For researchers studying the political origins of economic change and economic diversification in the African states type,2 the limited economic change or transformation observed in the African continent since independence – particularly in non-resource countries – is a puzzle (see Whitfield et al., 2015 Chapter 1; and North et al.,2015). The economic activities (such as the exportation of cocoa beans) that formed the basis of state rule at independence in the 1960s were unsustainable in terms of both price (due to international price fluctuation) and production (due to diminishing returns created by the relationship between forestland and output). Therefore, ruling elites were vulnerable to political crisis and dislodgement during sustained price reduction or production difficulties. Following a reduction in export prices, for example, the pursuit of political survival (the primary political objective of ruling elites) is bound to direct ruling elites towards economic change in an attempt to retain their position (Doner et al., 2005; Acemoglu and Robinson, 2006; Bueno de Mesquita et al., 2004; Booth and Therkildsen, 2010). As Peter Evans once observed, “as political survival and internal peace are more often defined in economic terms, states have become responsible for economic transformation” (1997, 7).
Yet most countries in West Africa have experienced virtually no economic change since independence, while enjoying internal peace and political order. Despite the increasing difficulty in producing cocoa beans due to diminishing returns, cocoa is still the main export product of both Ghana and Côte d’Ivoire. Scholars have generally used foreign-aid dependency to explain how political elites have managed to maintain their position without economic change (see Clapham, 1996, Chapter 7). But the aid thesis is problematic for two reasons. First, West African countries are less dependent on foreign aid than on foreign trade; for example, while the net ODA received by Côte d’Ivoire in 2014/15 amounted to 917 million dollars (most of which did not constitute a direct cash transfer), net exports exceeded 12 billion dollars, while the figures for Ghana were 1.1 billion against 13.73 billion dollars in exports (OECD, 2016). Since the 1950s, Côte d’Ivoire and Ghana have been the world’s top two exporters of cocoa beans: a product cultivated mainly for exportation, due to the absence of local demand, and from which ruling elites extract the majority of their rent. Second, as recognized in several studies of effective states and inclusive development, whilst foreign aid may sustain a political dictator like Mobutu Sese Seko, it cannot alone provide the kind of political coalition needed for political order without an economic basis.
In international trade, therefore, lies the puzzle of West Africa’s limited economic transformation. The EU is West Africa's biggest trading partner, accounting for 37.8% of its exports; oil is the main product exported to non-EU markets. The EU is also the main destination of West African non-oil agricultural exports. For example, the EU absorbs about 95% of the exports of pineapples, bananas, fishery products and processed cocoa from Côte d’Ivoire and pineapples, bananas and processed cocoa from Ghana.
This thesis contends that ruling elites in West African countries have historically structured the EU international trade system as a system of extraversion (through the demand for and use of price support, price stability and other preferences) to secure an economic basis for their survival. This extraversion has not only precluded the political conditions for economic change but directed production resources into extraverted sectors and created a static economic system. The role of domestic ruling elites in the formulation and use of the trade systems is therefore central to this thesis.
I use a theoretical framework (see Chapter 2) based on Douglas North’s limited access order (LAO) framework to theorize the political origins of economic transformation in the African state type (Whitefield et al., 2015, 11; Doner et al., 2005; Booth and Therkildsen, 2010; Khan, 2010), along with Jean-Franc̜ois Bayart’s theory of extraversion (which shows how ruling elites in Africa actively seek certain relationships to ensure their political survival) to explicate the blockage of the political conditions for economic change in the EU trade system.
Methodology and Limitation
In this thesis, the following two claims are made.
The first is that the EU-devised trade and development system with West African countries actively extended the colonial division of labor between the two regions (the neo-colonial claim), perpetuating an outdated colonial mode of production and preventing economic diversification in West Africa.
The second claim is that the above outcome is an endogenous function of the interaction between the EU’s trade systems and domestic political elites’ quest for survival.
The counterfactual argument is that the region would have been much more diversified in the absence of the EU trade system, because ruling elites would have had to negotiate their political survival by promoting economic change, as per Peter Evans’s above-cited observation.
The precise definitions used here of the terms African state type, ruling coalition and ruling elites are as follows. African state type. In both IR and other social sciences, the basic understanding of a state does not apply to states in Africa (North et al., 2008, 17; Gray, 2016, 5; Clapham, 1996; Jackson and Rosberg, 1982). The reality in Africa is not adequately represented by the single-actor model of the state, for example, or by Weber’s thesis that the most important feature of states in which order prevails over violence or disorder is the collective agreement that the state alone holds legitimate control over violence. Instead, as Douglas Lemke observed, the core assumptions of realism (an anarchic structure and security-maximizing units practicing self-help) are present among sub-state organizations in Africa. States in Africa are the product of negotiation between sub-state groups. This is expanded on in the theoretical chapter. A ruling coalition is the coalition of such sub-state groups involved in a particular political system. For example, the ruling coalition in Côte d’Ivoire after independence comprised the Baule and northern Ivorians, to the exclusion of Western tribal groups (Marshall-Fratani, 2016, 16). Together, they created the Democratic Party of Côte d’Ivoire (PDCI). Ruling elites are the highest-level rulers, such as the president and top party members, within the ruling coalition. The collapse or disintegration of a ruling coalition dislodges ruling elites.
Research Design and Case Selection
This thesis takes an explanatory research design. Explanatory research focuses on ‘why’ questions (De Vaus, 2001, 2). It is one thing to describe a fact or situation that is observed to exist or occur. It is quite another to develop explanations about an observed fact or situation. “Answering the `why' questions involves developing causal explanations” (De Vaus, 2001, 2). This research develops a rich explanation of the absence of economic change in Africa using a theory-testing as opposed to a theory-building approach. Theory-testing research begins with a theory that is subsequently tested with a set of observations. The theoretical framework for this research is outlined in the next chapter. The theory provides a robust explanation of the domestic political origins of economic change in the African state type and shows how the EU trade systems preclude economic change/diversification through extraversion. To test the theory, two of the fifteen West African countries are selected: Ghana and Côte d’Ivoire. The overall strategy is to pursue comparison of the two countries. The use of two case studies enables rich and in-depth analysis and ensures the generalizability and transferability of the findings to other West African countries, as demonstrated at various points in this thesis.
These two case studies were chosen for several reasons. First, to demonstrate the counterfactual position: Ghana joined the trade system in 1975, under the Lomé Convention, and was thus not part of the Yaoundé trade system. This provides a strong foundation for studying the counterfactual hypothesis regarding the EU trade system (i.e. that the region would be much more diversified without the EU trade system because ruling elites would have had to negotiate their survival by promoting economic change) by exploring the political drivers of economic change in Ghana prior to 1975 in contrast with the absence of such drivers of economic change in Côte d’Ivoire (which was part of the EU trade system from 1961), with further comparison of Ghana after joining the trade system. The theory developed in this study is thus tested with reference to the period of the Yaoundé Convention (1963-1975), when some West African countries were excluded from the trade system. Second, Ghana and Côte d’Ivoire have different colonial histories: the former was colonized by Britain and the latter by France. Their selection thus eliminates any explanation resting on similarities in colonial history, as the choice of two Francophone or Anglophone countries, for example, would not. Third and most importantly, the two countries share an export product, cocoa beans, thus providing a fertile basis for comparison.
Although the thesis is not primarily sector-focused (instead, it is ruling elite focused), in-depth case studies from different sectors are used to demonstrate the adverse outcomes of a lack of diversification. For example, in the cocoa sector (cocoa is the main export product in both case countries), an in-depth case study is conducted to explain the temporary nature of cocoa production due to the relationship between production and deforestation, which historically amounted to geographical rotation in the production of cocoa beans (Odijie, 2015). The case study also shows that without the EU trade system, ruling elites would seek to diversify away from cocoa after deforestation (as in Ghana, prior to joining the trade system), but that the EU trade system enabled ruling elites to use cocoa as a system of extraversion (by obtaining a guaranteed price from the EU) and thereby to persuade local planters to continue producing cocoa in worsening circumstances (such as increasing factor cost, which led to child labor trafficking in both countries) due to diminishing returns. I also discuss minor case studies of sugar, pineapple, banana and fishery products – all of which represent systems of extraversion in which ruling elites manipulate the trade system to guarantee their continuous production and exportation. The sector focus is important because the absence of diversification in West Africa has undesirable outcomes.
Method: Information Elicitation and Analysis
The empirical chapters are arranged in chronological order. The thesis covers the entire post-colonial history of West Africa from 1957 to 2017, with attention to three trade systems: the Yaoundé Convention (1963-1975), the Lomé Convention (1975-2000) and the Cotonou Agreement (2000-). The Rome Treaty (1957-1960) and the French Protocol (1960-1963) are also covered.
Units of Analysis
The main unit of analysis is ruling elites, not necessarily individuals or states. The thesis does not systematically investigate the ideational considerations that motivate specific rulers, but instead predicates a political rationality for survival, which is the central driver of political actions in the African state type (Mann and Berry, 2015, 124). The submission that the principal political objective of ruling elites is to retain power is somewhat axiomatic in the African context. According to Booth and Therkildsen, “what differs across countries and time-periods is the way this general motivation [to retain power] gets translated into incentives to behave in one way rather than another as a result of the specific characteristics of the political and socio-economic system of the country” (Booth and Therkildsen, 2010, 8). Accordingly, it was unnecessary to conduct interviews with ruling elites in this study, as their motivation is well known: to stay in power.
Mechanisms of extraversion
Informal price support, formal price stability schemes and tariff gaps (increased tariffs for non-ACP exporters to the EU) secured from the EU by West African ruling elites.
Data Sources and Types
The data sources used in this study comprise EU trade documents, books, journals and trade figures from Eurostat, FAOSTAT and Trade Map. Printed and online secondary sources are also used, such as books and magazines, newspapers, journal articles and PhD dissertations. The data are in both French and English. The data types are as follows: trade data (direction of trade), price data (world-market prices, producer prices and EU prices) and production data (cost of production, production volume, etc.)
(1) Focus on Ruling Elites. The analysis starts with a comparative case study of ruling elites’ quest for survival in Ghana and Côte d’Ivoire in 1960-1975, under the Yaoundé Convention. Attention is paid to how the economic basis of state rule is manipulated for political survival. The case of Ghana (and by extension Guinea and other West African countries outside the EEC trade system in the 1960s) is compared with that of Côte d’Ivoire (and other countries within the EEC trade system during this period). In the case of Ghana, the link between commodity-price reduction and threats to political elites’ survival is explored in detail, followed by investigation of the link between such threats and governmental efforts to diversify under the regimes of both Kwame Nkrumah and his successor Kofi Abrefa Busia. (The ideological divergence between Nkrumah and Busia, despite their pursuit of similar diversification schemes when they felt vulnerable, discounts any concentration on ideology. Political survival was the main driver for both administrations.) In the case of Côte d’Ivoire, ruling elites’ manipulation of the EEC’s trade system to secure political survival and deflate such threats is explored. This comparative study is presented in the first empirical chapter, Chapter Five.
(2) Sector Focus. Next, sectoral analysis is conducted to demonstrate the continuation of otherwise uncompetitive sectors under the EU’s extraversion system. Case studies of sugar, cocoa, pineapples, bananas and fishery products are reported. This section is slotted into the assessment of the Lomé Convention from 1975-2000, in Chapter Six. The sector analysis demonstrates how EU trade preferences shaped decisions made by ruling elites in terms of sector selection regardless of other considerations of viability or domestic endowment.
(3) Process focus. This section offers an analysis of the current trade and development system (the EPA) with reference to ruling elites’ efforts to maintain their historical advantage through survival strategies in the negotiation process. This section is slotted into the current EPA. I also address the EU’s policy preferences and the potential outcomes of the EPA in different sectors.
The whole analysis is therefore advanced from different angles – ruling elites’ quest for survival (Chapter 5), export sectors (Chapter 6) and the negotiation process (Chapter 7). The three different angles show different parts of the same process: ruling elites’ quest for survival led to the promotion of static sectors, the sectors are outdated (because they are either uncompetitive or have attained diminishing returns) and ruling elites sought to protect them through the negotiation process.
The study’s focus on the EU trade system could be interpreted as a limitation, as this system goes beyond trade to encompass aid disbursement. The European Development Fund (EDF) was created in 1957 and launched in 1959 specifically to disburse aid to the former colonies under the trade and development system. The EDF had a huge effect on some countries’ decision to allow the inclusion of certain provisions in the trade systems, due to their dependence on foreign aid. For example, in 2005, the EU proposed a clause on the fight against terrorism in the revised Cotonou trade agreement/EPA, which was rejected by the West African countries. They only agreed to the clause once it had been linked with a fresh aid-disbursement scheme under the EDF. This demonstrates the importance of aid to the trade system, making its near-exclusion from this thesis a limitation. However, this omission is not without reason: as the EDF is negotiated every five years, its inclusion would alter the focus and structure of the thesis.
Furthermore, specialization in West Africa within the timeframe of this study was clearly affected by development programs outside the EU’s trade considerations. The most obvious example is the structural-adjustment program (SAP) of the 1980s, under which the World Bank and the IMF introduced what came to be seen as market-led policies. These policies evidently affected the development trajectories of Ghana and Côte d’Ivoire. Given the existence of the SAP and other World Bank programs, there is a danger of giving too much weight to the trade system under investigation. These limitations are negotiated within the thesis.