Public Policy: Myths and Realities of Development

By Charles Ikedikwa Soeze
No doubt, many countries in the third world face the most daunting problems and therefore are in most need of a reasonably strong state.
Certainly, all the stories we see on television often stress the apparent power of their authoritarian rulers. This is absolutely so in the case of Saddam Hussein after the invasion of Kuwait in 1990 or of the Nigerian regime and the killing of Ken Saro Wiwa and other environmental activists in 1995. Another that is worthy of mention is Daniel Arap Moi, and his colleagues ignored the series of protest against skyscrapers and more.
However, few third world countries have been able to do much more than maintain law and order by surpassing dissent, and many have not been able to succeed at that. These are some exceptions, such as the state – sponsored ‘green revolution’ in India, which consequently improved agricultural output so much over the past generation that the country no longer has to import food. Far more common, though, is the disheartening history of Nigeria where the average citizen is worse off than twenty-five years ago despite the billions of dollars the government has taken in from the sale of oil.
Unarguably, weak institutions are particular problems in the countries that have had a personal or military dictatorship for an extended period of time. However, for reasons we do not fully understand those kind of leaders tend not to concentrate on building institutions that will function efficiently and effectively or even survive after they depart the scene. Many third world countries with weak states are also plagued by widespread corruption, which extends far beyond the loss of scarce resources that leaders like the Marcoses, Somozas, Duvaliers, or Suhartos spirit out of their country. The corruption often extends far into the bureaucracy, especially in countries that lack a strong legal system and other institutions that could keep state employees under checks and balances. For example in Nigeria, civil/public servants are often referred to as “Lootocrats” or “Kleptocrats”.
Based on the poverty level in most third world countries, it is astonishing that attempts to foster and speed economic developments have been at the heart of most public policy and most analyses of its political life. It should also come as no surprise that the inability to make much progress on that front is seen as yet another example of the weakness of most third world states.
Furthermore, it is important to note that this is an aspect of life in the third world, where the brief period of time since serious development efforts began in the 1950s makes a difference. It is abundantly clear that economic and political development in Western Europe and the North America took the better part of three centuries. In the few cases where it happened quickly, for instance, Imperial Germany and Meiji Japan, it still took decades and required stiff repression.
Some third world countries including those on Latin America that have been independent since the nineteenth century only commence their own developmental oddysseys recently and under less promising circumstances. Britain, France, and the United States industrialized at a time when they were also the world’s wealthiest and most dominant military powers and thus were largely free to marshal needed resources as their leaders saw fit .However, opposite is the case in the third world today. It is a truism to say that most countries are playing a game of political and economic catch-up in which they are very far behind the North and have very little chance of making the difference.
Obviously, there is no agreement about what development means. For some persons, it is all about creating an urban, industrial economy that would make Kenya, Mexico look like a carbon copy of Germany or Japan. I think and believe this is the plan of the current democratic structure of All Progressive Congress (APC) and his change for the best under the leadership of President Muhammadu Buhari whom I will refer to as “MB” that is Moving Best. Some observers doubt that there is such a “linear” or common path to development, and that third world countries will have to come with their own ways of sustaining growth, adding to the country’s wealth, and improving the people’s standard of living. In the last few years, some observers have questioned how much third world countries should be allowed to develop given the pressures economic growth places on their fragile eco-system.
Unarguably, third world countries have adopted two general development strategies. The first is import substitution which was most popular from the 1950’s into the 1980’s. Regrettably, it has been abandoned for the more capitalist oriented structural adjustment.
Import substitution was designed to do just what the two words suggest. Generally, if a country could replace expensive imported goods with ones produced locally, it would conserve more of its hard currency and other scarce resources that could then be used to accelerate development.
Furthermore, it is easiest to see why such approaches were popular not by looking at what those government did but by first exploring dependency theory, which suggest why countries were eager to pursue what amounted to economic nationalism. First developed by radical analysis in Latin America dependency theory is now thought to be something of an overstatement. While it may not explain every trend, it does go a long way towards helping us understand why the third world is finding it so hard to develop.
It is abundantly clear that dependency theorists divide the world in two. On the one hand is the wealthy and capitalist north. On the other hand are the poor and underdeveloped third world nations that remain victims and de facto colonies of the north, whatever their legal status. In other words, they focus on the economic rather than the political implications of imperialism and stress how. The regions that became the third world were forced into the global capitalist system.
From this point of view, capitalism restructured the local economy for the worse. Instead of growing food or manufacturing for domestic consumption, the imperial powers forced their colonies to produce a few raw materials for export. In turn, the colonies and then the new nations provided markets for the north’s finished goods, which earned tremendous profits for the already rich countries.
However, dependency theorists do not deny that there has been considerable industrialization and economic development in the third world in the last few decades. Rather, they argue that such development has left the third world even more dependent than before. Northern capitalist interests still control development. Their banks and governments provide aid, but they invariably attach “strings” to it. These same institutions issue loans that have left many third world governments owing hundreds of billions of dollars that they cannot afford to repay. It is manifestly clear that northern corporations resolve much of what is to be produced and decide that the lion’s share of the profits go back to their headquarters and shareholders.
It is abundantly clear that most third world countries are left with narrowly based economies that are highly vulnerable to the vagaries of the international market. The industrial development that has taken place only benefits a tiny proportion of the population and has often left everyone else worse off. Foreign investment is increasingly oriented towards industries the northern countries no longer want because they degrade the environment. Most importantly, decision -making power remains overwhelmingly in foreign hands.
Interestingly, leaders who accepted all or part of this explanation adopted policies that sought to break away from dependency by strengthening their economy and their own control over it. Most tried to develop a manufacturing base independent of the multinationals in such vital areas as steel, automobiles, clothing, and agricultural equipment. That is, by first of all, erecting tariff and other barriers that made it harder for foreign goods and business to get in. In other words, they could protect local fledgling manufacturers from competition from cheaper and higher quality imports.
Currently, most economists and political scientists prefer a more conservative approach to economic growth, commonly known as structural adjustments. In this approach, the global capitalist market is not the problem but the solution. They are convinced that import substitution has been a disaster and believe that the third world’s best chance of developing lies in integrating itself into the global economy as quickly as fully practicable.
Studies conducted by the World Bank, among others, divided the third world according to the degree to which countries were “outward” or trade oriented. Contrary to dependency’s predictions, the countries that traded the most, that is, the countries that played by the rules of the global economic game, grew the fastest. From 1973 to 1985, those countries grew on average of 7.7 percent per year overall and by 10 percent in manufacturing. By contrast, the least trade-oriented states grew by only 2.5 percent overall and 3.1 percent in manufacturing.
It is a truism that structural adjustment is, in fact, little more than another term for liberalization. Unlike the former communist countries, the emphasis has not been on privatizing publicly owned corporations. While that has occurred in countries like Mexico, which had a large and, typically inefficient state sector, most international banks and agencies have insisted, instead, on third world leader’s getting their countries macroeconomic life in order in two main ways, reducing inflation and cutting the national debt. Doing so, it is argued, will enable these countries to participate more effectively in the international economy. This may make good sense from the perspective of classical economics. It is less clear whether these countries can do anything about either catching up with the north or closing the gap between their own rich and poor by enacting such policies.
Finally, it has been stressed that few countries have adopted such policies voluntarily. While there are exceptions, for example Chile under Pinochet, liberalization has been urged on them from the outside by northern government, banks, and agencies that made adopting structural adjustment a precondition for receiving further aid and other forms of support. Structural adjustment may not be the panacea that its supporters think it is. However, there is no escaping the fact that is now being followed almost everywhere. As with any major shift in public policy, there are many reasons why leaders throughout South America, Africa, and Asia have turned to structural adjustment. None, however, is more important than the fact that the most aid and loans have been contingent on its adoption.
Charles Ikedikwa Soeze is a mass communication scholar from first degree to doctoral level and former Assistant Director (Administration)/Head, Academic and Physical Planning (A&PP) of the Petroleum Trainining Institute (PTI), Effurun, Delta State. A public affairs analyst/commentator. 08036724193 charlessoeze@yahoo.ca