Policy Innovation in Africa
Publisher: IGI Global
Author: Fred B. Olayele, Ph.D.
At the heart of political economy is how politics affects the economy and vice versa. To understand what has happened to the African economy and society, we need to look back at least to the immediate post-independence period. Policy innovation is a complex, non-linear process. The varying degrees of state and market involvement in resource allocation often present Africa as a mixed economy under policy design scenarios. This leaves a wiggle room for experiments that may not fully capture the continent’s core underlying social and political context.
Policy innovation is inextricably dependent on political economy dynamics. For various historical, social, and political economy reasons, economic systems across Africa are unique. Against the backdrop of social and economic ideologies like Ujamaa, Ubuntu, and Harambee, traditional African values like familyhood, interpersonal relationships, and togetherness are important in the resource allocation decisions of Africans. Contrary to the dominant tenet of individualism in industrial capitalist societies, this has implications for the holy trinity of rationality, selfishness, and equilibrium in neoclassicism (Colander et al., 2004).
The public policy development process in immediate post-independence Africa was largely influenced by the struggles for Africa’s national sovereignty and policy autonomy. This produced different strands and hybrids of African socialism based on varying economic systems, national struggles, and cultural and political debates. In much of the 1950s, leftist ideologies were prominent on the continent, partly as a backlash against colonialism – since most African leaders of the era recognized capitalism as being pivotal to the perpetuation of European dominance and imperialism.
Collier and Gunning (1999) question why Africa’s political self-determination and economic fortunes recorded positive outcomes in the period immediately after independence, while both components witnessed declines in the 1970s. After three decades of dominant socialist doctrines on the continent, neoliberal capitalist tendencies staged a comeback, albeit in different forms and for varying reasons. While the socialist ideologies put in place by African nationalist leaders to enhance socioeconomic progress through public control of the health, education, and welfare systems achieved modest results in some areas, the inefficiencies and bureaucratic failures associated with centrally planned systems contributed to the decline of this political economy approach.
The topics in this book have been chosen with a wide range of stakeholders in the policy cycle in mind – both in terms of their role and influence in the public policy development process. The book builds on the works of a handful of economists, political scientists, sociologists, and public policy enthusiasts who have navigated and studied economic and bureaucratic systems in the context of policy-market dynamics. The author offers a comprehensive, cutting-edge analysis of the paradigms, tools, and political economy analytical frameworks for making sense of policy innovation ideas and experiences of national and regional ecosystems, with a focus on Africa.
The book is divided into five parts.
Part I focuses on the political economy of capitalism and development policy. The introduction sets the pace with contemporary discussion on the philosophical foundations of political-economic interactions, the limits of conventional neoclassicism, pragmatism and policymaking, policy devices, and the political economy of industrial transformation. From global inequality and rentier capitalism to the political economy of policy change and its various theoretical ramifications, this part unpacks the core foundational issues.
Part II examines the various arguments on the call for a new approach to policymaking in the context of new paradigms and toolkits. The increasingly complex nature of society poses policy questions that are also becoming more difficult to address. Transaction costs, policy diffusion, and the applicability of the helix models of innovation are thoroughly analyzed, with implications for policy innovation potential articulated. Schumpeterianism and policy innovation, the limits of physical laws in economic phenomena, demographic shifts, the nexus between technology and policymaking, lessons from economic rebasing in Africa, and the implications of the interplay of policy, markets, and innovation for inclusive economic development are all covered.
The third part unpacks the implications of economic systems and state structures for policy innovation potential. In addition to exploring the innovation-federalism nexus and the implications of the resource economy for competitiveness, the theoretical underpinnings of fiscal decentralization in the context of redistributive fiscal flows, the diversification-specialization debate, and the deleterious effects of governance failures like authoritarianism, conflict, and social inequity on political economy outcomes are discussed. This includes the pros and cons of the arguments around institutional quality and resource extraction, innovations in the extractives sector, and climate change and competitiveness.
Part IV focuses exclusively on policy innovation case studies in Africa. Starting with the interplay between policy and markets in the context of the global energy transition, the ongoing shift in the energy landscape and what it means for policy incentives and pathways that may help strengthen Africa’s adaptive capacity are considered. Policy innovation lessons from other regions like Canada and the Gulf countries are examined. The pros and cons of the leapfrog effect, development finance innovations, infrastructure, venture capital ecosystem, policy diffusion in the startup economy, tax policy and supply-side economics, ocean finance, the global minimum tax debate, and higher education under disruptive technologies are broadly dissected.
Part V adopts the innovation supercluster sectoral approach in the context of the African Continental Free Trade Area (AfCFTA) to consider the pathways to economic resilience and sustainability in Africa. This segment sheds light on the implications of the digital economy for the high representation of women, low-income wages, and poor working conditions in Africa’s informal economy. Productivity gaps and the distributional implications of the AfCTFA in the context of Africa’s heterogeneous markets receive attention. Additional case studies on harnessing sectoral policy innovation opportunities in Africa are presented across the agriculture, maritime, tourism, and mining sectors. Lessons from adversity and how crises can serve as a catalyst for reinvention are analyzed with case studies from far and near.