Government-business relations in Africa

The phrase growth coalition describes a situation where two or more parties co-operate to promote policies that will encourage investment and productivity growth. The notion is vulnerable to ideological fashions. In recent years, many people influenced by neo-liberal ideas have been sceptical that governments can get together with any other group to agree on policies and action that actually will promote economic growth. Neo-liberal ideas imply that such coalitions will be either ineffective, corrupt, self-interested, or perhaps even damaging for economic growth. Deborah Brautigam, Lise Rakner and Scott Taylor disagree. They suggest that there is considerable accumulated evidence that growth coalitions, between government and organised business groups, can be effective, both in terms of process (i.e. in working together), and in terms of outcomes (i.e. in actually promoting economic growth). But nearly all the solid examples for contemporary developing countries derive from Asia. Can growth coalitions between government and business also work for Africa? Their article examines the recent experiences of three African countries: Mauritius, Zambia, and Zimbabwe. The conclusions are mildly optimistic.

First, they suggest that, despite continuing disagreements over the 'right' economic policies for Africa, there is wide scope for agreement around a common core, to which both business and government can subscribe: macroeconomic balance, a stable and un-biased exchange rate, and incentives for exporters and innovators. Second, they find that the broad conclusions about the conditions for effective growth coalitions derived from other continents also apply to Africa. Business associations need to have the capacity credibly to engage with government in technical discussions over economic policy. They should be relatively broad and encompassing in terms of the types of business they represent. Exporters are especially likely to push for appropriate public policies, while businesses that rely on politically-bestowed rents are least likely to do so. And it is generally appropriate to provide businesses with some incentives to engage in collective action through their associations. Equally, government has to be ready and willing to engage seriously with business associations on a regular basis.

There are some less optimistic elements to their story. We have no shining examples of very effective growth coalitions in Africa. If they emerge, they may not be sustained for long. And, like many other good things in life, they seem most likely to work in the highly democratic conditions found in Mauritius. But there are some grounds for hope, and Brautigam, Rakner and Taylor provide some useful guidance for people thinking of creating or encouraging growth coalitions.

Source: Deborah Brautigam, Lise Rakner and Scott Taylor "Business Associations and Growth Coalitions in Sub-Saharan Africa," Journal of Modern African Studies, Vol. 40 No. 4, (2002), pp. 519-47. Journal of Modern African Studies is published by Cambridge University Press.

Keywords: government-business relations.

Commentator: Mick Moore, IDS, (November 2003)

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