Political reform and policy reform in contemporary Africa
Development economists and political scientists point to a variety of factors to explain variations in growth in developing countries-among them geographic location, availability of natural resources, and the quality of political and economic institutions. They try to discover why one group of countries may have done well in the postcolonial period while others stagnated. Why, for instance, have the economic performances of Africa and Asia diverged so greatly when countries such as Ghana and Korea were at roughly similar levels of development in the 1960s?
In the late 1970s and 1980s, a consensus emerged that the answer boiled down to differences in economic policies. To encourage development, international financial institutions began to advocate a combination of economic policy reform, coupled with institutional change to make governments answerable to the people and therefore more likely to follow policies that benefited the majority. The result was a shift from military and authoritarian regimes to multiparty systems, particularly in Africa.
But improvements in economic policies did not necessarily follow. Indeed, the evidence suggests that while political competition reins in predatory governments, it may not encourage them to manage the economy better. In fact, the opposite may be true: governments subject to electoral risk may be less willing to adhere to macroeconomic (particularly fiscal) discipline. By introducing electoral competition, reformers may have stayed the hand of potential predators but also introduced politically driven budget cycles.
Using Africa as a case study, this article looks at the extent and pattern of African political reform, examines how politicians may turn political accountability to their advantage, and suggests why institutional change alone may not be enough to improve economic policies.
For a long time, economists believed that good policies would follow good governance. Citizens would choose governments that delivered economic performance and depose those that attempted to line their own pockets or those of special interest groups. Economic models provided support for this argument. In 1973, for example, Robert Barro showed that, in principle at least, institutions that render officeholders accountable can generate incentives that influence economic policy in the ways claimed by political reformers.
More recently, a study we undertook (Humphreys and Bates, 2005) highlighted a second implication: the larger the decisive group of citizens-which we call the selectorate-the more inclined the government will be to furnish public rather than divisible goods in its effort to retain office. Intuitively, as the selectorate grows in size, the costs of "paying off" each member individually rise; it therefore becomes cheaper for the government to pay them off by financing a good that all can enjoy, such as a school or a hospital.
In an attempt to put this theory about good policies into practice, local champions of political reform joined with international financial institutions to seek political change in low-income countries. In no place was this truer than in Africa, where political change came quickly, particularly between 1985 and 1995 (see Charts 1 and 2). The percentage of countries with multiparty systems rose dramatically, and the percentage of military governments declined (although less sharply).
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How successful was this experiment? Did political reform lead to effective policy reform, as expected? To address this question, we used two measures to explore the relationship of electoral competition to policy outcomes. Both reflect the assessments of informed observers and both...