By Sone Osakwe
Various factors contribute towards shaping a nation’s development pathway including capable states, strong social movements, efficient markets and self-reliant communities. However, these factors do not operate in silos. Rather, they are interconnected. Therefore it is important to appreciate how these elements interact at a national level and what the right balance should be in order to achieve sustainable change. But how does a country determine the appropriate mix in the midst of a global pandemic, and with the likelihood of a future global economic downturn?
The first step is to understand the individual functions and shortcomings of each group. States or governments provide public services, national security, and an enabling business environment; however, inefficiencies can creep in due to corruption or other factors. Who then can hold the state accountable? Other stakeholders perhaps, like strong social movements.
So what about the market? Efficient markets drive innovation and act as catalysts for growth. However, perfect markets rarely exist. Markets also have the tendency to promote selfish interests resulting in inequalities and exclusion of some citizens – often those most in need – from accessing basic goods and services like healthcare. Due to such shortcomings or the inefficient allocation of resources in the economy, states may intervene by providing those goods or services in which the market fails, such that it becomes available to people without restriction.
Besides states and markets, two other factors are equally important in economic development – social movements and civil society. Strong social movements, like the protests witnessed around the globe in 2019, can exert pressure on governments, leading to policy reforms. For example, in Chile and Ecuador, mass demonstrations led to the respective states reversing policies that would restrict poor and indigenous groups from accessing basic amenities, while countries such as Iraq and Lebanon saw political resignations in response to complaints from civil society. Community-led development also allows for implementation of grassroot-inspired goals, with less reliance on external foreign influence. The upside of this is reduced risk of pursuing development goals that might not align with local norms and traditions. However, a downside is the possibility of missing out on broader economic and political structures like increased market integration or access.
Context specific approaches and collaboration
This brings us to the second step – context. Although there is no precise formula for finding a balance between all factors, I am opined to think that the peculiarities of each nation is relevant and should be taken into consideration. For instance, a war-torn country may be in greater need of a strong state to protect and ensure the security of its citizens, whereas a politically stable country with some relative level of calm and security might consider private sector-led growth as a more immediate goal. Nonetheless, collaboration between all stakeholders is essential for sustainable national growth.
The ongoing global pandemic further highlights the importance of collaboration between these groups. Several governments in sub-Saharan Africa have had to increase expenditure to upgrade healthcare facilities and expand social protection schemes for vulnerable individuals and businesses. As a result of increased spending, the African Union, in conjunction with public and private sector players in the region, has set up a covid-19 intervention fund to tackle the effects of the pandemic. There are also similar joint response initiatives at national levels. For instance in Nigeria, non-governmental-organisations have been involved in raising funds, corporations have donated food, medical supplies and built make-shift hospitals. In Ghana, private organisations have collaborated with the government to build contact-tracing apps, while in Kenya, various corporations united to distribute supplies to promote personal hygiene. Civil society has been able to create awareness on relevant issues like digital exclusion in South Africa and challenges faced by the informal sector in Nigeria during the pandemic. Communities are also playing their role in respecting policies put in place to tackle the spread of the virus, reporting defaulters, and so on. Similarly, stakeholder cooperation has been used in tackling the impact of covid-19 in developed countries in terms of sharing accurate health information and medical research.
Consequently, a similar level of collaboration would be required to help reduce the future impact of the pandemic, and gradually enable planning for recovery and growth of national economies, especially in developing countries.
Sone is a masters student in International Development with Economics at the University of Bath. She has a background in accounting and finance and interests in poverty and inequality reduction as well as regulatory policies to stimulate small business expansion.
The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.
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