State-Business Relations and Economic Growth in sub-Saharan Africa
When the state and business interact effectively they can promote a more efficient allocation of scarce resources, appropriate industrial policy and a more effective and prioritised removal of key obstacles to growth, than when the two sides fail to co-operate or engage in harmful collusion. A major challenge which the cluster of research on state business relations (as part of IPPG) has addressed is to understand the relationship between state-business relations and economic performance. This paper synthesises four African case studies which cover four broad areas: 1) The drivers of SBRs; 2) measures of SBRs; 3) economic functions of SBRs; and 4) effects of SBRs. Whilst the case studies employ different methodologies and methods, this categorisation is a useful lens to analyse the findings of the case studies.
This synthesis includes a number of conclusions. One headline message is that formalised SBRs do matter. For example, the Joint Economic Council is an influential private sector actor in SBRs in Mauritius and measured SBRs lead to higher growth in a regression over the period 1970-2005. Budget proposals which include suggestions for better industrial policies are frequently taken over by government budgets. However, effective formalised SBR cannot simply be put in place. The South Africa case study found that Nedlac did not provide a real consensus-seeking forum, due to defections by key labour organisations from the Council and differences of approach and priorities amongst key state organisations (Treasury and Ministry of Labour), despite some early success in industrial policy.
Adrian Leftwich and Dirk Willem te Velde, August 2010.
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Last modified: 05 August 2010