Road Oft Traveled: Development Policies and Majority State Ownership of Industry in Africa, The

African Studies Review, Dec 2004 by Frishman, Alan

ECONOMICS John James Quinn. The Road Oft Traveled: Development Policies and Majority State Ownership of Industry in Africa. Westport, Conn.: Praeger, 2002. xiv 235 pp. Tables. Appendixes. Bibliography. Index. $64.95. Cloth.

The "road oft traveled" that John Quinn refers to is the proclivity of African nations after independence to adopt two intertwined policies: majority state ownership of industries and export-producing sectors and inward-oriented policies of economic development. He maintains that state ownership is usually associated with and causes inward orientation and that these policies have led to the poor economic growth that most African nations experienced from 1966 to 1986. After many repetitive arguments, comparisons, and statistical tests, he concludes that "the privatization of all, or a majority share, of most industries and the largest export sector should promote development and increase incomes in the region" (193).

Quinn writes as if his analysis applies to present-day Africa, but in fact his data set comprises twenty-five sub-Saharan countries from 1966 to 1986, when, as he accurately explains, most African states controlled the industrial and export sectors of their economies and the political elite tried both to build their nations and to maintain power. After 1986, when the World Bank and the IMF imposed Structural Adjustment Programs (SAPs) on all African nations and when the Newly Industrialized Countries of Asia showed that a policy of export promotion could lead to substantial economic growth, economic conditions changed dramatically. From 1986 onward, African nations were forced to privatize government-owned enterprises, set currencies at market values, lower inflation rates and tariffs, and open their economies. In spite of these changes and the clear indication that an outward-oriented policy was more successful, virtually every African nation has floundered-including all of the eight that are examined so closely in his matched studies. In short, the development process is much more complicated than Quinn leads us to believe.

Quinn's methodology is not very convincing either. He uses four matched pairs of countries to show the important association of majority state ownership with inward-oriented development policies. He asserts that he is able to control and eliminate five rival explanations, but the choice of countries and the pairing are at best arbitrary-any two countries could show any relationship, which means that his findings cannot be generalized. The proponents of this technique admit that it "cannot completely test variables"(94 n.1-3). Quinn himself adds that the technique "requires that the rivals be considered as working in the same way in each of the cases involved" (136). His statistical analysis shows a weak relationship between majority state ownership and below average GDP per capita (141, table 8.1), but his regression does not include dummy variables for state ownership and inward policies. He then makes the dubious claim that the results show that state ownership is negatively related to income.

Finally, the "thought experiment" decision model could be applied to any government anywhere in the world. His analysis of African nations is interesting to the extent that it indicates which groups were in favor of the status quo and which ones might be in favor of change (the author uses "reform"-which has a positive connotation). He finds that it would be difficult to bring about policy change (as it is everywhere), although he does indicate a few scenarios that might work. The most obvious, given the historical record, is the externally imposed SAPs, but he does not examine them in detail nor the fact that their adoption has not led to economic growth.

The Road Oft Traveled is a well-written, although sometimes repetitive (expectations, variables, and theories) historical analysis of African government policy and economic development from 1966 to 1986. However, Quinn's assertion that one variable-majority state ownership-has caused economic stagnation and that by changing it economic growth will occur is simplistic. How development economists wish it were that easy! His argument could have been used in the late 1980s to justify the SAPs, but the book was published in 2002. Virtually all of the conditions that Quinn asserts cause inward orientation (see page 58) are true of China and Vietnam (on a different continent), yet those nations have clearly embarked on successful outward-oriented policies. This book is based on Quinn's dissertation from 1995, and most of the entries in his bibliography are dated even earlier, which limits the relevance of the work to present-day Africa or national economic development anywhere in the contemporary world.

Alan Frishman

Hobart and William Smith Colleges

Geneva, New York