Abstract:We seek to understand both the incidence and the impact of the African political business cycle in the light of a literature which has argued that, with major extensions of democracy since the 1990s, the cycle has both become more intense and has made African political systems more fragile. With the help of country-case studies, we argue, first, that the African political business cycle is not homogeneous, and is rarely encountered in so-called 'dominant-party systems' where a pre-election stimulus confers little political advantage. Secondly, we show that, in those countries where a political cycle does occur, it does not necessarily cause institutional damage. Whether it does or not depends not so much on whether there is an electoral cycle as on whether this calms or exacerbates fears of an unjust allocation of resources. In other words, the composition of the pre-election stimulus, in terms of its allocation between different categories of voter, is as important as its size.1 Our thanks to Helene Ehrhart, Victor Lledo, Vera Troeger, Paul Whiteley and other participants at seminars at the University of Essex and the Centre for the Study of African Economies, Oxford (March 2010) for most valuable comments on an early version. The paper derives from work done under research contract 156/25/0016, The Political Economy of Pro-Poor Adjustment and Growth, within the ESRC's World Economy and Finance Programme, and we are grateful to the ESRC for their support and encouragement.
2The African political business cycle: varieties of experience
1.IntroductionFor well over a century, the economies of industrialised countries have been subject to systematic economic fluctuations, often known as business cycles. No amount of macroeconomic management has been able to get rid of these cycles, and many have claimed that governments within a democratic system have an incentive to stimulate rather than restrain a pattern of 'stop-go' in their policies. It is tempting, for example, to buy popularity by boosting the economy before an election, for example through tax cuts or monetary expansion, knowing that the costs of doing this, for example, in terms of increased inflation, may not be foreseen by voters 2 , and in any case do not have to be paid until after the election has been won. At that point, the government may well choose to deflate the economy, both in order to pay for the preelection boost and possibly also to restrain wage claims by making the workforce fear for their jobs 3 . Thus, the political process may of itself tend to augment rather than restrain the business cycle -as observed in a number of Western industrialised countries and analysed by, for example, Kalecki (1943), Nordhaus (1975), one of the present authors (Mosley, 1978) 4 , and Rogoff (1990). And the now firmly embedded global economic environment of open capital markets may, as many have discovered to their cost during the recent global recession, amplify the ease with which such shocks once administered can be passed on to other countri...