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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

Central Planning May Have Helped Modernize China, but It Ruined Africa



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On the Corner, Kevin makes an important point about Slate’s idea that authoritarian China ended famines more through subsidizing agricultural inputs and building infrastructure than through liberalization: This isn’t a lesson for the U.S. 

As Slate has it, Chinese government action yanked agriculture out of the 16th century into the 20th; this doesn’t really work if your economy is already in the 20th or 21st century.

But there’s at least one other big problem with this idea: This doesn’t work for lots of other primitive economies. Sub-Saharan African states did basically what China did for decades — in a slightly more liberal way via a system called marketing boards, extracting surplus from the economy to pay for modernizing the economy and subsidizing various agricultural inputs such as fertilizer and irrigation.

This went absolutely terribly, as a former professor of mine, Robert Bates, recounts in a slim but hugely important book that bears, unfortunately, the almost amusingly boring name Markets and States in Tropical Africa.

Rather than modernizing their economies, African countries used subsidies and modernization to extract wealth from the poor and marginalize them politically, to the benefit of a small cadre of politically connected individuals in each country’s capital.

So awful was this system that a country like Sierra Leone, the main agricultural product of which is rice, actually had to start importing rice to feed its soldiers and bureaucrats. (You can imagine what that then did to Sierra Leonean farmers.)

There are other examples on Slate’s side of the ledger — public investment in agricultural research did revolutionize Brazil and made huge swaths of the country arable. But even the limited lesson Slate is trying to draw immiserated hundreds of millions of Africans.



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