Accepted Paper:

The Political Economy of Commodity Processing Promotion: A Comparison of Export Restrictions on Raw Materials in Africa  

Author:

Nicolai Schulz (University of Manchester)

Paper short abstract:

This paper tests the argument that due to a perceived or actual increased risk to their political survival, policy makers are less likely to severely tax or ban the export of commodities, the larger the share of the population that gains significant income from working in producing that commodity.

Paper long abstract:

Since the early 2000s, the totality of African countries has increasingly reverted to high export taxes and bans on raw commodities to promote processing industries. Notably, however, the employment of heavy export taxes and bans varies significantly across commodity sectors within the same country, as well as between the same commodity sectors across countries. Several theories and arguments in the economics, international political economy (IPE), and domestic politics literature might explain why governments severely tax and ban certain commodity exports but not others. Based on a critical discussion of these approaches, this paper makes the argument that due to a perceived or actual increased risk to their political survival, policy makers are less likely to severely tax or ban the export of commodities, the larger the share of the population that gains significant income from working in producing that commodity. Employing a mix of methods - specifically a large-N cross-sectional OLS analysis of 150 country-commodities as well as in-depth case study analyses of nine distinct commodities based on field research in Ghana, Kenya, and Tanzania from March to December 2017 - it finds compelling evidence for the proposed argument and demonstrates that in African democracies the increased political threat of large producer groups appears to be particularly channeled through their electoral weight.

Panel J03
The political economy of industrial policy and state-business relations in the 21st Century (Paper)