Strengthening state capacity in Africa: Lessons from the Washington versus Beijing Consensus

• Published date: 01 December 2022
• Author: Kenneth Kalu,Oliver Nnamdi Okafor,Xiaohua Lin
• Date: 01 December 2022
• DOI: http://doi.org/10.1002/pa.2811

RESEARCH ARTICLE

Strengthening state capacity in Africa: Lessons from the

Washington versus Beijing Consensus

Kenneth Kalu | Oliver Nnamdi Okafor | Xiaohua Lin

Ted Rogers School of Management, Ryerson

University, Toronto, Canada

Correspondence

Kenneth Kalu, Global Management, Ted

Rogers School of Management, Ryerson

University, 350 Victoria St., Toronto, ON M5B

2K3, Canada.

Email: kenneth.kalu@ryerson.ca

Africa is currently the only continent that is yet to experience sustained industrial

growth and structural transformation. The continent's position as the last frontier for

industrial growth became clear following the spectacular transformations of the Chi-

nese economy since the late 1970s. While it is often emphasized that Africa must

improve its industrial capacities and diversify its economies in order to achieve real

growth and development, there is little clarity on the most effective model and strat-

egies for the continent's industrialization. This article conceptually examines the

Washington Consensus versus the Beijing development models, and empirically pre-

sents their evolution in Africa. Drawing on a modified Fukuyama's state theory which

differentiates between the strength of state institutions and the scope of state activi-

ties, this article argues that strengthening African states is a prerequisite for the suc-

cess of any development model. The article provides strategies for strengthening

state capacity in African countries from weak to moderately strong states.

KEYWORDS

Africa, Beijing consensus, economic development, public policy, state capacity, Washington

consensus

1|INTRODUCTION

By volume of industrial production and export, Africa ranks last

among other continents (World Bank, 2016). Weak industrial capacity

has meant weak economies and poor social outcomes, resulting in a

devastating social hierarchy with Africa having the largest number of

poor people in the world (World Bank, 2018a). Given Africa's grim

economic and social indicators, the continent's foreign development

partners, especially from the West, have been persistent in calling on

African countries to embrace economic and political reforms that

would open up the countries' respective markets, reduce government

interventions in the economy, and unleash the ingenuity and effi-

ciency of the private sector (Falola & Kalu, 2018; Padayachee &

Fine, 2019). Since the 1980s, African countries have experimented

with policy prescriptions, driven especially by the World Bank and the

International Monetary Fund (IMF). These policies, which collectively

encompass the Washington Consensus, were earlier packaged as the

structural adjustment program (SAP) (Helleiner, 2003; Mkandawire &

Soludo, 1999; Stiglitz, 2003), and have since evolved into different

policy support instruments often directed by the World Bank, the IMF

and other multilateral donors.

The Washington Consensus model recommended privatization of

public enterprises, focus on price stability, liberalization of interest

rates and financial markets, deregulation of foreign direct investment

and removal of government controls over the economy, among others

(Williamson, 1994). The Washington Consensus model argues that

markets will eliminate inefficiencies, remove the opportunities for

rent-seeking by public officials and produce greater benefits to the

society (Babb, 2013; Santiso, 2004a). These neoliberal beliefs

anchored on the self-regulating power of markets were assumed to

work in any society irrespective of the initial conditions in such soci-

ety and irrespective of the institutional environment. The assumption

was that competition will drive inefficient agents to either increase

productivity or to give way to more efficient competitors

(Williamson, 2004,2009). However, as the world would eventually

learn from the disasters that followed episodes of economic liberaliza-

tion, especially in parts of Africa, markets do not necessarily have the

power of self-regulation. In an assessment of the performance of SAP

Received: 9 October 2020 Revised: 27 July 2021 Accepted: 22 December 2021

DOI: 10.1002/pa.2811

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https://doi.org/10.1002/pa.2811