CIAO DATE: 03/04

The Plight of African States and Good Governance

Abstract

Promoting good governance and improving governance in Africa has drawn increasing attention from the international community as a new approach to solving a variety of problems such as military conflicts, poverty, and sluggish economic development. The question of how to achieve good governance came under the spotlight in the 1990s following the end of the Cold War era. Establishing good governance, along with democratization, has now come to be recognized an issue related to the "conditionality" imposed by donor countries on recipients in exchange for financial assistance.

Structural reform programs crafted by the World Bank and the IMF in the 1980s were the first set of policy prescriptions by the world community to address sluggish development in Africa. Under "the Washington Consensus," the World Bank and the IMF called for the battered economies of Africa, which were plagued with expanding budget and current-account deficits since the late-1970s, to reform their political and economic structures as a condition for creditor countries to start negotiations to reschedule their debt repayments. The IMF and World Bank programs inevitably prompted drastic changes in the political and economic systems established by African states after their independence from European countries. The consensus called on African countries to discard earlier economic policies, which were characterized by economically inefficient management by state-run companies and protectionist trade policies that let these state-run firms stay alive. The reforms aimed to introduce market mechanisms in African nations and help them to escape chronically anemic economic development by placing state-run businesses under private management and promoting deregulation.

Full Text (PDF, 12 pages, 193.7 KB)