Tackling the Governance of Economic Transformation

Policies to move African economies from growth to transformation are urgently needed, but are they feasible, given typical political-economic constraints? Drawing on a multidisciplinary literature, this paper warns against the twin errors of ignoring such constraints and treating them as insuperable. There is no doubt that typical patterns of power and interest undermine the credible commitments, adequate public good provision, investment coordination, and provisions for joint learning that are crucial in economic transformation. Moreover, efforts to tackle poor economic governance comprehensively have generally failed. However, history tells us that successful economic transformation occurs in steps and is often achieved by targeted measures and focused institutional improvements in priority areas, with a good deal of context-sensitive trial and error. What is needed is a politically smart approach to the conditions for economic transformation, one that is based conceptually on the form/function distinction, empirically on the growing body of fine-grained case studies of experience at sector level, and a problem-driven learning approach to policy implementation.