STUDIES ON THE AFRICAN ECONOMIES General Editors: Paul Collier and Jan Willem Gunning Published in association with the Centre for the Study of African Economies, University of Oxford Editorial Board: Paul Collier, Director, Development Research Group, World Bank, and Professor of Economics, University of Oxford; Jan Willem Gunning, Professor of Economics, University of Oxford, and Free University, Amsterdam, and Director, Centre for the Study of African Economies, University of Oxford; Ibrahim Elbadawi, World Bank; John Hoddinott, Research Fellow, International Food Policy Research Institute, Washington, DC; Chris Udry, Professor of Economics, Yale University This important new series provides authoritative analyses of Africa's economies, their performance and future prospects. The focus will be on applying recent advances in economic theory to African economies to illuminate and analyse the recent processes of economic reform and future challenges facing Africa. The books, published in association with the Centre for the Study of African Economies, will bring together top scholars from universities and international organizations across the world. Titles include: Arne Bigsten and Steve Kayizzi-Mugerwa CRISIS, ADJUSTMENT AND GROWTH IN UGANDA A Study of Adaptation in an African Economy Paul Collier and Cathy Pattillo (editors) REDUCING THE RISK OF INVESTMENT IN AFRICA Paul Glewwe THE ECONOMICS OF SCHOOL QUALITY INVESTMENTS IN DEVELOPING COUNTRIES An Empirical Study of Ghana
John Knight and Carolyn Jenkins ECONOMIC POLICIES AND OUTCOMES IN ZIMBABWE Lessons for South Africa Jo Ann Paulson (editor) AFRICAN ECONOMIES IN TRANSITION Volume 1: The Changing Role of the State Jo Ann Paulson (editor) AFRICAN ECONOMIES IN TRANSITION Volume 2: The Refonn Experience
African Economies in Transition Volume 2: The Reform Experience Edited by JoAnn Paulson in association with Palgrave Macmillan
First published in Oreat Britain 1999 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire R021 6XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British Library. ISBN 978-1-349-27485-7 DOI 10.1007/978-1-349-27483-3 ISBN 978-1-349-27483-3 (ebook) First published in the United States of America 1999 by ST. MARTIN'S PRESS, INC., Scholarly and Reference Division, 175 Fifth Avenue, New York, N.Y. 10010 ISBN 978-0-312-17752-2 Library of Congress Cataloging-in-Publication Data African economies in transition I edited by Jo Ann Paulson. p. cm. Includes bibliographical references and index. Contents: v. I. The changing role of the state - v. 2. The reform experience. ISBN 97S-0-312-17751-5 I. Africa-Economic policy. 2. Africa-Economic conditions-196()... I. Paulson, Jo Ann. HCSOO.A5674 1999 338.96-DC21 97-23323 CIP Centre for the Study of African Economies 1999 Softcover reprint of the hardcover 1 st edition 1999 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London WIP 9HE. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and ci vii claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. 10987654321 08 07 06 05 04 03 02 01 00 99
Contents Notes on Contributors... vii Preface... ix Introduction Jo Ann Paulson... 1 Part I: Country Studies 1. The Transition and the Political Economy of African Socialist Countries at War (Angola and Mozambique) Luiz A. Pereira da Silva and Andres Solimano.............. 9 2. Bureaucracy, Socialism and Adjustment: Congo and Madagascar Daniel Tommasi... 68 3. Saving and Investment in the Tanzanian Economic Reform Michael Gavin... 120 4. Structural Adjustment and the Manufacturing Industry in Mozambique Roberto J. Tibana... 178 Part II: Agriculture 5. Agriculture and Economic Reform in African Socialist Economies Stephen Jones................................... 235 6. Microeconomically Coherent African Agricultural Policy Reform in Africa Christopher B. Barrett and Michael R. Carter... 288 Index 349 v
Notes on Contributors CHRISTOPHER B. BARRETT is an Assistant Professor of Economics at Utah State University. His research and teaching focus on international economic development, trade and finance, applied microeconomics and environmental economics. MICHAEL R. CARTER is a member of the Department of Agricultural Economics at the University of Wisconsin at Madison. MICHAEL GAVIN is a Senior Economist in the Research Department at the Inter-American Development Bank, and was Principal Economist in the Africa Region of the World Bank when this project was started. STEPHEN JONES is at the Food Studies Group, Queen Elizabeth House, University of Oxford. Jo ANN PAULSON is Senior Economist at the Financial Sector Development Department of the World Bank, and was Senior Economist in the Africa Region of the World Bank at the time this project was started. She was formerly a faculty member of the University of Minnesota. LUIZ A. PEREIRA DA SIL VA is Senior Economist in the Africa Region of the World Bank. ANDRES SOLIMANO is the Alternate Director for Argentina and Chile of the Inter-American Development Bank. ROBERTO nbana received his D.Phil. in 1998 from St Antony's College, Oxford. His thesis researched the consequences of external shocks and government policies in Mozambique, with focus on the process of adjustment of the economy and the functioning of the markets during the war and the transition to peace. DANIEL TOMMASI is a consultant in public finance and macroeconomic management. He is working currently in several countries in Eastern Europe. He has advised African governments and been a consultant of the World Bank for the preparation of structural adjustment programmes in Sub-Saharan Africa. vii
Preface The collected papers in these volumes are the outcome of a research programme initiated by Alan Gelb in the Transitional Economies Division of the World Bank and financed by Trust Funds from the Government of Japan. Staff support in the World Bank was arranged by Ishrat Husain. The question for the project was whether there were lessons from African reform experience in the late 1980s and early 1990s that would ease the adjustment process in Mozambique. The search for lessons started with experience in countries with a similar background of strongly interventionist government and economic policy guided by socialism. This project turned out to be extremely difficult to execute. The African socialist countries are short of data, and lack a research community with time to undertake detailed investigation of past economic performance or to write scholarly papers. Many aspects of attempted reforms and economic management over the last decade have not been well documented, studied or debated. Furthermore the sample is limited because some of the African socialist countries are still mired in wars, making reforms impossible, while others have undertaken only mild reforms. Therefore over time the project shifted to a broader focus to look for lessons across a more diverse set of African countries. The efforts of the authors of these studies to gather scarce information and data are gratefully acknowledged. There was also a dedicated pool of reviewers from the World Bank and academic institutions who kept the debates on the papers lively, and improved the quality of the work. ix