The Agricultural Roots of Economic Disappointment
The Agricultural Roots of Economic Disappointment
Review: Robert Bates's Markets and States in Tropical Africa
Markets and States in Tropical Africa: The Political Basis of Agricultural Policies, by Robert Bates. 1981.
What an elegant book, argued convincingly without an ounce of fat -- a real model for how good a book on economics can be. It deserves a place alongside "How Asia Works" and "Seeing Like a State" as a must-read to understand why the world is the way it is.
Bates forcefully makes the case that bad agricultural policy is a root cause of disappointing African economic growth. Put briefly, most African economies are centered on agriculture, and most of the poor are farmers. Independence leaders (like their counterparts in East Asia and elsewhere) came to power promising development, which in their eyes naturally meant industrialization. To finance their industrial projects, they needed to extract funds from agriculture, which meant that state marketing boards set a price for farmers that was artificially low -- an implicit tax on rural areas. (Many of these marketing boards, and their pricing policies, were holdovers from the colonial era.) Another impetus was to placate urban discontent through low food prices. While these policies may have originally intended to promote development, they eventually ossified into standard interest group politics -- elites keeping the farmers down, and skimming a healthy profit off the top. To maintain the status quo, these states maintain a confusing tangle of input subsidies and implicit taxes that divide farmers into winners and losers, preventing collective action. And that pretty much brings us to the present day.
(For fans of Joe Studwell's "How Asia Works", these policies sound like a dark mirror of what occurred in East Asia around the same time. Korea, Taiwan, and Japan had similar policies to squeeze agriculture to fund industrialization but with radically different results. Why? Studwellians out there are surely crying "land reform! Land reform!" but I will need to think more about how exactly that worked. Perhaps the interaction between the Green Revolution, which was more successful in East Asia at raising yields, and land redistribution, which ensured the gains were widely spread, helped mask the fact that the farmers were getting a raw deal.)
Of course this is not the only reasonable theory out there. As Bates notes in his updated introduction, this book has precious little discussion of how external factors, from foreign bombs to commodity prices, have hamstrung development (the dependency theorists would like a word). But Bates's model of competing local interest groups rings true to me, and surely is a central part of the puzzle.