Introduction
It has become increasingly and patently obvious in recent years that, in spite of their compelling theoretical case from the point of view of neoclassical economics, the empirical evidence in support of structural adjustment programmes (SAPs) in Africa is rather mixed, anecdotal and inconclusive as to their success or efficacy. Indeed, the claim that SAPs have met with at most modest or marginal success in both the short and medium terms, (the relevant periods within which they have been implemented so far in most African countries) may not be disputed even by its proponents. The clincher is really why these programmes seem to be meeting with little success, and with increasingly diminishing support from among the presumed beneficiaries; and whether there is an alternative to them at all given that the post-SAP economic situation in many countries has been somewhat better than the pre-SAP situation that began with the mid-1970s world-wide recession.
The proponents of SAPs have generally responded to the foregoing questions by respectively citing policy implementation failures or inadequacies such as lackluster political commitment to SAPs, policy management inadequacies in government, improper sequencing of measures, the mild application of measures, or the brevity of the period within which they have been applied; and by insisting that, given the failure of import substitution industrialisation (ISI) strategies and the demise of socialism in the former Soviet Union and in the Eastern Bloc, there is no alternative (the so-called TINA, or `there is no alternative' syndrome).
The debate over SAPs and neo-liberal policies is further confounded by the appeal to differing criteria in their assessment. Critics of SAPs, on the one hand, have tended to emphasise their negative impact on employment and purchasing power as a consequence of the inevitable retrenchments and price increases that the programmes entail; their negative social consequences as cost recovery and expenditure cutting measures are implemented; and their ambiguous long-term impact on the attainment of sustainable economic development and equity. Proponents of SAPs, on the other, have tended to emphasise the short to medium-term benefits resulting from their adoption in form of the resuscitation of traditional exports, the disappearance of black markets and rent-seeking behaviour, and the increased `availability' of goods, particularly imported ones, on the market. In general, proponents of SAPs have relied on a counter factual argument, insisting that the post-SAP economic situation is better than the pre-SAP one, or what the situation could have been in the absence of SAPs.
It is clear that the discussion of SAPs would be best clarified by first explicitly spelling out what the desired long-term economic goal of African countries is, what this goal entails, and whether SAPs are an adequate strategy for the realisation of the goal. It is our contention that the fundamental and primary long-term economic goal in Africa is that of attaining economic development rather than economic growth per se, a distinction that will be clarified below. In this respect, it is contended that SAPs should be assessed first and foremost vis-a-vis the goal of economic development. In this essay, we argue that SAPs, while they may have necessary features, are in their current form of implementation, insufficient to initiate an economic growth process leading to the attainment of economic development.
It is our contention that the fundamental weakness of SAPs is their inability to accommodate and properly inform on an activist and dirigist role of the state to govern and guide the market toward the attainment of the goal of economic development. Indeed, there has been a seemingly conspiratorial and dogmatic silence among proponents of SAPs over the role of the state in African economies beyond the traditionally accepted ones of maintaining law and order and macroeconomic stability, providing physical and social infrastructure which can be shown to be pure public goods, improving the functioning of markets by eliminating market imperfections, and price distortions, resolving market failures and protecting or ameliorating the plight of vulnerable social groups. This silence would be understandable if there were a widely held consensus among scholars and policymakers on the minimalist passive role of the state as propagated through SAPs.
The dogmatic insistence on a minimalist state role is based on the claimed virtues of the entrepreneur as the main economic agent and actor, the market and private sector as the driving forces of the economy, and unfettered pure competition domestically and internationally as the harbingers of dynamic efficiency and growth. SAPs are designed to encapsulate and foster all of the foregoing through privatisation, liberalisation, deregulation, outward orientation, export promotion and so on. Now, while the theoretical validity and internal consistency of SAPs with regard to their ability to effect static efficiency gains in an economy may be unassailable, difficulties arise on both theoretical and empirical levels as to whether the precepts of SAPs and their consequent programmes are sufficient to effect dynamic economic transformations leading to economic development. The dissenting voices on this latter score are indeed numerous and wide-ranging in both Western academic and policy circles, that it is indeed perplexing when SAPs are peddled in Africa without a hint as to the areas of contention. Even worse, is the fact that in Africa, both scholars and policymakers have been unable to seize on these debates to their advantage. Indeed, in an attempt to forestall such an eventuality, proponents of SAPs have wasted no time in ensuring the regeneration and replication of their clones through the so-called `capacity building' initiatives!
The truth of the matter is that there is a respectable and accumulating body of opinion and evidence to challenge the theoretical and empirical adequacy of neo-liberal prescriptions as manaceas for the development problme. On the theoretical side, the major challenges, within the realm of traditional economics, have come from the structuralists and proponents of the New Trade Theory. The former have emphasised the domestic structural rigidities and the world market imperfections that severely limit the effectiveness of laissez-faire, market-based strategies as represented by SAPs; and the latter have demonstrated the limitations of traditional economic theories of specialisation, comparative advantage and competition in explaining the dynamic economic growth of nations in the present globalised economic environment. On the empirical level, there have been sustained challenges to the counter-factual evidence resorted to in support of SAPs which attributes the success of the Newly Industrialising Countries (NICs) solely to their private sector and market orientation coupled with an outward-orientation and to their adoption of SAP-like stabilisation and liberalisation measures. These dissenting voices have contended that an activist and dirigist state has been crucial and indispensable in the economic growth and development of the NICs. In fact, the underdevelopment of our own economies within the context of market-driven, outward-oriented, colonial empires is ample evidence of the limits of the laissez faire economy in promoting economic development.
The point to be made here is that the issue as to whether the state should play an active or a passive role in the economy is not as closed, as proponents of SAPs would have it, but an open one, and it is pure deceit to pretend that it is a closed one. Yes, the evidence both theoretical and empirical may not be clearly in support of one view or the other, but the issue remains an open one and as such it is best to suspend the dogmatism about SAPs, and it is incumbent on us in Africa to vigorously debate the relative merits of government intervention in the economy. As indicated earlier, we contend that the way beyond SAPs is through an activist state, guiding, and governing the market toward economic development. The problem with the dogmatic proponents of SAPs and a `hands-tied' state is that in their insistence to castigate state intervention and safeguard against the resort to the failed past import substitution or socialist strategies which have been one form of government intervention, they have gone to the other extreme of deliberately underplaying or ignoring the recognized active and dirigist role of the state in the development of the NICs, and thus precluding the lessons to be learned from these countries in this regard.
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