Book Feature: Constitutionalism and the Economy in Africa, (Charles M Fombad and Nico Steytler eds.) (OUP, 2022)
This book feature shines the spotlight on a book that has been described as the first of its kind to explore the relationship between constitutionalism in Africa and economic growth. The book raises questions about the economic success of authoritarian democracies and examines the incorporation and enforcement of constitutional provisions regarding property rights and freedom of contract. Additionally, it presents a comprehensive analysis by compiling case studies from various countries across Africa. The ALM team interviewed editors, Prof Fombad and Prof Steytler to get their views on the book.
1. Your book raises questions about the nature of the economy, the state, and the global economic order. What are some of your key findings or insights regarding the relationship between the state and the economy, and how do constitutions play a role in structuring or managing this relationship?
A: After the failure of the centralised and often ‘socialist’ state, the post-Cold War era saw the dominance of the free market ideology. The principal mechanism for the constitutional embedding of the market economy has been the inclusion of the protection of property rights and freedom of contract in a bill of rights (although the justiciability of these protections varies from one country to another). However, the state did not retreat from the economy or become smaller; instead, African states continued to hold onto the levers of economic power, though often using them poorly.
Constitutionally, the state was mostly allotted the guardianship of land and natural resources, the two mainstays of many African economies. The states, however, generally failed to perform their role to the advancement of the land toilers, and rarely used natural resources (minerals and oil) to benefit the citizenry at large. As the helmsmen of the nation, state executives structured the economy to serve the ruling elite; the pervasive ‘patrimonial state’ did not place the interest of the citizens as paramount.
While there is an equivocal relationship between the prevalence of constitutionalism and positive economic growth and prosperity, there is little doubt that the relationship between constitutionalism and economic growth in Africa is on the whole negative: more often than not, the absence of constitutionalism leads to economic decline.
2. How does the nature of the global economic order impact the relationship between the state and the economy in African countries? Are there any specific challenges or opportunities that arise from this interaction?
A: The World Trade Organisation rules and enforceable penalties can collide with fundamental public interests of African member states. The question is how are these states and their constitutions capable of constituting state authorities as active actors in human rights implementation and development despite the supposed primacy of trade rules? The history and development of the General Agreement on Tariffs and Trade (GATT) of 1947 and the subsequent birth of the WTO, make it clear that trade rules were made largely without the active participation of African states and thus lack procedural legitimacy. It also lacks substantive legitimacy, since entrenched trade rules might crush human rights initiatives that are consistent with African constitutions but hinder trade. African governments thus face the following dilemma today: they have to comply with constitutional and developmental imperatives while acting at the same time within the free trade rules. This requires a complex balancing act.
3. In the book, constitutionalism is described as a necessary element but not a sufficient condition for a growing economy. In your opinion, what other factors or conditions are essential for fostering economic growth, and how do they interact with constitutionalism?
A: The evidence suggests that there is no clear link that constitutionalism per se leads to economic growth. There are many examples where an authoritarian regime can produce strong economic growth. Whether the long-term stability, which is important for economic growth, is provided by authoritarian regimes, is, however, questioned. What is clearly established, with South Africa as a prime example, is that the absence of constitutionalism, particularly the absence of the rule of law, bleeds economic growth. The presence of high levels of corruption undermines stability and undercut the legal certainty which is important for economic growth.
Free and fair elections have not guaranteed economic growth; such elections are just one of the factors that have contributed to the political stability which has proved to be an essential ingredient for generating investor confidence. Other factors (and more important ones) include sound economic policy and the efficient stewardship of state-owned enterprises.
“What is clearly established, with South Africa as a prime example, is that the absence of constitutionalism, particularly the absence of the rule of law, bleeds economic growth.”
4. How does your research contribute to our understanding of the relationship between constitutionalism, economic growth, and the role of the state in the marketplace? Are there any new insights or perspectives that your work brings to this field?
A: The place and role of the ‘developmental state’ should be mentioned. The failure of post-independence socialist experiments has not led inevitably to the state’s withdrawal from active participation in the economy in the second wave of democratisation and the assertion of market supremacy. In economies based mainly on extractive industries and agriculture, the market was perceived as not producing inclusive economic growth and equitable distribution of resources. Moreover, the state continued to be conceived of as the only vehicle to stimulate and produce economic growth, mainly through state owned enterprise (SOEs). The state would not only steer the economic boat but also be the rower-in-chief. In effect, and without skipping a beat, the state-dominated economy returned with full force after democratisation, though now in the guise of the ‘developmental state’.
The success of a ‘developmental state’ depends on two main factors. The first is the problem of state incapacity and/or self-destructiveness through corruption. The state then fails routinely to lead economic growth plans and strategies effectively. Secondly, even a capable and honest ‘developmental state’ may fail in the long term if the distribution of the benefits of development is not seen as equitable by all the communities that comprise ‘the people’. The developmental state, which inevitably leads to centralisation, may exhibit all the symptoms of a fragile state, with skewed development in favour of the ruling elite or ethnic group at the expense of minorities and the periphery.
5. In the past thirty years, since the transition to multiparty democracy and market economies, how have African countries addressed the challenges related to the state’s role in the economy and the protection of private property? Are there any notable success stories or lessons learned from specific countries?
A: Botswana and Mauritius are seen as economic success stories, but in neither of them has a market economy been constitutionalised. Free and fair elections are just one of the factors that have contributed to the political stability which has proved to be an essential ingredient for generating investor confidence. Other factors include sound economic policy. It is further argued that economic prosperity in Botswana has more to do with its overall political stability and the observance of the rule of law, rather than any constitutional provision (its constitution has no provisions concerning land holding).
The two most celebrated cases of economic growth have been Ethiopia and Rwanda. Both of these countries are understood as representing ‘developmental authoritarianism’: that is, ‘nominally democratic governments that provide significant public works and services while exerting control over nearly every facet of society’. In the case of Ethiopia, the wide spread protests since 2018 have undone the image of stability. The growing protests in the ethnic regions (with many of these claiming marginalisation) and the civil war in the Tigray region have damaged the economy significantly. Rwanda, with powerful international support, continuous to grow economically, but its sustainability is questioned due to the current political configuration.
6. Given the complexity of the relationship between constitutions, the state, and the economy, what are some key factors that policymakers and constitutional drafters should consider when seeking to strike a balance and ensure sustainable economic development while upholding constitutional principles?
A: First, although a constitution is important, it can only provide the background framework for economic development. Economic growth cannot be legislated. Second, the constitutional framework should contain at least some secure and predictable land holding system. The use and exploitation of non-renewable natural resources are too important to leave entirely to legislation. Thirdly, a further constitutional element would be the independence of central banks; that should be regarded as a central plank of good financial policy. Central banks are mandated to protect monetary policy against the demands of short-term political expediency (by controlling the money supply and inflation, among other things). Although most African countries have a central bank, very few of these enjoy constitutional protection of their independence. However, even when there is such protection, the degree of independence the banks enjoy varies considerably, bringing the attention back to the importance of the rule of law.
7. What are the potential future directions for research in this area? Are there any specific aspects or gaps in our current knowledge that you believe warrant further investigation?
A: First, given that key African countries – Nigeria, Ethiopia, Kenya, DRC and South Africa – have federal arrangements, the role of subnational governments in economic growth should be further investigated. Do inter-state competition and innovation promote economic growth? Secondly, the role and performance of central banks, whether constitutionalised or not, in depoliticising key economic decisions require further research. Thirdly, the clash between the WTO rules and constitutional regimes in African countries should receive closer scrutiny. Do the various exemptions provide sufficient protection for constitutional commitments? Finally, the nature, import, and challenges of the ‘developmental state’, being a key pathway to economic development, are as of yet under-researched and under-theorised.
