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Industrial Policy and Structural Transformation in Namibia Since 1900

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Industrial Policy and Structural Transformation in Namibia Since 1900 Developmentalism, dependency, and the state: industrial policy and structural transformation in Namibia since 1900 Christopher James Hope Darwin College Centre of Development Studies University of Cambridge September 2018 This dissertation is submitted for the degree of Doctor of Philosophy This thesis is dedicated to my mother and to the memory of my father i ii Summary This thesis is about industrial development in Namibia over the 20th and 21st centuries: its causes, trajectory, vicissitudes, context, and politics. The research is premised on the notion that higher levels of industrial development are a good thing and that, to achieve large-scale industrial development, active state involvement is required (in other words, the state must successfully implement industrial policy). In the Namibian case, which has seen only limited industrial development and economic diversification over this time period, the thesis investigates what manufacturing sectors have been able to develop and why, why the Namibian state (both colonial and independent) has largely proved unwilling or unable to pursue industrial policy, and what exceptions there have been to this general rule of ambivalence from the state towards industrial development. To answer these questions, extensive archival research in Namibia, Switzerland, and the UK, data collection and analysis, and nearly one hundred interviews with government officials, leading economic actors, and members of civil society within Namibia were undertaken. There are two central arguments in this thesis concerning the conceptualisation of processes of industrial development. The first is that more attention needs to be paid to understanding the causes of commitment (or lack thereof) to industrial policy implementation from the state. Too often the state is assumed ex ante to be committed to achieving the structural transformation of the economy. The argument here is that this assumption does not hold true in a host of countries across the world. A key question for the thesis, then, is why are some states more ‘developmental’ than others? The second argument is that, in understanding challenges in industrial policy implementation, more analytical attention needs to be given to understanding power relations between and across countries, rather than just within a given country, as has often been the case in recent political economy works on industrial policy. The position taken here is that the now numerous country case studies of industrial policy do not, for the most part, give sufficient weight to the manner in which efforts towards industrial development can and are thwarted by the actions of other nations and foreign firms. The contribution of this thesis, therefore, is to present the first ever complete overview of industrial development in Namibia from the onset of colonial rule to present day. Moreover, it represents a novel attempt to explore the determinants of the strength of commitment to industrial policy from the state and the way in which international power dynamics affect industrial policy and processes of industrial development. The argument is that the main reason for limited industrial progress in Namibia has been that the country’s ‘system of accumulation’ (the dynamics of power in the country and the interests underpinning it), which has been perpetually created and recreated by domestic and international actors, has never considered structural transformation a priority, and accordingly the state has failed to actively pursue industrial policy. This has been to the detriment of long-term economic progress. iii iv Declaration This dissertation is the result of my own work and includes nothing which is the outcome of work done in collaboration except as declared in the Preface and specified in the text. It is not substantially the same as any that I have submitted, or, is being concurrently submitted for a degree or diploma or other qualification at the University of Cambridge or any other University or similar institution except as declared in the Preface and specified in the text. I further state that no substantial part of my dissertation has already been submitted, or, is being concurrently submitted for any such degree, diploma or other qualification at the University of Cambridge or any other University or similar institution except as declared in the Preface and specified in the text It does not exceed the prescribed word limit for the relevant Degree Committee. C.J. Hope Cambridge 12th September 2018 v vi Table of contents List of figures and tables ........................................................................................................... xi List of abbreviations .............................................................................................................. xiii Maps ......................................................................................................................................... xv Acknowledgements ................................................................................................................. xvii Preface .................................................................................................................................... xxi Introduction 1.1 The subject of research .................................................................................................... 1 1.2 Industrial development as the driver of economic development ..................................... 4 1.3 The importance of industrial policy ................................................................................. 6 1.4 The study of the political economy of industrial policy and development ...................... 9 1.5 The heart of the thesis: industrial policy and structural transformation in Namibia ..... 12 1.5.1 Developmentalism, dependency and the state in one country? .............................. 12 1.5.2 Providing a historical account ................................................................................. 13 1.5.3 Explaining the choice of Namibia ........................................................................... 15 1.6 Outline of the thesis ....................................................................................................... 18 Part I: Understanding industrial policy and structural transformation 2. Conceptual Framework ..................................................................................................... 21 2.1 Deploying a refined developmental state approach ....................................................... 21 2.2 Systems of accumulation ............................................................................................... 23 2.3 Methodology .................................................................................................................. 26 3. Why are some states more ‘developmental’ than others? A theory of industrial policy 3.1 Introduction .................................................................................................................... 31 3.2 Why state commitment is essential for industrial policy ............................................... 33 vii 3.3 The neglect of ‘developmentalism’ in the political settlements’ account of industrial policy .............................................................................................................................. 35 3.4 Capacity and commitment: the underpinnings of developmentalism ............................ 39 3.5 Previous assessments of what has caused the emergence of developmentally-minded states ............................................................................................................................... 41 3.6 Broadening our account ................................................................................................. 45 3.6.1 Structure and agency: understanding the attitude of governing elites .................... 46 3.6.2 The very plausibility of being developmental ........................................................ 49 3.7 Conclusion: the need to analyse the emergence of (un)developmental mindsets .......... 52 4. The international political economy of industrial policy 4.1 The political economy of industrial policy .................................................................... 55 4.2 The dependency school… .............................................................................................. 57 4.3 … and its decline ........................................................................................................... 59 4.4 In defence of the dependency school: a critique of the critiques ................................... 62 4.5 The usefulness of a dependency approach ..................................................................... 68 4.6 The international political economy of industrial policy ............................................... 72 4.7 Conclusion: the need to consider the international political economy of industrial policy .............................................................................................................................. 77 Part II: Namibian industrial policy and structural transformation since 1900 Introduction to the study ...................................................................................................... 79 Some reflections............................................................................................................... 82 Background information on Namibia .............................................................................
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