Political Economy and Economic Development in Africa: An Overview
a African Economic Research Consortium, Nairobi, Kenya
b Department of Economics, University of Maryland, College Park, MD
c African Economic Research Consortium, Nairobi, Kenya
* Corresponding author: Director of Research, African Economic Research Consortium, Middle East Bank Towers, 3rd Floor, Milimani Road, P.O. Box 62882-00200, Nairobi, Kenya. Email: olu.ajakaiye{at}aercafrica.org
This volume explores the relationship between political economy and economic development in Africa with a view to unravelling, at least part of the reasons why Africa has not been able to register appreciable development despite the perceptible improvement in growth performance since the beginning of this decade. To begin with, the question of whether or not there is a different political economy for developing countries was addressed in the first paper. It is argued that although the policy questions and political processes may differ, the same building blocks of political economy models are relevant for developing and developed countries. The second paper examined the relationship between natural resource rents and foreign aid on one hand and economic development on the other. Analysis and a review of available evidence suggests that both aid and natural resource rents constitute windfalls, natural resource rent is more highly correlated to corruption than aid. The third paper surveyed evidence on the relationship between international political economy (IPE) and economic development in Africa. Focusing on macroeconomic policy, financing for development and trade, the review suggests that ownership is subverted by the dominance of Africa's internal policy debate by its external partners while overall development finance will continue to be dominated by national security interest of Africa's major external partners. Finally, an exploration of lesson learnt from the study of IPE for Africa suggests that the African states are too small and too many, creating a situation where agents lack reliable recourse to the public good of enforced justice for the purposes of economic transactions. Each of the papers call for a variety of research agenda necessary to produce knowledge to guide policies at national, regional and international levels thereby ensuring that the primary purpose of political economy, namely, to enrich the people and the sovereign can be realised in Africa.
JEL classification: D72, O10, D78