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Accepted Paper:
The Politics of Industrial Policy in post-2000 Rwanda: Explaining Varied Sector Outcomes with a Focus on Agricultural Transformation
Sebastian Heinen
(Hochschule Bonn-Rhein-Sieg)
Paper short abstract:
The paper offers a political economy analysis of post-2000 Rwanda's economic transformation. It discusses why some industries were successfully built up or professionalised, while others made very little progress. It provides evidence for why Rwanda's agricultural transformation failed.
Paper long abstract:
Rwanda's political settlement has provided the ruling elite with both the political will and the political power to pursue economic transformation. While remarkable success in state-building and socio-economic indicators is as undisputed as the country's limitations on political freedom, structural economic transformation outcomes have been mixed. Initial success in coffee and tourism contrasts with preliminary failure in manufacturing and food crops. It is argued that the prevailing patterns can be explained by studying how the manifestation of the Rwandan government's main instrument of policy performance monitoring and enforcement -its imihigo system- fits together with each sector's transformation requirements. While the top-down governance mode worked sufficiently well to build up a domestic coffee-processing as well as a high-end eco- and conference tourism sector, it was inadequate to create a competitive manufacturing sector or to transform unproductive subsistence agriculture. The general argument is illustrated by diving into the details of the country's failed agricultural transformation. In particular, simple qualitative and quantitative evidence from official Rwandan sources is provided to show how food crop production was massively overestimated from 2008 to 2014, while actual output levels stagnated. Even more, overreporting was driven by a rigid performance contract system that incentivised farmers and agronomists to tweak the numbers instead of compelling them to achieve actual results. The paper concludes that Rwanda may need a more sophisticated and flexible governance system that supports entrepreneurial experimentation and bureaucratic discretion for sustained economic transformation progress.
Click the star to add/remove an item to/from your individual schedule.
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Accepted Paper:
Paper short abstract:
Paper long abstract:
Rwanda's political settlement has provided the ruling elite with both the political will and the political power to pursue economic transformation. While remarkable success in state-building and socio-economic indicators is as undisputed as the country's limitations on political freedom, structural economic transformation outcomes have been mixed. Initial success in coffee and tourism contrasts with preliminary failure in manufacturing and food crops. It is argued that the prevailing patterns can be explained by studying how the manifestation of the Rwandan government's main instrument of policy performance monitoring and enforcement -its imihigo system- fits together with each sector's transformation requirements. While the top-down governance mode worked sufficiently well to build up a domestic coffee-processing as well as a high-end eco- and conference tourism sector, it was inadequate to create a competitive manufacturing sector or to transform unproductive subsistence agriculture. The general argument is illustrated by diving into the details of the country's failed agricultural transformation. In particular, simple qualitative and quantitative evidence from official Rwandan sources is provided to show how food crop production was massively overestimated from 2008 to 2014, while actual output levels stagnated. Even more, overreporting was driven by a rigid performance contract system that incentivised farmers and agronomists to tweak the numbers instead of compelling them to achieve actual results. The paper concludes that Rwanda may need a more sophisticated and flexible governance system that supports entrepreneurial experimentation and bureaucratic discretion for sustained economic transformation progress.
The Politics of Economic Transformation: Finance and Industrial Policy I
Session 1 Wednesday 6 July, 2022, -