Transformative social policy and the developmental state

by  Paul Shipale

The title is taken from a paper written by Thandika Mkandawire, a Swedish Professor of Malawian origin from the Institute for Future Studies, in Stockholm. I chose this topic to dispel the notion of some social commentators, who were disputing the fact that I said we need an economic model that suits our country’s broad objectives and plans of fighting poverty and inequality.

Mkandawire says implicit in every development strategy is a social policy which consists of major transformative instruments, many of which are simply unavoidable for any meaningful policy of development, and yet much of the “developmental state” literature has ignored social policy as constitutive of such states.

Indeed, many developmental states have engaged in an extensive range of social policies without always being conscious of themselves as being welfare states, while others are now discovering that they have been welfare states all along, albeit nascent ones and far from the full blown form of social democratic welfare states such as Sweden. For this reason, I do not want President Geingob’s noble objectives to die a natural death, like the TIPEEG targeted intervention programme and others, simply because they were not based on an implementable blueprint of a viable and/or correct economic model.

If we look at competing ontologies of “welfarism” and “developmentalism”, in the neoclassical model it is assumed that markets perform perfectly. Savings equals investments and are both determined by the rate of return. Income distribution is determined by the marginal returns of the different factors of production and individuals are described as rationally pursuing the maximization of utility, among others.

This marginalization of social policy did not only reflect an ideological onslaught on the welfare state in general but it was also the reinforcement of the new focus on stabilization and rejection of development as a social project that could be collectively embarked upon and managed with the use of the state as lead instrument.

While the former drew on Keynesian economics of taxation, the latter was related to development economics. Both Keynesian and development economics were premised on the notion that there were many structural constraints that were normal to markets and both these literatures addressed problems of market economies; both presumed “market failures” and both assigned a central coordinating role to the state. And there the symmetry ended.

While there was clear theoretical association of Keynesian economics and the social policy regimes of the advanced industrial countries based on the “Keynesian welfare regime” – there was no equivalent theorization of the “developmental welfare state”. More significantly, there was no elaboration of the “development welfare regime” to anything comparable to the literature on comparative welfare states for the advanced industrial economies.

For the last decades, the state-market pendulum in development policy has been swinging back towards the role of the state. This is both because of the central role of state intervention in many recent economic success stories (China, South Korea, Taiwan, and Vietnam) and the well-publicised failings of the ‘market fundamentalism’ of the Washington Consensus policies of the 1980s and 1990s.

Indeed, structural adjustment and deregulation have produced considerable volatility and a series of bubble-and-bust cycles, but little in the way of sustainable, inclusive growth, or the long-term upgrading of poor economies.

As researchers and policymakers have sought the ‘lessons of Asia’, much attention has centred on the concept of the ‘developmental state’ and its potential replicability in other continents.

Chalmers Johnson, the scholar who coined the term in relation to Japan (Johnson, 1982), argued that its essential features are a small, inexpensive state bureaucracy given sufficient scope to take initiative and operate effectively; and the perfection of a range of market conforming methods of state intervention in the economy.

At the core of this model is what Peter Evans (1995), Professor of International Studies at the University of California, calls ‘embedded autonomy’: a state machinery run by sophisticated technocrats … sufficiently autonomous to avoid ‘capture’ by rent-seeking business elites that prefer the easy life of government favours to the competitive rigours of the marketplace.

Reviewing the relevance of developmental states to Africa, Peter Meyns and Charity Musamba (2010) concluded that “While nationalist and developmental aims were articulated by post-colonial states, developmentalism in Africa in the 1960s and 70s was characterized by weak state capacity and ineffective statist intervention in the national economy….”

The question is can a viable ‘democratic developmental state’ model now emerge in Africa? Prominent African scholars have argued forcefully for the adoption of the democratic development state model. Omano Edigheji believes that Evans’ concept of embedded autonomy needs to be extended beyond the private sector to a wider group of social actors. Arguing that ‘we are moving towards a revised, more inclusionary, understanding of the developmental state’, Verena Fritz and Alina Menocal (2007) cite the recent history of Brazil, India, South Africa, Mauritius and Botswana as examples ‘that democratisation and an increase in the developmental orientation of the state can occur simultaneously’.

Thus, it seems plausible that the transition from an exclusive to an inclusive state can occur earlier in a country’s development trajectory and the experience elsewhere is that developmental states are social constructs consciously brought about by political actors and societies.

As difficult as the task of establishing such states may be, rather than reducing development to poverty eradication, it is indeed within the reach of our country struggling against the ravages of poverty, inequality, and unemployment.

Instead of simply eradicating poverty through an economic model that does not allow government to intervene in the economy for developmental purposes, we are all required to contribute to the fight against poverty, as the President said, through a myriad of approaches and not a one fit all solution. These include debating the pros and the cons of our approach and not simply trying to sanitize our images with assertions of being “hands-on”, “transformational”, etc., because if the diagnosis is wrong then the prescription will be wrong.

  • Disclaimer: The opinions expressed here do not necessarily reflect those of my employer and this newspaper and are not in any way connected to my position but merely reflect my personal opinion as a citizen.

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