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International Financial Institutions and Economic Policy Reform in Sub-Saharan Africa

Published online by Cambridge University Press:  11 November 2008

Extract

Since the 1979 oil shock and in the course of the subsequent world recession, many African governments have dramatically altered the orientation of their economic policies. States previously committed to various brands of ‘African socialism’ have been ending subsidies, reducing de facto taxes on agricultural producers, ‘privatising’ previously state-run activities, adopting more liberal exchange-rate policies, and implementing numerous other ‘market-oriented’ reforms.

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Copyright © Cambridge University Press 1988

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References

Page 113 note 1 Representative here are Wheeler, David, ‘Sources of Stagnation in Sub-Saharan Africa’, in World Development (Oxford), 12, 1, 01 1984, pp. 123;Google ScholarHelleiner, G. K., ‘The IMF and Africa in the 1980s’, in Canadian Journal of African Studies (Toronto), 17, 1, 1983, pp. 1733;Google Scholarand the various writers in the special IDS Bulletin (Brighton) on sub-Saharan Africa and the Berg report, 14, 1, January 1984.Google Scholar

Page 114 note 1 This is a rough sketch of the ‘mainstream’ World Bank/I.M.F. view. See, for example, World Bank, Towards Sustained Development in Sub-Saharan Africa (Washington, D.C., 1984).Google Scholar

Page 114 note 2 Price, Robert, ‘Neo-Colonialism and Ghana's Economic Decline: a critical assesement’, in Canadian Journal of African Studies, 18, 1, 1984, p. 188.Google Scholar

Page 114 note 3 Hyden, Goran, No Shortcuts to Progress: African development management in perspective (Berkeley, 1983), pp. 8ff.Google Scholar

Page 114 note 4 Sandbrook, Richard, ‘The State and Economic Stagnation in Tropical Africa’, in World Development, 14, 3, 1986, p. 321.CrossRefGoogle Scholar

Page 114 note 5 Callaghy, Thomas, The State-Society Struggle: Zaïre in comparative perspective (New York, 1984).Google Scholar

Page 115 note 1 For example, Ibid. p. 196.

Page 115 note 2 Callaghy, Thomas, ‘Africa's Debt Crisis’, in Journal of International Affairs (New York), 38, 1, Summer 1984, p. 75.Google Scholar

Page 115 note 3 For representative essays, see Evans, Peter B., Rueschemeyer, Dietrich, and Skocpol, Theda (eds.), Bringing the State Back In (Cambridge, 1985).CrossRefGoogle Scholar

Page 115 note 4 Waltz, Kenneth provides a theoretical ground for these expectations in Theory of International Politics (New York, 1979).Google Scholar

Page 115 note 5 Jackson, Robert H. and Rosberg, Carl G., ‘Sovereignty and Underdevelopment: juridical statehood in the African crisis’, in The Journal of Modern African Studies (Cambridge), 24, 1, 03 1986, pp. 131,Google Scholar and ‘Why Africa's Weak States Persist: the empirical and the juridical in statehood’, in World Politics (Princeton), 35, 1, 10 1982, pp. 125.Google Scholar

Page 116 note 1 Browne, Robert S., ‘Conditionality: a new form of colonialism?’, in Africa Report (New Brunswick), 29, 5, 0910 1984, p. 14.Google Scholar

Page 119 note 1 For remarks on policy change in Ghana, see Africa Confidential (London), 6 06 1984, p. 3;Google Scholar on the Gambia, , African Economic Digest (London), 3 10 1984;Google Scholar on Guinea, , Legum, Colin (ed.), Africa Contemporary Record, 1985–86 (London, 1987), p. B47ff (hereafter A.C.R., 1985–86);Google Scholar on Equantorial Guinea, Ibid. pp. B226–7; on Mali, , Zulu, J. B. and Nsolui, S. M., ‘Adjustment Programs in Africa: the recent experience’, I.M.F. Occasional Paper No, 34, Washington, D.C., 1985, pp.22–5,Google Scholarand Africa Confidential, 30 January 1985, p. 7; on Mauritania, A.C.R., 1985–86, pp. B107ff;Google Scholar on Somalia, , Colin, Legum (ed.), Africa Contemporary Record, 1984–85 (London, 1986), p. B359 (hereafter A.C.R., 1984–85);Google Scholar on Togo, , ‘Policy Shifts, Foreign Financial Support Improve Togolese External Debt Prospects’, in IMF Survey (Washington, D.C.), 28 07 1986, pp. 226–9,Google Scholarand A.C.R., 1984–85, p.B601; on Zaïre, Africa Confidential, 27 February 1985.Google Scholar

Page 119 note 2 On Benin, see African Economic Digest, 30 August 1986; on Burundi, Ibid. 16 August 1986; on Burkina Faso, A.C.R., 1984–85, pp. 442ff; on Madagascar, Ibid. pp. B286–301; on Mozambique, , Thurow, Roger, ‘Impoverished Mozambique Rolls Out the Red Carpet for Both East and West’, in The Wall Street Journal (New York), 20 04 1987;Google Scholaron Niger, A.C.R., 1984–85, pp. B537–44; on Sierra Leone, see below;Google Scholar on Tanzania, , Park, Paula, ‘Wily Tanzania Softens the IMF’, in New African (London), 228, 09 1986, p. 40;Google Scholar on Uganda, , ‘Aid from the IMF’, in The Economist (London), 303, 7499, 23 1987, p. 70;Google Scholarand on Zambia, A.C.R., 1984–85, pp. B851ff.Google Scholar

Page 120 note 1 Helleiner, loc. cit. p. 20.

Page 120 note 2 For figures and analysis, see World Bank, Financing Adjustment with Growth in Sub-Saharan Africa, 1986–1990 (Washington, D.C., 1986).Google Scholar

Page 120 note 3 On this, see particularly, Towards Sustained Development in Sub-Saharan Africa, p. 24.

Page 120 note 4 Jaycox, E. V. K. et al. , ‘The Nature of the Debt Problem in Eastern and Southern Africa’, in C., Lancaster and J., Williamson (eds.), African Debt and Financing (Washington, D.C., 1986), p. 57.Google Scholar

Page 121 note 1 Sandbrook, Richard, The Politics of Africa's Economic Stagnation (Cambridge, 1985).CrossRefGoogle Scholar Also, Kasfir, Nelson, ‘State, Magendo, and Class Formation in Uganda’, in Journal of Commonwealth and Comparative Politics (London), 21, 3, 11 1983, pp. 84103.Google Scholar

Page 121 note 2 See, for examples, on Niger, Africa Confidential, 17 September 1985, p. 4; on Tanzania, A.C.R., 1984–85, p. B381; on Zaïre, Callaghy, The State-Society Struggle; on Zambia, A.C.R., 1984–85, p. B851.Google Scholar

Page 121 note 3 This is not hyperbole; see, for one example, the description of Zambia on the verge of economic ‘standstill’, in ‘Out of Steam’, in Africa Confidential 16 October 1985, p. 1.

Page 122 note 1 Ghanaian leaders approached the Soviet Union in 1982 and were advised to ‘seek as good a deal as possible with the IMF without betraying the revolution’. Haynes, J., Trevor Parfitt, and Stephen Riley, ‘The Local Politics of International Debt: sub-Saharan Africa’, Annual Conference of Political Studies Association, University of Manchester, April 1985, p. 21. President Didier Ratsiraka of Madagascar also sought Soviet assistance in the early 1980s, but obtained only limited debt relief; A.C.R., 1984–85, p. B286.Google Scholar

Page 122 note 2 Berg, Elliot, ‘The Role of the IMF and the World Bank in Sub-Saharan Africa’, Western Economics Association Meeting, San Francisco, 3 07 1986, p. 18 of draft.Google Scholar

Page 122 note 3 Towards Substained Development in Sub-Saharan Africa, p. 24.

Page 122 note 4 Due to arrears, write-downs, and reschedulings, an average of 22 per cent of exports was actually paid in 1984; Financing Adjustment with Growth in Sub-Saharan Africa, 1986–90, p. 55.

Page 123 note 1 On the importance of creditor organisations as a disincentive to default, see Aggarwal, Vinod K., ‘International Debt Threat: bargaining among creditors and debtors in the 1980s’, Institute for International Studies, University of California, Berkeley, Policy Paper No. 29, 1987. Between 1980 and 1985, officials from 18 sub-Saharan régimes made 41 trips to the Paris Club, and they succeeded in deferring a total of $7,100 million in payments, Lancaster and Williamson 42–3.Google Scholar

Page 123 note 2 Rieffel, Alexis, ‘The Role of the Paris Club in Managing Debt Problems’, in Princeton University Essays in International Finance, 161, 12 1985, p. 3.Google Scholar

Page 123 note 3 The information on C.G.s dervies from conversations with Bank officials, July–August 1986.

Page 123 note 4 Helleiner notes loc. cit. p. 30, the ‘comic opera character’ of some intra-government debates in Africa, ‘wherein virtually all of the local memoranda are in fact drafted by foreign advisors’. See also Mosley, Paul, ‘The Politics of Economic Liberalization: USAID and the World Bank in Kenya, 1980–84’, in African Affairs (London), 85, 338, 01 1986, pp. 109–19.Google Scholar

Page 124 note 1 Gulhati, Ravi, Swadesh Bose, and Vimal Atukorola, ‘Exchange Rate Policies in Eastern and Southern Africa’, World Bank Staff Working Paper No. 720, Washington, D.C., 1985.Google Scholar

Page 124 note 2 World Bank, Accelerated Development in Sub-Saharan Africa: an agenda for action (Washington, D.C., 1981).Google Scholar To say that a ‘consensus’ formed around the analysis does not imply that the Berg report has escaped criticism; see, for example, the papers in Ravenhill, Joha (ed.), Africa in Economic Crisis (New York, 1986).CrossRefGoogle Scholar

Page 124 note 3 Interestingly, Berg thinks the new emphasis by the Bank and by donors on conditionality is overdone and somewhat misguided; he would prefer to see stronger efforts at intellectural suasion of African policy-makers. Berg, Elliot and A. Batchelder, ‘Structural Adjustment Lending: a critical view’, World Bank Country Policy Department, Washington, D.C., January 1985.Google Scholar

Page 124 note 4 Lancaster and Williamson (eds.), op. cit. p. 124.

Page 125 note 1 The rescheduling of private L.D.C. debts is overseen by the London Club of commercial banks–for example, a total of $5,900 million for 11 sub-Saharan countries from 1980 to 1985. Lancaster and Williamson (eds.), op. cit. pp. 42–3

Page 125 note 2 But see Berg, ‘The Role of the IMF and the World Bank in Sub-Saharan Africa’, p. 9, on problems with the notion of ‘demand-restraining’ measures. For criticisms and discussion of Fund stabilisation programmes, see Williamson, John (ed.), IMF Conditionality (Washington, D.C., 1983),Google Scholar and Helleiner, G. K., The IMF and Africa (Washington, D.C., 1987).Google Scholar

Page 125 note 3 West, Robert, ‘Sources of External Imbalances in Sub-Saharan Africa’, Third Joint American-Soviet Conference on Contemporary Sub-Saharan Africa,Institute for International Studies,Berkeley,27–30 May 1986, p. 24.Google Scholar

Page 125 note 4 From IMF Surveys.

Page 126 note 1 Cohen, Benjamin, ‘Balance-of-Payments Financing: evolution of a regime’, in Krasner, Stephen (ed.), International Regimes (Ithaca, 1982), pp. 315–36.Google Scholar

Page 126 note 2 I.M.F., Intrernational Financial Statistics (Washington, D.C., 1985), p. 37.Google Scholar

Page 126 note 3 On Togo, see Africa Confidential, 19 January 1983, p. 6; on Zaïre, see Callaghy, ‘Africa's Debt Crisis’.

Page 126 note 4 Bienen, Henry and Gersovitz, M., ‘Economic Stabilization, Conditionality, and Political Stability, in International Organization (Cambridge, Mass.), 39, 4, Autumn 1985, p. 732.Google Scholar

Page 126 note 5 Ibid. p. 731.

Page 127 note 1 Callaghy, ‘Africa's Debt Crisis’.

Page 127 note 2 The relatively impressive results of this I.M.F. programme are briefly reported in ‘Zaïre: emerging pragmatism’, in Africa Confidential, 27 February 1985, p. 8.

Page 127 note 3 On Ghana, see Ibid. 12 December 1984, p. 3; on Mali, Ibid. 30 January 1985, p. 7.

Page 127 note 4 On Zaïre, Ibid. 22 02 1985, p. 8.

Page 128 note 1 On Benin, see Ibid. 15 August 1984, p. 4, on Cameroun, Ibid. 1 August 1984, p. 4, and 10 September 1985, p. 4; on C⊚te d'Ivoire, Ibid. 11 December 1985, p. 8; on Madagascar, Ibid. 4 January 1984, pp. 4–6; and on Mali, Ibid. 30 January 1985, p. 7.

Page 128 note 2 For a discussion of these relationships, see Hopkins, Anthony, An Economic History of West Africa (New York, 1973).Google Scholar

Page 129 note 1 ‘Rape’, in Africa Confidential, 28 November 1984, p. 3.

Page 129 note 2 Figures from Towards Sustained Development in Sub-Saharan Africa, pp. 57ff.

Page 129 note 3 ‘Rape’, loc. cit.

Page 130 note 1 See Bhagwati, Jagdish and Krueger, Anne, ‘Exchange Control, Liberalization, and Economic Development’, in American Economic Review, 63, 2, 05 1973, p. 424.Google Scholar

Page 130 note 2 For example, see Berg and Batchelder, op. cit.

Page 130 note 3 A superb illustration of how this cycle works is provided by Jeffries, Richard, ‘Rawlings and the Political Economy of Underdevelopment’, in African Affairs, 81, 324, 07 1982, p. 307.CrossRefGoogle Scholar

Page 130 note 4 Haynes, Parfitt, and Riley, op. cit. p. 30.

Page 130 note 5 Much of the information that follows was reported in ‘Rape’, in Africa Confidential, 28 November 1984, pp. 1–5.

Page 131 note 1 Ibid. p. 2.

Page 131 note 2 On the pull-out by B.P. Minerals (U.K), see Ibid. and A.C.R., 1984–85, pp. B596–7.

Page 131 note 3 Africa Confidential, 28 November 1984, p. 1.

Page 132 note 1 Haynes, Parfitt, and Riley, op. cit. p. 35.

Page 132 note 2 ‘Requiem for the Two-Tier FX’, in Africa Confidential, 2 November 1983, p. 8.

Page 132 note 3 The best I have seen is Africa Confidential, 5 July 1985, p. 1, which suggests that Stevens had seriously meant to resign, and was encouraged to do so by the hopeless condition of his régime and the official economy.

Page 132 note 4 ‘Sierra Leone: the end of the Siaka Stevens era’, in A.C.R.: 1984–85, p. B587.

Page 132 note 5 Cole, Bernadette, ‘Uneasy Freetown Calm’, in West Africa (London), 4 08 1986, p. 1619.Google Scholar

Page 132 note 6 Taking the Medicine’, in Ibid. 18 August 1986, p. 1718. On Jamli's fall, see also Africa Confidential, 20 August 1986, p. 7.

Page 133 note 1 A discussion of Momoh's decision-making in the early months of his Presidency which supports this interpretation is provided in ‘Sierra Leone: Generalissimo’, in Africa Confidential, 29 January 1986, pp. 2–4. Subsequently, Momoh has followed the ‘stop and go’ pattern of reform adopted by a umber of other new régimes. See Ibid. 21 October 1987, pp. 3–5.

Page 133 note 2 Cole, loc. cit. p. 1620.

Page 133 note 3 ‘Sierra Leone: end of the road’, in Africa Confidential, 13 February 1985, p. 5.

Page 133 note 4 On Ghana's progress towards economic ruin, see Jeffries, loc. cit.

Page 134 note 1 See, for example, ‘Flt.-Lt. Jerry Rawlings: interview’, in Africa Report, 31, 6, 1112 1986, pp. 48.Google Scholar

Page 134 note 2 Legum, Colin, ‘Ghana's Impressive Econimic Recovery’, in Third World Reports (Guildford), 7, 10 1986, No. HP. 1. See also A.C.R., 1985–1986, pp. B41–6.Google Scholar

Page 134 note 3 Assassination attempts did increase after the economic recovery programme effect, and Rawlings is still constantly fencing with various labour unions and political associations. For example, see ‘Gahana: potshots and crackpots’, in Africa Confidential, 27 February 1985, p. 3. Recently the Minister of Finance, the Harvard-trained economist Kwesi Botchwey, warned the I.F.I.s and donors that shortfalls of aid pledges threatened the whole programme. ‘Aid Givers and Aid Receivers’, in West Africa, 25 August 1986, p. 1763.

Page 135 note 1 This generalisation is developed analytically in detail by Bates, Robert, Markets and States in Tropical Africa (Berkeley, 1981).Google Scholar

Page 135 note 2 See Cowan, L. Gray, ‘A New Guinea?’, in C.S.I.S. Africa Notes, 59, 30 06 1986;Google Scholarand Africa Confidential, 30 January 1985.Google Scholar

Page 135 note 3 For a description of policy changes in Mali, see Zulu, J. B. and Nsouli, S. M., ‘Adjustment Programs in Africa: the recent experience’, I.M.F. Occasional Paper No. 34, Washington, D.C., 1985, pp. 22–5.Google Scholar

Page 135 note 4 Schissel, Howard, ‘No More Room for Maneuver’, in Africa Repiort, 29, 5, September-October, p. 63.Google Scholar

Page 135 note 5 On liberalisation under Mwinyi, see Park, loc. cit. p. 40.

Page 135 note 6 Lancaster, and Williamson, (eds.), ‘Concluding Appraisal’, in African Debt and Financing, p. 205.Google Scholar

Page 136 note 1 Jackson and Rosberg, ‘Sovereignty and Underdevelopment’, p. 4.

Page 136 note 2 See, for example, an excellent discussion of the alliance strategies of the President of Côte d'Ivoire in West Africa by French, Howard, ‘Houphouet's Region’, in Africa Report, 31, 6, 1112 1986, p. 9.Google Scholar