Ewout, you were trained as a historian and economist and wrote your PhD thesis on inequality in Latin America. What made you invest so much of your professional energy in African economic history?
A better understanding of the nature and historical origins of global economic inequality is, to me, the ultimate task of economic history. Scholars have paid enormous amounts of attention to explaining how the West grew rich. However, there is a vast gap in our knowledge of less developed or underdeveloped regions, especially Africa. African economic history was strong in the 1960s and 1970s but was subsequently abandoned. Many believed there were not enough sources to conduct proper historical research, but I think there are more than enough sources to fill our knowledge gaps.
The global distribution of wealth is in great flux. Do you believe that global economic inequalities can be eradicated in the future?
Based on what has happened during the last century, I am optimistic about the possibilities of eradicating poverty globally. Across the world, we have seen an escape from the most severe forms of poverty. I am less optimistic about the possibility of reducing global economic inequalities. It is likely that between-country income gaps will become somewhat compressed, but the type of growth we are observing in Africa today will, if anything, enhance within-country inequality of income and wealth, simply because it is insufficiently inclusive. To reduce within-country inequality, African economies need to create jobs and move away from their focus on primary commodities and, in particular, their heavy resource dependence. And if countries like Nigeria, Angola or Sudan stick to oil, they need to think of ways to invest and reallocate the revenues to facilitate such a transition.
I am optimistic about the possibilities of eradicating poverty globally […] I am less optimistic about the possibility of reducing global economic inequalities.
Can you summarize three major contemporary trends in African development?
First, I would point to the current resource boom. African economies have benefited from rising resource prices in the past 20 years. History has proven that economic growth resulting from resource booms is reversible. Hence, a pessimist may argue that there is “nothing new under the sun.” However, there are also internal dynamics that have developed separately from the export booms and are altering the structure of African economies in ways that are not reversible. Due to a combination of population growth and population concentration in growing cities, the structure of demand and the opportunities for labour specialization are changing fundamentally. It is impossible that such forces will fail to result in some kind of economic growth. We also see a structural decline in transportation and communication costs. Cell phone technology in Africa is expanding rapidly. This not only tells us that people like gadgets, but also how much they value being able to connect over vast distances. This is a great break from the recent past when people still had to travel large distances in order to make information flow or even to connect with family. It is difficult to predict what this will bring in economic terms, but productivity growth because of declining information costs would be a very logical outcome.
Internal dynamics […] are altering the structure of African economies in ways that are not reversible.
And what would you consider the most important hurdles on the way to economic growth?
One of the key threats is environmental degradation, including climate change. This threat is acute since so many Africans are farmers and directly depend on their land and the climate. Second, rapid population growth, resulting in a very skewed age distribution, combined with insufficient opportunities to make a decent living creates a socially explosive situation. Africa has overcome a period of intense warfare, but I would find it naive to think that that dimension of post-colonial history has now definitively been dealt with. Violence may resurge in a different form, spurred by the incidence of poverty and the lack of opportunities for a lot of African youth, while small elite groups reap the fruits of growth.
…Any policy advice on how to deal with this situation?
African governments have to recognize the intense dynamics of their societies, implement programs that provide jobs, and carry out policies that ensure that their economies benefit from the presence of surplus youth labour. The only way to create jobs is to support labour-intensive industries, including agri-business, and capture global markets, like Asian economies have done since the 1960s. Investments in skills, infrastructure and health care are key to promote such paths of growth.
You see a crucial role for African governments. However, many African citizens see government as the problem…
Governments are crucial. You need some type of social coordination to solve free riding problems inherent to all public goods. Moving everything to markets is not a solution.
I don’t think Africa is lacking leadership, but there are issues with the perception of what leaders ought to do. Are they there for society as a whole, or are they there to make sure that their immediate dependents benefit from the spoils of office? There is a culture of leadership that is in need of change: focusing on increasing rather than dividing the pie. But there are glimpses of hope. The new president of Tanzania, John Magufuli, offers an inspiring example of such change.
There is a culture of leadership that is in need of change: focusing on increasing rather than dividing the pie. But there are glimpses of hope.
Taking these issues into consideration, from which African countries would you expect growth in the future?
Predictions are always tricky… Who had foreseen the growth of Brazil? In the early 1990s, it was thought that Brazilian society was so unequal that economic growth was impossible. Since then, a wave of growth (which has now come to an end) has brought 30% of the low-income groups to a middle-class status. And who predicted the stellar growth performance of China in the early 1970s?
That said, there are some countries where structural economic policies have been implemented that really help the economy forward, albeit under rather oppressive regimes. Take Ethiopia, or Rwanda under Kagame. If this model proves to be sustainable and successful, it will probably be copied by more African governments. The question is whether this can also be done in more democratic ways.
There are some countries where structural economic policies have been implemented that really help the economy forward, albeit under rather oppressive regimes.
On the negative side, countries where we don’t see that type of development, or a match between political systems and economic development, and where we see little progress are still in the majority. There are reasons for optimism, but I also think we will see greater inequality in growth rates between countries in the coming decades, which could lead to intra-country warfare and increased migration flows that put things under pressure.
So far, your explanations focus on internal dynamics. What about Africa’s engagement with the world economy? It is widely perceived that it puts Africa at a disadvantage…
I certainly think that the world economic system has not been very benign to Africa, but part of this also has to be understood as a result of internal developments. The Atlantic slave trade can only be explained if one takes for a fact that African labour was more productive on sugar plantations on the other side of the Atlantic than it could have been in Africa. That is what made the slave trade a profitable business. Similarly, the adoption of land-extensive cash crops in the nineteenth and twentieth centuries was a response to local factor endowments and comparative advantage in this type of production vis-a-vis manufacturing industries or high-tech, high-skill industries. However, such factor endowments are changing. While labour once was the scarce factor, it is now rapidly becoming the abundant factor, and that transition will change the role of Africa in the world economy.
We should also not overstate the role of external factors and raise the impression that African societies are victims of a malicious world […] One should never deny African agency.
We should also not overstate the role of external factors and raise the impression that African societies are victims of a malicious world. This would raise the impression that Africans had no command over their own development, which is fundamentally untrue for most of their histories. One should never deny African agency.
How can the field of African economic history contribute to tackling contemporary development issues?
Although many people may not realize this, our field is really essential. For a deeper understanding of what is happening in Africa today, one needs a long-term perspective. Any debate about economic policies needs to start with a proper understanding of long-term economic developments in Africa in order to distinguish deeper changes from recurring hypes, trends, booms and busts. African economic historians should participate actively in debates on African development by showing how history matters and the vast difference it can make when one understands development as a long-term process of societal change.
African economic historians should participate actively in debates on African development by showing how history matters…
Some people say the African economic history community should make more effort to engage with African scholars. Do you agree?
I feel very uncomfortable knowing that most African economic history is conducted by scholars who are not from Africa. That is not a very healthy academic situation.
I think the root cause of this situation is massive underinvestment in African education, particularly academic education. There is an extreme shortage in academic facilities, especially on the higher levels. Moreover, although I fundamentally disagree with this view, most policy makers would consider African economic history a luxury discipline rather than one that is fundamental to major policy debates.
I believe that with time this situation will improve. What we can do as a community is make sure that we invest in new talent, in people who are committed to teaching. I think that the recent annual meeting of the African Economic History Network has shown that the community is capable of building up networks that include African scholars.
The Frontiers editorial team consists of Michiel de Haas, Kate Frederick (both Wageningen University) and Felix Meier zu Selhausen (University of Southern Denmark & University of Sussex). AEHN board members Ewout Frankema (Wageningen University) and Morten Jerven (Norwegian University of Life Sciences) form the supervisory board.
We welcome external contributions to the blog and encourage those interested to submit a summary of a recent working or published paper or book review, a commentary on current African developments or something else. Please contact the editors to discuss possible posts at [email protected].