Economics 172 Issues in African Economic Development

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Economics 172Issues in African Economic
Development

• Lecture 25
• April 25, 2006

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• Outline
• Barkan (1994)
• Miguel (2004) on Kenya versus Tanzania

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Politics in Kenya

• Kenya is extremely ethnically diverse (as is
  Tanzania)
• Ethnic Group Percentage
• Kikuyu (Embu, Meru) 28 (Kenyattas group)
• Luhya 14
• Luo 13
• Kalenjin 12 (Mois group)
• Kamba 11
• Nomadic groups in north 7
• (Small numbers of South Asians, Whites)

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Public policy in the Moi period (1978-2002)

• His political coalition consisted of ethnic
  groups previously marginalized during the
  colonial and Kenyatta periods Kalenjin, Maasai,
  coastal groups

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Public policy in the Moi period (1978-2002)

• His political coalition consisted of ethnic
  groups previously marginalized during the
  colonial and Kenyatta periods Kalenjin, Maasai,
  coastal groups
• Important policy shifts
• (1) Increased tax rates on agricultural exports
• (2) Replaced Kikuyu civil servants, military
  officials with loyal Kalenjins

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Public policy in the Moi period (1978-2002)

• Additional policy changes
• (3) Public investments in health, education,
  roads shifted to Mois Rift Valley stronghold
• Central (33 pop.) 44 funding in 1979 to 16 by
  1987
• Rift Valley (33 pop.) 32 funding in 1979 to
  57 in 1987

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Public policy in the Moi period (1978-2002)

• Additional policy changes
• (3) Public investments in health, education,
  roads shifted to Mois Rift Valley stronghold
• Central (33 pop.) 44 funding in 1979 to 16 by
  1987
• Rift Valley (33 pop.) 32 funding in 1979 to
  57 in 1987
• (4) Doubled the number of university slots, but
  not funding. This led to dramatic deterioration
  in the quality of instruction. Founded Moi
  University
• (5) Doubled the size of the civil service
  (133,000 to 272,000), but many were patronage
  posts

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Political opposition to Moi

• There was an attempted coup by Kikuyu Air Force
  officers in 1982, put down by Moi
• In the aftermath of the coup, Moi cracked down on
  the opposition, banned opposition parties,
  imprisoned hundreds of peaceful dissidents,
  banned all ethnic organizations. In 1986 he
  revoked the independence of the civil service and
  judiciary.

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Political opposition to Moi

• There was an attempted coup by Kikuyu Air Force
  officers in 1982, put down by Moi
• In the aftermath of the coup, Moi cracked down on
  the opposition, banned opposition parties,
  imprisoned hundreds of peaceful dissidents,
  banned all ethnic organizations. In 1986 he
  revoked the independence of the civil service and
  judiciary.
• With opposition and public oversight weakened,
  Moi and his cronies became increasingly corrupt
• (1) Massive kickbacks from foreign investors
• (2) Chartering banks, and then looting their
  deposits

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Political opposition to Moi

• There was an attempted coup by Kikuyu Air Force
  officers in 1982, put down by Moi
• In the aftermath of the coup, Moi cracked down on
  the opposition, banned opposition parties,
  imprisoned hundreds of peaceful dissidents,
  banned all ethnic organizations. In 1986 he
  revoked the independence of the civil service and
  judiciary.
• With opposition and public oversight weakened,
  Moi and his cronies became increasingly corrupt
• (1) Massive kickbacks from foreign investors
• (2) Chartering banks, and then looting their
  deposits
• (3) Smuggling food into the country, selling at
  profit
• (4) Printing money for patronage ? high inflation

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Political changes in Kenya

• The rigged 1988 national election was a turning
  point
• In early 1990, former ministers Kenneth Matiba,
  Charles Rubia called for restoration of democracy

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Political changes in Kenya

• The rigged 1988 national election was a turning
  point
• In early 1990, former ministers Kenneth Matiba,
  Charles Rubia called for restoration of democracy
• In July 1990 large protests were organized by
  students, church groups in Nairobi to call for
  democracy. 28 protesters were killed on July 7,
  1990 (Saba Saba Day)
• In 1991 Matiba, Rubia and Oginga Odinga founded
  the united opposition party Forum for Restoration
  of Democracy (FORD)

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Political changes in Kenya

• The rigged 1988 national election was a turning
  point
• In early 1990, former ministers Kenneth Matiba,
  Charles Rubia called for restoration of democracy
• In July 1990 large protests were organized by
  students, church groups in Nairobi to call for
  democracy. 28 protesters were killed on July 7,
  1990 (Saba Saba Day)
• In 1991 Matiba, Rubia and Oginga Odinga founded
  the united opposition party Forum for Restoration
  of Democracy (FORD)
• In November 1991 international donors imposed
  explicitly political conditions on further aid.
  Aid suspended for six months

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Ethnic clashes during democratization

• Moi relented and in December 1991 lifted the ban
  on opposition parties, and called an election for
  late 1992

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Ethnic clashes during democratization

• Moi relented and in December 1991 lifted the ban
  on opposition parties, and called an election for
  late 1992
• However, from late 1991-1993, KANU is reported to
  have organized Kalenjin youth militia groups to
  terrorize and expel non-Kalenjin farmers in Rift
  Valley
• Roughly 1500 were killed and 300,000 mainly
  Kikuyu and Luhya farmers were made homeless

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Multiparty elections in 1992, 1997

• Perhaps surprisingly, Moi easily won the
  multiparty elections in 1992, and again in 1997.
  Why?

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Multiparty elections in 1992, 1997

• Perhaps surprisingly, Moi easily won the
  multiparty elections in 1992, and again in 1997.
  Why?
• The political opposition in both elections was
  split along ethnic lines. For instance
• Kenya African National Union (Kalenjin, Maasai)
• Democratic Party (Kikuyu)
• Ford-Asili, NDP (Luo)
• Ford-Kenya (Luhya)
• Social Democratic Party (Kamba)
• Islamic Party of Kenya (Coast eventually
  banned)
• Safina (Whites, Asians, others in Nairobi)

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Democratization in 2002

• Moi was constitutionally prohibited from running
  again in 2002. He chose Uhuru Kenyatta as KANU
  candidate
• Raila Odinga (Ogingas son) was hoping to be the
  KANU candidate. He left the ruling party and
  joined the opposition NARC (National Rainbow
  Coalition)

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Democratization in 2002

• Moi was constitutionally prohibited from running
  again in 2002. He chose Uhuru Kenyatta as KANU
  candidate
• Raila Odinga (Ogingas son) was hoping to be the
  KANU candidate. He left the ruling party and
  joined the opposition NARC (National Rainbow
  Coalition)
• For the first time all of the opposition groups
  were united, behind Odinga (Luo), Mwai Kibaki
  (Kikuyu), Michael Wamalwa (Luhya), Charity Ngilu
  (Kamba). NARC won a major victory in the 12/2002
  elections
• The deal was that if they won, Kibaki would be
  President and a strong prime minister post
  would be created in the constitution for Odinga

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Is Democracy enough?

• During constitutional negotiations in 2003-4,
  Kibaki went back on his promise to create a
  powerful prime minister position for Odinga,
  preferring a ceremonial position. This has
  strained the government.
• The government tried to pass their version of the
  constitution by referendum but were defeated in
  2005

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Is Democracy enough?

• During constitutional negotiations in 2003-4,
  Kibaki went back on his promise to create a
  powerful prime minister position for Odinga,
  preferring a ceremonial position. This has
  strained the government.
• The government tried to pass their version of the
  constitution by referendum but were defeated in
  2005
• Anti-corruption czar John Githongo uncovered a
  massive corruption scandal involving the VP and
  three ministers, Anglo Leasing, which has
  further eroded support for the government

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Is Democracy enough?

• During constitutional negotiations in 2003-4,
  Kibaki went back on his promise to create a
  powerful prime minister position for Odinga,
  preferring a ceremonial position. This has
  strained the government.
• The government tried to pass their version of the
  constitution by referendum but were defeated in
  2005
• Anti-corruption czar John Githongo uncovered a
  massive corruption scandal involving the VP and
  three ministers, Anglo Leasing, which has
  further eroded support for the government
• All sides are jockeying for position in the 2007
  elections. Which coalitions will form? What
  options do the Kenyan people have?

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Whiteboard 1
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Whiteboard 2
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Whiteboard 3
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Whiteboard 4
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Whiteboard 5
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Map of Africa