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Corruption, Good Governance, and the African State : a Critical Analysis of the Political-Economic Foundations of Orruption in S

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Corruption, Good Governance, and the African State : a Critical Analysis of the Political-Economic Foundations of Orruption in S Corruption, Good Governance, and the African State A Critical Analysis of the Political-Economic Foundations of Corruption in Sub-Saharan Africa Joseph Patrick Ganahl Potsdam Economic Studies | 2 Potsdam Economic Studies Potsdam Economic Studies | 2 Joseph Patrick Ganahl Corruption, Good Governance, and the African State A Critical Analysis of the Political-Economic Foundations of Corruption in Sub-Saharan Africa Potsdam University Press Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at http://dnb.de. Potsdam University Press 2013 http://verlag.ub.uni-potsdam.de/ Am Neuen Palais 10, 14469 Potsdam Tel.:+49 (0)331 977 2533/ Fax: 2292 E-Mail: [email protected] The monograph series Potsdam Economic Studies is edited by Prof. Dr. Malcolm Dunn. Withal Dissertation Thesis, University of Potsdam, 2012 ISSN (print) 2196-8691 ISSN (online) 2196-9302 The document is protected by copyright. Layout and typography: Thomas Graf Print: docupoint GmbH Magdeburg ISBN 978-3-86956-248-3 Simultaneously published online at the Institutional Repository of the University of Potsdam: URL http://pub.ub.uni-potsdam.de/volltexte/2013/6516/ URN um:nbn:de:kobv:517-opus-65167 http://nbn-resolving.de/urn:nbn:de:kobv:517-opus-65167 Contents 1 Introduction 1 1.1 Statement of the Argument . 5 1.2 Methodology and Terminology. 10 1.3 Overview of the Individual Chapters . 15 2 Corruption and Good Governance: Key Elements in Western Powers’ Post-Cold War Africa Policies 21 2.1 Western Demands on African Governance – Then and Now . 22 2.1.1 French and U.S. Cold War Demands on Africa: Bad Governance as Foreign Policy. 22 2.1.2 French and U.S. Post-Cold War Africa Policies: The Turn to Democracy and Good Governance for Africa. 24 2.2 The Economic and Strategic Self-Interest - Behind the Push for Good Governance in Africa . 30 2.2.1 The Birth of Economic Good Governance: The African Debt Crisis. 30 2.2.2 The Structural Adjustment Regime: Good Governance Equals Less Governance. 31 2.2.3 The Consequences of Structural Adjustment for African Democracy . 33 2.2.4 The Era of Reform: Anticorruption and Good Governance Become Official World Bank Policy . 35 2.2.5 Critics of the Evolution of World Bank Policy in Africa . 40 2.3 The Wave of Democratization Hits Africa . 44 2.3.1 Standard Interpretations. 44 2.3.2 An Alternative Account . 48 2.4 Conclusion. 52 v 3 Corruption and Good Governance in Development Economics 53 3.1 Defining Corruption . 54 3.2 Surveying and Measuring Corruption . 58 3.3 Institutions and Classical Theories of Development . 62 3.4 The Liberal Account of Institutions in Economic Development. 63 3.5 Digression on Amartya Sen: What are Good Institutions?. 68 3.6 The Impact of Corruption on Economic Performance: Negative Accounts . 71 3.7 The Impact of Corruption on Economic Performance: Positive Accounts. 76 3.8 Conclusion. 81 4 The World Bank’s Anticorruption Strategy: Theoretical Premises and Practical Consequences 83 4.1 The Neoclassical Account of Corruption. 84 4.2 The World Bank and Institution Building in Africa. 86 4.2.1 Digression on the Concept of the Public Interest . 90 4.3 Implications of the World Bank’s Anticorruption Program . 95 4.3.1 Institutional Restraints on Power . 96 4.3.2 Political Competition and Democratization . 111 4.3.3 Civil Society. 123 4.4 Critics of the World Bank’s Anticorruption Efforts . 127 4.5 Conclusion. 129 5 The African State and the Logic of African Politics: Neopatrimonialism 131 5.1 The State in Theory. 132 5.2 The African State in Reality . 133 5.3 The Myth and the Reality of the African State. 137 5.3.1 Jean-François Bayart . 137 5.3.2 William Reno . 141 5.3.3 Patrick Chabal and Jean-Pascal Daloz . 143 vi 5.4 The Concept of Neopatrimonialism . 144 5.5 The Elements of Neopatrimonialism . 148 5.6 Varieties of Neopatrimonialism. 154 5.7 Post-Democratic Neopatrimonialism . 156 5.8 Conclusion. 159 6 The Economic Foundation of Good Governance: Mutually Advantageous Dependence 161 6.1 The Political-Economic Logic of Mutually Advantageous Dependence . 162 6.2 The Rise of Modern Institutions in the West. 168 6.3 Lessons from Western Institutional Development . 174 6.4 Charles Tilly: Accountability and the Bargaining Process . 177 6.5 Digression on Modernization Theory: Rising National Income and the Middle Class . 180 6.6 The Logic of Democratization in Western Europe . 182 6.7 Bottom-Up Dependence . 183 6.8 Conclusion. 185 7 The Lack of Mutually Advantageous Dependence in Africa 187 7.1 Lacking Advantageous Dependence I: Top-Down . 188 7.1.1 The Concept of the Rentier State . 188 7.1.2 The Effects of Extraversion on the Economy. 190 7.1.3 The Political Deficiencies of the African Rentier Economy . 193 7.1.4 Forcing State Dependence on Society: A Path to Good Governance? . 197 7.2 Lacking Advantageous Dependence II: Bottom-Up. 203 7.2.1 Undeveloped Economies . 204 7.2.2 Smallholder Agriculture . 206 7.2.3 Land Tenure Reform and the Political Consequences . 212 7.2.4 Conclusion . 216 vii 7.3 Failed Nation-Building Projects in Africa . 218 7.3.1 Africa at Independence . 219 7.3.2 Two Political Strategies. 223 7.4 Conclusion. 230 8 Conclusion: Difficulties and Prospects for Governance Reform in Africa 233 8.1 The Difficulty of Proposing Solutions for African Governance . 234 8.2 Botswana: A Bright Spot on the Landscape of African Governance? 236 8.3 A Difficult Choice for Policy. 244 8.4 Innovative Solutions from the Study of Failed States and Areas of Limited Statehood . 247 8.4.1 Questioning the Western Model of the Nation-State . 247 8.4.2 Separating Governance from the State. 250 8.4.3 Decertification . 252 8.5 Conclusion. 255 Bibliography 259 Author Index 288 Subject Index 292 viii Table of Abbreviations ACC Anticorruption Commission AIDS Acquired Immune Deficiency Syndrome BDP Botswana Democratic Party CAR Central African Republic CPI Corruption Perceptions Index CPIA Country Policy and Institutions Assessments CPP Convention People’s Party DCEC Directorate on Economic Crime and Corruption DRC Democratic Republic of the Congo EFCC Economic and Financial Crimes Commission EPM Enlarged Presidential Majority EU European Union FDI Foreign Direct Investment GDP Gross Domestic Product GNP Gross National Product GSI Global Standard Institutions HIPC Highly Indebted Poor Country ICAC Independent Commission Against Corruption ICRG International Country Risk Guide IFI International Finance Institutions IMF International Monetary Fund KACC Kenyan Anti-Corruption Commission KANU Kenya African National Union KKM Kaufmann Kraay, Mastruzzi KKZ Kaufmann, Kraay, Zoido-Lobatón MCA Millennium Challenge Account program NGO Non-Governmental Organization ix NIC Newly Industrialized Countries NIE New Institutional Economics OECD Organisation for Economic Co-operation and Development OSCE Organization for Security and Co-operation in Europe PPP Public-Private-Partnerships PRI Partido Revolucionario Institucional RPF Rwandan Patriotic Front SAP Structural Adjustment Programs SGR Second Generation Reforms TANU Tanganyika African National Union TI Transparency International U.S. United States UN United Nations UNCAC United Nations Convention Against Corruption USA United States of America USSR Union of Socialist Soviet Republics WGI Worldwide Governance Indicators x 1 Introduction To say that the last decade of the twentieth century was a time of worldwide trans formation, sweeping economic and political changes on a global scale, is to repeat a commonplace. For every rapid and large-scale political shift that oc- curred in this period, we find an equally grandiose metaphor to describe it. The sudden democratic transformation that took hold of much of the third world in the latter half of the twentieth century was deemed the “third wave of democ- ratization” (Huntington 1991). The democratic revolution that engulfed sub-Sa- haran Africa a few decades later was termed a “springtime for Africa” (Bourgi and Casteran 1991) or a “new democratic dawn” (Sesay and Alou 1998, 48), not to mention Francis Fukuyama’s notorious claim that the global expansion of political liberalism at the close of the Cold War was proof that humankind had finally reached the “end of history” (Fukuyama 1992). Perhaps just as remarka- ble as the internal dynamics of this democratic wave – the resurgence of inter- nal opposition and grassroots movements, as well as the apparent return of a vibrant African civil society – was the fact that both the United States and other Western powers suddenly insisted that African governments democratize. Hav- ing long supported African regimes with anything but democratic credentials, the West seemed to have returned to its own democratic values, insisting anew upon their universal validity and application. Furthermore, the 1990s witnessed a corruption eruption, a term used not to indicate an explosive rise in the actual incidence of third world corruption, but in the significance of the issue of cor- ruption in the West’s foreign policy agendas, as well as those of other interna- tional donors, non-governmental organizations (NGO), and major inter national financial institutions such as the World Bank and the International Monetary Fund (IMF) (Glynn, et al 1997). Although campaigns against third world cor- 1 1 Introduction ruption were hardly new, what happened at the beginning of the 1990s certainly was a kind of explosion – and it blew along two different channels. First, there began the fight against third world corruption, i.e. the use of public power for private gain.1 Building on the so-called “governance-related conditio- nalities” (Kapur and Webb 2000) tied to development aid during the 1980s debt crisis, the Western powers and more than a half-dozen international organiza- tions radically increased their efforts to promote good governance in the global South.
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