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The Political Economy of African Agricultural Policy Colin Poulton [email protected] 11/06/2014 SNRD Agricultural Policy Learning Event, Accra 1
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Colin Poulton: The political economy of African Agricultural Policy

May 24, 2015

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"The African Agriculture Policy Agenda in Practice: Managing processes and improving advisory capacities”, Accra, June 2014
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Page 1: Colin Poulton: The political economy of African Agricultural Policy

The Political Economy of African

Agricultural Policy

Colin Poulton

[email protected]

11/06/2014SNRD Agricultural Policy Learning Event,

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Page 2: Colin Poulton: The political economy of African Agricultural Policy

Outline

• Some “big picture” political economy theory

– Exclusive vs inclusive institutions

• Political settlements: towards a typology

• Democratisation and the political economy of

agricultural policy in Africa

�Key message: Politics and institutions define

the incentives that policy makers face and the

“room for manoeuvre” for policy change.

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Page 3: Colin Poulton: The political economy of African Agricultural Policy

Levels of Political Economy Analysissource: DFID (2009)

• Macro-level

– How political leaders are selected

– How the highest level political institutions function

• Sector-level

– Forces that shape policy formation and prioritisation at sector level

– How sector level institutions function

• Problem-driven

– How to change a particular policy or tackle an identified constraint

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Page 4: Colin Poulton: The political economy of African Agricultural Policy

Exclusive vs Inclusive Institutionssources: North-Wallis-Weingast (2009) and

Acemoglu and Robinson (2012)

• Political and economic institutions reinforce

each other

– Vicious or virtuous circle

• All states begin with exclusive institutions

– Elite agreement to limit violence (NWW 2009)

– Rents are created by and for the elite

– High inequality, as a result of economic policy, is protected by political control

– Economic outcomes reinforce the power of the elite

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Page 5: Colin Poulton: The political economy of African Agricultural Policy

Exclusive vs Inclusive Institutions II

• Inclusive institutions

– Competitive politics sustains and is sustained by a liberal market economy

– If a leader tries to limit competition in the economy (or use violence), s/he will be voted out

– The liberal market economy means that there are multiple sources of capital to finance (new) political organisations

– These countries have become the most wealthy over time, because they grow more steadily.

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Exclusive vs Inclusive Institutions III

• Only a minority of countries have yet made the transition to inclusive institutions

– Most are now in transition

– Historically, the transition has taken generations or even centuries

• Those in power “hold all the cards”

– They have to perceive reform as being in their interest

• Hence, the importance of

– competition between nations and/or between elite groups

– “critical junctures”: typically crises!

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Page 7: Colin Poulton: The political economy of African Agricultural Policy

Political Settlement (Elite Bargains)

• After a crisis, new “rules of the game” are negotiated, covering:

– How power is to be obtained / maintained

– Limits upon the behaviour of those in (or seeking) power

– How elites behave – and whether or not the poor

benefit - flow from this

• Some elite groups may be excluded from the new settlement

– This is only sustainable as long as they are unable to gain support to force their way back into power

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Why Might Elites Adopt Pro-Poor Policy?

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Incentives

Competition

between States

Competition

between Elite Groups

Demand from

Poor Groups

Fear of Revolt

by Poor Groups

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20th Century Asian “Tigers”

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Incentives

Competition

between States

Competition

between Elite Groups

Demand from

Poor Groups

Fear of Revolt

by Poor Groups

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Africa according to van de Walle (2001)

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Autonomous States

Competition

between States

Competition

between Elite Groups

Demand from

Poor Groups

Fear of Revolt

by Poor Groups

Page 11: Colin Poulton: The political economy of African Agricultural Policy

Autonomous States

• An elite of a few thousand per country could do largely what they liked!

• Priority given to security and elite expenditure

• Numerous jobs in state agencies given to supporters as rewards (source of rents)

– Low capacity of state agencies as a result

• Vicious circle of low tax base, hence little revenue left for development (left to donors), hence low tax base …

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Theory of Democratisation

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Incentives

Competition

between States

Competition

between Elite Groups

Demand from

Poor Groups

Fear of Revolt

by Poor Groups

Page 13: Colin Poulton: The political economy of African Agricultural Policy

Democratisation and Agricultural Policy

• Urban bias (Bates 1981)

– Will democratisation counter this?

• Reduction in taxation, but neglect of public investment?

• Voting on the basis of ethnicity, local issues, to secure patronage … and general policy performance (growth, corruption)

• Rural poor uneducated, dispersed, unorganised

• Public goods have long time lags from investment to impact, which may be “unattributable”

– Offer transfers (e.g. input subsidies) instead?

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Settlement Types 1 and 2

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Incentives

Competition

between States

Competition

between Elite Groups

Demand from

Poor Groups

Fear of Revolt

by Poor Groups

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Settlement 1: Kenya

• “Champions” gather votes from their regions

– Often playing on fear of other groups (e.g. land)

• Rewarded with ministries as source of rents

• History of state intervention in agriculture

– Each region has its commodity and state agency

– Some local elites obtain substantial benefits

– High inequality (within and across regions)

• Weak incentives to invest in national public goods

• Crisis 2008: have the rules changed?

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Settlement 2: Ghana• Eventual return to democratisation after early 1980s political

and economic crises– Political stability: investment climate for steady growth

• 2 institutionalised parties, but as much duopoly as competition (both have the same internal logic)

• Payments at every stage to obtain power– Recoup investment and reward funders once in office: posts, perks

• High elite expenditure and political appointments– Low capacity of state agencies as a result

– Heavy reliance on donors for non-salary expenditure

• Will competitive clientelism become too expensive?– Marginal cost of votes is rising

– Macroeconomic instability

– Oil is coming!

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Settlement Type 3

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Incentives

Competition

between States

Competition

between Elite Groups

Demand from

Poor Groups

Fear of Revolt

by Poor Groups

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Settlement 3: Rwanda• Forged following 1994 genocide

– Never let this happen again

– Secure future for Tutsis through wealth for all

– Visionary leadership; others willing to follow

• Political control (ethnic politics prohibited) plus broad-based growth– Establish legitimacy

– N.B. external threat + latent internal sympathy

• Highly incentivised state– Outcome-based management, learning

• Big investment in agriculture since 2007– MR perspective encourages public goods investment

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Page 19: Colin Poulton: The political economy of African Agricultural Policy

Thank you!

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References• Acemoglu, D. and J. Robinson (2012). Why Nations Fail: The Origins of

Power, Prosperity and Poverty. London, Profile Books.

• Bates, R. (1981). Markets and States in Tropical Africa: The Political Basis of Agricultural Policies. Berkeley, University of California Press.

• DFID (2009). Political Economy Analysis How to Note. DFID Practice Paper, Department for International Development, London, www.odi.org.uk/events/2009/07/23/1929-dfid-note-political-economy-analysis.pdf.

• Hopkin, J. (2006). Conceptualizing Political Clientelism: Political Exchange and Democratic Theory. Paper prepared for APSA annual meeting, Philadelphia, 31 August – 3 September 2006. [you can Google this!]

• North, D., J. Wallis and B. Weingast (2009). "Violence and the Rise of Open-Access Orders." Journal of Democracy 20(1): 55-68.

• van de Walle, N. (2001). African Economies and the Politics of Permanent Crisis, 1979-1999. New York, Cambridge University Press.

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References II

Please see also:

• www.future-agricultures.org for numerous case studies

• A forthcoming special issue of Development Policy

Review entitled “Democratisation and the Political Economy of Agricultural Policy in Africa”. This will feature papers on Ethiopia, Kenya, Malawi and Rwanda, all of which will be freely downloadable online.

• http://www.soas.ac.uk/courseunits/P527.html. This is a fee-paying course! It is currently being revised for 2015 study and covers the material in this presentation and much more.

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Page 22: Colin Poulton: The political economy of African Agricultural Policy

Clientelism

• “the distribution of selective benefits to individuals or clearly defined groups in exchange for political support” (Hopkin 2006)

• A product of unequal social and political relationships, and of excessive power being vested in the executive

– those in power act as principals (patrons), not agents

• Competitive clientelism: parties or groups compete to control the state in order to use its resources for the benefit of themselves and their supporters

– Politics as an investment

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