The Politics of African Industrial Policy : A Comparative Perspective

"This book engages in the debate on growth versus economic transformation and the importance of industrial policy, presenting a comprehensive framework for explaining the politics of industrial policy. Using comparative research to theorize about the politics of industrial policy in countries in the early stages of capitalist transformation that also experience the pressures of elections due to democratization, this book provides four in-depth African country studies that illustrate the challenges to economic transformation and the politics of implementing industrial policies."-- Provided by publisher Cover 1 Half-title 3 Title page 5 Copyright information 6 Table of contents 7 List of figures and tables 9 Acknowledgments 11 1 The Puzzle of Limited Economic Transformation in Africa 15 The Debate on Economic Transformation and Industrial Policy 17 The Debate on the Politics of Industrial Policy 20 The Developmental State and Its Critics 20 Collaborative Business-State Relations 24 Political Survival of Ruling Elites 25 Conceptualizing Capitalist Economic Transformation 28 The Politics of Industrial Policy Framework 31 A Theory of Successful Industrial Policy: Three Conditions 31 Elaborated Political Settlements Theory 37 Applying the Framework to African Experiences 39 Methods and Sources 44 Structure of This Book 46 Part I Rethinking the Political Economy of Development 49 2 The Case for Economic Transformation and Industrial Policy 51 Summary of the Argument 52 Interdependence between Agriculture and Industrialization 55 Manufacturing, Increasing Returns, and Imperfect Competition 59 The Imperative of Industrialization 62 The Role of Industrial Policy 65 Challenges and Opportunities for ‘Catching Up’ in the Twenty-First Century 69 Conclusions: Implications for African Countries 72 3 Assessing Economic Transformation in Africa 74 Trends in Economic Transformation: The Aggregate African Picture 76 Emerging Country Experiences: Ghana, Mozambique, Tanzania, and Uganda 81 Economic Transformation in Ghana 81 Economic Transformation in Mozambique 85 Economic Transformation in Tanzania 88 Economic Transformation in Uganda 92 Comparative Reflections 95 Economic Transformation and Structural Adjustment 96 Conclusions 99 4 Elaborated Political Settlements Theory and Clientelism in Africa 101 Drivers of Clientelism in Developing Countries 102 Clientelist Political Settlements and African Experiences 104 Clientelist Political Settlements and the Conditions for Successful Industrial Policy 109 Variable 1: Distribution of Power Outside the Ruling Coalition Degree of Vulnerability 110 Variable 2: Distribution of Power within the Ruling Coalition Degree of Contestation 111 Variable 3: Relative Power of Domestic Capitalists Degree of Political Influence 114 Variable 4: Degree of Technological Capabilities of Domestic Capitalists 117 Interactions between Vulnerability and Contestation within Ruling Coalitions 119 Interactions between Domestic Capitalists and Ruling Elites 122 Conclusions 125 Part II Evolution of Political Settlements 127 5 Increased Vulnerability and Contestation in Mozambique and Tanzania 129 Evolution of the Political Settlement in Mozambique 130 Postindependence Period, 1975–1989: A Strong Dominant Party 132 Reconstruction and Democratization (1990–2004): Vulnerable Authoritarianism 137 Toward a Strong Dominant Party after 2004 141 Evolution of the Political Settlement in Tanzania 143 The Postindependence Period until 1992: A Strong Dominant Party 145 Toward a Weak Dominant Party with Emerging Features of Competitive Clientelism 150 6 Dispersed Power and Elite Fragmentation in Ghana and Uganda 156 Evolution of the Political Settlement in Ghana 160 Decolonization and the Postindependence Period, 1957–1981 162 Rawlings and the PNDC (1982–1992): Vulnerable Authoritarianism 166 Return to Competitive Clientelism under the Fourth Republic (1992–2012) 168 Evolution of the Political Settlement in Uganda 175 Decolonization and the Postindependence Period 177 A Period of Vulnerable Authoritarianism and Africanization (1966–1979) 180 Political Settlement in Crisis (1979–1986) 182 From the Ashes of Civil War: A Strong Dominant Party and Economic Revival (1986–1996) 183 Democratization and the Move Toward Competitive Clientelism (1996–2012) 186 Part III African Experiences with Industrial Policy 191 7 Mozambique: Between Elite Capture and Pockets of Efficiency 193 Sugar Sector: Rehabilitating a Traditional Agro-Processing Sector 195 Economic Challenges in Rehabilitating the Sugar Industry 196 The Political Economy of Rehabilitating the Sugar Industry 199 Summary Analysis of the Sugar Rehabilitation Industrial Policy 206 Fisheries Sector: Failed Attempt to Create a National Fish Processing Industry 207 Economic Challenges in Creating a National Fish Processing Industry 209 The Political Economy of the Fisheries Sector 213 Summary Analysis of the National Fish Processing Industrial Policy 218 Conclusions 219 8 Tanzania: Intense Contestation within a Weak Dominant Party 222 Rice Sector: Smallholder Food Crop Production 224 Economic Challenges in the Rice Sector 225 The Political Economy of Increasing Local Rice Production 228 Summary Analysis of Industrial Policies Targeting Rice Production 233 Manufactured Exports and Export Processing Zones 234 Economic Challenges with Manufactured Exports 235 The Political Economy of the Export Processing Zones Initiative 238 Summary Analysis of the Export Processing Zones 244 Conclusions 245 9 Ghana: Competitive Clientelism and Weak Capitalists 247 Cocoa Export Sector: Rehabilitating a Traditional Export 250 Economic Challenges in Increasing Productivity in a Smallholder Export Crop 250 Political Economy of the Cocoa Sector 253 Summary Analysis of Industrial Policies in the Cocoa Sector 260 Palm Oil Sector: Modernizing a Traditional Agro-Processing Sector 261 Economic Challenges in Modernizing and Upgrading Palm Oil Processing 262 A Failed Industrial Policy: The Oil Palm PSI 267 Summary Analysis of the Oil Palm PSI 273 Conclusions 274 10 Uganda: Competing Factions and Conflicting Elite Interests 277 Fisheries Sector: Rise and Decline of a Nontraditional Export 279 Economic Challenges in the Fisheries Sector 280 The Political Economy of the Fisheries Sector 282 Summary Analysis of Industrial Policies Targeting Processed Fish Exports 286 Dairy Sector: Modernizing a Traditional Agro-Processing Sector 288 Economic Challenges in the Dairy Sector 288 The Political Economy of the Dairy Sector 291 Summary Analysis of Dairy Sector Industrial Policies 297 Conclusions 298 11 Conclusions and Perspectives 301 Theoretical Contribution 303 African Industrial Policy in Historical Perspective 305 The Politics of African Industrial Policy: Findings from the Case Studies 308 Potential Drivers of Change 310 The New Extractive Industries in African Countries 312 Foreign Direct Investments in Productive Sectors 319 References 323 Index 351