Articles of interest
Book in Focus
A History of Physics over the Last Two Centuries
By Alessandra Gliozzi and Ferdinando Gliozzi
Book in Focus
A History of Physics from Antiquity to the Enlightenment
By Alessandra Gliozzi and Ferdinando Gliozzi
12th February 2021
Book in Focus
Coups, Military Rule and Autocratic Consolidation in Angola and Nigeria
By Ross Harvey
In Coups, Military Rule and Autocratic Consolidation in Nigeria and Angola, Dr Ross Harvey provides a unique explanation of why Angola and Nigeria—Africa’s two largest oil-producing nations—have experienced such different political and economic outcomes since attaining independence. It explains why Asian-led oil-for-infrastructure deals materialised in Angola but failed in Nigeria between 2004 and 2007. One hypothesis of the natural resource curse is that resource wealth leads to underdevelopment because it entrenches autocracy, but that fails to explain the different political economy outcomes in Angola and Nigeria, which were both predominantly autocratic post-independence.
The book offers an analysis of this phenomenon and, through the application of a game-theoretic model, illuminates the importance of tailoring governance solutions to reflect the specificities of any resource-wealthy context. In this edition of Book in Focus, Dr Harvey introduces the background context of the study, in addition to the theories that informed its creation.
I wrote this book because I am deeply disturbed by the ‘resource curse’, the hypothesised counter-intuitive relationship between natural resource dependence and under-development. Of the 20 countries that score worst on the United Nations’ Human Development Index (HDI) for 2020, 17 are in Africa, and, of these, the vast majority are abundantly endowed with natural resources.
Having grown up in mining communities, I was blissfully unaware of this empirical relationship. It was a great childhood and I saw the immense benefit that mining produced for communities and countries alike. Not until 2009 did I fully grasp that resource wealth could lead to disastrous outcomes. I spent that year as an intern at the South African Institute of International Affairs compiling an annotated bibliography of the resource curse. By then a voluminous literature on the topic had developed. Richard Auty had first coined the phrase back in 1993 in his epic work on the subject. The first quantitative paper that tried to establish whether natural resource abundance was associated with negative economic growth was produced by Jeffrey Sachs and Andrew Warner in 1995.
Academics from different fields addressed the issue with a range of hypotheses. Some asserted that resource wealth caused civil war. Others argued that it didn’t cause civil war per se, but rather prolonged it. Yet others aimed to understand the dynamics that resource wealth created within rebel groups. Debates over definitions abounded: was it resource dependence that was a problem or was it simply abundance? If it was dependence, then how should we accurately measure dependence? Perhaps more importantly, scholars that were dissatisfied with the idea that a geographic endowment could somehow cause underdevelopment started to show that the question needed to be reframed. Rightly, then, the question became: Why do some countries do well from their natural resources while others seem to do worse than expected? The differentiator turned out to be the quality of a country’s institutions at the time of discovering resource wealth.
By 2006, a relative consensus had emerged that institutional quality was indeed the key variable determining why some countries did better than others. If institutional quality was the problem, then good governance was the solution. However, governance solutions are not entities that can be picked off a context-free shelf. Unless they cohere with the grain of pre-existing institutions, they’re bound to fail. Institutions are best defined, I argue, by Avner Greif, who wrote in 2006 that they are social systems—values, norms, beliefs and culture—that motivate regular human behaviour. In other words, they aren’t just the rules of the game or the organisations that govern us, they’re the systems from which incentives are derived. In short, where these social systems value holding elites to account and punish looting, resource wealth tends to be employed for public benefit. Where accountability mechanisms are weak, resource wealth can simply aid looting and strengthen autocratic rule by aspirant dictators. This accounts in part for the now widely observed phenomenon that, in weakly institutionalised contexts, resource wealth is correlated with authoritarian rule.
These problems fascinated me. At the same time, I was interested in understanding how Chinese interests in Africa’s resources might affect institutional quality. My premise was that if Chinese businesses were unconstrained by having to adhere to security exchange commission rules (like many Western multinationals) and were instead orientated towards serving Chinese Communist Party interests, then they might inadvertently exacerbate fragility in resource-wealthy jurisdictions. Bribery, for instance, might not be frowned on as heavily as in other cases. A case in point is that Beny Steinmetz has just been found guilty by a Swiss court of bribing a former First Lady in Guinea to secure access to iron ore resources. It’s not clear that Chinese courts would prosecute in similar ways.
With these two lines of interest, I pursued a PhD in Economics, trying to understand the impact of Chinese investment in Africa on institutional quality in resource-wealthy countries. As is often the case, this kind of study is overly ambitious. Firstly, why would one cherry-pick the impact of Chinese investments versus other investments; where was the ‘control group’, as it were? Secondly, how was the dependent variable going to be accurately measured? Thirdly, how was I going to control for other potentially determinative variables? The project, therefore, evolved towards understanding why a set of similar oil-for-infrastructure deals worked in one country (Angola), but not in another (Nigeria).
A 2009 Chatham House report revealed that between 2004 and 2007, Asian National Oil Companies (ANOCs) pursued oil blocks in Angola and Nigeria. In the latter, most potential investors withdrew when they perceived that the money on the table was being redeployed for the President at the time to procure for himself a third term. In Angola, the state-owned oil company—Sonangol—was an effective company and the leadership of the country was stable (if highly autocratic). The deals were struck, and the terms were executed. Unfortunately, much of the infrastructure that was built in Angola has not catalysed broad-based development in the way that it should have. Instead, it shored up President Jose Eduardo dos Santos’s dictatorship after the end of that country’s long-standing civil war in 2002. Either way, there was an important question here: If one expected deals to be struck in an apparently more open and stable context (in Nigeria in 2004), then why did the deals fall apart there but not in Angola?
To answer that question, I needed to first make sense of the preceding political economy contexts in both countries. As Sub-Saharan Africa’s two largest oil-producing nations, why was the political leadership in Angola more stable despite 27 years of civil war? Why was Obasanjo’s political ambition ultimately a problem for the ANOCs, and why was the Nigerian National Petroleum Company (NNPC) relatively less efficient than Sonangol? In two oil-wealthy nations, why has the resource curse played out so differently?
The answers are fascinating, and they essentially constitute the book. I start by detailing the evolution of the resource curse literature and the importance of institutions, and provide a theoretical framework through which to understand the problem. My methodological template is analytic narrative—the employment of game-theoretic models to make sense of historical data. The method iterates between theory and data until it arrives at explanations that account for most of the variations in the data with the fewest additional hypotheses (Occam’s Razor). Princeton scholar Milan Svolik happened to develop a game-theory model back in 2009 which turned out to be highly appropriate for this comparative case study.
Broadly-speaking, the model proposes that aspirant autocrats—at any given moment—can choose to maintain the status quo, the internal power-sharing arrangement within the ruling coalition, or grab more power for themselves at the expense of the other members of the coalition. These other members can, in either instance, launch a coup or accept the power-grabbing move. The model is appropriate because it answers the question of why—in two autocratic contexts post-independence—some rulers last for decades and others for only a few months. In Angola, dos Santos accumulated power early on in his rule by eliminating potential threats. At each turn, the remaining members of the coalition chose not to launch a coup. In other words, dos Santos was skilled at grabbing more and more personal power at the same time as destroying the probability of a successful coup against himself. He lasted 38 years as a result, but was surprisingly ousted by a bloodless coup in 2017 (led by current President Lourenco, who dos Santos had fired in 2003, but allowed back as Minister of Defence in 2014). By contrast, in Nigeria, two coups in quick succession (1966) and a civil war (1967 to 1970) had occurred before oil wealth even became a major factor in political calculus. However, it clearly exacerbated this fragility, and the country was racked by numerous coups (some successful and others not) until 1993 when Sani Abacha came to power.
I’ll not give too much more away, but the book essentially provides an account of why political economy outcomes have differed in Angola and Nigeria, despite both being oil-wealthy. Delving into specific anatomies of the ‘resource curse’ is necessary if governance solutions are to be found. Understanding that there is a general negative correlation between resource wealth and development is not sufficient for finding solutions. Explanations for Africa’s underdevelopment have typically centred around geography, colonialism and ethnic fragmentation. African leaders too often point to these factors as excuses for persistent poor performance on HDI scores and a range of other metrics. I provide an alternative view, one that emphasises the agency of aspirant autocrats. Too many efforts to improve governance and development in African countries ignore the dynamics of autocratic consolidation. The road to hell is paved with good intentions, and more emphasis now needs to be directed at stopping the flow of resource rents that enable autocratic consolidation at the expense of broad-based development.
“Harvey’s compelling study adds significantly to our understanding of the “resource curse” that has bedevilled many oil-rich countries in Africa and elsewhere. Tracing the political and economic trajectories of two of the African continent’s oil-producing giants, Nigeria and Angola, he applies an innovative game-theoretic analysis to explain the two countries’ distinct developmental outcomes. The book will be of great interest to scholars and advanced students of African and comparative politics and development. It also offers valuable insights for practitioners looking to improve governance in resource-rich countries.”
Professor Anthony Butler
Professor of Political Studies, University of Cape Town
“Coups, Military Rule and Autocratic Consolidation is an excellent book that makes a solid contribution to scholarship and to the literature on oil and its influence in institutional formation and evolution in Angola and Nigeria.”
Alex Vines, OBE, PhD,
Director, Africa Programme, Chatham House; Assistant Professor, Coventry University, UK
“This book successfully clarifies some of the core issues and challenges that bedevil development in Africa. Why do African nations, well-endowed with natural resources, continue to be associated with dismal development, corruption and poor governance? Can extractive industries in Africa ever be harnessed to reduce rent-seeking behaviour by elite governing groups? Can African nations, dependant on resource extraction, ever develop institutional arrangements that are truly compatible with global engagement? Ross Harvey provides a cogent insight into the often opaque arrangements that govern elite politics in Africa by unpacking the impact of oil-for-infrastructure deals on institutional formation, factional diversity, and the differing political settlements that have developed within Angola and Nigeria.”
Director of Stephan Bros; former Lecturer in Political Economy, University of Cape Town
“An enduring puzzle in the development economics literature is why some resource-rich economies perform better than others. Drawing from game theory, economic history and political economy, Ross Harvey makes an original and compelling contribution to the “resource curse” literature by examining the causes of the institutional divergence of two oil rich countries, Angola and Nigeria. The book will be essential reading for scholars in political economy and development economics.”
Director, United Nations University-World Institute for Development Economics Research (UNU-WIDER); Professor of Development Economics, University of Manchester
Ross Harvey has a keen interest in natural resource governance and the evolution of political economies. He read for an MPhil in Public Policy at the University of Cape Town, South Africa, and completed his PhD in Economics at the same institution while working as a Senior Researcher at the South African Institute of International Affairs. He is currently the Director of Research and Programmes at Good Governance Africa and a Senior Research Associate at the Institute for the Future of Knowledge at the University of Johannesburg.
Coups, Military Rule and Autocratic Consolidation in Angola and Nigeria is available now. Enter the code PROMO25 at the checkout for a 25% discount.