonies in Africa in hopes of paying down their war debt through exports to the United States.

 

As the empires collapsed, write Bates, Coatsworth and Williamson, so did the twin safeguards they had provided against outside intervention and internal strife.Spanish interventions in Latin America persisted for a time in the nineteenth century.The United States competed with the British for influence in Mexico and the Caribbean, then with the French.  In the twentieth century, the Cold War contributed to the local ferment. The US and the Soviet Union competed for favor among newly independent nations, especially in the Congo, the Horn of Africa, and the former Portuguese colonies of Angola and Mozambique.

 

But mostly it was coups, war and civil war that disrupted trade and economic growth in post-colonial Latin America and Africa. Border wars were common in Latin America, where military spending accounted for nearly everything that governments did, averaging nearly 80 percent of all government spending for fifty years. In Africa, minority regimes often previously had been protected by colonial powers. In post-colonial times, campaigns against them, sometimes bordering on the genocidal, were more common than cross-border wars. Nations printed their own currencies, erected tariff barriers, heavily managed their economies in accordance with the latest economic fad. The result, in each case, was extreme Balkanization.

 

What turned around the economic performance of Latin America?

 

Paradoxically, decades of violence had the effect of weakening central governments and dismantling many old colonial institutions that impeded growth.  Governments stopped enforcing the tithe and other privileges of the Church. Public lands were sold, property rights reformed. “Latin America began drifting towards liberalism long before it became an ideology and a slogan,” the authors write.

 

Then, after 1870, nearly everything changed. As the rest of the global economy boomed, liberal values finally won an overwhelming victory, abolishing slavery, separating church and state, putting the legal system on a modern footing. Conservative interests, mainly colonial settlers and indigenous aristocrats, bought into the new system and enacted further reforms, including investment in infrastructure. Latin American economies began playing by different rules, and foreign investment flooded in.

 

Thus began a Latin American belle époque of peace and economic growth, but it came at a considerable social cost. The new regimes, dominated by business interests, centralized power and eliminated much political participation. Inequality soared, oligarchies took root, education was neglected, and twentieth-century Latin America emerged, neither especially democratic nor geared toward creating large domestic markets, but thoroughly integrated into the world trading system.

 

What are the chances that Africa will experience the same kind of belle époque? Many of the various impediments that it inherited from the colonial system have been abandoned or worked through. The end of the Cold War saw a rise in the number of its civil wars, but it also saw a dramatic decline in authoritarian rule. Multi-party politics, of the sort that now threatens to end Robert Mugabe’s disastrous rule, had been established in 70 percent of Africa by 1995, the authors report. Market-oriented policies have been adopted by most states, and strong demand for natural resources and agricultural products, especially from China, have buoyed many of them.

 

There is even a chance that Africa can avoid some of the distortions that have evolved in Latin America in the two centuries since colonial rule ended.  It is true that the growth of markets and the privatization of government assets have sparked a trend toward the rapid accumulation of wealth in a few hands and its alliance with power, Bates, Coatsworth and Williamson say.  But there are two reasons to hope that Africa might succeed in ways that Latin America failed.

 

For one thing, democracy and voting rights are far more widespread in Africa than they were in Latin America in the years before 1950. For another, there are far fewer European settlers to make common cause with local oligarchs, and far more indigenous Africans able to resist the kind of land reforms that led to the concentration of wealth than was ever the case in Latin America in the nineteenth century.  It is possible that Africa will not have to pay the same high price in inequality that Latin America did.

 

There is the tragedy of AIDS. But even its terrible scourge may conceal an economic silver lining, raising the real wage of labor, much as the Black Death did in fourteenth century England, setting the sub-Saharan continent on a different path than before. That’s not necessarily good, even if it’s true. Already in the early 1990s, development economist Peter Timmer argued that real wages in Africa were too high to compete with Asia in the market for manufactured goods or estate agriculture (rubber, palm oil), given their level of labor productivity. Africans might have to wait until Asia is rich to have “their turn,” he warned.

This much is clear: the world has changed. There are advances in public health, in communication (the Internet!), in institutional know-how. After an appalling forty years, the level of violence is dropping. Morgan Tsvangirai (pronounced CHANG-guh-rai), the opposition leader in Zimbabwe, has been compared to Lech Walesa – a long time trade unionist who by leading a series of strikes against the government catapulted himself to political prominence.  Maybe.  Maybe not. But the news from Zimbabwe is not all bad.   

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