What is the “Rwanda Model” of development?

Here’s Nic Cheeseman’s summary:

Instead of sitting back and waiting for foreign investors and the “market” to inspire growth, the new administration intervened directly in a process of state directed development. Most notably, his government kick started economic activity in areas that had previously been stagnating by investing heavily in key sectors. It has done so through party-owned holding companies such as Tri-Star Investments.

Combined with the careful management of agriculture, these policies generated economic growth of around 8% between 2001 and 2013. Partly as a result, the percentage of people living below the poverty line fell from 57% in 2005 to 45% in 2010. Other indicators of human development, such as life expectancy and literacy, have also improved.

Cheeseman rightfully cautions against copying the Rwanda model:

Shorn of the internal and external political control required to make it work, the application of the Rwandan model elsewhere would generate very different results.

Extending the control of the ruling party over the economy is more likely to increase graft and waste than to spur economic activity. And efforts to neutralise opposition parties are likely to be strongly resisted, leading to political instability and economic uncertainty.

What this means is that if other countries on the continent try to implement the Rwandan model, the chances are that they will experience all of its costs while realising few of its benefits.

Read the whole thing here.

Cheeseman argues that the RPF’s total political monopoly is a necessary condition for the observed bureaucratic discipline in Rwanda. While this might be true, I am curious about what conclusions we might arrive at if we drop the assumption that Rwanda’s is a system of “developmental patrimonialism”.

What if we were to see it as just bureaucratic developmentalism (infused with good old crony capitalism)? Are there lessons on the industrial organization of the Rwandese state that are transferable to Malawi or Sierra Leone?

For more on neopatrimonialism and development in Africa check out this important paper by Thandika Mkandawire.

What does it mean to be “tough on crime”?

This is from Alex Tabarrok over at MR:

Our focus on prisons over police may be crazy but it is consistent with what I called Gary Becker’s Greatest Mistake, the idea that an optimal punishment system combines a low probability of being punished with a harsh punishment if caught. That theory runs counter to what I have called the good parenting theory of punishment in which optimal punishments are quick, clear, and consistent and because of that, need not be harsh.

We need to change what it means to be “tough on crime.” Instead of longer sentences let’s make “tough on crime” mean increasing the probability of capture for those who commit crimes.

More on this here.

In my public policy class this semester we read the sad story of Thabo Mbeki’s capture by “dissident” scientists who sold him unconventional policy approaches to South Africa’s AIDS epidemic. The lesson was that we should always be wary of allowing experts too much leeway in deciding actual policy. This means more debate (both among experts and by the public) and routine rigorous evaluation to strengthen the quality of feedback after policy rollouts.

Social Science is awesome. And may the credibility revolution live on. But the world certainly needs more humble social scientists.

Africa’s looming debt crises

The 1980s are calling. According to Bloomberg:

Zambia’s kwacha fell the most on record after Moody’s Investors Service cut the credit rating of Africa’s second-biggest copper producer, a move the government rejected and told investors to ignore…..

Zambia’s economy faces “a perfect storm” of plunging prices for the copper it relies on for 70 percent of export earnings at the same time as its worst power shortage, Ronak Gopaldas, a credit risk analyst at Rand Merchant Bank in Johannesburg, said by phone. Growth will slow to 3.4 percent in 2015, missing the government’s revised target of 5 percent, Barclays Plc said in a note last week. That would be the most sluggish pace since 2001.

The looming debt crisis will hit Zambia and other commodity exporters hard. As I noted two years ago, the vast majority of the African countries that have floated dollar-denominated bonds are heavily dependent on commodity exports. Many of them are already experiencing fiscal blues on account of the global commodity slump (see for example Angola, Zambia and Ghana). This will probably get worse. And the double whammy of plummeting currencies and reduced commodity exports will increase the real cost of external debt (on top of fueling domestic inflation). I do not envy African central bankers.

Making sure that the looming debt crises do not result in a disastrous retrenchment of the state in Africa, like happened in the 1980s and 1990s, is perhaps the biggest development challenge of our time. Too bad all the attention within the development community is focused elsewhere.

What makes some countries urbanize without industrializing?

…. Kuwait, Gabon, Saudi Arabia, Libya, Algeria, Angola and Nigeria are as urbanized as Uruguay, Taiwan, South Korea, Mexico, Malaysia, South Africa and China respectively, and yet the former countries have not industrialized to the same extent as the latter. This raises several questions. Where do the cities in Angola, Nigeria, and the others come from? Why have so many cities in today’s developing world never been factory cities, in stark contrast to the historical experience of today’s developed countries? If these cities have a different origin, does it matter for economic development?

We show that conditional on income per capita, urbanization rates are unrelated to the share of resource exports in GDP or the share of manufacturing and services in GDP. Urbanization is a function of income per capita across all countries.

However, the composition of urban employment differs starkly between resource-exporters and non-exporters, holding constant income levels and urbanization rates. We use IPUMS census micro-data, labor force surveys, and household survey data to recreate the sectoral composition of urban areas for a sub-sample of 88 countries. Using this novel data set, we find that cities in resource-exporting countries are what we term “consumption cities”, with a larger fraction of workers in non-tradable services such as commerce and transportation or personal and government services.1 Cities in countries that do not export significant resources, on the other hand, appear to be “production cities”, with more workers in industrial sectors such as manufacturing or in tradable services like finance.

Source: The Economist Newspaper

Source: The Economist Newspaper

That is Douglas Gollin and co-authors in a working paper on urbanization with and without industrialization. The authors also find that ceteris paribus “consumption cities” also tend to be marked by higher rates of poverty and greater shares of populations living in slums. In short, and to paraphrase the authors, consumption cities of resource exporters are not as welfare-improving as production cities of non-exporters.

This should worry policymakers across the Continent. Africa is urbanizing fast (see image), but without the benefits of mass job creation. Indeed UN Habitat’s 2014 State of African Cities report warns that urbanization in Africa lacks the potential “to deliver on the aspirations of broad based human development and prosperity for all.” The continent’s “consumption cities” will have significant impact on state economies. Increased imports of consumer goods (and food) will put pressure on currencies, with inflationary consequences (Africa imports $81b worth of agricultural produce annually). Tending to the urban sector will likely lead to further taxation of the rural sector a la Bates.

That said, demography might provide a way out. Africa’s population is also expected to balloon over the next five decades. That might just create big enough domestic markets to make it worthwhile for firms to consider locating their manufacturing bases on the continent. Increases in labor costs in east Asia are therefore a welcome trend.

A total of 19 incumbent African leaders have now lost elections

And as my adviser likes to remind me, the trend was started by Somalia in 1967.

Source: Mail & Guardian

Source: Mail & Guardian

More on this here.

H/T Onyango-Obbo.

Rwanda, 20 Years On

Caution: This is not an apology for President Kagame and his autocratic tendencies that have resulted in carnage and death in the DRC, Rwanda and elsewhere.

At a conference last year a US State Department official told a group of us that Rwanda was so polarizing that even at the Consulate in Nairobi the DRC crowd did not get along well with the Rwanda crowd.

It is not surprising why that might have been the case, or why the present analysis on the commemoration of the 20th anniversary of the 1994 genocide remains polarized.


If one just looks at the improvements made in advancing human welfare since President Paul Kagame and the RPF took power (see graph, data from the World Bank) it is hard not to arrive at the conclusion that ordinary Rwandese are unambiguously better off. The country is the least corrupt in the region and has also been consistently ranked top in the ease of doing business. But there is also the side of the Kigali government that most reasonable people love to hate: the murderous meddling in the DRC and the oppression and occasional murder of dissidents at home and abroad. Those who admire what President Kagame has done tend to emphasize the former, while his critics tend to emphasize his autocratic tendencies which have made Rwanda the least democratic country in East Africa (see below, data from Polity). Many wonder if the post-1994 achievements are sustainable enough to outlast President Kagame’s rule.

So is Mr. Kagame a state-builder or your run of the mill autocrat whose achievements will vanish as soon as he relinquishes power?

ImageIn my view, I think that Rwanda is the best success story of state-building in Africa in the last 20 years. I also think that this (state-building) should be the paramount consideration for those who care about the Rwandese people and want to help them achieve greater freedoms. The fundamental problem in states like CAR, Sierra Leone or Liberia has never been the insufficiency of democracy. Rather, it has been the problem of statelessness. The contrast between Rwanda and Burundi is instructive (see both graphs, the two are neighbors with similar ethno-political histories. Rwanda has historically had a stronger state, though. See here and here). Despite the latter being the second most democratic state in the region, it has consistently performed the worst on nearly all human development indicators. Part of the reason for this is that Burundi remains a classic papier mache state confined to Bujumbura and its environs.

May be I am too risk averse. But I am scared stiff of anything that could lead to a recurrence of the horrors of the early 1990s stretching from the Mano River region to the Horn. As a result I am always skeptical of activism that takes state capacity (including coercive capacity) for granted.

With this in mind, the fight against autocratic rule in Rwanda should not come at the expense of the state-building achievements of the last 20 years. The international community and those who genuinely care about Rwandese people should be careful not to turn Rwanda into “democratic” Burundi in the name of democracy promotion. Interventions will have to be smart enough to push President Kagame and the ruling elite in the right direction, but without gutting the foundations of political order in Rwanda.

Absent a strong state (even after Kagame), the security dilemmas that occasioned the 1994 “problem from hell” would ineluctably resurface.

Lastly, I think the level of discourse in the “Rwanda Debate” could be enhanced by the extension of the privilege of nuance to the case. For example, if all we focused on were drones killing entire families at weddings in Yemen or the horror that is the South Side of Chicago we would probably get mad enough to ask for regime change in Washington. But we don’t. Because people tolerate the “complications and nuance of American politics.” The same applies to less developed countries. Politics is complicated, everywhere. And those who approach it with priors of good-or-bad dichotomies are bound to arrive at the wrong conclusions. One need not be a Kagame apologist to realize the need for a delicate balance in attempts to effect political change in Kigali.

Before you hit the comment button, notice that this is neither an apology nor an endorsement of autocracy in Rwanda. It is a word of caution regarding the choices outsiders make to accelerate political change in Rwanda.

Tyranny is not the panacea to underdevelopment. But neither is stateless democracy.

For background reading on the 1994 genocide in Rwanda see Samantha Power’s Problems From Hell; Mahmood Mamdani’s When Victims Become Killers; and Philip Gourevitch’s We Wish to Inform You That Tomorrow We Will be Killed With Our Families.

Authoritarian Origins of Democratic Party Systems in Africa

That is the title of a new book by Rachel Riedl of Northwestern University on party system development in Africa following re-democratization in the early 1990s. Riedl writes:

To explain these country’s divergent development, I point to earlier authoritarian strategies to consolidate support and maintain power. The initial stages of democratic opening provide an opportunity for authoritarian incumbents to attempt to shape the rules of the new multiparty system in their own interests, but their power to do so depends on the extent of local support built up over time. Where authoritarian incumbents are strong, they tightly control the democratic transition process, which paradoxically leads to higher party system institutionalization in the new democratic system.  Conversely, where authoritarian incumbents are weak, they lose control of the transition agenda and new players contribute in uncoordinated ways to press for greater reform and more open participation, which results in lower party system institutionalization in the democratic era.  The particular form of the party system that emerges from the democratic transition is sustained over time through isomorphic competitive pressures embodied in the new rules of the game, the forms of party organization, and the competitive strategies that shape party and voter behavior alike.

The book is an excellent resource for understanding the evolution of party systems on the Continent.

Implied in the book’s argument is the centrality of state capacity to well-ordered development and consolidation of democracy. As the case of Mali shows, if there was ever a precondition for democracy it is certainly a reasonable level of state capacity. In other words, there has to be empowerment before limitation, or else you get collapse.

Do African leaders have a voice?

That is the question asked by Africa Is A Country:

These days, well-behaved African heads of state are rewarded by Barack Obama with the chance to meet with him in groups of four and have their picture taken with him. It’s like meeting Beyonce, but you get to call it a state visit. That’s what happened on Friday when Malawi’s Joyce Banda, Senegal’s Macky Sall, Cape Verde’s José Maria Neves and Sierra Leone’s Ernest Bai Koroma were paraded before the White House press corps, sitting in star-struck silence as Barack reeled off a kind of wikipedia-level roll-call of their accomplishments. They beamed like competition winners. It was all very feudal.

….. The East African called it as they saw it: “The meeting was to reward them for their support for US interests in Africa.” Though some others wanted to be there. In Uganda, some sites were wringing their hands over why Museveni hadn’t been invited.

The post raises an important question especially with regard to the recent rise in African assertiveness. Most of this has been restricted to elite circles with regard to the ICC and general Western meddling presence on the continent. 

Among the many posts I hope to write soon – the dissertation and life permitting – is one on African IR (yes, African International Relations). For a very long time the Continent has engaged the world in disaggregated terms – mostly as a result of individual weakness. But recently some countries have realized their power (For instance Uganda and Kenya in their military and diplomatic usefulness, respectively) and are more than willing to exercise those powers. The realization of individual power has also catalyzed a tendency to use the regional bloc – the AU – as a leverage in wider international engagements (I expect Kenya’s president-elect Uhuru Kenyatta to use the AU a lot in dealing with the charges he faces at the ICC). 

And among the African elite I expect a new sense of self-confidence, with calls like these to become louder and more common. Whether the Western governments (and regular Western Africa watchers) will adapt fast enough or be caught flat-footed is still unclear, especially after the ill-considered and tactless obvious attempt to influence the outcome of the Kenyan election. Also worth considering is whether this new-found African assertiveness will result in actual progress and attempts at catching up with the developed world or turn out to be a mere echo of the empty rhetoric of African pride – a la Zaireanization – that was championed by a kleptocratic navel-gazing African elite of decades past.

Nominate the best blogs of 2012

A View From the Cave blogger Tom Murphy is holding the annual Aid Best Blogger Awards (ABBA). I don’t consider my blog to be an “aid blog” per se but I think I fit into the general category that Tom intended to include in his awards.

If I may toot my own horn a little, I even once got a shout out from one of the better know aid bloggers out there, Chris Blattman (Blogger of the Year last year).

So if you like what you read on this blog please go ahead and nominate the blog for this year’s awards here.

Some of my better posts in recent months have been on the topics of the upcoming elections in Kenya and the conflict in eastern DRC.

More on State Building and the International System

This is a guest post in response to a previous blog post by friend of the blog Matthew Kustenbauder.

Your post highlights the contradictions between today’s human rights regime (which is based on universal concepts of humanity and has its origins in European anti-slavery campaigns and traditions of humanitarianism, and before that debates in Christian theology) and the post-imperial international order (based on the nation state as the fundamental political unit).

Since the rise of nationalism after WWII, new states that were historically part of empires (and thereby incorporated under their systems of law, governance, and trade) have had to make their own way. For most of these states, and especially for the people living within them, the new era of national self-determination has been no more kind than was the Age of Empire. The withdrawal of imperial powers left a vacuum that today’s international system struggles to address with any effect. There are many reasons for this, not the least of which is that it is a fragmented and cumbersome system that gives the impression all states are “equal” — clearly they are not. It also tends to be a forum in which smaller and poorer states invoke language of victimhood in an effort, ironically, to get larger or more wealthy states to step in and do the work that states are meant to do for themselves — namely, govern those residing within their boundaries.

What do I mean by this last point? An illustration by way of anecdote may help clarify. I was recently frustrated watching a BBC World Report special (an outlet for the Bleeding Hearts Industrial Complex that you mentioned in your post) about multinationals and poor working conditions in the developing world. Cotton and chocolate were featured. The reporter investigated big cotton operations in India and cocoa plantations in Cote D’Ivoire. What registered as surprise to the BBC reporter was no surprise to me — He found lots of young women and children working there. But instead of asking why the local government didn’t regulate the industry or why they didn’t enforce the regulations already on the books, he ran off to Switzerland and the UK and America to ask why Nestle and Tommy Hilfiger, etc. don’t monitor their supply chains. I was baffled. This is a classic example of how an international system based on the sovereignty of individual nation states is at odds with universal notions of human rights. In many ways, it is the modern-day replacement for the old global-local tensions that existed between the imperial metropole and its colonies. We might ask, however, whether the current framework in which human rights activism operates is really any better suited to address the ongoing problems that plague developing nations. To my mind’s eye, the focus is on the wrong place … or is at least too focused on the role of businesses and advanced economies and not focused enough on working with multinationals in order to help citizens in poor countries put pressure on their governments to be accountable, competent, and truly sovereign.

The emphasis on human rights by Western governments and development work by NGOs in African countries have, more often than not, undermined the sovereignty of national governments since decolonization. More recently, however, China has emerged as the largest trading partner with many African countries. This is a game changer, not only because the Dragon does not hold human rights sacrosanct, but also because, unlike its Western counterparts, China considers economic growth and trade essential to establishing national sovereignty and the nation-state (not the international community) as the principal guarantor of the well-being of its citizens. The degree to which China can be ‘socialised’ in the ways of the international system, which was after all created by the Great Powers to replace the disintegrating world that western empires had made, remains to be seen. In any event, the long-standing tensions between universal principals of human rights, on the one hand, and the limits placed on intervention into the affairs of one state by another in the name of national sovereignty, on the other, will endure.

Matthew Kustenbauder is a PhD candidate in history at Harvard University.