Government-Business Relations in the Democratic Era

Abstract

By the late 1980s, aid donors had come to the conclusion that the market reforms that they were sponsoring in Africa would succeed only if augmented by congenial governance. This followed the growing realization that broad discretionary power wielded by undemocratic, corrupt, and unaccountable African governments hindered economic reforms. “Underlying the litany of Africa’s development problems is a crisis of governance” the World Bank, in its famous 1989 (p. 60) report, argued. Bilateral donors began making their much-needed aid assistance to African states conditional on democratization, based on the belief that it would check arbitrary power, undercut their patronage, bring more conciliatory relations with business and other interest groups, and thereby make market reforms more effective.