Studies in Policy Alternatives to Structural Adjustment

Asian Industrialization and Africa: Studies in Policy Alternatives to Structural Adjustment

Saha, Santosh

Stein, Howard (ed.). Asian Industrialization and Africa: Studies in Policy Alternatives to Structural Adjustment. New York: St. Martin’s Press, 1995. 284 pp.

This edited book with eight well-knit essays on finding alternative routes to structural adjustment programs is an intellectual exercise which demands serious academic attention and policy makers reflections. It begins with identifying sociopolitical factors helping industrial successes in Asian countries such as Taiwan, South Korea, Malaysia, Japan, etc., and ends up with pointing out Sub-Saharan countries’ poor economic performances in recent decades, and rightly concludes that political culture as well as traditions have played roles in shaping the process of development or underdevelopment in both areas.

Neoclassical orthodoxy that underpins structural adjustment has explained the rapid all round growth of East and Southeast Asian countries and the persistent stagnation of African countries by the former s embrace of and the latter’s disdain for the free market, both externally and domestically. In our present book, eight economists and management professors of Asian and American institutions of higher learning, have cogently argued that this was far too simplistic a picture, and indeed might be taken to mean far more efficacious policy prescriptions in certain cases, especially relating to Africa’s underdevelopment. The contributors’ thoughtful and well documented articles have not changed our minds on that score of paths to rapid economic development, but they have pointed the way toward a somewhat different and certainly more sophisticated line of thinking. The debate over state versus market forces opens up to a new direction. As Howard Stein, in his introduction, notes, in response to the overwhelming proof of large-scale intervention by states in markets in Asia, a revisionist neoclassical position has arisen on the question of identification of “pinpointing” responsible factors for industrial growth (p. 3).

One core argument in this volume is: Is there “no alternative to the state in the developmental process?” (p. 21). On Japan versus “the others,” E. Wayne Nafziger submits that the Meiji rulers, from 1970 to 1985, owned and operated factories and mines, and there soon arose the state-assisted entrepreneurs (Zaibatsu) leading to sustained progress. The question that follows is how feasible is the “reproducibility” of Japanese conditions. As Nafziger argues, the World Bank, IMF, and bilateral Western donors have prescribed privatization as well as structural adjustment programs for Africa. But Africa has its own traditional problems. For instance, few African societies have the Japanese style community reciprocal obligation that might reduce “the destructive power of capitalist rivalries” (p. 65). In the same vein, but with a different perspective, Beborah Brautigam has examined the state as “an agent of development” and has seen the possibilities of bringing in “lessons from Taiwan’s industrialization” to Sub-Saharan Africa. He argues, rightly so, that “Taiwan’s industrial support policies involved an extensive government role” (p. 177) and Taiwan has Japan as a model to imitate. In the African case, there is no such nearby model, and also situations are different because there is hardly any market for African products, Braitigam concludes.

The question is not really whether the state policy will affect the economy, but how a government goes about using its policy tools to achieve its goals. As Kwan S. Kim notes, the “guided capitalism” of South Korea has the process of interaction between government and market. But African problems are immense, Kim observes. “The abuse of non-market instruments” and unchallenged state power in Africa has often turned into large scale bureaucratic corruption and mismanagement (p. 133). Thus, “cloning” is not feasible. Kim’s suggestion is that the state has been the prisoner of political and social norms in Africa. African government likes to “engineer the economy at every level from a dictating position and the business community has little confidence in the civilian bureaucracy” there (p. 134).

The second important debate raised here is about “Africa’s experience with structural adjustment” (SAP). Is it working toward industrial and agricultural development? Perhaps, there is some truth in the African claim that the World Bank and IMF adjustment programs failed to consider “African market imperfections” (p. 74). The government cannot decontrol all prices and liberalize foreign exchange and capital markets.

In fact the essays are more about Asian “miracles” and less about African underdevelopment. S. Gordon Redding and Simon Tam, in their examination of Hong Kong’s entrepreneurship and African inhibition, observes, Hong Kong, like Taiwan, Singapore, and South Korea relied on indigenous enterprises, while in Africa the governmental control combined with parsimony discouraged “the emergence of an articulated economy” (p. 195).

Several issues have been ignored in examination of Asian miracle. Hong Kong’s laissez-faire policy under colonial administration, Japan’s quite conscious support of its iron and steel industry despite its comparative advantage in light industry, the Korean commitment to import substitution, etc. are matters for discussion. Despite these minor issues, the major themes in the book are documented and well analyzed. Authors have argued convincingly that the state has a distinct role in late-developing nations and the strong developmentalist states validate this point. Incidentally, a latter book, Cal Clark and K.C. Roy, Comparing Development Patterns in Asia, 1997) has a parallel to our present book under review.

The essays have tried in a novel way to create a scenario in bringing in Asian miraculous growth strategies to African scene. The conclusion is that East Asian Tigers do not offer a simple, comprehensive formula for success which other countries can adopt in its entirety. The essence of the book is that the Tigers offer a readily exportable model. The contributors’ suggestions are directional rather that prescriptive. Here is the strength of the volume. Precisely because intensive discussion is needed more than diktats, there is merit in offering a detailed blueprint for global reform: the process of argumentation (as in this volume) is part of the solution. Strategist planners, African leaders, and international agencies will derive benefit from the book.

Santosh Saha

Mount Union College.

Copyright Association of Third World Studies, Inc. Fall 1999

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