SOL PLAATJE LECTURE
African economic transformation demands a radical shock to failed post-colonial systems
The desire to emulate the success of East Asian tiger economies will require South Africa and other African nations to commit to the hard work of drastic individual and collective mindset changes and a profoundly new way of doing things.
Many successful East Asian developmental states, unlike many African countries after the end of colonialism, deliberately and conscientiously pushed for a collective transformation mindset change to set them up for achieving high economic growth rates, industrialising and building competitive global businesses.
These societies created “new normal” behaviours, institutions and partnerships that were in most cases not there before.
Scholars within the comparative institutional analysis discipline, such as Japanese economist Masahiko Aoki, argue that many developing countries may find themselves inert. They struggle to come up with innovative policies, and if they do, find it difficult to get the various components of their societies’ social systems, institutions and customs to implement these policies. This is because the components of their institutional systems have complementarities that oppose social change and innovations, reinforcing inertia.
As illustrated by the concept of path dependence, old institutions, behaviours and customs of a country system will continue on the same path unless there is a heavy shock to the system.
Radical mindset changes
One of the reasons for the success of the East Asian developmental states was that governments and leaders introduced radical mindset changes that thoroughly shocked the old social, traditional and political systems, and set these countries on the path to successfully pursue industrialisation, lift economic growth rates and develop globally competitive companies.
Kenichi Ohno, a leading Japanese economic development strategist, calls the collective mindset change necessary for a country to move from poverty or middle-income classification to becoming a developed and high-income one “a national movement for mindset change”. Ohno argues that only if a “sufficiently large mass begins to behave differently, institutional and strategic complementarities of the old type stop working and rules and customs start to change”.
Several types of collective mindset changes drove the astonishing industrial transformation of the East Asian developmental states from similar poverty levels to their African and developing country peers, to levels of development similar to or better than those of their former colonial occupiers.
Pragmatism, not ideology
These countries transformed into pragmatic societies rather than ideologically driven ones. The institutional, policy and product innovations pioneered by them could happen in a pragmatic environment where governing parties cobbled together development policies with different societal stakeholders — business, trade unions and civil society. They borrowed policies from elsewhere if there was evidence that they were working, whether it was the West or the Soviet Union, and then adapted them for local context.
Singapore’s governing People’s Action Party (PAP) even saw its ideology as that of pragmatism. It adopted policies based on whether they produced results, not dogma or the belief in an absolute truth. They were rejected if they did not produce results.
Different approaches to decolonisation
Like many African and developing countries, these nations also emerged from mass trauma after World War 2. Japan had been defeated, humiliated and occupied. South Korea had been colonised by Japan and then plunged into a civil war, which split the country into North Korea and South Korea. Singapore had been colonised by Britain and later split from mainland Malaysia after the departure of its former coloniser.
The East Asian developmental states dealt with the mass trauma by looking toward the future, rather than remaining stuck in the past or seeking refuge in victimhood. They saw the restoration of individual and country self-worth as building their economies, businesses and the state to the same level as, or to surpass, former “enemies”.
There were few of the excuses so often heard in African and developing countries, such as “colonialism and apartheid lasted so long, we cannot redress it over a short period”. They did not use their oppression — as terrible as it may have been — to rationalise not developing their countries quickly.
They fostered high levels of personal, leadership and government accountability for decisions and were less prone to scapegoating by attributing failures to others, whether from within or outside.
They approached decolonisation differently to most African countries. For many it meant equalling or bettering former colonial powers in the domains of economy, technology and business. It meant using the best ideas, technology and policies of former colonial powers and war victors, combined with local ideas.
South Korea copied the industrialisation of its former coloniser Japan. Singapore was among the poorest countries in the world in the 1950s, and now schoolchildren in Great Britain, the former colonial superpower, study mathematics according to the Singapore maths teaching method.
The broadest interests of society
Citizens collectively learnt to expect leaders and governing parties to govern in the broadest interest of all. Leaders and governing parties prioritised lifting the largest number of people out of poverty, into wealth and prosperity, rather than small numbers of elites.
They also elected leaders who personified dignity, valued others, treated them ethically and equally, and showed commitment to personal discipline and strong family ties. They voted for serious and honest leaders, who were in sync with their emotions, who projected humility, cared for communal interests, and did what’s right, not what’s easy. They tended to elect leaders who are authentic and hold themselves accountable for their actions.
Leaders led through setting an example for all. They followed the law, rules and prescripts of society which others are expected to follow. They were more ethical and moral than in many developing countries. Leaders went beyond self-interest, self-gratification and self-aggrandisement.
In Japan, for example, the idea of shame was a strong method for society to hold leadership wrongdoing accountable. Societies that have emerged from traumatic experiences such as colonialism, apartheid, civil war and war defeat, need leadership that is more caring, has greater self-awareness and is less inclined to seek refuge in victimhood.
Fostering merit-based societies
East Asian developmental states foster a fundamental collective mindset change towards merit-based societies. Appointments to the public sector and the awarding of government contracts and opportunities are seen to be done on merit, not based on political connections to the ruling party or leader, the leading political faction or the family or ethnic group of the leader.
These states push for new individual, community and society-wide behaviours which make ethical behaviour at all levels the standard, and dishonest and corrupt behaviour socially unacceptable. Furthermore, the reward structure in society was changed to reward hard work, honesty, innovation and merit.
They equalised social status across society, often breaking the power of traditional authority and landowner and feudal-based power, giving every citizen equal value. Many of these societies equalised the status of women more broadly than many other developing countries. This unleashed pent-up energy for industrialisation.
New reward structures were introduced at all levels of society, fundamentally changing the social, economic and psychic structures of these nations within one generation. They changed social norms, the unwritten rules of behaviour that individuals and communities deem acceptable. Those who did not follow the new norms suffered severe societal disapproval.
Entrepreneurship: A mindset
After World War 2 South Korea, Taiwan and Japan pushed entrepreneurship, which is why they are now more advanced than all African countries. They switched to the mindset of entrepreneurship, of creating private and state businesses which can outcompete industrial country equivalents.
Entrepreneurs change society. They create new industries, new jobs and new wealth. In their book, Entrepreneurship, researchers Robert Hirsch, Michael Peters and Dean Shepherd describe it as “initiating and constituting change in the structure of business and society”.
Furthermore, the successful developmental states focused on export manufacturing, which is technology-intensive, knowledge-intensive and competitive.
To break into global markets demands that companies produce cutting-edge products, penetrate difficult new markets and produce high-value products.
Just the focus on export manufacturing alone increases a country’s technology, knowledge and capacity — and therefore growth, employment and competitiveness. It changes the structure of the economy, institutions and skills levels of the producing country.
Redistribution strategies in these countries focused on boosting human capital, entrepreneurship not linked to the state and creating new globally competitive export industries not present or underdeveloped in the country. Their ambition was to, in one generation, educate their citizens to similar or higher education levels than those of the former colonial powers.
Fostering partnerships for growth and development
Many of these societies cobbled together pragmatic relationships between business, government, trade unions and civil society, bringing together all the talents, ideas and energy of a wide spectrum of society, to co-imagine industrialisation, lift economic growth and deliver development.
In the case of Japan, which built a democratic developmental state from the start, the governing party built consensus with opposition parties on core country priorities. Between 1967 and 1993, the period of Japan’s high-growth phase, the Liberal Democratic Party held power uninterruptedly, either alone or in coalition. It pursued consensus-style politics, offering policy concessions in parliament to opposition parties, in return for support for its export-led growth strategy.
Tackling corruption regardless of seniority
The East Asian developmental states determinedly tackled corruption. Singapore’s PAP was firmly against corruption from the start. Its definition of corruption includes elected and public representatives living beyond their means or being unable to explain wealth, property or assets.
It prosecuted its own powerful leaders to show that “independence” leaders were not above the law, as is the case in many postcolonial societies.
Some developmental states executed corrupt officials.
In Japan, the custom of shame meant corrupt individuals were publicly ostracised.
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No sustainable industrialisation, development or democracy can take hold unless corruption is reasonably tackled.
It undermines the capacity of the state, business, civil society and ordinary citizens; the credibility of policies and the authority of institutions managing development. It deters local and international investors.
Corruption prevents the best people getting appointed to manage industrialisation and development and siphons off public resources meant for it. Corruption undermines the trust in government necessary to build social pacts between the state, business, trade unions and civil society.
The human capital development so key to the success of developmental states would not have been possible with high levels of corruption, as money for education, skills and training would have been diverted to corrupt causes.
Long-term planning — a pillar of developmental state success — is certainly not possible amid high levels of corruption.
Entrenching equality before the law
Establishing a culture of rule of law is crucial for industrialisation, growth and development, which cannot take place without legal certainty, the absence of government and leaders abusing their powers, and equality before the law for everyone, with no exemptions for powerful political leaders. Access to fair justice in the instances of abuse of power is a crucial part of rule of law.
These nations were determined to establish the rule of law and make everyone equal before the law. Leaders were not exempt because of their “struggle” credentials, their high positions in the party, government and business, or because of their “dignity”.
Lack of rule of law fosters lawlessness, under which industrialisation, growth and development cannot take place. Long-term local and international investors will not risk their money, resources and time in countries where there is no rule of law, forcing the most skilled citizens, as well as capital and business, to move to safer shores — stripping a country of energy, resources and talent.
Accountability in basic terms means to accept and be held responsible for, or to account for, one’s actions. Accountability ensures that any leader, manager or organisation “that uses public money and makes decisions that affect people’s lives can be held responsible for their actions”. It is also about the extent to which the state is answerable for its actions.
Enforcing accountability ensures that elected and public officials act in the interests of the country, not in their own or that of their parties.
Accountability is crucial to building trust in government.
Without accountability, there is no public trust in elected and public representatives.
The East Asian developmental states fostered accountability across all levels of society. Political, business and civil society elites were held accountable, not only by citizens, but also by themselves. The societies use shame, firing and executing people who are not accountable. The practice of many African societies to exempt leaders because of their struggle credentials — or shared ethnicity or language — from accountability did not exist.
Mass civil movements to change minds
Many East Asian developmental states mobilised their populations behind national movements to change their societies’ collective mindsets.
The Japanese government had the Income Doubling Plan (1960-1967), which “called for doubling the size of Japan’s economy in 10 years through a combination of tax breaks, targeted investment, an expanded social safety net and incentives to increase exports and industrial development” in its efforts to catch up with the West.
In the 1970s South Korea started the Saemaul Movement to increase productivity in rural towns and villages. This included fostering a new appreciation for hard work, teamwork, innovation and productivity. In the 1980s, Singapore set up a national movement to bring about popular mindset change, getting people to buy into increasing productivity in their areas of work to boost overall national growth.
Africa’s continued post-colonial decline: No mindset changes
In contrast, almost all African countries within one generation became significantly poorer, more corrupt, more ethnically divided and more dysfunctional than they were at independence.
Most have been unable to pursue collective mindset changes. Ohno calls developing countries stuck in such “bad” historical behaviours, beliefs and institutions, institutionally solidified, and this applies to most African countries since the end of colonialism.
African institutional solidities were legacies of colonialism, white minority rule and apartheid, and pre-colonial traditional cultures, traditions and patterns of behaviour.
Power based on patriarchy, social and gender status, whether one is from the dominant ethnic ethnicity and how politically connected one is, means that talented individuals falling into the wrong category will never secure a top position or business contract or be elected to become a national leader in many societies. This undermines state capacity, industrialisation and entrepreneurship.
In patriarchy-based, “connections”-based and small-elite-run African societies, there would naturally be little incentive for power elites to boost the education of the wider populace.
The more educated a society, the more the newly educated will challenge patriarchy and the hegemony of small elites.
Many of these societies overly concentrate on and live in the past. Individual and collective identities are often victim-based. Much energy is spent on being angry, bitter and resentful towards former colonial powers, not on building in the present and for the future, or on holding current leaders and parties accountable for present decisions.
For governing parties, leaders and citizens, the past often becomes an excuse for present poor policies or the consequences of present corruption and present incompetence. Living overwhelmingly in the past diminishes the agency, imagination and self-confidence of individuals and the collective.
Many are “connections”-based societies, where individual advancement depends on ethnicity, religion or region, or on “struggle” ties, rather than merit. Merit is normally not the guiding principle for appointment to elected, public service and civil society leadership.
Entrepreneurship is not encouraged as the pinnacle of development, but is often seen as “bad”, “capitalist” and “exploitative”. In recent times, getting rich through living off the state, or tenderpreneurship, the opposite of entrepreneurship, is celebrated.
When post-independence governments lead the private sector they often have very little deep knowledge within the state of specific industries. The state often smothers the private sector rather than encouraging it, killing entrepreneurship, or encourages tenderpreneurship, which undermines genuine entrepreneurship and distorts markets.
Redistribution strategies often focus on getting formerly disadvantaged communities to live off the resources of the state, and seizing private assets from previously advantaged communities, rather than on expanding human capital and creating new private businesses. The state is expanded and the private sector shrunk, resulting in de-industrialisation and foreign imports displacing products previously produced locally and providing jobs, investment and income.
Many countries are ideologically driven, with decisions, policies and behaviours based on ideology, not evidence, pragmatism or rationality. Many governing parties pursued populism, adopting policies based on popular moods, not practicality, usefulness or effectiveness.
Many liberation movements are steeped in rigid Marxist-Leninism, and have adopted such policies dogmatically, whether they were suitable or not. Some have rigidly pursued different variants of what they called African socialism and African communalism — trying to return to pre-colonial communal economies.
Most countries are steeped in the ideology of patriarchy whereby women are unequal, young people have little say and deference is given based on age, positions in traditional structures and length in the “struggle”, and not honesty, competence or wisdom.
Most exclude vast numbers of talented women, young people and “outsiders” — depriving them of their energy, ideas and innovation.
Many countries lack the rule of law, starting with governments exempting party members and leaders while policing ordinary citizens not connected to the leaders. Such unequal treatment undermines establishing a culture of rule of law.
In many African countries, corruption has become an everyday occurrence: allocation of public money, appointments to public institutions and policy-making are based on patronage.
Governing parties and leaders are themselves often deeply corrupt, which makes it impossible to eradicate corruption.
Many citizens argue that corruption has no consequences, despite the overwhelming majority of their countries collapsing into failed states, plunging into civil war and becoming poorer than they were during colonialism.
Citizens continue to elect corrupt parties and leaders, repeating the continuous loop of failed states, civil war and development failure — over and over since the beginning of independence after World War 2.
Psychopathic, narcissistic leaders
African countries — with their high levels of poverty, contestation over legal, cultural and moral codes and lack of direction — are fertile ground for psychopathic, narcissistic and mean-spirited leaders.
Citizens often vote for them as either father figures or strong men who can supposedly defend them against threats such as former colonial powers, “enemy” groups or hostile elites from the ancien regime.
“Strong” leaders are those seen as aggressive, angry and shouting the loudest at “enemies” and other scapegoats. The concept of strength is rarely personified by dignity, compassion, emotional maturity or competence.
Voters also tend to choose based on past struggle, ethnic, religious or regional solidarity, or support autocratic, corrupt and incompetent leaders because they are “one of us”.
If they want to mimic the extraordinary and radical economic transformation of the East Asian tiger economies, South Africa and other African and developing countries will have to undergo drastic individual and collective mindset changes, and overhaul old institutions, behaviours and customs.
Without such a shock to thinking patterns, they will stay locked in mass underdevelopment, poverty and instability. DM/MC
This is the text of Prof William Gumede’s 2022 Sol Plaatje annual lecture, “Intellectual re-imagination: What can South Africa learn from the East Asian development states”, delivered at Sol Plaatje University in Kimberley on 7 October 2022. He is an associate professor at the School of Governance at the University of the Witwatersrand and the founder and chairman of the Democracy Works Foundation.