Developmental State and Economic Development: Prospects for Sub-Saharan Africa

Abstract

This paper will argue that the demonization of sub-Saharan African state proposed and enacted by neoliberal institutions during and since the era of structural adjustment has no historical foundations. In making this argument, the history of development thinking prior to and after World War II will be analyzed to show that the state was and continues to be instrumental in economic development. Finally, drawing on the contributions of heterodox development economists, prospects for re-integrating the sub-Saharan African state to bolster economic development will be assessed by drawing on the development experiences of East Asia's high performing economies.

Foreign Direct Investment and Local Firm’s Performance

“…There's a lot of emphasis on studies of foreign direct investment largely on account of its potential benefits to host countries. Dadzie (2012) pointed out that foreign direct investment is instrumental for the growth of local firms as it provides investment funds, create competition, increase their productivity through adoption of better technologies or investing in human and/or physical capital. Onyekwena, (2012) asserted that studies on foreign direct investment spillover assumes that technologies are freely available to local organization and that FDI automatically involve transfer of technology and therefore local firm's benefits automatically.…”

Developmental States in Sub-Saharan Africa: Reflections on State, Development, and Foreign Policy

“…Neoclassical economists contend vehemently that the state's role should be limited to nothing but a "facilitator" or "custodian" […] Heterodox development economists argue strongly that the role of the state in development goes beyond the scope defined by neoclassical economists. Dadzie (2012) aptly claimed neoliberal thinking to have mistakenly demonized states in SSA. The author concluded, "Instead of demonizing the state as was the case particularly starting in the early 1980s, policy initiatives should seek to refine the state in ways that allow it to execute its developmental functions while becoming a stronger partner of the private sector" (Dadzie, 2012, p. 22).…”

“…The author concluded, "Instead of demonizing the state as was the case particularly starting in the early 1980s, policy initiatives should seek to refine the state in ways that allow it to execute its developmental functions while becoming a stronger partner of the private sector" (Dadzie, 2012, p. 22). While elaborating on this key argument, Dadzie (2012) mainly adhered to the developmental state literature. Dadzie's (2012) analysis emphasized crucial points but did not cover recent mainstream developments.…”

“…While elaborating on this key argument, Dadzie (2012) mainly adhered to the developmental state literature. Dadzie's (2012) analysis emphasized crucial points but did not cover recent mainstream developments. Nor did it problematize the inherent issues or diverse views within the developmental state approach.…”