Globalization, Democracy, and Poverty: The African Experience at the Onset of the 21st Century

Economic reports from international financial institutions suggest that Africa can harness globalization, achieve more rapid poverty reduction and faster growth. Such assumptions, however, ignore the fundamental role that democracy plays in the distribution of welfare, especially in this era of globalization. Based on the analysis of various social, political, and economic data on 44 African countries, this paper indicates that nations with democratic traditions are more likely to achieve social justice and reduce poverty than those whose political regimes are dictatorial. Such findings suggest that democracy encourages and disciplines state actions and over time can lead to decline in poverty. Introduction Economic reports from financial institutions suggest that Africa can harness globalization, achieve more rapid poverty reduction and faster growth. Such accounts are usually based on the belief that: 1) much of Africa has made economic progress in recent years; 2) the world economic environment is more favorable now; and 3) the international community is ready to help. According to Michel Camdessus, the Managing Director of the International Monetary Fund (IMF), “economic growth and poverty reduction can accelerate if [the] continent follows IMF and World Bank prescriptions.” This assumption, however, ignores the fundamental role that democracy, civil society, and nation-state play in the distribution of welfare, especially in this era of globalization. “Now, it=s time to get realistic. The plain truth is that market liberalization by itself does not lift all boats, and in some cases, it has caused severe damage.” It is argued in this article that programs of poverty reduction in Africa should be preceded by the implementation of democracy, civil society, and nation-state. Civil society is a place where people enact their democratic and political identities and articulate issues in public discourse. Democracy and civil society assume a nation-state as the modern location of political belonging. The coexistence of democracy, nation-state, and civil society is essential in promoting social justice, and creating welfare states, which can effectively adapt to the current of globalization. It is only when such coexistence matures that poverty can be successfully alleviated, and sustained social, economic, and political systems will emerge. No viable partnership can be established between the state and the civil society without some degree of democracy. More specifically, it is suggested in this article that one major obstacle Africa faces in its struggle for poverty reduction is the absence of legitimate civi l societies, fostered by the lack of democracy. Using social, political, and economic data on 44 African countries, it is shown that nations with democratic traditions are more likely to achieve social justice and reduce poverty than those whose political regimes are dictatorial. The results are discussed in light of theoretical perspectives on democratic loyalty and social equality. One main argument here is that there is no civil society without democracy, and without civil society, the concept of nation-state is very elusive. In other words, if democracy gives citizens “voice” that presumably produces loyalty to national identities, then its absence will produce disloyalty and exit. The present increase in the international migration of African elite is one consequence of this disloyalty and poor governance. Notwithstanding the influence of other factors, it is argued that the lack of democracy contributes in large measure to Africa=s poor governance, weak legal and justice systems, nepotism, and corruption, factors that block the emergence of civil societies. Only those countries that have the will to break with the past and adopt socio-political regimes based on the freedom of expressions, actions, and respect for human dignity will harness globalization in the 21st century. Globalization: The African Experience Globalization has become a slogan of the 21st century. This concept is not new to social science literature, but its present use has been extended to virtually all aspects of our lives. It is believed that global markets and global ideas exchanged at high speeds through the global technological development of our time will enrich the lives of populations. Nonetheless, the real challenge is to ensure more social justice and equity. Economists and those concerned with more aggregate measures of development are optimistic that Africa is an interesting partner in the global market. Yet, a closer look at the current and future prospects of the lives of the majority of the African people reveals that innovative approaches are necessary to reach out to these populations and bring them to democracy and respect for human rights. Financial institutions such as the World Bank and the International Monetary Fund (IMF) are more concerned with macro indicators that ensure the payment of the loans they provide to African countries. The high rates of their loans help compensate for the low performance of some borrowers, as long as many others pay back. Such considerations explain, at least, partly these financial institutions= positive attitude toward Africa=s economic conditions. Based on their aggregate data, the IMF and the World Bank maintain that Africa can harness globalization because the continent has made significant economic progress, and because the world economic environment is improving. On the social ground, however, there are many obstacles that hinder social and economic progress in Africa. Among these obstacles, poverty, socioeconomic inequalities, and the fragility of the states at this time of globalization are probably the most critical factors, in part because they mostly affect the socially disadvantaged groups. This article examines these issues and recommends the implementation of more democratic regimes as a way of giving populations the opportunity to take the matters of the societies and nations into their own hands. Of course, democracy alone is not the solution to Africa=s socioeconomic and socio-political crises. There are, nonetheless, some indications here that democracy contributes to the reduction of poverty. Africa at the Onset of the 21st Century Many observers believe that Africa has enormous economic potential. The economic growth has increased for most sub-Saharan African countries from an average of 1 percent during 1992-94 to about 5 percent during 1995-98 (Ouattara, 1999). Yet, the examination of social indicators reveals that the continent was probably more troubled in the 1990s than it was before: experiencing massive genocides, due partly to growing social injustices and inequities; rebellions and civil wars, that are fighting oppressions and dictatorships; and declining life expectancies, due partly to famine and AIDS. One consequence of these problems has been the growing poverty in most of African countries. In the last decade, the whole world watched the explosion of the ethnic clash between the Hutu and Tutsi in Rwanda. Although some people still search for the roots of this contemporary genocide, any systematic investigation will certainly show that the increase in socioeconomic injustice was one of the major causes. More recently, rebellions that erupted in the Democratic Republic of Congo have added to Africa=s list of civil wars, including those conflicts in Sudan, Sierra Leone, Angola, and elsewhere. Oppression, nepotism and corruption foster an environment of social and political unrest. In fact, many African countries are led by self-proclaimed presidents; even for those who legitimated their power through elections, the whole process of assuming authority is usually questionable. To keep themselves in power, many African politicians have crushed civil societies, and integrated corruption and nepotism into their model of governance. Health, education, and other social issues are usually relegated to the bottom of their national agenda, further exacerbating such problems as AIDS, malnutrition, and morbidity and mortality. This helps to explain the decline in life expectancy observed in many countries of Africa during the period between the 1970s and 1990s. With the exception of the United States Agency for International Development (USAID) and few other organizations, many foreign and international institutions that presumably work to help Africa improve its level of development do not pay due attention to the problem of democracy. Instead, they propose strategies that would not work unless some level of democracy is achieved. The emphasis of such financial institutions on the private sector seems unrealistic, given the nature of most African governments today. More specifically, the assumption that globalization can enrich lives of people would be a myth for many Africans. The basic argument emerging from the present analysis is that economic development and democracy must go hand in hand for a society to achieve social justice and equity. It is under such circumstances that poverty can be alleviated and globalization positively endorsed. Democracy and Socioeconomic Development The relationship between democracy and socioeconomic development has a long tradition in the social sciences. It is found explicitly or implicitly in the work of Durkheim, Weber, and Marx, and in the writings of some contemporary scholars. The major thesis in this tradition has been that democracy and development are positively related (Lipset, 1959; Cutright and Wiley, 1969). Additionally, development is said to foster a population=s interest and capacity in political participation and engender pressures for democratization (Rueschemeyer, Stephens, and Stephens, 1992: 16). The main assumption from this school of thought is that a high level of development must be achieved for democracy to emerge. However, given the current level of globalization and exchange between nations, one should remember that even fertility transition in less developed countries did not follow the pattern of developed nations. That is, global technologies and global ideas can help to establish democracy even before reaching a higher level of development. It should be pointed out that many African tribes and kingdoms were organized around some democratic principles before the colonial era. In fact, such traditional democratic regimes offered strong resistance to European invasions in Africa. Hence, democracy can emerge at any level of development; nonetheless, its maintenance requires some degree of socioeconomic equality in the society (Muller, 1988). So, while others see development as a prerequisite for democracy, Muller maintains that “the length of a country=s experience with democracy has a significant negative impact on income inequality.” As stated earlier, the argument developed here is in line with Muller=s thesis. It is, therefore, suggested that African countries need to open up their institutional systems and to begin to work toward democracy. Unlike what many African presidents have said before, democracy is possible only if there exists a fairly strong institutional separation the technical term is differentiation of the realm of politics from the overall system of inequality in society (Rueschemeyer, Stephens, and Stephens, 1992: 41). Under the system of institutional separation, those who are socially, economically, and politically disadvantaged will have the opportunity to significantly shape collective decisions that are binding for all. All these principles are based on specific assumptions about each of the concepts entering into the analysis. The analytical model constructed for the present investigation is based on three concepts: globalization, democracy, and poverty. Each of these terms carries its own socio-cultural meaning. The next section examines the contextual meanings of these terms as well as methodological issues that guide the analysis. Conceptual Issues The core of the present analysis is based on the premise that Africa and its partners should find appropriate ways to place democracy at the top of their agenda, in order to make a smooth entry into the world of globalization and to reduce poverty. To understand this recommendation, it is useful to explain what globalization stands for in this context, and how it makes African nations losers in the 21st century. As the United Nations Development Programme recognizes, Africa=s prospects will depend on how the continent responds to the challenge of globalization. Globalization is not a new concept. However, its significance has become very important today as the whole world witnesses the shrinking of space, time, and borders due primarily to advancement in communications technologies. Many observers contend that globalization is advantageous because it allows consumers to access a wider variety of goods and services at lower cost. But to take these advantages, Africa needs legitimate governments freely elected by the people for the people. At the very minimum, there is a need for communications technologies, which are not yet available and accessible to a larger proportion of Africans. After all, the age of information has useful meaning only for those who are equipped with skills and means to access the information they need to improve their lives. In fact, a recent study by Kedzie (1995) shows a strong positive correlation between communications technologies and democracy. Yet, Africa scores very poorly on both variables, with very limited access to means of communication and an overall lack of democracy. Globalization will leave Africa behind also when it comes to human resources; if global markets and global ideas are associated with spatial mobility and employment in this “global village,” then many African countries will continue to lose their elites through “brain-drain” movement. Democracy offers the foundation for civil society and nation-state. By giving people voice, democracy produces “loyalty” to the legally defined polity and to democratic practices (Berezin, 1999a). According to Hirschman (1970), the absence of “voice” would produce either disloyalty or exit. In contrast, loyalty to national identities provides a good avenue for civil society. Civil society is actually the social space where citizens build their democratic political identities and articulate issues in public discourse. Nation-states that are based on strong civil societies have more chance of survival than the ones that prohibit or limit citizens= freedom of expression and association. The definition of democracy set forth by the Freedom House helps understand the interrelations among these key factors. Democracy refers to the following three elements: (1) Political rights. These rights refer to the extent to which citizens freely participate in selecting policy-makers and influencing policy decisions. Political rights are most effectively implemented through civil societies. It is where citizens “meet” to evaluate and discuss their social, economic, and political issues, in order to build a nation-state that has some national identities. (2) Civil liberties. To set civil societies, people need the freedom of expression. Civil liberties offer the opportunity to develop and express ideas independent of the state=s. (3) Institutionalized checks and balances. These refer to the protection of individual rights against arbitrary state action. The citizens of a democracy select their leaders and retain the capacity to institutionally limit the leaders= power. Under such a framework, democracy serves the interests of the citizens well, and initiatives to combat poverty are more likely to succeed. First, people would be able to elect their leaders. Having a mandated term in office, these leaders would do their best to gain the confidence of their populations in order either to be reelected, or to leave the office with honor and still be respected as “good citizens.” Second, because citizens would be free to express their voices, political leaders would likely act more responsibly to avoid critics and discharges. Third, having the opportunity to express their voices, people living in democratic nations can organize themselves in different types of civil societies to fight poverty and limit exploitation, and other forms of abuse. Methodological Approaches and Data The major hypothesis is that democracy helps reduce poverty by increasing equity in distribution of resources. Or to use Muller=s thesis, the length of a country=s experience with democracy has a significant negative impact on income inequality (Lipset, 1959). Democracy creates and reinforces membership in the polity (Alexander, 1996; 1998). It is through such solidarity that civil society emerges and citizenship becomes an emotional as well as a legal category (Berezin, 1999b). How to operationalize democracy and poverty? How to measure their association? Democracy is difficult to measure, partly because of various interpretations that people attach to it. Also, countries are complex systems and they use the term democracy in different ways. For example, a country with the term “democratic” in its name may have no democratic structure of governance and vice versa. The present analysis is based on the definition and measurement proposed by the Freedom House, a leading authority in the quantitative measurement of democracy. Since 1972, Freedom House has published an annual assessment of the state of freedom by assigning each country and territory the status of “free,” “partly free,” or “not free” by averaging their political rights and civil liberties rating. Commonly known as “democracy rating,” the Freedom House index has been widely used by social scientists (Rowen, 1995; Muller and Seligson, 1994). This article uses the version of the democracy index developed by Kedzie (1997), because it is intuitively convenient as explained below. Using data from the Freedom House, Kedzie constructed a version of the democracy rating index whose values range from a minimum of zero to a maximum of 100. The democracy rating indexes analyzed in this article are for the years 1983 and 1993; these indexes are used to predict poverty and other basic indicators of socioeconomic development. Poverty is measured through the index developed by the United Nations Development Programme (UNDP) called the human poverty index. “The human poverty index is a multidimensional measure of poverty. It brings together in one composite index the deprivation in four basic dimensions of human life a long and healthy life, knowledge, economic provisioning, and social inclusion (UNDP, 1999).” UNDP constructed two versions of the human poverty index to account for differences in levels of development between developing countries and industrialized nations. For the developing countries, the index is HPI-1, and it measurement takes into account the percentage of people not expected to survive to age 40, adult literacy, percentage of people without access to safe water, percentage of people without access to health services, and percentage of underweight children under age five. The 1997 human poverty index was used in the present analysis. For these indices of democracy and poverty, data were available for 44 African countries (see Appendix A). These data were analyzed in descriptive forms, mainly through binary correlations, for the following reasons. First, the number of observations is very small (44 at most) which makes multivariate analysis trivial. Previous studies suggest that very small countries may be anomalous in this kind of analysis (Kedzie, 1997; Alesina and Spoloare, 1995). Therefore, only countries whose populations exceeded 1,000,000 in 1993 were included in the analysis. Second, the dependent variable considered here (human poverty index HPI-1) is a composite of several indices commonly used in the analysis of democracy (Kedzie, 1995). Therefore, any multivariate analysis that includes this poverty index and its components will probably lead to multicollinearity. Nonetheless, the separate effects of some of the components of the poverty index are discussed below. Results and Discussions The first step was to calculate the correlation between the democracy rating indices (in 1983 and 1993), the poverty index, and few components of the poverty index (average years of education, gross domestic product (GDP), and population without access to safe water). The results in Table 1 show that democracy is negatively associated with poverty. However, the fact that only the 1983 democracy index is statistically significantly associated with poverty suggests the latent effect that Muller discussed in his work (Muller, 1988). Therefore, the results of this study are in line with Muller’s argument that the length of a country=s experience with democracy has a significant negative impact on poverty. Table 1 First Order Correlation Matrix of Poverty, Democracy, and Other Variables