Why did modern nation-states not emerge in China?

This is from Yuhua Wang (highly recommended):

The collapse of the Chinese state in the early twentieth century was surprising. China was a pioneer in state administration: it established one of the world’s most centralized bureaucracies in 221 BCE, two hundred years before the Roman Empire. In the seventh century, it produced a quarter of the world’s GDP (Maddison 2007, 381) and became the first country to use a civil service examination to recruit bureaucrats…

Why, then, did China suffer a dramatic reversal of fortune, given its early bureaucratic development?

… elites’ level of support for state building depends on the geographic span of their social networks. If they must protect a geographically dispersed network, it is more efficient to support state-strengthening policies. These elites have an encompassing interest (Olson 1982, 48). If they need to protect a geographically concentrated network, it is more efficient to rely on private protection and oppose state strengthening. These elites have a narrow interest (Olson 1982, 48).

China…. As the elites’ social networks became localized, they also fragmented; they found it difficult to organize cross regionally. A fragmented elite contributed to a despotic monarchy because it was easier for the ruler to divide and conquer. Historians have noted the shift to imperial despotism during the Song era, as the emperor’s position vis-à-vis his chief advisors was strengthened (Hartwell 1982, 404–405). The trend further deepened when in the late fourteenth century the founding emperor of the Ming Dynasty abolished the entire upper echelon of his central government and concentrated power securely in his own hands (Hucker 1998, 74–75). This explains the increasing security of Chinese rulers [see image].

The despotic monarchy and the narrow interest elite became a self-enforcing equilibrium: the rulers were secure, while the elite used the state to protect their local interests and enjoyed their autonomy. Yet this arrangement led to the gradual decline of the Chinese state.

There are so many parallels to the challenges to state-building in Africa throughout the piece (many of which were documented by Catherine Boone in the excellent Political Topographies of the African State).

Read the whole thing here.

About 12% of ships around the world fly the Liberian flag

This is from The Economist:

Over 4,400 vessels (about 12% of global shipping) fly its flag. And the number is growing.

How did this happen?

The secret of this maritime success is an old practice known as the flag of convenience. In the 1920s shipowners began to register their vessels abroad for a small fee. This allowed them to avoid taxes and labour laws back home. Liberia had few regulations and made it easy to sign up. By the 1960s it had the largest merchant navy in the world.

Read the whole thing here.

Apparently, the government of Liberia makes over $20m a year from its shipping registry.

Two of the “unique advantages” cited on the registry’s website include:

Vessel Construction – The Liberian Registry does not require vessels to be constructed by a particular nation. The supplies for construction and outfitting are also free from similar restrictions. Without this type of protectionism, shipowners are allowed to search and solicit shipbuilders solely on commercial considerations, such as competence, experience, and price.

Vessel Manning – Manning requirements specified by the Liberian Registry are based exclusively on competence, international recognition and safe operation. Many national registries require manning by citizens of the country of registry. This promotes higher wages, inflated labour costs and overheads, excessive bureaucracy, and the potential for interference from organized labour.

The Liberian Registry is headquartered in Dulles, Virginia in the United States.

Since its inception, the Liberian Registry has been operated from the United States. In fact, the U.S. structure and principles governing the Administration of the Liberian Registry are embedded into Liberian law. Pursuant to these statutes, the Registry must be principally operated from the U.S. and managed by international maritime professionals for the benefit of the people of Liberia. The strong U.S. – Liberia alliance provides the Registry with the ability to participate in the international arena with key industry institutions.

Nigerians of Guangzhou: Institutional Adaptation in a Foreign Land

This is an old piece that is nonetheless fascinating:

Large-scale Nigerian migration to China began in the aftermath of the 1980s Deng Xiaoping reforms, which opened China to the international community. The first wave of Nigerian migrants to China arrived in the late 1990s.

…. The Nigerian community in China has elected officials who preside over matters affecting their members. The post of ‘President General’ is an elected position, in line with a Constitution that gives anyone holding office term limits of two tenures. As of March 2016, the President General had completed the tenure of his predecessor who stepped down and another election was planned towards the end of the year. The President General organizes the community, ensuring that safety, representation and support are accessible. The Nigerian migrant community is also made up of sub-communities between which the President General solves power imbalances.

….. There is an informal justice system within the Nigerian community in China that facilitates dispute resolution at a micro level—which, practically, the Chinese government cannot enforce due to the clandestine existence of many individuals. In my interview with Mr. T (not real name), he stated that the Nigerian community has a task force that handles policing on behalf of the community.

The justice system is presided over by executives (judges) who settle cases brought before them. According to a member of the community, the judges are elected and not appointed. They are often people well respected within and outside the community; as a result, people obey their directives.

Read the whole thing here.

Trends in trade and influence in Africa

Here are some interesting figures from the Center for Strategic & International Studies. Between 2010 and 2017 trade between African states and China rose from $91.2b to $165.4b. For the U.S. total trade volume contracted from $80.3b to $36.7b (admittedly some of this driven by declining oil prices). All major Western countries saw a decline in their trade volume with the Continent.

trade trendsGermany is the only major Western country that saw its trade volume with African states increase over the same period.

These figures also underscore the recent narrowing of the Red Sea – with Gulf states pushing for ever closer ties with African governments. A lot of focus has been on the geopolitical aspects of this shift (with Qatar and Turkey jostling for influence vs Saudi Arabia and other Gulf states). But as the trade data suggest, trade is also an important feature of the evolving Afro-Arabia relations.

Overall, it is likely that African states’ economic policies and regulations, as well as votes at the UN, will shift to reflect the changes in the strength of the Continent’s trade links.

More on this here.

Japan is trying to stem the decline of its economic influence on Continent with a new joint insurance product with African Trade Insurance Agency and a Saudi bank. The U.S. is about to launch the U.S. International Development Finance Corporation.

 

Here’s why African states value their economic and political ties with China

This is from an excellent essay by  in Foreign Policy:

…. when former U.S. Secretary of State Rex Tillerson raised a cautionary alarm for Africans to be wary of Chinese predatory investments just a few months ago, his lecturing tone did not go over well. Many African leaders reacted negatively to the underlying assumption that they were not qualified to figure out profitable from predatory investments on their own.

Sierra Leonean President Julius Maada Bio rebuked the warning as misguided, saying, “We are not fools in Africa. … At difficult times, when we needed help most, China was there for us.”

The expansion of Confucius Institutes across Africa is another part of the push worth engaging with. With more than 50 Confucius Institutes teaching Chinese language, as well as the Communist Party’s version of Chinese history and culture, more and more Africans have the chance to study Chinese and travel to China on cultural scholarships. In 2015, approximately 50,000 African students attended Chinese universities, compared with 40,000 in the United States and the United Kingdom. Elementary and middle schools in several African countries are now offering Mandarin as a foreign language.

I highly recommend that you read the whole thing.

H/T Judd Devermont

Are Metros Overrated?

This is from a story in The Guardian:

The ITDP bemoans Africa’s obsession with metros. Lagos in Nigeria – the largest city in the world without a functioning mass transit system – has been trying to build a metro since the 1980s. In the latest of many incarnations, the project was supposed to begin operations in 2012 at a cost of $2.4bn (£1.9bn). Six years after the supposed start date, construction is “nowhere near complete”, says Kost.

Abidjan, the economic capital of Ivory Coast, began construction of a metro last year. The French-financed and -built line is projected to carry 500,000 passengers a day at a cost of $1.7bn. Dar es Salaam’s bus system, by contrast, has capacity for 400,000 people and cost less than a 10th of that – about $150m.

Addis Ababa in Ethiopia opened a Chinese-built and -operated light rail line last year at a cost of $475m. Shenzhen Metro Group has a deal to run it for the first five years.screen shot 2019-01-09 at 4.03.54 pm“With a metro, an international firm will often just parachute in its own system,” says Kost. “Bus rapid transit allows existing stakeholders to get involved. That’s what we did in Dar es Salaam and what we’re planning in Nairobi, where the bus bodies will be built in the city and local operators will look after tickets, fare collection and IT. It’s good for the development of the local economy.”

Regular readers know that I have a bias for Kost’s argument. Read the whole thing here.

H/T Dina Pomeranz.

How can African governments increase their bargaining power vis-a-vis China?

Folashade Soule has answers.

First, a reminder that African governments are not uniformly bad at negotiating with China:

….when you look closely at what happens on the ground, some African countries are much better at negotiating with the Chinese than others. Railway projects in East Africa appear to be a good example. In Kenya, the Standard Gauge Railway is the largest infrastructure project since independence from Britain in 1963. China Eximbank provided most of the finance for the first phase – 472 kilometres of track between Nairobi and Mombasa – at a cost of US$3.2 billion.

In neighbouring Ethiopia, an electric train line from Addis Ababa to Djibouti, which is also Chinese-financed, opened two years ago. The cost for this more expensive type of railway was US$3.4 billion – for 756 kilometres. Kenya claims that its railway cost more for reasons like the terrain and the need to carry higher volumes of cargo. At the same time, however, many believe other issues to have been at play – including failures around the negotiation process.

Second, there are Soule’s suggested remedies:

Involve everyone: When all relevant government departments are involved in a negotiation, it does take longer. The process is more coherent, however, and the resulting project is less likely to breach national regulations.

Empower negotiators: The Chinese often adopt a take-it-or-leave-it approach. In many cases, Africans are not confrontational enough in return. They don’t appreciate that China has a surplus of domestically produced materials they are seeking to offload, for example. Wiser negotiators will play China off against other countries seeking to finance infrastructure projects on the continent, such as South Korea or the United Arab Emirates.

Keep the public onside: China tends to be popular in Africa – more so than the US in around 60% of countries on the continent. Yet the public also see negatives: many think Chinese products are poor quality, while there is a growing perception that dealing with China tends to favour Chinese labourers.

Increase knowledge: African governments are still relatively new to dealing with China; they should take every opportunity to share lessons with one another. There is a role for African universities here. They should set up more centres of Asian studies to close the gap in information and knowledge.

I fully agree.

While it is true that China has geopolitical ambitions in Africa, a lot of Chinese infrastructure plays in Africa are commercial in nature. It is in China’s interest that these projects succeed. That means that African governments could get better deals (in terms of value for money) by doing their homework (on Chinese politics and commercial and institutional architectures) before chasing the money. Similarly, public opinion presents a potential bargaining chip — (the threats of ) transparency and robust public participation should force Beijing’s hand in settling for better deals (from the perspective of African governments). 

All this, of course, is predicated on the assumption that African elites get loans from China to finance infrastructure projects; as opposed to dreaming up projects in order to get loans that then find their way into private bank accounts. 

Read the whole thing here.

H/T Zainab Usman.

Claims About “Good” Institutions

This is from Yuen Yuen Ang’s excellent book on How China Escaped the Poverty Trap:

When foreign experts enter developing contexts and insist that there is one standard of good institutions — namely, that found in wealthy societies — this by itself imposes a lethal impediment against localized adaptation. Imagine “good governance” in medieval European communes being measured according to how closely they approximated institutions in the future. Then imagine foreign consultants dispensing praise and conditional aid to these European communes based on how well they score in good governance alongside contemporary countries; such an index would be titled “Worldwide and Timeless Governance Indicators” (WTGI). Further imagine medieval commune leaders and merchants being herded into classrooms to be taught about the technicalities of replicating institutions from the future in their current communities. Could this be an environment that empowers medieval actors to improvise fitting solutions for the needs of their time?

Highly recommended.

The wonder that is Chinese growth

Below is an amazing illustration of shifts in the sizes of leading global economies:

For more on China see here, here, here, and here. This reminded me of this graphic from Carlos Lopes, former head of the UNECA:Dr3w9PhW4AAnCGU

All that happened in just 36 years. Time is on Africa’s side. If (and that’s a big IFF) African elites can get their act together. As shown in the graph below, the lost long decade (1980-1995) was particularly brutal for African economies — but it was a temporal dip and not a permanent feature of African economies.income

It is also worth noting that in 1980 African states and China were not at the same level of institutional development. By that time China had already accumulated centuries of coherent stateness — which made it possible for elites to optimally allocate human and capital resources in ways that produced the growth miracle.

Here is a good nuanced take on trends in economic growth and development on the Continent.

The U.S. tops list of FDI projects in Africa

This is from EY’s 2018 Africa Attractiveness report:

Screen Shot 2018-10-30 at 5.27.43 PMMature market investors continue building on their deep-seated ties to Africa. In 2017, the US remained the largest investor in the continent, with a noticeable 43% growth in FDI projects. Western Europe, another well-established investor, also built on its already strong investments into Africa, up by 17%. However, emerging-market investments fell, with both intra-regional and Asia-Pacific investment declining by 12% and 13%, respectively. This is, in part, attributable to slower emerging markets growth and weak commodity prices.

It is odd that this report does not give the dollar values of FDI projects. But it has a summary of the distribution of projects and the number of jobs created. This is an important indicator because it reveals projects’ real impact on the real economy — as opposed to projects designed to create enclave economies. Notice that China is far and away the leader on this metric — with Chinese projects resulting in nearly three times as many jobs as American projects (FDI from Italy appears to be particularly good at producing actual jobs).

Screen Shot 2018-10-30 at 5.40.30 PM

Here’s another interesting observation on the sectoral focus on FDI projects from the report:

Over the past decade, we have discussed a shift from extractive to “consumer-facing” sectors, thanks to Africa’s growing consumer market. Mining and metals, along with coal, oil and gas, previously the major beneficiaries of FDI flows, have slowed, while consumer products and retail (CPR), financial services, and technology, media and telecommunications (TMT) have risen.

In 2017, FDI shifted somewhat, with consumer-facing sector investments slowing, in line with challenging operating conditions. The focus changed instead to manufacturing, infrastructure and power generation.

And finally, here are of “FDI-to-jobs” conversation rates. On this measure South Africa and Kenya stand out for their apparent inefficiency in converting FDI projects into jobs.

Screen Shot 2018-10-30 at 5.54.29 PM.pngMore on this here.

 

 

Can African states eliminate malaria?

Southern Africa has an ambitious plan to eliminate malaria by 2030. According to the FT:

Under the Elimination8 plan, the idea is to end malaria by 2020 in four so-called frontline states where transmission levels are already low — below 10 per 1,000. These are Botswana, Namibia, South Africa and Swaziland. Four higher-transmission, “second line” countries — Angola, Mozambique, Zambia and Zimbabwe, where transmission rates can climb as high as 400 per thousand — have until 2030 to get the job done.

Kenya presents a less sanguine but still somewhat positive story. The country reported 8.3 million cases of malaria in 2018, a decline of 12% from 2012. And out of these cases, 16,000 fatalities were reported. Contrast this with China which in 2017 reported a grand total of 2,672 malaria cases, all of which were due to infections while abroad. China’s population is 1.4 billion. Kenya’s population is 49 million. 40 years ago China reported more than 24 million malaria cases annually.

So how did China do it?

Screen Shot 2018-04-24 at 9.08.41 PM.pngThrough a combination of vector control, human behavioral change (including use of treated bed nets), and treatment. All three approaches are important. For instance, while the malaria mortality rate of 0.09% in Kenya is not super high (thanks to treatment), it still means that each year millions of work hours are lost due to illness. It is also a significant drain on the healthcare system. In addition, while treated bed nets have been shown to save lots of lives, we should still work towards complete elimination of the disease.

And that will require an aggressive form of vector control, something that is glaringly missing from most malaria programs on the Continent.

Interestingly, the international community used to take vector control seriously, which resulted in some significant results (see map):

 In 1955, the UN committed to ending the scourge of malaria. It was optimistic because it thought there were effective tools. The pesticide DDT had been found to kill the mosquitoes that were spreading the disease in US army camps in the Pacific during the second world war. Widespread use of DDT and the drug chloroquine drove malaria out of many countries in the Americas, Europe and parts of Asia.

But it all fell apart. There was no real attempt to tackle malaria in sub-Saharan Africa because it was thought to be too difficult. Elsewhere, elimination fell foul of the problem that has bedevilled all malaria control efforts: resistance of the malaria parasite to drugs and of the mosquitoes to pesticides. Then in 1962, Rachel Carson’s blockbuster Silent Spring was published, alerting the world to the environmental devastation wreaked by DDT. The UN’s malaria eradication plan was officially scrapped in 1969.

The over-correction arising from Carson’s paradigm-shifting findings meant that much of the world was willing to sit on their hands as more than 400,000 people died each year of malaria. The WHO only dabbles in vector control through treated bed nets. Sadly, resistance to its choice of insecticides stood at 81% in 2016.

That translates to over 200 million people infected each year, over 400,000 of whom die.

Even Bill Gates agrees that complete eradication of malaria is the most sustainable solution:

“Eradication is the only sustainable solution to malaria,” Bill Gates said on the release of the report his foundation produced with the UN last September. “The alternative would be endless investment in the development of new drugs and insecticides just to stay one step ahead of resistance. The world can’t afford that approach.”

Is anyone out there investing in research on environmentally-safe insecticides?

 

 

What exactly is China up to in Africa?

Leading Afro-Chinese relations scholar Deborah Brautigam has a great piece over at the Washington Post:

On Chinese imported labor in Africa:

Surveys of employment on Chinese projects in Africa repeatedly find that three-quarters or more of the workers are, in fact, local. This makes business sense. In China, textile workers now earn about $500 a month — far more than workers in most African countries. Chinese investors flocking to set up factories in low-cost countries like Ethiopia are not thinking about importing Chinese workers. Like U.S. and European factory owners who moved their factories to China in past decades, Chinese firms are now outsourcing their own manufacturing to cheaper countries.

On Chinese loans to African states:

… In Africa, we found that China had lent at least $95.5 billion between 2000 and 2015. That’s a lot of debt. Yet by and large, the Chinese loans in our database were performing a useful service: financing Africa’s serious infrastructure gap. On a continent where over 600 million Africans have no access to electricity, 40 percent of the Chinese loans paid for power generation and transmission. Another 30 percent went to modernizing Africa’s crumbling transport infrastructure.

On alleged Chinese land grabs:

… the total amount of land actually acquired by Chinese firms was only about 240,000 hectares: 4 percent of the reported amount.

I like to remind my students of the qualitative difference of the “Chinese model” of resource exploitation in Africa.

Previously, Exxon, Elf and other Western resource sector firms would pay African leaders in cash, most of which wound up in Swiss banks, property in southern France, and various tax havens outside the Continent. This was, if you will, the “Western model” of resource exploitation in Africa.

afrobarometerEnter the Chinese. Their model is to pay for resources both in cash and in kind. African leaders still get cash that they can stash abroad. But they also get roads, railways, stadia, hospitals, water works, among other infrastructure investments. And more recently Chinese firms have begun to invest in actual factories — most notably in Ethiopia. It is no wonder that a majority of Africans have a favorable view of China (see image).

Some of these projects produced sub-standard structures (in the recent past the quality has gone up). And the level of indebtedness of African states as a result should concern every sane person. But this arrangement is orders of magnitude better than useless capacity building workshops and janus-faced democracy promotion on the back of rapacious pillaging with little public investments to show for it.

Finally, the inability of African states to negotiate reasonable deals with Beijing is on African political and economic elites. The Chinese have every right to rationally push for the best deals they can get. And if they are smart, they will also work to avoid future defaults by not overstepping their bounds.

To paraphrase a Mozambican diplomat at a recent event here on campus, Africans are too smart to allow themselves to be recolonized by the Chinese.

Xi’s power grab in China is a big deal

Regularized and predictable change of leadership is perhaps the most important indicator of political development. It doesn’t matter if such changes occur through popular elections (as in electoral democracies), boardroom meetings (in party dictatorships), or through inheritance (as in monarchies). Predictability provides stability and allows for the cultivation of elite consensus over a system of rule. It also provides the background conditions necessary for the rule of law to emerge. A situation in which rules change with rulers is hostile to constitutionalism.

jinpingThis is precisely why life presidencies are sub-optimal. Long tenures eventually convince even the most democratic of leaders that they are above the law. They freeze specific groups of elites out of power. And remove incentives for those in power to be accountable and to innovate.

For a while China seemed to have turned this corner, having imposed term limits on its state presidents. But President Xi Jinping has thrown that consensus out the window with the announcement that he plans to scrap term limits and presumably stay on as president indefinitely. 

This is a big deal. Xi has revealed to us that he is no different than Yoweri Museveni.

Who would have guessed that in the 21st century we would be back to a situation in which the world’s biggest economy has life presidents, and occasionally goes through unpredictable transfers of power? Certainly, the coup risk in China is likely to go up under a life presidency. And the demonstration effect to other autocracies will be huge. Remember that even Vladimir Putin had to engage in questionable institutional jujitsu by allowing his wingman to be president in order not to flout the Russian constitution.

global_tenuremean.pngXi’s China is a reminder of that political development is not uni-directional. It is also a caution against trust that elites’ material interests are a bulwark against would-be personalist dictators. China’s economy is booming (albeit at a slower rate of growth), and continues to mint dollar billionaires. Yet the country’s political and economic elites appear helpless in the face of a single man who is bent on amassing unchecked power (the same happens in democracies with “strong western institutions”, too).

Globally, the annual average of the number of years in office for heads of governments has been on decline since the mid-1980s (see graph). Perhaps we were due for a correction, like happened in the mid-1920s. May be this time we will be lucky enough to avoid the messes that followed in the subsequent two decades (the fact that China appears to be a revisionist world power is not a great sign).

Finally, it is remarkable that even after being around for thousands of years China hasn’t figured a system of stable, regularized transfer of power that lasts for centuries. May be it is the curse of being a big country. Or may be this is just how politics works. It really does put in perspective the achievements of a number of African countries that appear to have consolidated term limits within a few decades of existence.

Patchwork Leviathans? Pockets of Excellence in Otherwise Dysfunctional States

This is from Erin Metz McDonnell:

Within seemingly weak states, exceptionally effective subunits lie hidden. These high- performing niches exhibit organizational characteristics distinct from poor-performing peer organizations, but also distinct from high-functioning organizations in Western countries. This article develops the concept of interstitial bureaucracy to explain how and why unusually high-performing state organizations in developing countries invert canonical features of Weberian bureaucracy. Interstices are distinct-yet-embedded subsystems characterized by practices inconsistent with those of the dominant institution. This interstitial position poses particular challenges and requires unique solutions. Interstices cluster together scarce proto- bureaucratic resources to cultivate durable distinction from the status quo, while managing disruptions arising from interdependencies with the wider neopatrimonial field. I propose a framework for how bureaucratic interstices respond to those challenges, generalizing from organizational comparisons within the Ghanaian state and abbreviated historical comparison cases from the nineteenth-century United States, early-twentieth-century China, mid- twentieth-century Kenya, and early-twenty-first-century Nigeria.

…… Monolithically dysfunctional administrations are the exception, not the rule— albeit the exception that has long captured popular and academic attention (Evans 1989; Helman and Ratner 1992). Instead, many states regarded as uniformly ineffectual have great internal variation, with agencies spanning a continuum from ineffectual quagmires to competently achieving organizational man- dates in the public interest. These state “leviathans” are patch-worked: they are cobbled together from scarce available resources, with organizational diversity sewn loosely together into the semblance of unity. In such states, adapted Weberian-style bureaucracy exists in interstices—niches within predominantly neopatrimonial administrations.

The sociology of state and nation building, and development in general, is underrated.

Read the whole thing here.

Interesting paper on the privatization of the “Rule of Law” in autocratic China

This is from Stanford’s Lizhi Liu and Barry R. Weingast:

We argue in this paper that, China has begun to fashion an alternative approach to establishing legal market infrastructure, which we call, “law, Chinese style.” Facing the authoritarian’s legal dilemma that constrains formal legal development, the central government has effectively off-loaded a substantial part of the development and enforcement of commercial law to private actors, namely, various online trading platforms. This approach allows the central government to cabin the domain of the legal system to private law.

To elucidate this private development of law, we focus on Taobao, China’s largest online trading platform, owned by Alibaba. We demonstrate that, with over 430 million users and more than 10 million vendors, Taobao is not simply an exchange platform, but a complete market that is in the process of developing a modern legal system. The system includes a very complex reputation mechanism, a credit score, a fraud detection program, and even a jury-like system in which ordinary users can vote to adjudicate cases or to change platform rules. With respect to exchange on the platform, this legal system helps creates law, enforce contracts, protect certain property rights, resolve disputes, and prevent fraud. By doing so, Taobao has begun to supply many aspects of market-supporting infrastructure normally associated with the state.

This the kind of paper that might interest folks in Kigali and Addis Ababa. Or Nairobi, these days.