Paper short abstract:

Using a template based on international experience, this paper examines the status and prospects of public-private coordination in support of the export manufacturing drive in Rwanda.

Paper long abstract:

Countries across Africa are seeking a greater role for employment-intensive, export-oriented manufacturing. Experience in other parts of the world does not suggest that it will be easy for Africa to make the desired breakthrough into export manufacturing. However, results will depend in part on the ability of countries to create mechanisms that effectively coordinate public and private action in support of their declared goals.

In the literature, six institutional requirements emerge as particularly needing to be satisfied for success in export manufacturing. Using these as a template, this paper examines the status and prospects of public-private coordination in Rwanda. Based on extensive and ongoing interviews in the country under ODI's SET programme, it argues that Rwanda's political economy provides a uniquely favourable framework, compensating to some degree for the country's unhelpful physical location and limited resource base. However, meeting the other key requirements is proving challenging and must be regarded as work in progress.

While the Government of Rwanda has looked to some models in Asia, it is not clear that the right lessons have yet been drawn from Asian experience. At the same time, Rwanda's own experience of constructive, mutually accountable, engagement across the public-private divide is more diverse and interesting than appears at first sight. This domestic experience is equally relevant in thinking about the right way to strengthen the current institutional architecture for promoting export manufacturing.

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Paper short abstract:

The paper discusses the centrality of foreign firms to the crafting of a viable economic and political order in Angola since 2002, highlighting case-specific qualities of this involvement as well as the need for greater attention to foreign firms in political economy analyses more generally.

Paper long abstract:

Since the end of Angola's civil war in 2002, its ruling elites have been able to craft a political settlement that has thus far proven remarkably effective at sustaining a cohesive ruling coalition, co-opting putative challengers, and building support among critical constituencies. As this paper demonstrates, the activities of foreign firms have been indispensable to this process in several respects. Besides the well-known role of multinational oil firms in generating the fiscal basis of the Angolan state in the form of petroleum revenues, foreign corporations have served as an instrument for the implementation of the government's reconstruction agenda, while carefully managed local linkages in various sectors have evolved into a significant patronage resource. Taken together, the presence of these firms has thus enabled the emergence of a private sector that is capable in some critical areas, but that remains politically dependent and is unlikely to provide material backing for any kind of alternative political project. Whilst calling for greater attention to the impact of foreign business activities on any political settlement, the paper argues that the configuration observed in the Angolan case rests upon a particular combination of conditions that is unlikely to be replicated elsewhere. These comprise a very high degree of centralisation of power at the end of violent conflict, as well as a resource-based economy that offers highly attractive opportunities to foreign firms despite weak performance on conventional indicators of the investment environment.

Paper short abstract:

The paper explores converging industrial development strategies in Ethiopia and Vietnam. Despite growing similarities at the level of policy, however, it finds that important differences, including in the form of state-business relations, shape each regime's prospects for industrial policy success.

Paper long abstract:

This paper explores the overlooked convergence of developmental strategies, particularly industrial policies, in two contemporary late developers: Ethiopia and Vietnam. For all their differences in terms of geography, political systems and current income levels, it is suggested that the two countries share important commonalities across their basic socio-economic features, transitional economic histories, and domestic political economies. Further, both are notable for making rapid economic and social advances from positions of extreme poverty and vulnerability, and are governed by ruling regimes that have placed considerable policy emphasis on spurring manufacturing development during the transition from centrally planned to market economy. Drawing on PhD research, this paper argues that common features of their underlying political economies have notably driven the ruling regimes in Ethiopia and Vietnam to embrace strikingly similar strategies for rapid state-led development in the context of current global conditions. The basis of this common strategy is the attempt to combine significant levels of state ownership with sizeable levels of foreign investment in order to further the expansion of national manufacturing capacity. Yet it is also argued that despite this growing policy convergence, important differences also condition each regime's prospects for industrial policy success. The balance of social forces prevailing within Ethiopia and Vietnam differs in important respects, especially in terms of the prevalent form of state-business relationships. The result is that despite similar strategies, prospects for success in each country differ on account of the evolving class interests and the political economies in which these developmental policies are embedded.

Paper short abstract:

This paper explores the explores the role that illegal trade networks have played in state-building in Tunisia and Morocco, their development implications, and the challenges that the two states have faced in transforming the political settlements in their borderlands.

Paper long abstract:

The core of the literature on business-state relationships and development has focussed on the political centres and key formal industries in late developing countries, exploring how governments manage the relationships with their capitalist partners in order to secure stability, electoral gains, and developmental strategies. While many theoretical works refer to the importance of informal institutions, and empirical papers hint at the importance of illegal industries, there is a severe lack of work applying mainstream theories of business-state relationships to informal economies.

Based on intensive fieldwork in Southern Tunisia and Northern Morocco between 2014 and 2017, this paper explores the role that large informal trade networks have played in post-independence state-building in both countries, examines their development implications, and discusses the challenges that the Moroccan and Tunisian government have faced as they set out to reform the political settlements that they had established in their borderlands.

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Paper short abstract:

This paper analyses the outcomes of the South African government's attempts to turn state-owned enterprises into instruments of a 'developmental state', using procurement to advance domestic manufacturing capabilities and advance racial transformation of the economy.

Paper long abstract:

This paper analyses the political economy of state-owned enterprises (SOEs) in post-apartheid South Africa. Its focus is on the efforts of the African National Congress (ANC) government to turn SOEs into instruments of its proposed 'developmental state'. Using document analysis, financial data from the major SOEs and material from key informant interviews, the paper examines the central role of SOEs in the ANC's rendering of a developmental state. Lacking the more conventional 'reciprocal control mechanisms' Amsden (2001) identified as central to industrial transformation elsewhere, the ANC has used SOE procurement - in particular from the electricity and logistics utilities, Eskom and Transnet - as key means of economic intervention. Selective rent distribution by SOEs has been for both industrial policy and to pressure for racial transformation of the economy. Procurement specifications have pressured multinational firms to increase domestic manufacturing capabilities, to nurture nascent black-owned small and medium-sized enterprises, and to pressure the established white-dominated private sector to adhere to government's black economic empowerment objectives. The outcomes of this process are complex. Areas of apparent success are overshadowed by severe financial strains, and by multiplying incidences of unproductive rent-seeking related to SOE procurement, which has led to accusations of 'state capture'. The paper argues the developmental potential of the South African SOEs to lever private sector transformation has been undermined by the multiple contradictory objectives they attempt to fulfil - in particular a continued dependence on international capital markets - and by insufficient attention to disciplinary measures embedded within rent distribution.

Paper short abstract:

This paper argues that, since the 1990s, the interests of key actors within Kenya's political settlement have aligned to sustain a dynamic garment industry within a relatively insulated EPZ programme, but that more advanced forms of industrial policy are restrained by Kenya's competitive clientelism

Paper long abstract:

During the last twenty years, Kenya has become the second-largest garments exporter in SSA, hailed as a future sourcing hub. Attributing this to Kenya's preferential access to the US market under AGOA as well as the shifting sourcing strategies of MNCs, scholars make no mention of the state's role in promoting the industry. Deploying a conceptual framework that combines political settlement analysis with two concepts from the state-business relations literature, namely the deals and rents spaces, this paper argues that ruling elites insulated Kenya's EPZ programme from the political meddling that undermined other initiatives during the 1990s and 2000s, allowing the Export Processing Zones Authority, a 'pocket of effectiveness', to attract a wave of investment from Asian garment manufacturers by offering open-ordered deals that contrasted with the wider disorderly deals environment. As their organisational power increased, these firms demanded further openings and orderings in deals, triggering positive feedback with spillovers for other industries. Their calls for more extensive industrial policies, however, particularly the development of a vertically-integrated cotton-textile-garment value-chain, have been undermined by splits within the industry which pit EPZ firms against non-EPZ firms who bemoan preferential treatment, as well as Kenya's 'competitive-clientelist' political settlement which endows ruling coalitions with short time-horizons, reducing elites' willingness to undertake long-term investments required. The story of Kenya's garments industry during the last two decades, the paper argues, thus provides valuable insights into the possibilities and challenges of conducting industrial policy in a competitive-clientelist setting, which is fast-becoming the twenty-first century's default political settlement-type.

Paper short abstract:

Comparing the Ghanaian and Kenyan Cashew sectors, this paper tests the hypothesis that the electoral weight of raw commodity sectors influences whether governments tax or prohibit their respective exports for the benefit of commodity processors.

Paper long abstract:

Primary commodity processing is arguably the most promising route for African economies to rekindle their economic transformation. Export taxation and prohibitions on unprocessed commodities are currently among the most-employed policy instrument to promote it. Importantly, however, the employment of such export restrictions varies significantly across the developing world. Many extractive commodities, metal waste and scrap, timber as well as raw hides and skins exports are being restricted very commonly and heavily. Most agricultural good exports, however, are barely restricted at all nowadays. While different economic and political science scholarships and models struggle to recognize and explain this pattern, I test the argument that depending on their capacity to bring large numbers of the population to vote in their economic interest, certain commodity producing sectors can constitute a significant threat to governments' political survival. While all producing sectors oppose export taxes and other restrictions as they redistribute income from producers to processors, only those producing sectors with a high "electoral weight" - such as most agricultural sectors - will have enough political leverage to avoid high taxation and severe restrictions. Mixed methods - consisting of large-N descriptive statistics from the novel "African Export Restrictions Database" and in-depth comparative case studies of the cashew sectors in Ghana and Kenya - are employed to test this argument against competing explanations.