Institutional Monocropping and Monotasking in Africa

The study of institutions is once again at the centre of development thinking in Africa. Early development economists were aware that institutions were the framework within which markets work, and the motors that can drive markets to perform differently from what would be expected by the simple extrapolation of their past performance. In fact, innovative institutional development would allow latecomers to move much faster and optimal arrangements would alter developmental trajectories. However, neoliberal policies were followed through facilitating the workings of the market, thereby removing distortions, in particular the negative role of the state. When it was found that the adjustment based on these policies had failed, policy failure and, subsequently, institutional weakness was blamed.

Mkandawire argues that the upsurge of interest in institutions is welcome and long overdue. However, the new focus is marred by the tethering of institutions to a “one-size-fits-all” policy perspective, incorporated into neoliberalism with a focus on credibility and property rights. This has led to “institutional monocropping”: idealized versions of Anglo-American institutions being imposed on developing countries on the assumption that they would transcend national circumstances and cultures. According to the author, institutional reforms also suffer from the insistence on institutional “monotasking”, whereby institutions are reduced to servicing a standard set of often imposed policies or tasks, and from the endless experimentation on institutions that renders them highly unstable and unpredictable. Monocropping depends on an attachment to “rational choice institutionalism”, which has tended to focus on the restraining role of institutions and has ignored the developmental and transformative role that historical and sociological forms of institutionalism highlighted. And finally, it has been defined by a proliferation of tasks to be performed by highly restrained institutions.

It is obvious that economic development requires good institutions. Outside the rarefied world of neoclassical economics, it has always been common knowledge that markets are embedded in complex social relations. The unresolved question is: which institutions are appropriate in a particular context to achieve a certain goal and perform a particular function?

After nearly three decades of adjustment and the evisceration of developmentalist arguments for state intervention, the return to institutions is indeed a major shift. According to Mkandawire, African economies have moved to a state of policy disarray in which getting everything right is now the goal, even as the effectiveness of institutions has been severely narrowed. Much of this has taken place through processes of imposition sustained by aid and conditionalities. African institutions that might have conceivably played a developmental role have been dismantled; the institutions that have been strengthened are, at best, those good for “stabilization” rather than development.

Mkandawire says that for all the “certainty” about the institutions needed by African countries—and the resulting monocropping—history and experience elsewhere suggest that institutions do not monotonically map onto any one set of policies, nor do certain policies require a specific set of institutions. There is no standard “market economy” model. Instead, market economies are compatible with a diverse range of institutional arrangements, products of path dependence, serendipity, luck and the force of unintended consequences of the actions of many agents.

The author recognizes that the remits of institutions go well beyond the narrow needs of the market. Institutions play many roles in the development processes, and seemingly identical institutions can take on different roles in different times from country to country, or even within a single country. The fact than an institution may be necessary for a particular function does not mean that is the only one that that particular institution can serve.

In addition, even when institutions are designed to serve a single purpose, they have multiple effects, not all of which may be intended. Because institutional reforms are demanded and supplied by the aid establishment and designed to empower groups favoured by external actors, there is little consideration of the distributive outcomes of institutional reform. Thus the main issues covered by the literature on institutional reform—process, collective action, the relationships and asymmetries of power, the problems of vested interests—are simply sidestepped, which, in turn, means that a range of issues related to institutions—social equity, legitimacy of power and, especially, their role in enhancing that which societies may have reason to value—are also sidestepped.

Mkandawire argues that many of the issues that developing countries were preoccupied with, such as autonomy, nation building, social cohesion, poverty and underdevelopment, are still on the agenda. However, the solutions being proffered have simply avoided these concerns and addressed an entirely different agenda—“market friendliness”—ignoring the fact that in real life, institutions tend to do much more.

The author says that the focus on institutional design that places a premium on creating “enabling environments” of stability and predictability for global investors is not necessarily desirable from a developmental point of view. The single-minded subjugation of institutional reform to one set of policies has denied local institutions the capacity for learning from the wide range of experiences from other parts of the world. He argues that it has also led to the marginalization of the many concerns that Africans have sought to address with their own or borrowed institutions. Worse still, this practice has blunted the effectiveness of institutions by denying them context specificity and flexibility.