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Political economy is back on the centre stage of development studies. The ultimate test of its respectability is that the World Bank has realised that it is not possible to separate social and political issues such as corruption and democracy from other factors that influence the effectiveness of its investments, and started using the concept.

It predates the creation of “economics” as a discipline. Adam Smith, David Ricardo, Thomas Malthus, James Mill, and a generation later Karl Marx and Friederich Engels, explored how groups or classes in society exploited each other or were exploited, and used their conclusions to create theories of change or growth.

Marx’s ideas were taken up in the 1950s by economists and sociologists of the left, such as Paul Baran (The Political Economy of Growth, 1957) and later Samir Amin (The Political Economy of the Twentieth Century, 2000) who linked it to theories of imperialism and neo-colonialism to interpret what was happening in newly independent African countries where nationalist political parties had taken power.

Marx and Engels in their early writings, and Marxist orthodoxy subsequently, espoused determinist theories in which development went through pre-determined stages – primitive forms of social organisation, feudalism, capitalism, and then socialism. But in their later writings Marx and Engels were much more open, and recognised that some pre-capitalist formations could survive, and that there was no single road to socialism. Class analysis, and exploration of the economic interests of powerful classes, and their uses of the technologies available to them, could inform a study of history, but not substitute for it.

That was how I interpreted what happened in Tanzania in the 1970s. The country was built around the economic interests of those involved, and the mistakes made, both inside Tanzania but also outside. It focussed on the choices made by those who controlled the Tanzanian state or negotiated “foreign aid” deals with Western governments—Issa Shivji’s bureaucratic bourgeoisie. These themes are still current today.

I am not alone. Michael Lofchie’s (A Political Economy of Tanzania, 2014) focuses on the difficult years of structural adjustment in the 1980s and 1990s). He argues how the salaried elite could personally benefit from an overvalued exchange rate. From 1979 on, under the influence of the charismatic President Julius Nyerere, Tanzania resisted the IMF and World Bank which urged it to devalue. But eventually, around the mid-1980s, they realised that they had the possibility of making even bigger financial gains if the country devalued and there were open markets, which would allow them to make money from trade or production. They were becoming a productive bourgeoisie.

Lofchie’s analysis can be contested. The benefits of the chaos that resulted from the extremely over-valued exchange rates of the 1980s were reaped by only a few. It is true that rapid growth followed from around 1990 to the present, but that is also due to the high price of gold on international markets and the rapid expansion of gold mining and tourism. There is still plenty of evidence of individuals making money illegitimately – corruption is ever present in the political discourse, and will continue to be so up till the Presidential elections due in October 2015.

A challenge for the ruling class in Tanzania, leaving the 1970’s, was would they be able to convert their economic strategies into meaningful growth and benefits for the population? By 2011 the challenge was even more acute, because very large reserves of gas had been discovered off the coast of Southern Tanzania, so money for investment would no longer be a binding constraint. But would those resources be used to create real assets which would create the prerequisites for rapid expansions in manufacturing, services and especially agriculture? Or would they be frittered away through imports of non-productive machinery and infrastructure (such as the non-existent electricity generators purchased through the Richmond Project in 2006 in which several leading members of the ruling political party were implicated)? Or end up in Swiss bank accounts? The jury is very much still out. To achieve the current ambition of a rapid transition to a middle income country will require much greater understanding of engineering, agricultural science, and much better contracts than have been recently achieved – and more proactive responses to the challenges of corruption. It will need to take its own political economy seriously.

Headline image credit: Tanzania – Mikumi by Marc Veraart. CC-BY-2.0 via Flickr.

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By Morten Jerven

In most studies of economic growth the downloaded data from international databases is treated as primary evidence, although in fact it is not. The data available from the international series has been obtained from governments and statistical bureaus, and has then been modified to fit the purpose of the data retailer and its customers. These alterations create some problems, and the conclusions of any study that compares economic performance across several countries depend on which source of growth evidence is used.

The international databases provide no proper sources for their data and no data that would enable analysts to understand why the different sources disagree about growth. See, for example, the disagreement in economic growth series reported by the national statistical office, from Penn World Tables, The World Bank, and the Maddison dataset for Tanzania, 1961-2001.

The average annual disagreement between 1961 and 2001 is 6%. It is not evenly distributed; there is serious dissonance regarding growth in Tanzania in the 1980s and 1990s, and how the effects of economic crisis and structural adjustment affected theeconomy depends on which source you consult.

The problem is that growth evidence in the databases covers years for which no official data was available and the series are compiled from national data that use different base years. The only way to deal satisfactorily with inconsistencies in the data and the effects of revisions is to consult the primary source. The official national accounts are the primary sources.

The advantage of using the national accounts as published by the statistical offices is that they come with guidelines and commentaries. When the underlying methods or basic data used to assemble the accounts are changed, these changes are reported. The downside of the national accounts evidence is that the data is not readily downloadable. The publications may have to be manually collected, and then the process of data entry and interpretation follows. When such studies of growth are done carefully, it offers reconsiderations of what used to be accepted wisdom of economic growth narratives.

I propose a reconsideration of economic growth in Africa in three respects. First, that the focus has been on average economic growth and that there has been no failure of economic growth. In particular the gains made in the 1960s and 1970s have been neglected.

Secondly, for many countries the decline in economic growth in the 1980s was overstated, as was the improvement in economic growth in the 1990s. The coverage of economic activities in GDP measures is incomplete. In the 1980s many economic activities were increasingly missed in the official records thus the decline in the 1980s was overestimated (resulting from declining coverage) and the increase in the 1990s was overestimated (resulting from increasing coverage).

The third important reconsideration is that there is no clear association between economic growth and orthodox economic policies. This is counter to the mainstream interpretation, and suggests that the importance of sound economic policies has been overstated, and that the importance of the external economic conditions have been understated in the prevailing explanation of African economic performance.

We know less than we would like to think about growth and development in Africa based on the official numbers, and the problem starts with the basic input: information. The fact of the matter is that the great majority of economic transactions whether in the rural agricultural sector and in the medium and small scale urban businesses goes by unrecorded.

This is just not a matter of technical accuracy; the arbitrariness of the quantification process produces observations with very large errors and levels of uncertainty. This ‘numbers game’ has taken on a dangerously misleading air of accuracy, and international development actors use the resulting figures to make critical decisions that allocate scarce resources. Governments are not able to make informed decisions because existing data is too weak or the data they need does not exist; scholars are making judgments based on erroneous statistics.

Since the 1990s, in the study of economics, the distance between the observed and the observer is increasing. When international datasets on macroeconomic variables became available, such as the Penn World Tables, and the workhorse of study of economic growth became the cross-country growth regressions the trend turned away from carefully considered country case studies and then rather towards large country studies interested in average effects.

However, the danger of such studies is that it does not ask the right kind of questions of the evidence. As an economic historian, I approach the GDP evidence with the normal questions in source criticism: How good is this observation? Who made this observation? And under what circumstance was this observation made?

Morten Jerven is an economic historian and holds a PhD from the London School of Economics. Since 2009, he has been Assistant Professor at the School for International Studies at Simon Fraser University. He is author of Economic Growth and Measurement Reconsidered in Botswana, Kenya, Tanzania, and Zambia, 1965-1995 and has published widely on African economic development, and particularly on patterns of economic growth and economic development statistics.

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Image credit: Tanzanian farmers, by Fanny Schertzer. CC-BY-2.5 S.A via Wikimedia Commons.

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The threads of a little boy’s life are drawn together and lead to a happy ending, thanks to the wisdom of his grandfather, in this beautifully written and illustrated picture-book: Babu’s Song by Stephanie Stuve-Bodeen and illustrated by Aaron Boyd (Lee & Low, 2003). Set in contemporary Tanzania, Bernardi lives with his grandfather, Babu. They make a living from the toys which Babu makes and Bernardi sells at the market. Bernardi shares a love of soccer with the other boys his age and he wishes he could afford to go to school like they do…. and he longs for the new football he sees in a shop window.

One day Babu gives Bernardi a musical box he has made from an old tin: it plays a song that Babu used to sing to him, which makes it extra special as Babu lost his voice after an illness several years earlier:

Bernardi hugged Babu, and together they listened to the music. That night for the first time in many nights, Bernardi fell asleep listening to Babu’s song.

The following Saturday, Bernardi sells the music box to an insistent tourist and decides he will buy himself the football. However, he finds that he cannot buy it and, filled with guilt, he hands the money over to Babu. Babu leaves Bernardi for a while, then returns with three surprises: a school uniform, because he has paid the fees for Bernardi to go to school; a soccer ball he has made; and an old lard tin to make another music box.

Babu’s Song became an immediate hit in our household and, since it arrived a few months ago, we have read it many times. I’ve included it in my Personal View for our current music theme; and it is definitely one of the books Steve Adams of the Willesden Bookshop would have been referring to when he spoke to me about children’s books about Africa and India starting to reflect a modern urban setting. The illustrations here really help to get that across.

All in all, there’s plenty of food for thought and this is exactly the kind of story we need to get children thinking at an early age, even if subconsciously to start with, about the distribution of world wealth. For parents reading this book with their children, it is a wake-up call: a tourist paying, albeit generously, for a hand-made souvenir makes it possible for a child to attend school…

Little Brother read this as his African book in our Book Challenge so I’ll leave him with the last words:

There are some sad bits and some happy bits, which makes it a heart-moving story.

During our session with the IFLA (International Federation of Libraries Associations and Institutions) in Bologna, both speakers (Patsy Aldana and Viviana Quiñones) stressed the importance of children having access to books which both reflect their experiences and open windows onto other customs and cultures. We were urged to pay a visit to the stand shared by a number of different African publishers, and there we met three very special publishers, all producing books to meet that demand.

The first two were librarians we had met at the session the day before: Antoinette F. Correa from BLD (Bibliothèque-Lecture-Développement) Éditions in Senegal and Pili Dumea of the Children’s Book Project (CBP) for Tanzania.

Antoinette, pictured right with a selection of her books, told me that she set up BLD Éditions to meet the needs of both teachers and pupils, who were crying out for access to good books in their own language. She is a well-known figure in the IFLA, and sees the continued development of libraries as crucial work: as well as publishing books, BLD helps to set up libraries and trains librarians.

Pili, pictured left, is secretary to the CBP for Tanzania, which, again, connects children with books published locally. Last year the CBP was awarded the UNESCO King Sejong Literacy Prize for its work promoting the love of books among children and adults. One eleven-year-old, talking about her school library, following the school’s affiliation to the CBP, said

“I have read most of the books in the school library which helped me learn about different topics through interesting stories told in our own national language, Kiswahili, which is easier to understand than English.”

The third publisher was Bakamé Éditions from Rwanda, who publish children’s books in the national language, Kinyarwanda, which is understood by all Rwandans. They also run various projects to promote reading, including their “Bibliothèque en route” – a rucksack library, which takes books out to children who do not have access to an actual library. It gets a tiny mention on their English pages, but if you read French, there’s more here. Editions Bakamé was the joint recipient of this year’s IBBY-Asahi Reading Promotion Award and this article on IBBY’s website is also an interesting read.

The work these organisations are doing is truly awe-inspiring and it was a real privilege to meet Antoinette and Pili.

Last week, I talked about Patricia Aldana’s address to the International Meeting of Children’s Librarians in Bologna. Our second speaker on that occasion was Viviana Quiñones, who spoke to us about the French national children’s book organisation La Joie par les Livres. After running through its history, she told us about some of their initiatives in promoting children’s books, such as travelling exhibitions of African books and books about the Arab world, the Caribbean and around the Indian Ocean. They also publish two magazines: “La Revue des livres pour enfants” and “Takam Tikou”, which focuses on multicultural books in French.

Of particular interest was what Viviana had to say about their work with libraries and independent publishers in Africa. Like Patricia Aldana, she stressed how important it is for children in Africa to find their own experiences mirrored in the books they read: and to read books that are reasonably up to date and written in their own language. In 1985, internationally renowned librarian Geneviève Patte visited Mali and other African countries, where she found that all the library books were old and in French… In 1987 she set up a service within La Joie par les Livres to collaborate with libraries and the publishers of African children’s books to promote books in the local languages. La Joie par les Livres also trains librarians, which raises the status of the libraries in the eyes of local communities.

Viviana said that there are still challenges, for example, with the distribution of books, but that in the world of African publishing, there are some inspirational stories. Afterwards, she recommended a book to me called Courage and Consequence: Women Publishing in Africa edited by Mary Jay and Susan Kelly and published by the African Books Collective. In fact, I had been sitting right next to Pili Dumea from Tanzania and across the room from Antoinette Correa from Senegal – both librarians turned publisher, whom I’ll be talking about in Part 3…