Economic Restructuring, Coping Strategies and Social Change: Implications for Institutional Development in Africa

The first part of the paper reviews discussions on structural adjustment and institutional perspectives, highlighting why a focus on institutions and social relations is important in the study of African economies in distress. The next two sections discuss coping strategies and issues of social change, and attempt to develop a framework that relates the crisis in social relations with problems of institutionalization. The last section takes up the analytical and policy questions of institutional reform, and outlines issues that would need to be addressed in mapping out alternative strategies of development.

Two key contradictions would seem to explain why institutions have been relatively ineffective in managing the economic and social crisis in Africa. First, there is a growing contradiction between the interests of bureaucratic actors and the goals they are supposed to defend. The second contradiction is between the institutional set-up itself and the wider society. To understand the working of these contradictions, it is necessary to look more closely at the sets of values and relationships that anchor institutions in social systems. The paper explores these issues through an analysis of the coping or survival strategies of different social groups. The characteristic response to economic crisis and insecurity by most groups has been to pursue multiple survival strategies. Farmers, workers, state employees, informal sector operators — even some professional and academic personnel — have sought to counter declining and insecure incomes through diversification of their economic activities.

The economic crisis and the livelihood strategies adopted by different groups have had four consequences which are relevant for this inquiry: economic polarization, multiple social identities, truncated modernization and stalemate in the configuration of political power. These in turn have contributed to social tensions; divided loyalties; erosion of work place identities; loss of legitimacy for the state; search for security in religious, traditional and ethnic movements; and lack of a broad alliance of political forces behind economic reform.

The institutional reforms that have been attempted — retrenchment of state activities, privatization of enterprises and encouragement of NGOs — have had limited success in restoring growth, arresting social conflicts and promoting political stability. The paper argues that strategies aimed at supporting a process of institutionalization that would lead to effective rules, predictable transactions and viable incentives for institutional actors would need to address three main issues. The first concerns questions of livelihood, social polarization and multiple identities. The second relates to the role of culture in social development and institution-building. The third issue concerns the role of social forces in disciplining institutions. The paper sets out policy implications of required changes in each of these three areas.