Democracy and economics in Africa: the circle of growth

2018-04-10

At low levels of economic development, democracy has little if any impact on growth. However as countries’ average incomes rise, a positive relationship emerges, as research by the Institute for Security Studies (ISS) shows. This is largely because modern economics requires competitive politics to unlock improvements in productivity.

Yet the spectacular growth rates achieved in past decades by the Asian Tiger economies, as well as Japan, China and African economies such as Ethiopia and Rwanda, support the view that autocracies grow more rapidly than democracies. Many African leaders have been seduced by the further extension of this argument to one where democracy is largely responsible for low or no growth.

A senior Chinese Communist Party leader recently told ISS Today that Africa was in a multi-party trap. In this vein, China has much to offer Africa, he argued, saying Africans need single-party systems that can dispense with the messy nature of individual rights and democracy to focus on the upliftment needs of the larger community.

That early hunger to innovate and reform that comes with new leadership, winds down over time

As always, the reality is much more complicated. For every high-profile example of rapid economic growth there are many more examples of poor or no growth under autocracy. The ISS research confirms that at low levels of development, the nature of the governing elite is much more important for growth than the institutional setting (democratic vs non-democratic).

Hence countries that produce a developmentally oriented governing elite tend to grow much more rapidly. This is particularly so if this is in the form of a cohesive governing party or coterie of leadership that is clear in its pursuit of the good of the country.

Historically such a common purpose is often the result of a deep national trauma such as the genocide in Rwanda, the Red Terror in Ethiopia or the devastating Cultural Revolution in China. These events scar a country – creating a leadership committed to ‘never again’, united in their vision to rectify the conditions that gave rise to the traumatic events in the first place.

The problem is that this is the exception. Nature seldom proceeds in a linear way, and eventually the circle of growth is decidedly curvy. Fortunately very few countries have to experience the trauma of the mass death and suffering of Rwanda, Ethiopia or China. In most countries things go up and eventually come down in a more gradual fashion – but often with dire long-term impact. 

Modern economics requires competitive politics to unlock improvements in productivity

The problem with authoritarian systems in the long term is often the lack of leadership renewal that regular free and fair elections bring about. Leadership in even the most developmentally determined countries becomes complacent and stale, and without renewal, initial reform efforts eventually lose their momentum. That early hunger to change, innovate and reform that comes with new leadership inevitably winds down over time.

For example a young Yoweri Museveni came to power in 1986, promoting vigorous change and progress in Uganda, only for the momentum to peter out as he clung to power. Zimbabwe experienced an even worse fate under Robert Mugabe, while in Algeria, a sickly Abdelaziz Bouteflika is apparently ‘being encouraged’ to run for a fifth term. Nothing could be worse for Algeria’s future prospects.

Without leadership renewal, complacency is inevitable. This is where Ethiopia finds itself today after the death of its iconic leader Meles Zenawi in August 2012, and where much of Central Africa has been for decades.

Teodoro Obiang Nguema and Denis Sassou Nguesso have been the presidents of Equatorial Guinea and the Republic of the Congo respectively since 1979. Paul Biya has been president of Cameroon since 1982, and Idriss Déby has been president of Chad since 1990. This makes Ali Bongo Ondimba (president of Gabon since 2009) appear a latecomer to a region doomed to political and hence economic statis. 

Even the most promising reformers tend to grow stale and arrogant with time, with decisive negative consequences for their economies. And that’s why term limits are important in Africa.

Leadership in even the most developmentally determined countries eventually becomes complacent

Where there is no regular, real, substantive political change at the top, but rather rotation within a small clique, patronage is seldom disrupted. In these circumstances pressure builds up until a rupture occurs. That appears inevitable in much of Central Africa and in a country such as Swaziland that has been run as a family business by Mswati III and his father for decades.

The problem with the incremental leadership change happening within liberation movements in southern Africa, or in Algeria, or the lack of leadership renewal in Central Africa, is that it effectively buys off the pressure for leadership revitalisation.

There is only one way to unlock steady growth over long periods across countries and cultures – and that is through regular leadership and policy renewal within the context of strong institutions. And there lies the problem, for elites in poor countries often compensate for the lack of institutions through strongmen and authoritarian politics.

If Namibia, Zimbabwe, Angola, Mozambique, South Africa, Algeria and others such as in Central Africa are to embark on productive renewal of their growth prospects, they must do more than replace a few elderly politicians at the top with others from the same stable.

Jakkie Cilliers, Head, African Futures and Innovation, ISS Pretoria

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