Economic Development Is Not Neutral: Understanding African Economies

Introduction

The development of the economy is usually considered a technical discipline with objective measures and quantifiable results. The standardized indicators for assessing the developmental trajectory of economies include growth rates, foreign direct investment (FDI) inflows, institutional rankings and export performance. The development here is described as measurable and quantifiable process: a country gets better or worse with respect to its performance and reference to the standardised criteria.

However, these measurement cannot be considered as being neutral. Conceptualisation of development analysis is not just descriptive tools, but they can be seen as a collection of interpretations that contain assumptions concerning what development must be, what it is supposed to look like and what outcomes are desirable. These are used as conditions of analysis in the background and as an organisation of any academic discussion and policy recommendations and as objective standards.

This results in an interesting paradox : African economies are described as being underdeveloped, but this analysis is based on criteria which are historically developed by external actors and institutions that did not always demonstrated a genuine desire to understand Africa. Progress is associated with economic development, having an international presence in global markets and attracting FDI. They are the product of well entrenched Western traditions of thought on development economics.

The central thesis of this article is that the notion of ‘neutral’ Western economic development measures needs to be nuanced. Indeed, it argues the necessity to integrate measures that integrate local social objectives, political context, and the peculiarities of African societies. Western metrics are not representative of African economic reality, and they have impacts that reverberate not only in the understanding of African economies but also in the governance of African. 

Development Economics as a Normative Framework

Development economics is a discipline based on empirical research and rigorous analysis. Nevertheless, there is a set of prevailing models that study development through specific lens. These include growth, market, investment, and institution models. While having different focuses, they agree on setting standards for measuring economic performance.

Growth-centred models consider Gross Domestic Product (GDP) growth to be the major measure of development. According to this model, growth depends on national productivity and added-value activities, such as manufacturing or agricultural output quantities. This analysis can be problematic. Growth is a measure of scale, not structure; it measures the size of the economy but fails to determine how it is structured, its governance, and where the value is added.

Market-led models bring about new assumptions. They are based on the neoclassical economics tradition, which asserts that efficient markets manage the distribution of resources most appropriately and market liberalization promotes productivity. It’s the approach pushed forward by M. Thatcher in the UK and R. Reagan in the U.S. during the 1980s. Development, therefore, can be seen as the result of the elimination of state intervention, trade barriers, or regulatory constraints. This model, however, assumes that markets exist under an environment where productive capabilities already exist or can be created by chance. It is detached from the historical processes in which such capacities were built. Most of the Western industrialized countries have such economic models, while most of the globa Southern countries do not, which limit their ability to implement such norms.

Following an investment-led model, capital inflows, or FDI, are usually directed to productive transformation of sectors like mining or agriculture aimed at achieving industrialization. However, the fundamental assumption is that in order to be productive and drive development, investment must happen in an industrial ecosystem that can absorb, diffuse, and eventually upgrade. When the ecosystem does not have these characteristics, investment is not embedded in the economy, and development is limited. Plenty of research demonstrates this dynamic, led by big tech corporations in developing countries. Ultimately, the benefits do not flow within the local economy or the local labor market, but remained within the foreign company’s walls.

Institutionalist approaches change the focus to governance and the role of institutions in determining economic results. In this view, strong institutions, measured in terms of property rights, quality of regulations or rule of law, just to mention a few, are preconditions to economic development. Although such a view is important in bringing up governance issues, it tends to consider institutions as independent variables, instead of products of political and economic dynamics. It also has the tendency to generalize institutional forms based on particular historical experience ignoring the fact that these structures are often deeply embedded in a country’s specific social reality and power struggles. One of the best examples of this is the push by international organizations towards formalized land titling and private property rights in several African countries. On the paper, these institutions are considered independent variable that are supposed to automatically result in higher investment and growth (the Western historical experience). But in practice, these rights are frequently a product of political and economic relations: the strong elites can take advantage of the new formal system to expropriate land belonging to communal owners who lack any formal paperwork.

Within these frameworks, there are a number of assumptions made. One is that markets are the major drivers of development; investment is supposed to bring economic change, notably by allowing local sector to develop; global market integration is regarded as desirable; and development is considered a sign of progress. These assumptions are indicative of a specific vision of the way economies develop, a vision that values efficiency, openness, and accumulation of capital.

If the primary indicator is growth, then the growth of GDP is considered progress. If we believe that global integration has a good side, then we should welcome more exports, including if those ladders up the global value chain are the low-value ones.

Development structures have a positive function in this respect. They are creating the concepts of development, stagnation and failure. They also impact on policymaking. The liberalization, investment promotion and institutional reform concepts, which are the core of development policies, appear very reasonable and justified in the light of the common development models. Other strategies, like selective protection, state-led industrialization or capability-oriented interventions may be perceived as being inefficient.

The Political Role of Development Frameworks

Normative development frameworks can be perceived as being political as well. Actually, most of these frameworks are not impartial and they tend to embody political vision and goals rather than economic ones. They have an impact within academic circles but also on the structure of economic regulation. They influence policy decisions, form international interventions and specific development paths.

Government policies are not only in line with the dominant models of analysis since they appear to be economically viable, but also as an expression of compliance with the international norms. This conformity increases credibility and eases the availability of external financing as well as placing governments in the global policy networks.

The different development frameworks developed at institutional levels organise economic interventions.  Economies are assessed by standardized analysis tools employed by multi-lateral organisations, donor agencies and development banks and a range of economic programs are developed for developed countries in order to follow an economic pathway that is expected to move them out of poverty. These instruments are based on some assumptions about what a good economic policy should be which then become the conditions and reform programs. Consequently, policies tend to become similar and uniform rather than be country-based.

More fundamentally, frameworks are political tools that foster political legitimacy. Development has been the most important evaluation measure of governments in postcolonial contexts. The ability to deliver development outcomes, through similar conceptual frameworks that also underpin the evaluation approach, is increasingly linked to political control. A vicious cycle of its own creation is thus created, with structures defining success, and success proving the necessity of the structures.
For example, the World Bank’s “Ease of Doing Business” index, a business environment ranking by the World Bank, would incentivize African governments to rapidly make “shallow” changes to their laws such as cutting down the time to register a company with a supposedly positive economic impact, but which would result in a centralization of political power.

This phenomenon results in depoliticisation of development. Development frameworks present political decisions as purely technical issues by using a neutral, scientific language that defines economic decisions. Issues of efficiency, and not controversial political decisions, are raised with respect to industrial strategy, sectoral priorities or types of economic organization. This leaves very little room for other visions and restricts the arena of democratic discussion.

But development structures go beyond the depoliticizing process by actually organizing politics and economics. They decide what strategies should be embraced, shape the incentives of policy-makers and shape the nature of interaction among domestic actors and international institutions. It does not only prescribe what  economic processes should be  but it is also a part of their manufacturing.

Resource-Led Growth and the Limits of Standard Indicators

Analytical extension of development models is most notable in resource-based economies, such as the copper and cobalt economy in Africa. In recent years these industries have experienced a great development due to the growth of the world demand, investments and export levels.

In the light of conventional indicators of development this is clearly beneficial. Export earnings go up, foreign investments intensify, and the performance of macroeconomic indicators improves. In growth-centred and investment-led models these are outcomes of good development. Resource sectors are considered as drivers of development and an easy gateway to international markets..

Nonetheless, this interpretation is based upon a specific interpretation of economic change prioritizing the scale over the structure. When we look closer, these countries do not seem to perform that well. They are performing well in the overall indicators but in these economies, there is not much industrial upgrading. The production is still located at the lowest and initial parts of the value chain, such as extraction and rudimentary processing, while higher value chain activities such as manufacturing and technological development are carried out in other countries. This is for example the case of the Democratic Republic of Congo whose industrial activities in the mining sector, especially in the copper and cobalt sector are mainly concentrated at early, low value-added stages of production (refining and treatment) while downstream activities are done in foreign countries, such as China, once minerals are exported. As a result, the country is unable to benefit from these minerals and reap a major part of their value.

The economy grows, but the framework of production does not change much. National capacity building is limited, and still relies on outside actors. The economy becomes incorporated in the global markets, albeit at certain terms that restrain the capacity of an endogenous transformation.

Normal measures apprehend growth, not economic structural change. They capture gains in production, but don’t capture gains in productive power, technological complexity, and value dispersion. Therefore, they can build a picture of success that obscures structural problems.

Development is not something that can be narrowed down to a combination of aggregate indicators. It is a transformation of the organization, which involves changes in products, capacities and economic organization. Failing to capture such dimensions can lead to a misrepresentation of economic transformation in frameworks.

Conclusion: Toward a Reflexive Political Economy of Development

The article does not argue that current economic analysis are to be fully replaced but that it is important to realize that development frameworks are not neutral. It demands a reflexive approach, one questioning the assumptions that are deeply entrenched in instruments of analysis and in the way that the assumptions shape policy.

The starting point of such an approach is the following fundamental questions: What is being measured, and why? What aspects of economic change take preeminence? What types of change are being made invisible? What theory of development is presupposed?

These questions change the orientation of the outcome to the process, the indicators to the structures, and the measurement to the interpretation. They open up the option of other analytical approaches that focus on structural change, capacity building, and redistribution of value in economies.

A structural perspective provides a path forward. By focusing on production, transformation and retention of value in the economies, this approach could capture the aspects of development that aggregate measures fail to capture. It puts emphasis on the productive capabilities, technological modernization, and institutional coordination. It also acknowledges the fact that development is not a linear process but rather a disputed and unbalanced change, which is influenced by political and economic dynamics.

After all, it is not merely the necessity to make current measures better but the need to re-examine the very conceptual premises of development analysis. 

As far as analytical frameworks are regarded as neutral, their political and ideological aspects will be hidden. And so as long as they go largely unchallenged, they will still inform the perception of the economies of Africa in such a way that constrains analysis as well as policy imagination.

Development in this meaning is not merely an economic process. It is even an epistemological and political one. Its definition will dictate how it is followed.

Please Read the Following for More Information:

“Unlocking Africa’s development potential: insights from the perspective of global hierarchy and competition”, Humanities and Social Sciences Communications, Fanglei Wang, Jianbo Gao, and Feiyan Liu, 2024 

“Exploring the Path of Autonomous Development: the Development Dilemma and Coping Strategies of Sub-Saharan Africa in the Post-epidemic Era”, Journal of Knowledge Economy, Mo Bi and Zhenke Zhang, April 10, 2023 

“Changing the narratives on Sub-Saharan Africa’s failure to develop”, London School of Economics and Political Science (LSE Research for the World), Leigh Gardner, January 18, 2022