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The politics of economic reform in zimbabwe continuity and change in development


INTERNATIONAL POLITICAL ECONOMY SERIES
General Editor: Timothy M. Shaw, Professor of Political Science and International Development Studies, and Director of the Centre for Foreign Policy
Studies, Dalhousie Univereitv, Nova Scotia, Canada
Recent titles include:
Manuel R. Agosin and Diana Tussie (editors)
TRADE AND GROWTH: NEW DILEMMAS IN TRADE POLICY
Mahvash Alerassool
FREEZING ASSETS: THE USA AND THE MOST EFFECTIVE
ECONOMIC SANCTION
Robert Boardman
POST-SOCIALIST WORLD ORDERS: RUSSIA, CHINA AND THE
UN SYSTEM
Richard P. C. Brown
PUBLIC DEBT AND PRIVATE WEALTH
John Calabrese
REVOLUTIONARY HORIZONS: REGIONAL FOREIGN POLICY
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Jerker Carlsson, Gunnar Kohlin and Anders Ekbom
THE POLITICAL ECONOMY OF EVALUATION
Edward A. Comor (editor)

THE GLOBAL POLITICAL ECONOMY OF COMMUNICATION
0. P. Dwivedi
DEVELOPMENT ADMINISTRATION: FROM UNDERDEVELOPMENT
TO SUSTAINABLE DEVELOPMENT
Steen Folke, Niels Fold and Thyge Enevoldsen
SOUTH-SOUTH TRADE AND DEVELOPMENT
Anthony Tuo-Kofi Gadzey
THE POLITICAL ECONOMY OF POWER
Betty J. Harris
THE POLITICAL ECONOMY OF THE SOUTHERN AFRICAN PERIPHERY
Jacques Hersh
THE USA AND THE RISE OF EAST ASIA SINCE 1945


Bahgat Korany, Paul Noble and Rex Brynen (editors)
THE MANY FACES OF NATIONAL SECURITY IN THE ARAB WORLD
Howard P. Lehman
INDEBTED DEVELOPMENT
Matthew Martin
THE CRUMBLING FA<";ADE OF AFRICAN DEBT NEGOTIATIONS
Paul Mosley (editor)
DEVELOPMENT FINANCE AND POLICY REFORM
Tony Porter
STATES, MARKETS AND REGIMES IN GLOBAL FINANCE
Stephen P. Riley (editor)
THE POLITICS OF GLOBAL DEBT
Alfredo C. Robles, Jr
FRENCH THEORIES OF REGULATION AND CONCEPTIONS OF
THE INTERNATIONAL DIVISION OF LABOUR
Ann Seidman and Robert B. Seidman
STATE AND LAW IN THE DEVELOPMENT PROCESS
Timothy M. Shaw and Julius Emeka Okolo (editors)
THE POLITICAL ECONOMY OF FOREIGN POLICY IN ECOWAS
Frederick Stapenhurst
POLITICAL RISK ANALYSIS AROUND THE NORTH ATLANTIC
Deborah Stienstra
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Arno Tausch (with Fred Prager)
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A POST-APARTHEID SOUTHERN AFRICA?
Peter Utting
ECONOMIC REFORM AND THIRD-WORLD SOCIALISM
Sandra Whitworth
FEMINISM AND INTERNATIONAL RELATIONS


The Politics of
Economic Reform
in Zimbabwe
Continuity and Change in Development

Tor Skalnes
Research Fellow
Chr Michelsen Institute, Norway


First published in Great Britain 1995 by

MACMILLAN PRESS LTD

Houndmills, Basingstoke, Hampshire RG21 6XS
and London
Companies and representatives
throughout the world
A catalogue record for this book is available
from the British Library.

ISBN 978-1-349-13766-4 (eBook)
ISBN 978-1-349-13768-8
DOI 10.1007/978-1-349-13766-4
First published in the United States of America 1995 by

ST. MARTIN'S PRESS, INC.

Scholarly and Reference Division,
175 Fifth Avenue,
New York, N.Y. 10010

ISBN 978-0-312-12574-5
Library of Congress Cataloging-in-Publication Data
Skalnes, Tor.
The politics of economic refonn in Zimbabwe : continuity and
change in development I Tor Skalnes.
p. em.- (International political economy series)
Includes bibliographical references and index.

ISBN 978-0-312-12574-5

I. Zimbabwe-Economic policy.
government. I. Title. II. Series.
HC910.S58 1995
338.96891--dc20

2. Zimbabwe-Politics and
94-43719
CIP

© Tor Skalnes 1995
Softcover reprint of the hardcover 1st edition 1995

All rights reserved. No reproduction, copy or transmission of
this publication may be made without written pem1ission.
No paragraph of this publication may be reproduced, copied or
transmitted save with written permission or in accordance with
the provisions of the Copyright, Designs and Patents Act 1988,
or under the tem1s of any licence pemJitting limited copying
issued by the Copyright Licensing Agency, 90 Tottenham Court
Road, London WI P 9HE.
Any person who does any unauthorised act in relation to this
publication may be liable to criminal prosecution and civil
claims for damages.
10

9

8

7

04

03

02

01

6
00

5
99

4
98

3
97

2
96

I
95


Contents
List of Tables and Figures
Acknowledgements
List of Abbreviations
Map of Zimbabwe

vi
vii
viii
ix

2

Political Institutions, Organised Groups and Economic
Policy

12

3

The Open Economy and Societal Corporatism, 1923-65

35

4

Economic Nationalism during UDI, 1965-79

56

5

Majority Rule: Parties, Interest Groups and the Drive
for 'Unity'

73

6

The Politics of Stabilisation, 1980-6

97

7

The Politics of Liberalisation, 1987-94

118

8

Agricultural Land, Pricing and Marketing Reforms

150

9

The Marginalisation of Labour Unions

183

10 Conclusion

197

Index

211

v


List of Tables and Figures
Tables
3.1
6.1
8.1
8.2
8.3
8.4

8.5

Average real growth rates for the Southern
Rhodesian economy, 1923-60
Gross Domestic Product, 1980-94 (1980 prices)
Distribution of land by sector and Natural
Region (%)
Nominal and real producer prices, 1970/1-1979/80
Nominal and real producer prices, 1980/1-1992/3
Maize intake in '000 tonnes by the Grain
Marketing Board and CA/SSC contribution (%),
197011-199112
Annual crop production, three-year averages
('000 tonnes)

40
103

155
167

168
173

175

Figures

8.1

8.2

Real 1980 prices, 197011-1992/3
Maize intake by the Grain Marketing Board and
real 1980 prices (Z$/t)

VI

169
174


Acknowledgements
In the course of writing this book, I have received help from many
quarters. The Chr. Michelsen Institute, Bergen, Norway and the Department of Political Science at the University of California, Los Angeles,
USA provided very stimulating intellectual environments. The Southern
African Political and Economic Series (SAPES) Trust, Harare, Zimbabwe, extended practical help during fieldwork in 1991. Thank you.
I would also like to thank the institutions which funded this project.
The Norwegian Research Council for Social Science and the Humanities gave a generous four-year scholarship during 1988-91 as well as
travel grants to the United States and Zimbabwe. Den norske Banks
Jubileumsfond for Chr. Michelsens Institutt funded the writing of a first
draft during 1992. Financial help was also received from the University
of California, Los Angeles.
While the usual disclaimers apply, I wish to express my deep
gratitude to Richard Sklar at UCLA, for offering his unfailing guidance
and friendship. The following individuals also made helpful comments
on the entire manuscript: Edward Alpers, Helge Hveem, Tore Linne
Eriksen, Michael Lofchie, Richard Sandbrook and Timothy Shaw. In
addition, a number of people gave careful and stimulating criticisms of
chapic• Jrafts which I presented at UCLA (December 1990), Uppsala
(May 1992), Bergen (May 1992, October 1993 and February 1994),
Lund (August 1993) and Kampala (April 1994). I want to mention, in
particular, Bjorn Beckman, Nina Byers, Peter Gibbon, Vegar Iversen,
Alhadi Khalaf, Atul Kohli, Guillermo O'Donnell, Lise Rakner, Phil
Raikes, RonalJ Rogowski, Arne Tostensen, and John Toye. Sincere
appreciation is also due to all those Zimbabweans who gave generously
of their time and contributed their valuable insights during confidential
interviews. Inger A. Nygaard did an excellent job turning the manuscript into a camera-ready copy.
My warmest thanks are nevertheless due to my wife, Gro Beate, and
my three children, Helene, Hakon and Sunniva, for all their love and
support.

vii


List of Abbreviations
ACCOR
ACCOZ
ALB
AMA
ARNI
ARnl
BSAC
CA
CAZ
CFU
CIO
CMB
COMES A

esc

CZI
DMB
DRC
EMCOZ
EPP
ESAP
FPZ
FRI
GATT
GDP
GMB
IBDC
ICA
ICFA
IMF
IRA
ISA
lSI
KADU
KANU
LRA
LSC
MMCZ

Associated Chambers of Commerce of Rhodesia
Associated Chambers of Commerce of Zimbabwe
African Labour Bureau
Agricultural Marketing Authority
Association of Rhodesia and Nyasaland Industries
Association of Rhodesian Industries
British South Africa Company
Communal Area
Conservative Alliance of Zimbabwe
Commercial Farmers' Union
Central Intelligence Organisation
Cotton Marketing Board
Common Market for Eastern and Southern Africa
Cold Storage Commission
Confederation of Zimbabwe Industries
Dairy Marketing Board
Domestic Resource Cost
Employers' Confederation of Zimbabwe
Extended Export Promotion Programme
Economic Structural Adjustment Programme
Forum Party of Zimbabwe
Federation of Rhodesian Industries
General Agreement on Tariffs and Trade
Gross Domestic Product
Grain Marketing Board
Indigenous Business Development Centre
Industrial Conciliation Act
Indigenous Commercial Farmers' Association
International Monetary Fund
Industrial Relations Act
Import Substitution Assurance
Import-Substituting Industrialisation
Kenya African Democratic Union
Kenya African National Union
Labour Relations Act
Large-Scale Commercial
Minerals Marketing Corporation of Zimbabwe
viii


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Kadoma

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Key
_ _ International
boundary
----Province

boundary

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Capital city



Major town I city

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Bulawayo ,;
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MATABELELAND ~,SOUTH
<-..,

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1001kilometres

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1001miles

Map of Zimbabwe

ix

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1

Introduction

In mid-1990, Zimbabwe joined the swelling ranks of countries
undertaking to liberalise their trading policies and adopt a programme
of macroeconomic adjustment supported by the World Bank and,
eventually, the International Monetary Fund (IMF). President Robert
Mugabe and the dominant political party, known as the Zimbabwe
African National Union (Patriotic Front)- ZANU (PF) - thus formally
abandoned several economic policies identified with their past
professions of socialism, including extensive price, wage and investment
controls, social service additions, and government intervention
generally. Later that year, ZANU (PF) dropped its proposal for legal
status as the country's sole party. These events occurred only months
after the party had won - on a platform calling for Marxist-Leninist
socialism and a one-party state - an overwhelming majority of seats in
the third parliamentary elections to have been held after the negotiated
dismantling in 1980 of the racially-based Rhodesian regime and the
consequent gaining of formal independence from Great Britain.
Zimbabwe has thus joined the global trend towards more liberal
politics and economics. In Africa, as elsewhere, economic and political
liberalisation is partly a response to the failure of authoritarian regimes
of various ideological hues to promote development and establish
popular legitimacy. Economic crisis has played a large part in
encouraging a fundamental reconsideration of ideological tenets of the
past. In the early 1980s, falling world commodity prices, greatly
increased real interest rates, and the continuing difficulty of access to
new lending all combined to bring the economic problems to a crisis
point. Still, most African countries were slow to respond. But Africa's
economic downturn continued to manifest itself in insufficient per
capita agricultural production, stagnating industrial output, loss of
export market shares, severe balance-of-payments problems, debilitating
debt, occasional hunger and starvation. By the late 1980s and early
1990s, change appeared to be engulfing the continent. Although the
crisis was never as deep in Zimbabwe as in much of the rest of Africa,
that country nevertheless faces the twin challenges of economic and
political restructuring in the 1990s.
The often timid reactions of African leaders to new economic
challenges have prompted many analysts to emphasise external factors
in their explanations of African social change. Consequently, decisions
1


2

Politics of Reform in Zimbabwe

of the World Bank and the International Monetary Fund to involve
themselves heavily in conditional or policy-based lending have
encountered resistance and frequent protests against 'neo-colonialism'.
Numerous observers now cite Africa's aid dependence to account for
the general acceptance by African governments of IMF/World Bank
prescriptions for structural adjustment. Donors are currently also
pushing strongly for democratic reforms, which are seen as necessary
to put governments on a more secure political foundation as well as a
pre-requisite for stemming Africa's economic decline. Recently, many
analysts have pointed to the collapse of communism in Eastern Europe
as an additional reason for Africa's reorientation towards liberalism.
Military and financial support for ostensibly left-wing rulers has
evaporated. On their part, western countries now have little reason to
support self-proclaimed anti-communist governments on the continent.
Partly as a consequence of this, the National Party in South Africa
inaugurated negotiations with the liberation movement. These
negotiations have resulted in a temporary power-sharing agreement and
in the election of a Constitutional Assembly in April 1994. Hence,
another rationale has been removed in the Southern African countries
for their adherence to old ideas of economic nationalism and political
regimentation.
THE CHANGING INTERNATIONAL CONTEXT OF
ZIMBABWEAN POLICY-MAKING
Although changes in Eastern Europe have weakened the appeal of the
Marxist-Leninist ideology adopted by ZANU (PF) in the 1970s, the
party's policies since independence, in 1980, have borne little
resemblance to Marxist-Leninist practice as it has been seen elsewhere.
Among the country's political elite, firm adherents to MarxismLeninism have been relatively few in number. Neither the Soviet Union
nor its satellites were ever a source of funding for Zimbabwe development aid has always come mostly from the West, and the
country is rather well integrated into the world economy despite its
legacy of import-substituting industrialisation. During the guerrilla war
against the minority regime of Ian Smith's Rhodesian Front in the
1960s and 1970s, Robert Mugabe's ZANU obtained its main 'antiimperialist' ally outside of Africa in the People's Republic of China.
The fall of communism in Eastern Europe, therefore, had few
immediate practical consequences for Zimbabwe.


Introduction

3

The changes elsewhere in Southern Africa, especially in South
Africa, more clearly called for a reconsideration of policy. South Africa
is now unhampered by sanctions and is determined to attempt to revive
its flagging economy. The rationale for nationalising South Africanowned companies in Zimbabwe and for reducing dependence upon
imports from, and trade routes through, the south has disappeared. In
fact, Zimbabwean policy makers are worried that the foreign investment
they once shunned will now not be forthcoming because South Africa
will be seen as more attractive to international capital. South Africa
became a member of the Southern African Development Community
(SADC) in August 1994 and plans have been made to strengthen that
organisation by consolidating economic cooperation and expanding
functions into fields such as human rights, conflict resolution, defence
and security. 1 The Preferential Trade Area (PTA) has been turned into
a Common Market for Eastern and Southern Africa (COMESA). Calls
have been made for the merger of SADC and COMESA.
One possible Zimbabwean response to this new situation, and the
one largely followed by the authorities, was to welcome South Africa
into the fold, seek areas of cooperation, begin negotiations to reduce
trade barriers and further integrate economies, and improve investment
incentives at home so as to be able to attract, among others, South
African firms. However, many South African businessmen and government officials have been keen to discourage what they see as unrealistic
expectations by neighbours that the country can act as an engine of
economic development and investment in the region. South Africa, they
say, needs to concentrate for quite some time on solving domestic
problems of low investment and high unemployment.
Increased isolationism might have been an understandable
intellectual and political reaction on the part of Zimbabweans, too. The
inclusion of South Africa into SADC was not greeted with universal
enthusiasm and fears have been frequently voiced that the country will
come to dominate the region. 2 Furthermore, the practical consequences
of formal changes to SADC and PTA are yet to be felt to any significant extent. Bilateral trade relations between South Africa and
Zimbabwe are also problematic because the old 1964 agreement has
been terminated while a new one has yet to be negotiated. This has led
to an effective end to Zimbabwean exports of textiles and clothing to
South Africa. Partly in response to this, Zimbabwe raised its own tariff
barriers to these products. Many have predicted a 'regionalisation' of
the world economy as a result of the end to superpower military rivalry.
That end has led instead, it has been said, to an increased economic


4

Politics of Reform in Zimbabwe

rivalry between Europe, North America and East Asia that has
weakened global arrangements and stimulated regional trade pacts in
many comers of the world. Notwithstanding SAOC and COMESA,
however, this tendency is as yet weak in Southern Africa compared,
say, to Latin America.
Uncertainties about the practical economic consequences for the
region of regime change in South Africa are compounded by the difficulties in ascertaining the drawbacks and benefits of global trade
liberalisation under the auspices of the General Agreement on Tariffs
and Trade which is being transformed into the World Trade Organisation. The liberalisation of trade in agricultural products agreed upon
during the Uruguay Round may be beneficial in some ways to countries
such as Zimbabwe. Nevertheless, fears have also been voiced that
gradually doing away with special tariff rates under the General System
of Preferences and the Lome conventions will work in the other
direction. 3 Whatever that case may be, I submit that the global and
regional changes outlined above do not strongly predict recent
Zimbabwean policy reforms.
In many countries around the world, fundamental policy changes
have been made only in the context of immediate problems with the
balance of payments and government finances. In 1990, however,
Zimbabwe did not face a crisis so deep as to clearly compel change.
According to the government's Frameworkfor Economic Reform ( 19911995), the country's trade balance was in surplus over the years 198590 while the current account deficit was a relatively mild US$89
million in 1989 against a surplus of US$78 million the year before.
Between 1985 and 1990, merchandise exports increased from US$1124
million to US$1688 million, while imports rose from US$922 million
to US$1333 million. External debt service peaked at 34 per cent of
export earnings in 1987 and decreased to about 24 per cent as the
Framework was written. The fiscal deficit was high at 10.6 per cent of
GOP in 1990/1, but could be financed out of a 'healthy savings rate of
about 20% per annum'. 4 Real GOP growth was highly erratic during
the 1980s but picked up in 1989-90. Zimbabwe's problems were of a
more long-term character: prospects for future growth were hampered
by the obsolescence of productive equipment and infrastructure, caused
by long-lasting insufficiency of private and public investment.
Consequently, there had been little employment creation and stagnant
or falling real wages. It is my contention, therefore, that it is this
domestic context and the internal political reactions to it which are most
important to explaining the adoption of structural adjustment in


Introduction

5

Zimbabwe. This is not to argue that international economic trends have
not been significant or that international financial institutions have not
exercised political influence in the country. 5 Chapters 6, 7 and 8 will,
quite to the contrary, demonstrate that they have. But comparative
analysis tells us that there is no clear association between the extent of
economic crisis and debt in various countries and the vigour with which
structural adjustment has been pursued by their governments. 6 The
large variations in initial response call for analysis of domestic policy
as do the many later reversals of policy or 'slippages' observed. 7
After having advocated 'self-reliance' for a decade since coming to
power, Zimbabwe's ZANU (PF) government embraced structural adjustment in 1990. The World Bank and the IMP had pressed for economic
reforms since the early 1980s, but without much success. In 1990,
however, World Bank support was welcomed for a new Economic
Structural Adjustment Programme (ESAP). While altered international
circumstances constitute a background to policy change, external factors
are only loosely constraining. Domestic politics is of fundamental
importance in understanding Zimbabwean policy change.
THE DOMESTIC REASONS FOR POLICY CHANGE
Despite its Marxist-Leninist rhetoric, the ZANU (PF) government tried
to preserve the largely white-owned productive structure while it
increased opportunities and benefits for the African population. Private
power remains entrenched in the country's diversified economy and
pluralistic social structure. Robert Mugabe inherited a system of market
controls originally put in place by Ian Smith after the Unilateral
Declaration of Independence (UDI) from Great Britain in 1965. These
controls were intended to benefit the Europeans; hence, Smith's
government shielded industry from international competition, subsidised
large-scale agriculture and protected European wages and salaries. After
1980, ZANU (PF) used and extended these controls so as to benefit the
majority: industrial protectionism was maintained, wages and working
conditions were regulated, and agricultural support was given to African
farmers. At the same time, the fundamental structure of ownership was
left intact, although state ownership increased and a limited amount of
previously commercially farmed land was redistributed to smallholders.
ZANU (PF) in reality did little but strengthen an inherited system of
dirigiste capitalism so as to favour its political constituency among
African workers and peasants. This strategy, however, gave rise to a


6

Politics of Reform in Zimbabwe

number of conflicts and discontents which undermined domestic support
for the government's economic policies.
Despite the recent decision by ZANU (PF) to maintain formal multipartyism, open political contestation is barely tolerated by the ruling
elite; yet interest groups have been strongly entrenched for decades. In
key sectors, erstwhile supporters of protectionism and economic
controls gradually adopted a favourable attitude towards liberalising
reforms. In conjunction with the World Bank in particular, the various
organisations representing producer interests in the country began to
lobby an originally recalcitrant government for structural adjustment. A
core argument in this study is that Zimbabwe's ESAP represents the
successful outcome of the lobbying efforts of certain domestic interest
groups as well as of the World Bank and other donors. This argument
goes against the grain of important theories in political economy.
POLITICAL INSTITUTIONS, INTEREST GROUPS AND THE
STATE
For the past quarter-century, development studies have been strongly
influenced by analyses which emphasise the structural obstacles to
modernisation. Such impediments are thought to originate in both the
international economic system and domestic political economies.
Consequently, a search has often been made for forms of political
organisation and particular institutional devices which may serve to
break down apparent barriers to change. Many neo-Marxists and neoliberals alike have counted on 'state autonomy' to function as such a
device. Yet, many others now claim that where state-centric models of
development have been followed, they have often had strongly negative
consequences. There is no lack of evidence in Africa's post-independence experience to support that assertion.
Meanwhile, a 'new institutionalism' has emerged to guide research
in political science and economics. Political institutions, it is said,
should be studied in their own right. They should be seen, to use more
technical language, as independent variables insofar as they structure
the possibilities for access to the portals of power by various ideas and
influences. 8 Hence, public policy cannot be seen as the direct resultant
of various societal pressures. Many scholars use this perspective to give
added refinement to state-centric theories. The concept of political
institutions, however, transcends the analytical state-society divide.
Parties, interest groups, and other political associations, as well as


Introduction

7

informal patron-client networks, are alternative institutional devices by
which the preferences of groups and classes in society may be
channelled with varying degrees of effectiveness into a country's
policy-making bodies: bureaucracies, legislatures, governments. While
governmental policy may not be a simple reflection of the powerweighted preferences of societal actors, societal organisation is sometimes a potent resource for influencing the actions of bureaucrats and
politicians. An institutional perspective on economic policy-making
might therefore start with an analysis of how societal actors organise to
bring their influence to bear upon government, and proceed to studying
how governments employ their own organisational resources in order
to meet, modify or resist societal demands.
For many of those who have become exasperated with the failures
of statism in Africa, the strengthening of civil society represents a
necessary antidote. They reject the claims of civilian and military
autocrats to represent uniform national aspirations and exclusive
knowledge about how to attain them. Civil society as understood here
denotes a space for organising, in partial or complete autonomy from
governmental influence, interests that are shared among a certain
number of individuals and that transcend bonds of family and their
extensions such as lineage and clan. Organisations which normally do
so include political parties; civic organisations; ethnic associations;
churches; farmers' associations; trade unions; chambers of commerce,
industry and mining; and so forth. In this study, we focus specifically
on economic interest groups and political parties.
Empirical analyses of the effects of interest group politics are
heavily influenced by normative considerations- to a large extent, by
whether or not one believes in the benefit to a country of the policies
which ostensibly result. For much of this century in Europe and North
America, interest group politics has been associated with a form of
managed and regulated capitalism which was subjected to increasing
scrutiny in the late 1960s, the 1970s and 1980s. From both the right and
left of the political spectrum, group politics came under attack for being
but the expression of particular, vested interests inimical to the
legitimate concerns of broader segments of society. For Marxists and
other radicals, pluralist democracy institutionalised the dominance of
capitalists over the workers, of the 'haves' over the 'have-nots', of the
few over the many; for conservatives, it militated against the adoption
of policies deemed to be in the national interest. In the non-Western
world, the perpetuation of policies of economic nationalism is similarly
often explained with reference to the political power of interest groups.


8

Politics of Reform in Zimbabwe

The solutions advocated in response to the purported failings of
interest group politics have been many. Those who profess to be able
to ascertain and act upon the needs of the whole rather than the part be that need defined as national self-sufficiency, free-market orientation,
socialised production and distribution, equality or some other goal have frequently favoured centralisation of power by the chief executive,
the top-level bureaucracy, the single party, or the vanguard party. Those
who adhere broadly to liberal-democratic ideas but recognise a potential
conflict between certain national goals and private aspirations, have
advocated various institutional changes within the broad confines of
representative democracy. In any case, the institutional arrangements for
dealing with the apparent conflict between particular and general
interests are many and diverse. The means of linking organised economic interest groups to the national policy-making institutions range from
the authoritarian solution of 'state corporatism' to fragmented
'pluralism', via 'societal corporatism'. This study identifies the Zimbabwean system as a particular form of societal corporatism in which
producer interests hold sway. Such a system has certain beneficial
consequences for resolving collective action problems and formulating
relatively consistent policies and programmes of fundamental reform.
THE ARGUMENT IN BRIEF
In Zimbabwe, a vibrant group politics operates to exert considerable
pressure upon government to alter economic policies, despite government attempts to centralise decision-making power and increase state
autonomy in order to pursue a certain vision of the 'national interest'.
As the institutionalised expressions of strongly entrenched and
centralised private economic and political power, Zimbabwean interest
groups engage in the formulation of economic policies of national
significance. The organisational form of Zimbabwean interest groups
and the particular institutional framework within which they operate
differ from the patterns found elsewhere in Africa. This helps account
for the characteristics of public policy-making. Generally, political
authoritarianism in Africa served to repress broad-based organisations
along class and sectoral lines and encourage instead the expression of
narrow and localised interests. In Zimbabwe, in contrast, the politics of
reconciliation among the races has resulted in the maintenance of highly
centralised economic interest groups which command strong and wide-


Introduction

9

spread support in their sectors. These groups take a keen interest in
issues of general economic policy, growth and efficiency (Chapter 2).
In order to trace the development of the brand of interest group
politics found in Zimbabwe, it is necessary to go back to the economic
crisis of the 1930s. During that decade and those following, a particular
structure of state-society interactions developed. Interest groups were
tied to the country's policy-making institutions in a manner akin to that
found in certain European countries, and which can be described as a
form of societal corporatism. The policy outcome resulting from such
government-interest group collaboration varied considerably over time,
as the interests of the different organisations changed with international
political and economic currents. Flexible adjustments within the broad
confines of an 'open economy' defined the resultant economic policies
of Rhodesia until 1965 (Chapter 3).
In Chapter 4, I consider how demands for majority rule were perceived as a threat by the ruling minority, and how this perception
resulted in the Unilateral Declaration of Independence and consequent
changes in the country's political structure and economic policies.
These policies fall within the broad confines of import-substituting
industrialisation.
Chapter 5 outlines some important results of the establishment of
majority rule and the attainment of formal independence from Great
Britain. The resolution of the conflicts between ideological and pragmatic considerations, the outcome of the struggle over the one-party
state, and the compromises between the aspirations for African advancement and the need for racial reconciliation had important consequences
for the nature of political institutions and the possibilities for various
groups to influence government policy. In general, parties and parliament never developed as significant institutions for expressing the
interests of the African majority. Interest groups were seen by the ruling
party - ZANU (PF) - as less threatening to its authority; hence they
were able to reassert their autonomy and legitimacy as channels for
influencing government policy.
Chapters 6 and 7 describe the background to ZANU (PF)' s eventual
adoption of structural adjustment in the 1990s. The government's
attempt to extend controls so as to benefit the majority created a
number of strains in the economic system that eventually served to
undermine support for economic nationalism (Chapter 6). The major
erstwhile beneficiary of protectionism, the manufacturing sector,
became the key group lobbying for reform in the late 1980s. That sector
made a large imprint on the particular manner in which reform was


10

Politics of Reform in Zimbabwe

undertaken. The bargaining process amounted to a strengthening of the
system of government-interest group collaboration or societal
corporatism (Chapter 7).
Throughout this study, I try to show ( 1) that interest groups can be
a force for policy change in general and economic liberalisation in
particular, depending on how they are organised and on the distinctive
institutional arrangements for mediating their interests; and (2) that
interests subjectively defined by key actors themselves are open to
considerable modification and change in response to changing economic
circumstances and the perceived adequacy of governmental policy in
meeting new challenges. This may create considerable scope for
government flexibility in economic policy-making over time.
Beyond these issues, however, I am concerned with the particular
constellation of group interests and power in Zimbabwean society that
can be held accountable for the 'fine print' of the structural adjustment
programme. Although ESAP set Zimbabwe off on a course of economic
liberalisation, the actual content of the programme represented to some
degree a compromise among different views and interests. For instance,
some degree of tariff protection continued (Chapter 7). Also, government involvement in agricultural pricing and marketing looks bound to
remain large (Chapter 8), and the labour market is only partially
liberalised (Chapter 9). Through an analysis of these issues, I assess the
relative strengths of various interest groups in Zimbabwe and their
consequent potential for influencing public policy. Theories of urban
bias posit an alliance between manufacturing industry, workers and
bureaucrats as the societal basis for protectionism. Primary producers
are seen as the main supporters of liberalisation. In contrast to these
theories, I view structural adjustment in Zimbabwe as a result of the
pressures not only of commercial farmers and primary sector producers,
but also ~and most importantly~ manufacturers. These actors ally with
external actors and certain government officials. Small farmers, labour
unions, and a number of government ministers and bureaucrats have
tended to resist reform. With respect to macroeconomic policies, the
former alliance seems to have won out, while the latter has been
influential in slowing down the extension of reforms to the agricultural
sector.


Introduction

11

Notes
1.
2.

3.
4.
5.

6.
7.

8.

Southern African Economist (Harare), August 1994, pp. 7-8.
See, for instance, Nancy Thede and Pierre Beaudet, eds, A Post-Apartheid South
Africa? (Basingstoke and London: Macmillan, 1993).
For Zimbabwean perspectives on these issues, see Daily Gazette (Harare), 17
January 1994 and The Herald (Harare), 14 and 21 April 1994.
Government of Zimbabwe, Zimbabwe. A Frameworkfor Economic Reform (19911995) (Harare: Government Printer, January 1991), pp. 1-5 and p. 25, table 4.
For an analysis from a dependency perspective, see Colin Stoneman, 'The World
Bank and the IMF in Zimbabwe', in Bonnie K. Campbell and John Loxley, eds,
Structural Adjustment in Africa (Basingstoke and London: Macmillan, 1989), pp.
37-66.
Stephan Haggard and Robert R. Kaufman, eds, The Politics of Economic
Adjustment (Princeton, NJ: Princeton University Press, 1992).
Paul Mosley, Jane Harrigan and John Toye, Aid and Power Vols I & II (London
and New York: Routledge, 1991). For an analysis that argues that breakdowns in
debt negotiations and adjustment policy programmes result from insufficient
willingness by the IMF and other donors to take domestic political and economic
situations into account, see Matthew Martin, The Crumbling Far;ade of African
Debt Negotiations: No Winners (London and Basingstoke: Macmillan, 1991).
See, for instance, Peter Evans, Dietrich Rueschemeyer and Theda Skocpol, eds,
Bringing the State Back In (Cambridge: Cambridge University Press, 1985); James
G. March and Johan P. Olsen, Rediscovering Institutions: The Organizational
Basis of Politics (New York: Free Press, 1989); Peter A. Hall, ed., The Political
Power of Economic Ideas: Keynesianism across Nations (Princeton, NJ: Princeton
University Press, 1989).


2

Political Institutions,
Organised Groups and
Economic Policy

The disciplines of political science and economics have in recent years
been profoundly influenced by a liberal political economy which posits
models of free trade and limited state intervention as normative
standards of rationality in economic policy. Although neo-liberal
economics has gained increasing favour with academics and policymakers around the world over the last fifteen years, there is continued
and widespread failure of governments to abide by the maxims of nonintervention and minimal protection of domestic industries. Presumably,
since both theory and practical experience indicate the economic superiority of freer trade over protectionism, the reasons for persistently high
trade barriers must be sought in the realm of politics.
Within the field of the political economy of development, theories
of policy-making now almost invariably stress the role interest groups
play to maintain a protectionist status quo, while 'state autonomy' is
given pride of place in explanations of liberalisation. 1 State autonomy,
in this literature, connotes the ability of a government to ignore
pressures from domestic groups and classes (such autonomy can go
hand in hand with dependence upon international actors).
Underpinning the view that the free play of interest group politics
will only serve to stall necessary economic reforms are two fundamental
assumptions: (I) that losses resulting from policy change are often
certain and immediately felt while benefits are usually uncertain and,
at best, long-term; and (2) that losers are often spatially concentrated
and well-organised while winners are frequently dispersed and badly
organised. Since people must be expected to follow their own narrow
and short-term interests to the exclusion of broader and more long-term
considerations, this bodes ill for reform. Among Africanists as well as
others, it has become commonplace to argue with Robert Bates that
farmers and rural dwellers in general must be expected to constitute the
main beneficiaries of reform while industrialists, bureaucrats, urban
workers and consumers bear the brunt of adjustment? This argument
follows directly from the idea that reform consists in correcting for the
'urban bias' associated with import-substituting industrialisation. 3
12


Political Institutions and Economic Policy

13

Farmers, however, are often remotely located, have difficulty communicating with each other and the government, and are rarely represented
by strong organisations. They are therefore unreliable political allies for
a government wishing to implement change in the face of vocal and
organised protests from urban constituents. 4
In Zimbabwe, however, many groups in both the urban and rural
sectors are fairly well organised. Furthermore, politically strong urban
groups have argued for liberalisation. In fact, a long-protected manufacturing sector represented a major domestic political influence behind
the adoption of structural adjustment. In order to explain this situation,
we need to take a look at the literature concerned with societal corporatism as practised in Western Europe. This literature contains comparative evidence to suggest that interest groups, under certain institutional
and political circumstances, regularly adopt positions and attitudes
which reflect a willingness to take into account long-term considerations
of national economic growth and well-being in addition to the narrow,
short-term interests of their members. Under such circumstances, compromises over economic reform may be easier to fashion, with resultant
beneficial consequences both for the legitimacy of market-oriented
economic policies and for the sustainability of liberal politics in the
longer run.
Compared to the rest of Africa, the political economy of Zimbabwe
is in many ways exceptional. Elsewhere on the continent, excepting
South Africa, formal associations of economic interest are weaker and
much more fragmented. Hence, the views such organisations propound
may perhaps be more narrowly self-interested and shorter-term than
those of the more broadly-based associations found in Zimbabwe.
Differences in levels of development contribute, unsurprisingly, to
understanding why, since the vitality of civil society is, in part, a
function of the development of market exchange and of industrialisation. However, an equally significant explanatory factor is the role of
governments. In Africa, attempts have been common to restrict and
control the free expression of economic interest through the construction
of 'state-corporatist' structures of state-society interaction. In general,
these attempts have been counterproductive: rather than serving to align
private aspirations with national goals, they have encouraged narrow
and localised pressure-group politics while suppressing sectoral and
class-based conflicts. Long-standing policies of suppression and fragmentation constitute, I suspect, an important reason why it is now
difficult for many regimes to mobilise stable support behind coherent
and long-term programmes of economic reform. In such a situation


14

Politics of Reform in Zimbabwe

increasing 'insulation' or 'autonomy' for policy-making organs constitutes one possible response; a democratic opening, so that political
parties may seek to mobilise diffuse and dispersed support for economic
reform, may represent another. 5
ECONOMIC POLICY AND ECONOMIC RATIONALITY
According to a great number of neo-classical economists, most forms
of state intervention, such as protection from external competition,
produce sub-optimal outcomes and tend to reduce overall welfare in an
economy. Not only is it allegedly the case that global welfare would be
enhanced by adherence to the principles of free trade and minimal
intervention; but, with limited exceptions, an individual country has
nothing to gain by departing from such principles, according to this
body of theory. In other words, free-market economic principles constitute models of economic rationality.
There is a great deal of evidence that countries with an orientation
towards world markets have enjoyed higher long-term rates of economic
growth than have countries following a strategy of pronounced
domestic-market orientation. But there is little empirical support for the
contention that outward orientation requires minimal state intervention.
Specifically, there is not much evidence for the thesis that export
success is linked to very low levels of tariff or quota protection. 6 If
that be the case, economic rationality cannot simply be defined as the
pursuit of strict or ideal-typical free-market policies but has to be
defined in a more circumspect manner. This is increasingly recognised
in recent debates.
Certain forms of state intervention may be necessary in some
circumstances to increase efficiency of resource use within a broadly
market-based economy. The literature on 'public goods', for instance,
emphasises the role of government in correcting for 'market failure'.
Government intervention may be required, among other things, to
restrict monopolistic practices and supply credit where private capital
markets are underdeveloped. As Tony Killick argues, 'the concept of
"market failures" has proved quite robust against the criticisms of promarket writers' .7 Furthermore, rhetoric has tended to conceal that the
effective implementation of any economic policy, whether of liberalisation or control, may require a strengthening of the role of public
institutions. 8 A growing body of literature on Africa, some of it highly
cognisant of the need for such reforms as devaluation, deregulation and


Political Institutions and Economic Policy

15

trade liberalisation, argue against the idea that this would entail the
establishment of a 'minimal state' .9
The key question for development may not be the optimal extent of
government intervention in the economy, but rather the proper form of
such intervention. 10 Within the context of stabilisation and structural
adjustment, trade and exchange rate policies have been dominant
concerns, as have supporting macroeconomic policies of curbing
inflation through the reduction of excessive government budget deficits.
Setting realistic exchange rates and achieving more uniform levels of
protection imply to a large extent a change rather than a reduction in
the role of government. Limiting government budget deficits through
increased cost-recovery or through cuts in excessive levels of public
employment similarly do not necessarily imply 'rolling back' the state.
Limitation of the government's role is, on the other hand, the issue
where privatisation or liquidation of public enterprises is contemplated
and where producer and consumer subsidies are reduced. Some forms
of such reduced intervention may be propitious for effective market
development, while others may not be. For instance, it may, on the one
hand, be necessary to encourage private trading where agricultural state
marketing boards have become inefficient and exploitative. But on the
other hand, agricultural producer price increases may easily be
cancelled out by input subsidy reductions.
That the form rather than the extent of state intervention may be the
crucial issue is further illustrated by the experience of the East Asian
'newly industrialising countries' (NICs). Not only is it the case that the
governments of South Korea, Taiwan and Singapore have actively
intervened through credit controls, the setting up of public manufacturing enterprises and the like, but quantitative restrictions and other
import control measures have been used so as to shield some products
from competition on the domestic market. Price controls and restrictions
on foreign direct investment have also been extensively applied. But the
way policies were used to encourage exports remains a crucial
difference between East Asian NICs and Latin American and African
countries. Outward orientation led to a strong exposure to competition
even in cases where the domestic market was oligopolised. 11 East
Asian governments not only set export targets for firms and channelled
investment towards them, but made it possible for these firms to
compete on world markets through active exchange rate management.
Overall, the trade regimes in East Asia were more liberal than in Latin
America and Africa. According to Sebastian Edwards, 'the successful
outward-oriented countries have generally had lower coverage of prior


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