Economic Policy after Independence Flashcards
period of liberation
50s to early 90s as the extended period of decolonisation
economic policy legacies of colonial rule
particular economic institutions created during colonial periods outlasted the colonisers, contributing to slow economic growth (Bates 1981)
roots of relatively bad economic performance in the 70s-90s in the colonial period
focus on agricultural policy
important in African societies where the majority of the population engages in subsistence agriculture
centrepiece of agricultural policy as the agricultural marketing board
- regulates purchase price offered to farmers for particular agricultural products
- monopoly of agricultural products which by law farmers have to sell to
- colonial-run marketing board as an anti-market institution and government monopoly buyer regulating prices farmers receive
after independence, African governments retain marketing boards for decades
benefits of agricultural marketing boards in colonial Africa
in theory can insure farmers against price fluctuations, allows the government to invest in new technologies, increase farmer access to credit and inputs
another advantage is that it makes it easy for the marketing board to outreach to farmers and share new technologies/seeds/fertiliser/techniques
agricultural marketing boards in practice in colonial Africa
prices set far below world prices
- massive transfer of incomes from African farmers to European empires, particularly during WWII
- major source of revenue for European colonisers
conflicts between colonisers and Africans about what types of crops to grow
- rules about how much acreage farmers had to plant of different crops
labour policies in the colonial period
colonial economic policy focused on maximising resource and wealth extraction from colonies to Europe
challenge that imperialists faced was that African farmers preferred to grow different crops (for own consumption or local sale) since Europeans did not want to share profits
solution was to mandate policies of forced labour in all major colonial territories in SSA
public goal to end slavery and forced labour in Africa at odds with reality
variety of approaches to securing labour for European-run projects and plantations
mandatory annual days of labour (corvee)
payment of a hut tax in European currency
- forces Africans to work for or sell products to Europeans
those who refused to participate or couldn’t pay taxes could be arrested and forced to work as prison labour under terrible conditions
- in periods where returns to commodities were higher, colonial authorities arrested more men and forced them to work since there was money to be made
agricultural marketing in independent Africa
post-independence governments continued the policy of ‘squeezing’ peasant farmers to benefit urban residents, boost government revenue and subsidise new industrial projects
highly regressive policy since rural residents tend to be poorer than urban residents
farmers had no choice since marketing board was granted a monopoly on purchases and seed distribution
agricultural taxes constituted a large share of revenue (between 20-40% in most cases) for newly independent African states
lack of competition led to abuses: inefficient operations, bloated staff and wasted revenue in the marketing boards
Tanzania vs. Kenya with different pricing policies for coffee
estates in Kenya getting world price vs. much less in Tanzania
- different prices offered for estates (which are typically owned by European owners)
- estates had a lot of political influence with post-independence governments who could pay them off and get good prices whilst small-scale producers get poor prices
- poor farmers aren’t treated well even in the post-independence period
view that there was a lot of smuggling going on since they share a big border
who benefitted from marketing boards?
story about African elites stepping into the shoes of colonisers, keeping institutions in place, with profits going to the capital and then to Europe
central government revenue could increase
law enforcement and customs officials: bribes
smugglers/organised crime
bureaucrats working for marketing boards
urban residents and other net agricultural consumers
- policies were pro-urban
big losers were African farmers (majority of the population in every African country in the 1960s-1990s)
