Global Geopolitical Power and African Political and Economic Institutions by Quinn John James;

Author:Quinn, John James;
Language: eng
Format: epub
Publisher: Lexington Books/Fortress Academic

Chapter 7

The Partial Fragmentation of Economic Power in Africa

The Liberalization of Economic Policies and Partial Privatization

Not only did the political institutions of the region undergo a massive reordering in the wake of the second geopolitical shift, but the economic institutions and practices of the region did as well. Like the political reforms, we can see a significant region-wide outward appearance manifestation of economic reforms, but, in reality, these changes only represent a partial, but important, fragmentation of economic power throughout the region. The extent of the economic liberalization also varied within the region. The adoption of many of these reforms began in the mid- to late-1980s, but their pace accelerated following the new geopolitical alignment.1

The most noticeable evidence of the partial liberalization of economic power and greater exposure to markets for the region are these: (1) a move away from inward-oriented economic policies; (2) greater flows in international trade; (3) a region-wide increase in the number, and importance, of acts of privatization of majority state-owned industries; and (4) a rise in levels of foreign direct investment (FDI). Moreover, the region has also seen (5) increased African membership in intergovernmental organizations established to lower trade barriers, increase trade flows, and/or increase economic regional integration, and (6) an attendant rise in bilateral investment treaties. Several of these actions can be seen as both causes and consequences of liberalization.

Despite the emergence of region-wide and significant reforms in economic institutions and practices, the legacy of so much prior state control over these economies means that the state remains a significant player. The continued strength of the governing political elites in most countries can be seen through continued control over, and ownership of, much of their economies. Evidence for the continuing consolidation of economic power can be seen in the following: (1) large and significant components of the economy continuing to be in state hands, especially oil or mining sectors, (2) the state remains the largest employer of formal wage (non-agricultural) employment, and (3) one party which exercises power with only a small likelihood of losing elections. This last point is more relevant in conjunction with the fact that so much of the economy and so many jobs remain controlled and distributed by political elites. The apparent causes of many of these trends on regional, domestic, and international levels, are addressed in this chapter, though the influence of the international level was mostly addressed in Chapter 5.

Evidence for the Partial Fragmentation of Economic Power

Dramatic Decline in Inward-Oriented Economic Policies

As discussed in prior chapters, the political elite in most countries in the region consolidated its control over the economic domain partially through the use of inward-oriented development policies. This helped channel economic power through the political process rather than the market, though this tendency was stronger in some countries than in others.2 Countries with majority state ownership were more inward-oriented, though Afro-Marxist and socialist countries followed such policies from an ideological basis.3 Inward-oriented policies (moderate or strong) are those which result in incentive structures which are biased toward, or distinctly favor, production for the domestic market.

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