Political economy analyses

South Sudan: A Political Economy Analysis

This report provides a comprehensive analysis of the current state of South Sudan. A main argument is that its political economy is fundamentally atypical: achieving independence in 2011 and dissolving into renewed civil war in 2013, South Sudan is suffering the crisis of a weak, neo-patrimonial guerrilla government, with fragmented military-political systems that stretch across its extensive borderlands. This report locates the current crisis within a longer and deeper context, and explores the power dynamics and centrifugal destructive forces that drive patterns of extractive, violent governance. These forces underpin today’s economic and state collapse, civil war, famine, the flight of its people, and their local tactics of survival.

Mozambique: A Political Economy Analysis

This report uses a political economy analysis to shed light on some of the paradoxes that characterize Mozambique mid 2017: Entrenched poverty, the resuscitated armed conflict/war, the trust crisis between the Mozambican (Frelimo) government and its development partners, the spiralling debt and the party-state. Since 2017, Mozambique is arguably at one of its most critical moments since the end of the civil war, in a crisis-like cocktail of political, economic and social problems. By the time of writing, the Mozambican authorities only released the content of the Kroll report (an independent forensic audit of the ‘secret’ loans taken up in 2013) in summary form. Mozambique defaulted on its foreign debt in 2016, which has become unsustainable for the immediate future. The ‘secret’ loans explain a smaller part of the new debt, while heavy international and domestic borrowing and public spending after the discovery of large new mineral resources drove up the debt levels. The economy unhinged not by a full-blown resource curse, but rather by the mere prospect of large future income from the offshore LNG gas and coal, which we dubbed the “presource curse”.

Malawi: A Political Economy Analysis

This report provides a comprehensive political economy analysis of contemporary Malawi. The country epitomises the primacy of patrimonial politics – including endemic corruption – with a powerful presidency at the helm and a weak legislature, although with a largely independent judiciary. Political parties, barely distinguishable in terms of policies and ideology, are dominated by strong personalities whose regional and ethnic provenance influence voter preferences. Political clientelism, characterised by informal decision-making, trumps sound economic policy formulation and implementation, despite purported efforts to reform and build institutions based on legal-rational Weberian principles. This inhibits long-term transformation of the ailing agrarian economy vulnerable to climate change. The report recounts salient features of social sectors such as education and health, and highlights the burden posed by high population growth rates on resources and social services. Improvements have been noted in civil and political rights but less in economic and social rights owing largely to the fact that half the population live in poverty. Apart from social and electoral cleavages, Malawi exhibits no serious domestic conflicts. A dispute with Tanzania over the northern part of Lake Malawi remains unresolved

Nepal: A Political Economy Analysis

This report is an integrated political economy analysis of Nepal. The main finding is that economic growth and poverty reduction have been steady in Nepal since the mid-1980s independently of a number of political upheavals, including ten years of civil war. The growth has been driven by remittances and an upward pressure on wages in local labor markets. As a result, poverty has declined and social indicators have improved. Despite the availability of private capital and increases in wages for the poor, there is still a massive need for public investments in infrastructure, agriculture, health, and education. In the political domain the recent local elections will reintroduce local democracy after 20 years. Elected local politicians are expected to boost local development efforts. The leading political forces in Nepal are the political parties. There are close links between politicians and business leaders, the political parties control the trade-unions, have links to civil society organizations, and the parties select high-level government officials. The civil war and the post-war ethnic uprising led to demands for an ethnic based federal republic. A compromise federal map was decided in 2015, with provincial elections scheduled for the fall of 2017. There are concerns that the ethnic agenda may escalate ethnic conflicts, and it will be essential for all parties to work for participation of all social groups within the recently established local units, as well as in the economy at large.

Mali: A Political Economy Analysis

Afghanistan: A Political Economy Analysis

This report provides a comprehensive analysis of the current state of Afghanistan, arguing that the Afghan state is fragile, and sustained through constant negotiations over power, resources and ideology. What began as a radical state-building and democratization project in 2001 was soon captured by elites. Some of which engages in semi-formal and informal governance structures to further their influence. Distribution of state revenue, largely from external donors, has been used to secure loyalty and maintain control. This has contributed to extreme state centralization, hampered development of state institutions, failed justice sector reforms, high levels of corruption and reduced government legitimacy, and lately an increase in poverty. On the positive side, access to education and health services has improved, partly due to the strong emphasis placed on the rights of women. The security situation has deteriorated since 2014. At present the government control less than 60 percent of the country and civilian causalities are steadily increasing. Conflicts in Afghanistan are exacerbated by the involvement of its neighbors. To improve security, as well as economic and social development, a negotiated peace settlement is needed. If the conflict is left unresolved (in fear of regional and international security concerns), a slow and steady deterioration of security, and economic and social development, is to be expected.

Myanmar: A Political Economy Analysis

Myanmar may for a long time remain in a transitional state with an uncertain future. After a series of political and economic liberalization reforms from 2011 onwards, Myanmar’s political trajectory remains open-ended, although the most plausible scenario remains a continued slow democratization process. The democratic opening has been driven largely by the interest of the military rulers in changing Myanmar’s relations with Western states and thereby gaining leverage vis-à-vis China. Continued military influence, persistent capacity problems in political parties and parliamentary politics, weak channels of political representation and limited administrative capacity give rise to critical questions about the substance of democratization and economic development in Myanmar. The country’s informal economy is one of the largest in the world and is upheld by informal elite pacts that were formed in the military era, often involving high-ranking officers and crony companies. Along with a high level of corruption and lack of redistributive mechanisms the continuing cronyism hinders inclusive growth. If these economic structures persist, social and ethnic conflicts may intensify and progress towards further democratization stall. Despite this, foreign direct investments in resource extraction and other sectors have been on the rise since 2011 and are likely to continue. Myanmar is also ranked as the world’s second-most vulnerable country to climate change. The government needs a better understanding of climate change and its effects – both its direct impacts on Myanmar and its indirect impacts via neighbouring countries such as Bangladesh. As Myanmar remains at a crossroads, smart external assistance may have greater long-term impact in Myanmar than in other recipient countries where the situation is less volatile. However, donors may also become increasingly frustrated and reduce their assistance because of the ongoing Rohingya crisis and because of the limited local capacity to absorb international assistance.

Tanzania: A Political Economy Analysis

This report provides a comprehensive political economy analysis of contemporary Tanzania. Focusing on developments since the election of John Magufuli as President, it traces the evolution of the country´s political economy. Three main developments are emphasized. First, significant efforts have been made at addressing corruption, reforming public service practice, and maximizing public revenues. Second, there has been a clear shift towards a state-led model of economic development. This reconfiguration is unfolding in an increasingly competitive political environment and in the context of long-standing symbiotic relationships between politics and business. Third, there has been an increasingly restrictive approach towards civil society. Representatives of the public have been arrested and detained, and open political gatherings have been banned. The potential impact of these changes on the political settlement are complex. Factionalism within the CCM in recent years have been characterized by repeated cases of grand corruption. Still, there has been remarkable party cohesion, related to the fact that the factions belong to a narrow elite, which with ultimately has shared interests. Effective state-led development faces several challenges. Political capacity to direct long-term developmental change has been challenged by the development of factions within the CCM. Moreover, there are limits to the state’s capacity to formulate and implement policy. Uncertainty over public finances, particularly regarding international commercial borrowing, will, in the short term at least, stymie efforts to make the public service more effective. The greater political challenge is that posed by CHADEMA. With the 2015 elections, it consolidated itself as the leading political opposition in mainland Tanzania, with stable leadership and a solid organization in much of the country. CHADEMA´s relationships with Tanzanian private-sector interests leave its supporters open to targeted actions by tax and regulatory authorities. The state´s repressive approach towards civil society reflects the level of threat perceived by the ruling elite. External issues – like shifting relationships with donors, the emergence of new international allies and financiers, and security threats from transnational groups – are more tangential to the future direction of the Tanzanian state. Their impact will depend on trajectories in the areas of political and administrative capacity, relations between capital and the state, and the levels of political and civic organization beyond the party and the state. Dialogue with development partners has remained generally poor, a decline that set in some years ago. Like other countries in the region, Tanzania is increasingly attracting investment and public debt finance from China, from emerging powers like Turkey, and from others with an investment interest in Tanzania, such as the Gulf states.

Ethiopia: A Political Economy Analysis

This report provides an overview and analysis of some key issues pertaining to the political economy of Ethiopia in a historical perspective. The continuous rule of the Ethiopian People’s Revolutionary Democratic Front (EPRDF) since 1991 has advanced a revolutionary democracy founded on the idea that the EPRDF itself should be the vanguard party both representing and leading the people. This form of central dirigisme has produced a developmental state with authoritarian features and opaque boundaries between the party and the state system. The strong and assertive party, having its clear vision of the developmental objectives and means, has produced a self-determined state apparatus that seldom yields to internal or international pressure. It has also produced impressive economic results over the last decade and a half, especially in the central and urban areas, and now aspires to become a middle-income country by 2025. Against this economic performance, there are critical concerns regarding democracy, human rights, uneven distribution and growing inequalities. The political space has gradually narrowed since the contentious 2005-elections, and there are currently no opposition parties with parliamentary representation. The invocation of a ten months state of emergency following the popular anti-government protests in 2015 and 2016, is just one expression of how human rights are being truncated, the lack of an open political space and the regime’s authoritarian features. Despite this, international actors maintain their relations to Ethiopia and continue to provide development assistance. This is partly due to the government’s performance in other domestic areas, but also a recognition of Ethiopia’s important regional role in providing stability in the Horn of Africa. The government has known to capitalize on the international actors’ need for a stable partner in the region, which has provided leeway for both its domestic and international affairs. It is thus unlikely that Ethiopia would be challenged by any other regional state or combination of states. Nor is it expected that any of its international partners would challenge Ethiopia, for instance by putting conditions pertaining to domestic political and human rights issues before the concern for regional stability. Any challenges to the regime and political stability are more likely to emerge from within – whether in the form of further popular political unrest, or disagreements within the EPRDF government or its coalition parties.

Haiti: A Political Economy Analysis

Haiti is governed by a small economic elite and the majority of its poor and marginalized population has no access to power. This report analyses the historical roots of the deep socio-economic and political cleavage in Haiti and the consequences of repeated cycles of foreign interference, economic liberalization policies, increased food insecurity and natural disasters. The report reveals that the elections in 2010/2011 and 2015/2016 only served to exacerbate this cleavage. The elections in 2016 had a record low participation of 17.3%. Many of Haiti’s poor abstained from voting due to lack of confidence in the elections, as well as due to extremely difficult socio-economic conditions post-earthquake in 2010/2011, and post-Hurricane Matthew in 2016. Since the earthquake in 2010, there has been a heavy presence of international actors in Haiti. Whereas several of these actors put pressure on Haiti to hold elections relatively short time after the disaster, most of the foreign actors, and particularly the United States and the EU, showed little concern about fraud and low voter turnout. The elections brought President Michel Martelly to power in 2011 and President Jovenel Moïse to power in 2016, both of them representing the economic elite in Haiti. They invested in agribusiness and special economic zones benefiting the economic elite, but further marginalizing small-scale farmers. These two presidents also succeeded in reestablishing the Haitian Army, an institution with extremely bad reputation in Haiti, due to its past severe human rights violations.

Somalia: A Political Economy Analysis

Somalia has been without a central authority for more than a quarter century. An entire generation is growing up without experiencing stability and security, basic human rights, and economic prosperity. There is no functioning central government with authority over the entire country, extreme weather impacts the country unmitigated, and social challenges such as corruption are rampant. This bears several risks, such as support for radical Islamist groups, such as Al-Shabaab, posing a threat to domestic and international security, or a brain drain with large number of people fleeing the instability and conflict in Somalia. Informal governance actors, formal local authorities, and the private sector have filled the gaps in providing security, education, and health services. Yet, powerful formal and informal, national as well as international actors have vested interests in a weak state or governance failure, with conflict and instability becoming self-perpetuating. This political economy analysis sheds light on the actors, their interests, and power relationships, thus providing a better understanding of these arrangements and their relation with the wider state-building efforts.