Zambia – an example of personalized competition

Extract from chapter 5 of Working with the Grain:

“For a country of only twelve million people, Zambia has enjoyed a strikingly high profile in the development community – partly because as of independence in 1964 its strong copper mining sector made it one of the wealthiest, and most urbanized countries in Africa, partly because it has consistently been an island of peace and stability in a Southern African sub-region beset by conflict, and partly because it was a pioneer in Africa’s embrace of democratization and economic liberalization in the early 1990s.

Countries growing along a personalized-competitive  trajectory can be viewed as having managed to assemble ‘just enough’ of a platform for economic development to proceed.  Is the combination of growth plus personalized competition (often underpinned also by vertical links between patrons and clients) to be welcomed as a viable way forward or, given its governance limitations, is it an avoidable failure? And, insofar as it is viable, what might be the possibilities for doing better, even if only incrementally?

The first three decades of Zambian independence witnessed a sequence of  three far-reaching institutional  experiments. Each was  welcomed at its outset with huge optimism, only for these inflated expectations to be dashed against the rocks of seeming failure.

The first failed experiment – ‘failure’, that is, when viewed through the eyes of the former colonial power –  came within the first decade of independence. When the British left in 1964, and the flag of an independent Zambia was first unfurled, the erstwhile colonial power likely looked on its handiwork with some satisfaction. There had been a successful first democratic election, which resulted in a legitimate elected parliament and president; there was a strong independent judiciary; property rights were protected. As a country with a per capita income in 1964 of $2,700 (in calendar year 2000 dollars),  among the highest on the African continent,  and a thriving copper mining sector, development prospects seemed good.

But this optimistic perspective did not reckon with some fundamental disconnects that underlay the institutional façade. Though political power had transferred to the African majority, ownership, control and access to income opportunities continued to reflect those of the now-ended colonial order. The best paid and most senior jobs in both the public and private sectors were almost all held by Europeans; 60-70 percent of all marketed agricultural goods were produced by white settler farmers on large commercial farms; the copper mines, which dominated the non-agricultural part of the economy were wholly-owned by South African, British and American interests.   Inequality pervaded Zambian society, with startling poverty at the bottom: only one-third of adults was literate; average life expectancy at birth was 40 years; 230 of every 1,000 children died by the age of five.

Along with these economic inequities, there was also an underlying tendency towards  fragmentation. Its land area was vast, inhabited by multiple scattered indigenous populations that had little in common other than their colonial overlord. Notwithstanding the collective euphoria over the end of colonial rule, any sense of collective national interest was fragile – and once independence was won, entropy began to set in. Between 1964 and 1966, the number of person-hours lost due to labor disruptions  led by the powerful coppers mineworkers union rose five-fold. Regional, and sometimes ethnically-based opposition emerged from among the many factions that had come together under the umbrella of the nationalist struggle for independence.

The result of these disconnects was a progressive unraveling of the institutional arrangements inherited at independence. In 1972, all political parties except UNIP were banned. The following year, a new constitution was passed initiating a “one party participatory democracy”,  under the aegis of the United National Independence Party (UNIP).

Early-stage dominance thus became the second of Zambia’s far-reaching institutional experiments. Kenneth Kaunda, leader of UNIP, sought to govern in an inclusive way, co-opting aspirant elites and potential rivals into the governing coalition via the  distribution of rents to powerful urban and ethnic constituencies, represented by key elites who were awarded positions in the Cabinet, carefully balanced ethnically. This dominant model proved economically unsustainable – in part because political considerations repeatedly trumped the economic dimensions of development policymaking,  but also because of a sustained collapse of the price of copper from 1973 onwards. (Copper mining was the dominant industry, and accounted for over 90% of export revenues.)  As economic conditions worsened, political discontent rose.

Then came the third institutional experiment – the embrace of political competition. In response to political discontent President Kaunda decided to mount multi-party elections in 1990.  To his surprise, they were won by the opposition party. To his credit he left office peacefully (an early pioneer of Africa’s sweeping democratic transition of the 1990s).  Zambia’s democratic transition in 1991 was greeted with euphoria, as a leading edge of an African (and global) wave of democratization in the wake of the fall of the Berlin wall and the collapse of the Soviet Union. Immediately its new Movement for Multi-Party Democracy (MMD) government, led by the former trade union leader, Frederick Chiluba, took power it won further kudos from the development mainstream by  aggressively embracing  the Washington Consensus package of macro-economic stabilization, exchange rate and market liberalization, and privatization. Hitherto far-reaching price controls were eliminated entirely; hitherto radically overvalued exchange rates became market determined; privatization , especially of commercial enterprises, proceeded  rapidly and, for the most part, transparently – accelerated by the establishment of the Zambia stock exchange. In support of these far-reaching reforms, aid flows increased rapidly, reaching a peak of 27 percent of total government spending  in 2002.

But, again, the euphoria  turned to disillusion.  The MMD split less than two years after it came to power, with some of the most committed reformers leaving office.  To be sure, the experience on the political front was  not all bleak, with democratic contestation continuing to  remain robust. Though  President Chiluba won re-election in 1996 with over two-thirds of the vote, subsequent elections were more closely contested; the MMD won elections in both 2001, 2006, but its vote total hovered at or below 40 percent. There also has been alternation: the MMD it was voted out of office in 2011. Moreover, when President Chiluba sought to amend the constitution to run for a third term of office, he was rebuffed by sustained civic opposition.

On the economic front, consistent with the logic of personalized competition (though not the hopes and dreams of democracy’s champions), top-down presidentialism and political management via the allocation of rents became the order of the day — both during President Chiluba’s period in office, and during the presidencies of his successors, Levy Mwanawasa and Rupiah Banda.  Patronage remained the order of the day. For ambitious individuals, the path to  individual gain and opportunities for patronage was via success in the never-ending game of winning access to the president’s (revolving door) inner circle through the continual forming, unforming and reforming of political coalitions under the MMD umbrella.   With the ending  of a leadership code during the Kaunda era that had (not always successfully) prohibited senior public officials from owning businesses, the opportunities for extracting rents were many. 

Poor economic performance contributed further to the general disillusion. Notwithstanding the ambitious reform agenda, for  the first decade following the democratic elections the economy failed to recover – with no growth between 1991 and 1996, and a paltry annual average of only 1.7 percent between 1996 and 2000. 

Over the course of the subsequent decade,  growth accelerated —  from less than 2 percent per annum between 1996 and 2000, to upwards of 6 percent between 2006 and 2009, barely slowing in the wake of the global financial crisis. Urban poverty fell – from 45 percent of city residents in the early 2000s, to 28 percent by 2010.   Zambia also had successfully further consolidated its democracy in 2011, with a peaceful transfer of power following an electoral victory by the opposition Patriotic Front.”