Herbst - The Structural Adjustment of Politics

06 August 2006
18:41

· Votes not important - African leaders depend on webs of patronage
· BUT weak tax base makes pork barrel spending impossible
· So economies manipulated to send money to allies.
· Parastatal sector has always been vital part of elite's power structure and financial base
· This interference, pressure to employ large numbers, etc, means parastatal performance poor
        ? REALLY poor - many fail to over even basic costs
· Govts control imports administratively not through exchange rates, to enable them to pick and choose who benefits
        ? --> overvalued exchange rates
        ? Imports cheaper, so access more valuable, govt power increases
        ? Exports more difficult, whole sections of economy affected.
· Govts buy agricultural goods at less than price to benefit politically important urbanites
· Rural producers lack political strength to force up prices
                § Underproduction
· These interventions not unprecendented - were done by colonialists and encouraged by WB in 60's and 70's.
· Lagos Plan shows total unwillingness of African elites to face need for reform.

Immediate effects of adjustment
· Privatisation --> thousands of job losses
· Devaluation --> food prices etc up 20% overnight
· Agri producer prices also raise food cost.

· Whole point of adjustment is to abolish the power of govts to distriute to favoured groups - the very power on which govts depend.
· CHECK So can it only be brought about by internal imposition?
· Apparent policy tweaks actually amount to massive political upheavals
· Sensitive to claims of neocolonialism WB fails to suggest alternative model of state except to say "smaller."
· Clients will continue to make demands of state as private sector so weak
· States will become repressive to hang on to power
· It will be harder to buy ethnic peace with well-placed spending
· You can't decentralise economic power without also decentralising political power.
· Leaders will cease adjusting before they move towards democracy.
· Western donors must offer incentives for adjustment, and plenty of time, while maintaining pressure.