Morten Jerven’s book reminds me of two pioneering economists, namely Andre Gunder Frank, author of Capitalism and underdevelopment in Latin America (1972) and René Dumont, author of False start in Africa (1966). In the age of neoliberalism, this comment should not be misconstrued as patronising: this is indeed an exhilarating and devastating critique of much of what passes as ‘scientific study’ of African economies. Dumont had warned African leaders that the strategy of neglecting agriculture constituted a false start in the quest of nation-building that would lead Africa into an economic cul-de-sac – an action that many an African leader came to rue. Frank had argued that the development of Latin America was not possible as long as it remained under the yoke of capitalism.
Jerven’s main concern is to establish the reasons why ‘economists continue to get Africa wrong; how wrong; in particular, why they keep getting economic growth in Africa wrong’. He starts off by drawing attention to the headline in The Economist at the beginning of the millennium (2000), ‘The hopeless continent’, though some 11 years later a volte face had been instituted via ‘Africa rising’ (Taylor 2014), now celebrating Africa, the hopeful continent. For Jerven, The Economist was simply reflecting the consensus in the existing economic literature. No economist epitomises this hype of afro-pessimism more than the identifier of the ‘bottom billion’, Paul Collier (2007), who claims that they – the bottom billion – are engulfed in poverty traps. One important conclusion from Jerven’s work is that there is no ‘bottom billion’, since Collier’s four poverty traps are escapable and the curses are not destiny. Jerven’s point of departure is a critique of the caricature of Africa’s economic performance by the mainstream growth economists who have argued that Africa has suffered chronic failure of economic growth in the post-colonial era. Jerven argues that these economists have ignored changes in economic growth in the post-colonial era; and the instruments for capturing ‘bad’ policy were poorly identified. In short, the mainstream economic growth literature has ‘mistakenly identified effects of an economic downturn as the causes of an economic downturn’.
Jerven questions the pessimistic representation of African economic performance and asks why mainstream economists have found it so easy to ignore the patent economic performances of Africa in the post-independence period. Using empirical data, Jerven argues that African economies grew from 1950s to the 1970s and then tapered off with the debt crisis and other shocks of the 1970s. Indeed, Jerven draws attention to the fact that ‘growth in Africa has been a recurring process’ (5).
In trying to explain how and why mainstream economic literature got it all so wrong, he points to the quality of the statistics on which they relied. He also draws attention to the fact that since the 1990s the GDPs of many small countries in Africa have risen at a high rate, but quickly points out that a portion of these increases ‘is a statistical fiction’; more importantly, ‘GDP numbers tell us too little about what has really happened’ (5), including impact on living conditions. Thus, instead of celebrating recent growth of economic and political liberalisation – pace Africa rising theorists – he points out: ‘Growth in Africa is to some extent old news … [and] recurring growth has happened because of Africa’s long term pattern of exporting natural resources … and the region now depends more than ever before on external demand for sustainable growth’ (5).
The author points out that the overarching question in the economic growth literature has been why Africa has grown relatively slowly, instead of asking how African economies have grown, an orientation which would have offered policy makers something useful to work on. He observes: ‘despite their shortcomings and despite all their institutional differences from their European counterparts, African states have experienced periods of economic growth’ (6).
For Jerven, this is not simply an academic spat, since these findings influence policies at the highest level, not least the Berg report (1981), an important definer of the destructive structural adjustment programmes which crippled many African economies in the 1980s, following a period of economic growth. This report, which came at the cusp of the neoliberal ascendancy, firmly placed the blame for slow growth in Africa at the door of African policy makers, which heralded a prolonged period of anti-dirigiste economic and social policy. Jerven points to an emerging dualism: bad policy and state intervention on the one hand, and on the other, the liberalisation package and the Washington Consensus, the positive economic package. Furthermore, Jerven reminds us of two historical facts: that state intervention in the 1960s and 70s was not always catastrophic; such interventions do not always equate to the state suppressing markets. Furthermore, many of these mainstream economists, driven by the neoliberal zeal, are advising that ‘good’ policy was not enough, as bad governance and poor institutions are also crucial.
A central theme in the book is that African states were misdiagnosed and dismissed as being incapable of unleashing development based on the observations of the 1980s and 1990s, a period which Jerven describes as ‘experiencing the deepest recession of the twentieth century’ (8). The characteristics demonstrated by African economies during this crisis moment ‘were not representative of longer trajectories’ (8). The verdict on the quality of these states, or ‘governance’, was made by comparing actual states in Africa of the 1980s with idealised, perfectly functioning states that do not exist. For Jerven, mainstream economists have been posing the wrong research question, since growth in Africa has been misunderstood. The right question must be addressed: it is not ‘why has Africa failed?’, but ‘why did African economies grow and then decline only to grow again?’ It is also a methodological issue: it is caused by the particular method used in studying Africa, a method which relies on correlations in country-level data sets. Both method and evidence put a limit to the questions which can be posed. He argues:
when we look closer and start questioning assumptions, about the underlying theory or model of change and about the quality of the numbers used in the investigation, the central findings of the economics literature on Africa look far more contestable. (9)
Some of the issues that Jerven goes on to identify in both the assumptions and methodology of mainstream (neoliberal) economists studying Africa include what he calls ‘garbage in’ and ‘garbage out’: systematic errors, overstating poverty, subjective data sets, poor numbers, quality of current and historical data, how the informal sector is captured, limitation of the literature, obsession with ‘stylised fact’.
One major theme in the book is this: in contrast to what the growth literature tells us, the African growth experience has not been one of persistent stagnation. Jerven points out that the African growth shortfall is only a recent phenomenon, as prior to 1977 African economies were not lagging behind significantly in terms of growth rates. Between 1960 and 1975, African economies tended to perform better than the world average. In terms of total GDP, African economies grew more rapidly than those of the rest of the world in the first half of the post-colonial period. Furthermore, between the start of the decade of independence in 1960, and the first oil price shock (1973), many African countries experienced widespread economic growth, and this was driven in part by direct and indirect state intervention, in the quest for industrial growth.
The OPEC oil price increases and the subsequent inflationary spiral reversed much of the gains made by African governments in the preceding years. The crisis of macro-economic imbalances triggered the long march to the international financial institutions: the International Monetary Fund, the World Bank, and the International Finance Corporation, just at the point when the new right was gaining ascendancy in the West. In no time, structural adjustment became the panacea for all structural ailments. The conditionality quickly triggered the reversal of Africa’s fortune: stagflation soon became the normal part of economic life as African countries’ inability to compete in the new world order became evident. Unemployment among the young rose to astronomical levels, and deficient public service became the norm, marking the end of social citizenship. Finally, as governments became spectators, the nascent industrial sector was destroyed by competition from abroad. In no time, ‘the impressive gains African countries had made since independence were reversed’ (39).
This thought-provoking work has put down a marker for mainstream economists not only to think about, but also to respond to, given the economic caricature of Africa which has now become their hallmark.