DIVERGING PATHS

Fifty years ago when the colonial empires ended, most of the globe, including the Asian as well as the African tropics, was inhabited by peasantries facing very low living standards. Since then, the tropical world, the South, has diversified into a wide spectrum of development outcomes. On the one hand, there are successful countries with export-oriented manufacturing industries and productive, commercialized agricultural sectors. At the other end of the spectrum are countries where, despite increasing urbanization, subsistence farming still forms the backbone of the economy, and where the only significant export industry is oil or mineral extraction. While the successful developers have experienced vast improvements in living standards, many of the countries left behind are still almost as poor as they were fifty years ago.

The reasons for this great divergence are of obvious importance to everyone concerned with development and development cooperation today. This book sets out to investigate them in the context of the two regions of the world which most clearly exemplify the diverging paths to prosperity and poverty: South-East Asia and sub-Saharan Africa (Figure 1.1). The present chapter introduces some basic data and briefly summarizes my main arguments and conclusions. For more detail on any point, readers are referred to the more complete information and argumentation presented in subsequent chapters.

In South-East Asia the 1960s, 1970s and 1980s all saw sustained and accelerating economic growth. By the 1990s only Burma, among the major countries of the region, was still missing out on what was acclaimed as an Asian development miracle (World Bank 1993). Although the financial crisis of 1997–98 revealed vulnerabilities in South-East Asia's economies, it only very briefly halted their expansion. In Africa, by contrast, such dynamism remained absent. By the early 1990s even those few African countries where security and policy conditions had long been considered promising, such as Kenya and Côte d'Ivoire, were falling into the continental pattern of instability and stagnation. Scholars identified a negative 'African dummy' as a statistical predictor of comparative economic performance (Barro 1991), and counterposed an African 'growth tragedy' to the Asian miracle (Easterly and Levine 1995).

Since the late 1990s there has been sustained growth in national incomes in Africa due to improved macroeconomic policies and liberalization of markets, together with increased world demand for minerals, coffee, cotton and other primary products. But by most accounts, there is little sign yet of this rapid aggregate growth translating into comparably rapid poverty reduction. If poverty is still present among marginal and dispossessed groups in South-East Asia, in Africa it is still the norm. And whereas the bulk of South-East Asian exports now consists of manufactured goods, Africa still manufactures almost nothing which the rest of the world wants to buy. South-East Asia, to complete the irony, has outstripped Africa even in the export of traditional African agricultural products such as palm oil, coffee and cocoa.

Historically, both regions formed part of the world's economic periphery, exporting forest products (spices, ivory) and later commercial tree crops, and importing manufactures. At the local level their economies were subsistence-oriented and their societies organized on a peasant or tribal basis, often without educational or business institutions of indigenous origin. Commerce, in both regions, was associated with trade-specialized ethnic minorities – historically often Islamic, later also Asian (Indian/Chinese) and European. Over large parts of South-East Asia as well as most of Africa, indigenous state formation was limited prior to colonial intervention. In the middle of the twentieth century, both regions were still substantially under European rule. Climate and soil conditions in both regions are generally problematic for arable farming, and people and livestock are subject to similar health problems.

These historical and geographical similarities make the comparison of South-East Asia with sub-Saharan Africa a sharp tool for the analysis of development issues. Insofar as the research on which this book is based has precedents, they have most often involved the comparison of Africa with economically successful Asian countries in general, including Taiwan, South Korea and even Japan (Lawrence and Thirtle 2001; Lindauer and Roemer 1994; Nissanke and Aryeetey 2003a; Stein 1995a). But North-East Asia, by almost any measure, was already much more different from Africa fifty years ago than was South-East Asia: better governed, more educated, more industrialized (Booth 1999, 2007). In analytical terms, selecting South-East Asia as the unit of comparison helps to reduce the number of potential explanations for the observed developmental divergence. By the same token South-East Asia's policy experience, as the World Bank's East Asian Miracle study rightly noted (1993: 7), is more relevant than that of North-East Asia to other developing countries, including those of Africa.

Another good reason for comparing Africa with South-East Asia is that since the 1960s both regions have been characterized by corruption and a notorious lack of 'good governance'. Certain features of African politics which are often said to explain economic stagnation in Africa (Chabal 2009; Chabal and Daloz 1999; Van der Veen 2004; Van de Walle 2001) are also present in economically successful South-East Asia. In both regions, rent-seeking is common in government positions in connection with what has been called 'neo-patrimonialism': a fusion of public and private spheres in which patron–client relations structure political behaviour. Some of the same cultural phenomena currently blamed for development failure in Africa, including a preference for personalistic power relationships, have been equally pervasive aspects of the South-East Asian political scene (Robison and Hadiz 2004;Scott 1972). In South-East Asia, some have even argued, patron–client ties between politicians and businessmen may serve precisely to facilitate economic development (Braadbaart 1996; Khan and Jomo 2000).

Corruption and clientelism, then, cannot in themselves explain African economic retardation. Correlations between indices of 'good governance' and economic growth rates, as Mushtaq Khan (2007: 8–16) has shown, all but disappear once already rich countries are excluded from the database. Among developing countries, those with rapidly growing economies hardly differ from slow growers in terms of corruption and institutional quality (Wedeman 2002).

Some authors have tried to qualify this observation by distinguishing between 'organized' (Asian) and 'disorganized' (African) forms of corruption, the former being centralized and predictable and the latter competitive, unpredictable and incompatible with growth (Lewis 2007; Kelsall 2013; Macintyre 2001). On close inspection,...