One common criticism this blog has been getting has to do with its rural focus. “Sure,” people argue, “most of the very poorest live in the countryside. But, overwhelmingly the way they get less poor is to move to a city.”
This is true. Urbanization has been a key feature of every fast development experience there’s ever been. So, in terms of grand strategy, why would you waste your time messing with rural producers?
In Taiwan and South Korea, the cities had to compete for rural people to want to move there.
That’s what I thought too until I read Diane Davis’s remarkable Discipline and Development: Middle Class Prosperity in East Asia and Latin America. (You can read the brilliant intro online here.)
Davis’s book is a perfect little counterpoint to Robert Bates’s classic Market and States in Tropical Africa, (which it really helps to have read before you dive into it.)
For Bates, the political economy of the post-colonial African state was pretty simple: they were machines for extracting rents from farmers and transferring them to urban constituents. Through a series of institutional mechanisms handed down from the Colonial past (chief among them, the dreaded Agricultural Marketing Board), African states systematically looted the countryside, underpaying for products, undersupplying services, and spending the proceeds on a series of industrial boondoggles in town. It…wasn’t a very successful development model, in large part because it created powerful incentives for industrialists to specialize not on running profitable industries, but on pressuring the state to extract rents from rural people and hand them over.
Bates’s book is the stuff of a thousand undergrad syllabi, I think most people in the development game have at some point come across the argument. What I find dismaying is that Davis’s book, which is at least as good (for my money, way better), is…not as often read. What she shows is that some of East Asia’s fastest developers of the Tiger years turned the political economy of African states on its head.
Davis shows how in Taiwan and South Korea – which, in the 1950s, were just as poor as Uganda or Nigeria – land reform produced a class of prosperous, independent, middle-class rural producers. The producers – mostly rice farmers in South Korea, a mix of rice and sugar-cane farmers in Taiwan – were politically powerful. Powerful enough to resist any thought industrialists might have had to finance industrial expansion on their backs.
If anything, it was just the opposite: rural people put the heat on the government to squeeze the industrialists for surpluses. In this narrative, Taiwanese and South Korean industrialists’ export orientation was forced on them by a political dynamic where they were relatively weak, and under strong pressure to perform.
Davis is a particular fan of the Taiwanese model, where farmers, she argued, really did have the whip hand over industrialists. In one of the more eye-opening bits of the book, she comments on the way the relative shabbiness of Taipei – contrasted with the gleaming sky-scrapers of Seoul – is actually a testament to Taiwan’s “balanced development.” The government couldn’t be seen to be building prestige projects in the capital, rural people were to powerful to be snubbed like that. What surplus industrial expansion brought in had to be ploughed right back into agriculture, (well, and the army.)
This counterintuitive way that a focus on rural incomes can end up generating success in urban economies works on a number of levels.
Yes, it is true that both empirically and normatively agriculture will get smaller and less important with development — relative to other sectors, and smaller absolutely in employment — but that doesn’t mean that this will be achieved by ignoring farming. On the contrary, one of development’s great paradoxes is that the quickest way to get out of agriculture is to raise agricultural productivity. That this will almost certainly produce the most equitable and benign transformation — it remains the case that agricultural growth reduces poverty more than any other sector in most low income countries — is a massive bonus.
The African model brutally pauperized the countryside, leading to the unchecked mass internal migrations that left Africa with the unmanageable slums that now take up the bulk of their bigger cities. In Taiwan and South Korea, the cities had to compete for people to want to migrate there. Internal migrants were, in relative terms, much more empowered, and much more to make the move with reserves of human and financial capital than similar migrants in Africa. This made them much more productive when they did reach the cities.
In the end, Taiwan and South Korea grew extraordinarily fast mostly because they got very good at making things in factories that people in other countries wanted to buy. But Taiwanese and South Korean industrialists pulled it off because they faced states that would not allow them to slack off, pulling in rents from farmers and wasting them on absurd projects. (That’s the “discipline” in Davis’s title.)
Her book influenced me deeply. I’m a true believer. If you want to do something for Africa’s cities, help farmers be more productive.