Find here the Papers and Presentations of the 22nd Annual Research Workshop as PDF Downloads. Click on the link for download.
Why Nations Succeed: Connecting Entrepreneurial Ecosystems and Industrialization to New Institutional Theory
Dr. Leendert de Bell, Utrecht University; Prof. Hein Roelfsema, Utrecht University
The central argument in the paper/presentation is that economic development needs both institutional reform and the emergence of an entrepreneurial society. Stressed in much of the recent literature, political institutions provide incentives in the form of property rights. However, entrepreneurship will not flourish if these institutional improvements do not go hand in hand with support systems for the individual entrepreneur at the local level. By exploring the connections between institutions and entrepreneurial ecosystems, the analysis provides for a microfoundation of how institutional reform may lead to economic development
Institutions and Sustainable Industrial-led Development in Sub-Saharan Africa
Anointing Ogie Momoh, Centre for the Study of the Economies of Africa (CSEA), Abuja, Nigeria
Over the past decade up until 2013, the economies of Sub-Saharan Africa (SSA) grew at an average of 5 per cent; with some countries dubbed to be growing at “East Asian rates”. This growth has however not translated into inclusive and sustainable development of the region. This is primarily as a result of the nature of growth in the region, one which has been driven by exploitation of natural resources and headwind gains from commodity markets. This hold contrary to the growth and development experience of every developed economy, where industrialization has been the backbone of development. This paper rides on the premise that institutions matter to the type and pattern of growth and development across economies. Hence, if the trend of deindustrialization being experienced in much of SSA is to be reversed, the role of institutions needs to be put in proper perspective and understood. This is particularly so within the context of a region so vastly characterized by informality. Some of the emerging issues covered in the discus include; what forms of institutional change processes are needed for industrial development to be achieved in SSA economies, how environmental sustainability can be mainstreamed into the industrialization agenda of SSA economies, among others.
A survey about Institutions and Development in Tanzania
Francois Libois, Paris School of Economics; Dr. Abel Kinyondo, REPOA
100 decision makers from various horizons (national and local governments, politicians, high civil servants, entrepreneurs, farmers, media, lawyers, army, police, clergy, …) have filled a questionnaire and answered a view open questions about the functioning of several types of institutions, from political to economic to judicial or regulatory, in Tanzania and the extent to which they were an obstacle or an adjuvant to economic development. This presentation will summarize the dominant views that emanate from this survey.
Ghana’s Path to an Industrial–led Growth: A reflection of the Role of Decentralisation
Dr. Ama Pokuaa Fenny, Institute of Statistical, Social and Economic Research/ University of Ghana
Ghana’s industrial sector has evolved with the various stages of political and economic reforms since independence in 1957. As the country plans to implement a new long term development plan, industrialisation has been projected to be at the forefront of this agenda. An industrial-led growth will ensure that manufacturing sub-sector will be boosted to improve production and provide jobs. Ghana’s efforts to decentralize its key institutions to enhance economic growth has seen very little success especially in the area of linking industries to local institutions. A number of policy and programme initiatives by the government have been undertaken especially in the area of revamping the local economies through the existing decentralized systems. Despite these interventions some regions in Ghana have failed to develop. The envisioned industrial geographical dispersion has not been realised as we find many Ghanaian industries concentrated in a few regions. This paper presents a critical review of the role of decentralized institutions in industrialisation in Ghana. The paper utilises annual data from the Ministry of Finance and Ghana Statistical Service from 1981 to date. The paper highlights the challenges facing Ghana’s decentralized institutions and identifies the opportunities that can catalyse the growth of Ghana’s industrial sector if key policy strategic reforms are undertaken.
Institutions and Industrial Growth in Uganda: A review of progress
Dr. Madina Guloba, Economic Policy Research Centre – Uganda
This paper reviews progress, if any, on the performance of Uganda’s industrial sector amidst changes in institutional frameworks. There is a wide consensus that growth is necessary but not sufficient for sustainable development; this holds true for Uganda. Agriculture’s contribution to gross domestic product (GDP) continued to decline from 26 percent to 23.5 percent while the share of services sector increased from 46.2 percent to 49 percent and the industrial sector’s share to GDP has declined and stagnated at 19.7 percent over in 2011/12 and in 2015/16 respectively. Supportive institutional frameworks and structures are in place to spur the economy towards an industrial led path; however, minimal tangible results are noted. It is often argued that development is often reflected in the strength of an economy’s institutions. In Uganda, analysis shows that the linkages between institutions and industry are weak, largely due to weak coordination between institutional structures and the role of political economy in translating the industrial priorities set into reality. The unclear path between right human capital for industry, high commercial bank interest rates on domestic borrowing, uncertainly in land markets, weak enforcement of the legal and regulatory frameworks and persistent weak links between agriculture and industry continue to impede growth of industry in Uganda. The argument we make is that there is no economy that has grown through industry without strong backward and forward linkages between research and development (innovations). Simply put, transformative initiatives still need to be emphasised.
The Role of Financial Institutions –TIB Development Bank
Mr. Charles Singili, Managing Director, TIB Development Bank; Dr. Hildebrand Shayo, Manager Research and Planning; Dr. Andrew Coulson, University of Birmingham
Industrialization plays a vital role in the economic growth of an underdeveloped country. The historical facts reveal that all the developed countries of the world broke the vicious circle of underdevelopment by industrialization. Tanzania being a developing country also wants to achieve higher standard of living for its masses. In order to achieve higher standard of masses, financial institutions have a key role to play in mobilizing appropriate resources to enable industrialization objectives to be achieved. Experiences from the pioneer countries have a lot to share as Tanzania eyes the journey into industrialization. This paper scans and shares its experience on this journey. TIB-DFI is licensed as Development financial institution and is wholly owned by the government of Tanzania.
Tanzania has 56 banks in total. Drawing on TIB’s establishment mandate, the paper shares what is like to take on board financial institutions on inspiring industrial development. Created in 1970, TIB has played a fundamental role in manufacturing sector. Following its re-launch as a Development Finance Institution (DFI) it is charged with making long-term loans to projects with national developmental impact promoted both private and public sector.
Premature de-industrialisation: understanding industrial policy failure in Mozambique
Epifania Langa, Institute of Social and Economic Studies (Mozambique)
As most African countries have been unable to revert premature de-industrialisation, studying the role played by industrial policies and the main factors shaping their outcomes is an imperative for the continent. This paper discusses industrial development and policy in Mozambique, a country that despite being praised for recent rapid economic growth by the ‘Africa Rising’ narrative has been unable to develop its domestic industrial sector and effectively create jobs and reduce poverty. The paper highlights the need to understand industrialisation dynamics as a result of the interaction between industrial policy orientation, state’s implementation and coordination capabilities and the characteristics of the domestic private sector, all shaped by the political economy the country. In the case of Mozambique, the paper argues that the economy is losing industrial particularly manufacturing capabilities due to the marginalization of selective industrial policy, fragmented and incoherent policy actions between sectors and actors, and the low capabilities of the domestic industrial sector.
Industrial policy and development of agro-processing regional value chains in southern Africa
Shingie Dube, Centre for Competition, Regulation and Economic Development (CCRED) University of Johannesburg
This paper looks at the role of institutions and industrial policy in developing regional agro processing value chains in southern Africa. Adopting a regional value chain approach, the paper highlights key issues and lessons in the animal feed to poultry and sugar to confectionery value chains, including the role of supermarkets in these value chains. It draws on detailed country studies undertaken in Zambia, Zimbabwe, South Africa and Botswana. The paper considers regional dynamics in the animal feed to poultry and sugar to confectionery value chains focusing on production, trade, main inputs and key routes to market. Key findings reveal that there are opportunities to increase regional production and replace deep sea imports given the ability of large lead firms to make coordinated investments at different levels of the value chain. These initiatives require a coordinated policy framework around regional procurement requirements and investment in regional transport networks by governments in the region. However, conflicting national objectives, including in industrial policy, seem to limit cooperation in the interest of developing regional value chains.
Can mining promote industrialisation? A comparative analysis of policy frameworks in three Southern African countries
Lauralyn Kaziboni, Center for Competition, Regulation and Economic Development (CCRED) University of Johannesburg; Judith Fessehaie, CCRED, University of Johannesburg; Zavareh Rustomjee CCRED, University of Johannesburg
This paper explores the linkages between the national systems of innovation of Botswana, South Africa, Zambia, and Zimbabwe and their respective mineral extraction and mineral processing value chains, including input industries. Our analysis reveals four individual national systems of innovation, with different outcomes in terms of engineering skills development, technical vocational education and training, research and development, innovation capabilities, and competitiveness of the domestic engineering consultancy services. These national systems of innovation are tentatively interconnected as an embryonic regional system of innovation, including institutional relationships, cross-border investment flows, flows of mining-related goods and services, and intra-Southern African Development Community flows of students, lecturers, technicians, and engineers. Notwithstanding important dynamics related to skills development and competence building happening across borders, more collaborative and synergistic initiatives between government, industry, and teaching and research institutions are required to shape a more balanced and coherent regional systems of innovation.
The political agenda effect and state centralization
Ragnar Torvik, Norwegian University of Science and Technology
We provide a potential explanation for the absence of, and unwillingness to create, centralized power in the hands of a national state in many societies based on the political agenda effect. State centralization induces citizens of different backgrounds, interests, regions or ethnicities to coordinate their demands in the direction of more general-interest public goods, and away from parochial transfers. This political agenda effect raises the effectiveness of citizen demands and induces them to increase their investments and conflict capacity. In the absence of state centralization, citizens do not necessarily band together because of another force, the escalation effect, which refers to the fact that elites from different sectors will join forces in response to the citizens doing so. Such escalation might hurt the citizen groups that have already solved their collective action (though it will benefit others). Anticipating the interplay of the political agenda and escalation effects, under some parameter configurations, political elites strategically opt for a non-centralized state. We show how the model generates non-monotonic comparative statics in response to the increase in the value or effectiveness of public goods (so that centralized states and public good provision are absent precisely when they are more beneficial for society). We also suggest how the formation of a social democratic party may sometimes induce state centralization (by removing the commitment value of a non-centralized state), and how elites may sometimes prefer partial state centralization.
Role of regional and international institutions in Africa’s industrialization: a case of East African Community
Simon Githuku, Policy Analyst at Trade and Foreign Policy Division Kenya Institute for PublicPolicy Research & Analysis (KIPPRA)
African countries have in the past two decades experienced rapid economic growth rates creating an impression that the continent is finally on the rise. However, this economic growth has not been sustained because it was largely fuelled by high commodity prices which have been on a decline. Individual African countries and institutions in the continent have come-up with proposed interventions in the form of industrialization strategies. This study has examined the role of institutions and how they have conceptualized industrialization. Literature review and secondary data analysis were used as the methodology. The East African Community was selected for purposes of illustration. Feature of the East African Countries reveals that agriculture should take the lead in developing their economies. However, institutions spearheading industrialization in Africa have over-emphasized the role of industrial manufacturing in developing the continent. What Africa requires is industrial development so that industrial manufacturing is one of the sectors that can be selected to promote industrialization. For industrialization to be said to have taken place in Africa, it is not a must that agriculture has to decline.