International development discourses and the development of Ghana : a historical discursive analysis

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International

Development

discourses and the

Development of

Ghana

A historical discursive analysis

University of Amsterdam

Faculty of Social and Behavioral Sciences Academic year 2018 - 2019

Yassine Ejdaa - 11231203

June 17, 2019

Bachelor’s thesis

Human Geography

Word count: 19524

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ABSTRACT

Development is a highly discursive topic; many perspectives and discourses provide different meanings on development and how to achieve it. This research focusses on the historical evolution of politics in Ghana and their associated changing discourse on economic progress. It links the general international development discourses with the national perspectives of political leaders. This thesis answers the question: How are international development

discourses reflected in the political history of Ghana? Overall, two distinct groups of leaders

reigned in Ghana: the socialists who plea for protectionism against foreign interference and the pro-Western liberalists who turn to the Bretton Woods institutions for financial aid. Although Ghana is in the grasp of the neoliberal discourse since the economic crisis of 1982, popular resistance against western interference and policies remains – as a legacy of Nkrumah. Future policies should try to involve the populace in the development and economic prosperity of Ghana as the SAPs and PRSPs failed to do so.

Keywords: International Financial Institution, development, discourse, Ghana, socialism, structural adjustment, economic stability, liberalization, PRSP.

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ABBREVIATIONS

ADA AFRC AYO CIA CPP ECLA ERP ESF GBA GDP GPRS HIPC IBRD IDA IMF MAP NAL NDC NGO NLC NLM NRC NPP NUGS PAMSCAD PFP PNDC PNP PP PRS(P) SAP SMC UGCC UP WB

Avoidance of Discrimination Act Armed Forces Revolutionary Council Anlo Youth Organization

Central Intelligence Agency Convention People’s Party

Economic Commission for Latin America Economic Recovery Program

Emergency Social Fund Ghana Bar Association Gross Domestic Product

Ghana Poverty Reduction Strategy Heavily Indebted Poor Country

International Bank for Reconstruction and Development International Development Association

International Monetary Funds Muslim Association Party National Alliance of Liberals National Democratic Congress Non-Governmental Organization National Liberation Council National Liberation Movement National Redemption Council New Patriotic Party

National Union of Ghanaian Students

Program of Action to Mitigate the Social Costs of Adjustment Popular Front Party

Provisional National Defense Council People’s National Party

Progress Party

Poverty Reduction Strategy (Paper) Structural Adjustment Program Supreme Military Council United Gold Coast Convention United Party

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It is far easier for the proverbial camel to pass through the needle’s eye, hump and all, than for an erstwhile colonial administration to give sound and honest counsel of a political nature to

its liberated territory. - Kwame Nkrumah -

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CHAPTER 1:

Introduction

The concept of International Development arose around the late 40s, at the end of World War II. The war led to massive destruction, the era of colonialization came to an end and left former colonies exploited and underdeveloped, and the Cold War, which threatened the expansion of communism, started. International development primarily targeted the colonies that gained independence. These newly formed states needed construction of governance to stimulate growth to eradicate poverty, hunger, and economic instability (Layne, 2007; Helleiner, 2006).

The term development suggests that countries have different levels of development and there is a hierarchy, a goal to pursue. It implies that there is one path for underdeveloped states to follow to receive the status of ‘developed’. But what is development? What do we mean by progress and prosperity? Many scholars, politicians, economists, etc. have attempted to define development resulting in the evolution of a variety of discourses on international development over the past decades. These discourses hold different ideas of what development is and how to achieve it.

The establishment of the Bretton Woods institutions - the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), now part of the World Bank –- in 1944 can be seen as a means to spread a discourse to different underdeveloped nations (Helleiner, 2014). These International Financial Institutions (IFIs) offer loans for their member states to finance development programs; first mainly for the reconstruction of Europe, later more focused on economic development in the Global South. The IMF and the World Bank, however, do not just have a passive function of financial assistance; they hold the power to dictate the introduction of policies that are in line with their philosophy on development. Consequently, nations that implement these laws will receive financial assistance. Additionally, the creation of discourses on development is a dynamic process. By analyzing the realizations and shortcomings of previous discourses, new ideas are formed. This has resulted in a wide spectrum of different development programs following different discourses (Ruger, 2005). The diversity of development discourse is the main focus of this research.

Ghana is by many scholars considered as the African pioneer regarding economic progress and position in the international market. Ghana was the first sub-Saharan state to gain independence and also one of the first and successful countries to implement the Structural Adjustment Programs of the IFIs (Brydon & Legge, 1996). Additionally, Ghana is also known for its resistance to neoliberal policies. The Ghanaian government is, for example, the only African government still controlling its export of cocoa beans while the cocoa export of other sub-Saharan states is in hand of foreign companies and multinationals (Wilcox & Abbott, 2004). This research investigates Ghana’s development path between 1947 and 2008 to clarify its leading role amongst the developing nations. This will be done by linking the perspectives of the Ghanaian political leaders with the overall discourse on development to highlight their relationship and investigate the origin of the Ghanaian resistance to neoliberalism and trade liberalization.

The subject of Ghana and its economic and political development is not unknown to the academic world. Ghana received a lot of university attention due to its pioneering role and because the Ghanaian academic system is relatively extensive. The novelty of this research lies in its completeness of the Ghanaian historical development and its link with international

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development discourses. Previous academic research mainly focused on certain decades or regime of the political history of Ghana. By looking at the entire history since 1947, the emphasis lies on the evolution of ideologies and discourses and their interrelations. It helps to understand how discourses got created and which events contributed to certain perspectives.

The main research question of this thesis is:

How are international development discourses reflected in the political history of Ghana?

To guide the research, several sub-questions were drafted. The first one is directed to the general perspectives on international development and their evolution:

What are the different discourses on international development and how did they evolve over time?

The second question focusses on the Ghanaian political and economic situation after World War II up till 2008 and the influence of political leaders on the development of Ghana:

How did the political history of Ghana effect the national economy and development?

The last sub-question is directed to the power of the International Financial Institutions and the resistance they experienced in amongst Ghana’s population.

How did the International Financial Institutions influence the development of Ghana?

Chapter two outlines the methodology of the research including an elaboration on the importance of discourse analysis. Chapter three describes the history of development thinking; the main theories and the relation to each other. The fourth chapter delves into the political history of Ghana since 1947. It extensively describes the sequence of political leaders and their discourse and perspective on economic progress. Additionally, the relation to the IMF and the World Bank is included. Chapter five provides the analysis of this research by answering the main research question. Finally, a short conclusion and discussion will conclude this thesis.

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CHAPTER 2:

Methodology

This chapter provides an outline of the methodology of the research. This includes the research strategy, the research design and methods of data collection, the units of research, the type of analytic approach and finally a description of the sources. Additionally, chapter two is a plea for the use of discourse analysis in the field of social sciences. The chapter delineates its importance and added value to investigation on prevailing discourses and their power relations.

This bachelor’s thesis explores the political situation throughout the history of Ghana to offer a better understanding of past economic and social events and the reciprocity between the Ghanaian development and the international aid community. The intentions lie in placing the Ghanaian development into a wider context to elucidate important actors and stakeholders and their relationship and contribution to the process of economic growth in Ghana. In the current globalized political environment, the process of development has become more complex and interwoven. A qualitative research strategy is more fitted for this purpose of broader context shaping and articulation of the complexity of the situation. This research strategy is consistent with the analytic induction as analytic approach. In the analytic induction approach, the investigator starts the research with some assumptions and a broad hypothesis. In the course of the investigation, this hypothesis will be adapted as new information comes to light. The research is carried out iteratively; more knowledge on the situation will alter the theory and conclusion. By doing qualitative research, the experiences of the Ghanaian population and politics become the focal point of the investigation; the meaning of the interference from the International Financial Institutions (IFIs) and the liberalization process becomes the subject. The emphasis lies on the profundity of the knowledge rather than the generalization of the outcomes (Bryman, 2016).

The research focusses on development and economic growth in the case of Ghana; a case study research design seemed most suited. By applying a case study design, the research was able to intensively explore the Ghanaian historical situation and evolution in detail. The focus lies on the unique characteristics of Ghana in its path to economic stability and the complex nature of the phenomenon. Additionally, a case study proved to be most suitable for investigating political decisions and policies (Bryman, 2016). The discourses and perspectives of political leaders of Ghana and the international development aid milieu are the units of research. The national and international discourses will be studied adjacent to each other to explore common grounds, contradictions, and frictions. The information used for this research is mainly based on the secondary analysis of qualitative academic literature. As this academic literature is predominantly western and has a discursive nature, the research tried to involve non-western, mostly Ghanaian scholars into the data collection. Luckily, the Ghanaian academic world is well organized and extensive, so African publications were not hard to find.

Furthermore, policy documents, speeches, and publications by political leaders were primary analyzed to crawl into the mindset and reasonings of these influential characters. The next

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section will elaborate on the concept of discourse and the reasons why it should not be neglected.

Social Science and Discourse

Many scholars have tried to define the term discourse (see e.g. Hall, 1992). This research will use the definition given by Hajer, Van Den Brink & Metze (2006). They write that a discourse is:

… an ensemble of ideas, concepts, and categories through which meaning is given to social and physical phenomena, and which is produced and reproduced through an identifiable set of practices.

(Hajer, Van Den brink & Metze, 2006 - p. 67) A discourse is a coherence of statements, a particular way of representing and talking about a specific kind of knowledge about a topic. As denoted in the definition above, a discourse gives social phenomena meaning and has a reproductive nature. The French political philosopher Michel Foucault argues that all social practices entail meaning, and that meaning shapes and influences our actions. The practice of producing meaning creates discourses and so all social practices have a discursive aspect (Hall, 1992). In line with this thinking, is the ontological position of the constructionist philosophy. Viewed through the constructionist lens, reality and social phenomena are not independent of but are constructed by actors and individuals. Knowledge of the social world comes about through an active creation by social actors such as organizations, institutions or individuals. Meanings are developed through interactions with other individuals. Additionally, there is not one reason, not one reality; absolute truths are illusions (Bryman, 2016).

The concept of discourse is not about whether things exist but about where meaning comes from.

(Stuart Hall, 1997) The constructivist position advocates for research on the power of language and discourse. Analyzing discourses is deemed crucial because discourses hold power – they possess a constructive force; a discourse actually constructs the object or event itself. The ways we think influences the way we act and our conduct. In other words, all social practices must be understood through their discursive construction (Langdridge & Hagger-Johnson, 2009). Hall (1997) adds that discourses do not only construct social phenomena but also regulates the knowledge on a topic through power relationships. There is not just one discourse on social phenomena. Different discourses with different perspectives and meanings interact. The dominant, prevailing discourse rules out alternative perspectives and ways of talking about a topic. Hall (1992) underscores that with sufficient time and effort, certain ways of talking about and understanding the world can become so natural that they become axioms or assumed truths, making it difficult for alternative perspectives to thrive. This power of discourse is also what Foucault brought forward in his academic writings and theories (Hall, 1997).

Foucault is seen as one of the greatest philosophers and historians of the second half of the twentieth century and he is the most cited philosopher in the field of social science. His

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scientific interests were focused on providing a different perspective on history than the prevailing train of thought. He undermined the assumption that everything now is better than the past. By presenting an alternative view, he emphasizes the power of discourse in society and shows us that we too often take things for granted. Foucault encourages us to look at the dominant ideas and institutions of our time and to critically analyze their interactions, history, and evolution (Eribon & Holierhoek, 1990; Hall, 1992).

The critical discourse analysis practitioners - also known as the Foucauldian discourse analysts - try to track how discourses are constructed and maintained. Hereby, a historical review of the evolution of discourses on the topic is crucial to illustrate the changing meaning of the topic. Equally important is the research on the power of discourses; the influence of the dominant discourse on other perspectives and the linkage between different discourses as they influence each other (Bryman, 2016).

The Power of Discourse

This research examines the social phenomenon of international development by applying a Foucauldian approach to discursive analysis. This research strategy provides a tool to describe how actors and organizations use discourses and arguments to frame their interests. Three aspects of the discourses will be explored: (1) the meaning of development of the discourse and the evolution of this meaning, (2) how different discourses construct the process of development and how they influence governmental acting and policy making, and (3) how the different discourses relate to each other, which one is the most dominant and enjoys a power advantage. The latter component, the relationship between knowledge and power, is typical for the Foucauldian discourse analysis. Besides focusing on the meaning and the origin of a discourse, the power of the discourse and who imposes it, is equally relevant.

The academic world of international development aid is in constant debate. This is because international development is a rather recent field of study with a large discursive component. International development is fueled by different stakeholders: non-governmental organizations (NGOs), international financial institutions (IFIs), governments and multilateral organizations. These different actors serve different interests and have a different meaning on development, and thus act according to different discourses. It is the task of social scientists to examine this variety in interests and discourses, to map them and to investigate them from a historical perspective in order to reveal the evolution of the discourses and their influence on development. But it is not only important to examine the past. Joining Foucault’s method of reasoning, examining the limitations of contemporary perspectives on development can be of even greater importance. It helps us to not take ideas for granted, to locate dominant discourses, analyze their shortcomings and to think of alternatives. It helps us to move forward. It helps us to develop.

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CHAPTER 3:

International Development Discourses

As discussed in chapter two, all social practices entail meaning, so does international development. Development is a complex and contradictory term with not just one unambiguous definition. Different stakeholders with differing interests may have different perspectives on what development is; there is little consensus on the meaning of development. This chapter will elaborate on the diversity of the conceptualization of development and, more importantly, the historical changes that occurred when dominant ideas where questioned and altered. This will be done by placing the particular meanings on development in the context of their institutional, political and historical moments. To clearly illustrate the different discourses, this chapter will present them as static entities, separate from each other. It must be clarified that a discourse is dynamic, in constant change. By evaluating the limitations of previous perspectives, new discourses are created or adjusted. Additionally, as stated before, different discourses can exist during the same period. It is not a clearly demarcated sequence but rather an intertwined complex process.

Development occupies the centre of an incredibly powerful semantic constellation … at the same time, very few words are as feeble, as fragile and as incapable of giving substance and meaning to thought and behaviour.

(Esteva, 1992 - p.8)

What is development?

The main issue with defining development is the dependency on value judgments. We need to acknowledge the divergence in opinions on the objectives and aspirations of development. There is, on the other hand, however, a general basis in the definition that is independent of its discourse: development is a continuous and cumulative process of change that is not always positive and is comprehensive – not just change in one particular element (Thomas, 2000).

A widespread assumption is that development is a synonym for prosperity and progress and is thus, put differently, always a beneficial improvement. This belief was and still is, criticized by many social scientists (Chant & McIlwaine, 2009). Arturo Escobar, for example, discusses in his book Encountering development: The making and unmaking of the Third

World (2011) the negative outcome of development on the Global South. He suggests that the

development project is a Western creation that made the lives of people in the South worse instead of ameliorating them. Also, Edward Wadie Said – the auteur of the acclaimed book

Orientalism (1978) – offers criticism of the Western perception of the East, what he refers to

as Orientalism. As Said (1978) addresses in his book:

Orientalism can be discussed and analyzed as the corporate institution for dealing with the Orient – dealing with it by making statements about it, by teaching it,

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settling it, ruling over it; in short, Orientalism as a Western style of dominating, restructuring and having authority over the Orient …

(Said, 1978 - p.3) He argues that - by romanticizing the Orient - the West provides an Other against which the own identity of superiority can be created. According to this thinking, international develop-ment became a mechanism of control comparable to colonialism. Interventionist developdevelop-ment – even with positive consequences – is thus per definition a problem because it sets the terms of how people in underdeveloped countries should live (Arturo, 1995). Both scholars try to make us aware of the axiom of development as inherently positive and break the tendency to view development as unquestioned and interventionist rather than complex and discursive (Chant & McIlwaine, 2009). Therefore, they are both indispensable when talking about and examining international development.

The Evolution of the Discourse on Development

Just as there is not one fixed definition of development, there is no single development discourse. Instead, there are only suggestions on what development is and should contain. Different discourses present different meanings and explanations of what they think development is. Examining discourses can make social events more understandable as it examines the consequences by looking at the causes, the ways of thinking that resulted in these consequences. A development theory aims to describe how development took place in the past and how it can be improved in the future. A new development discourse is therefore always built on the flaws of the previous one. Development discourses are thus, as mentioned before, dynamic, constantly redefined as new insights and limitations emerge (Chant & McIlwaine, 2009; Daniels et al., 2012).

This section summarizes the main development theories to illustrate the changing patterns of development throughout the world in the post-world war II era. These discourses will be linked to the thinking and acting of the World Bank and the IMF. The choice to link the general discourses to the World Bank and the IMF is because of the large influence the institutions have on the field of development relative to other organizations such as the UN; the World Bank is the world’s premier economic multilateral institution and the largest financial contributor to development projects (Ruger, 2005; Chant & McIlwaine, 2009). Furthermore, the World Bank and the IMF played a vital role in the realization of the liberalization processes of Ghana as discussed in chapter four (Brydon & Legge, 1996). Their vision and influence on development can therefore not be ignored. The discourses that will be discussed are, in chronological order: the Modernization theory (1940s – 1960s), the Dependency theory and World System theory (1960s – 1970s), the Neoliberal discourse (1980s – now) and the Post-development discourse (1990s – now).

The Modernization theory

In the aftermath of World War II, two distinctive worldviews and ideologies were developed. This disparity in perspective resulted in the division of the world in two main power blocks: the capitalist western block led by the United States and the communist block led by the Soviet Union (USSR). This geopolitical tension between two opposite ideologies brought about an armed peace; the so-called Cold War. The world was divided into three: the capitalist West as the “first world”, the communist block as the “second world” and the remaining countries that did not actively participate in the Cold War. The latter was also

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named the “third world” or developing countries (Daniels et al., 2012). The goal of the West in this period was to spread capitalism and contain Soviet expansionism. The containment of communism was advocated by George F. Kennan’s, former U.S. diplomat, “Long Telegram” or X article. In his article, published in 1946, Kennan pleas for a policy of containment of the Soviet Union and strong anti-communism (Kennan, 1946).

The expansion of their ideologies was only possible in the neutral third world so both blocks fought for the dominance of the developing countries. Foreign policies and international development aid became the battlefields of the Cold War. The Western conception of develop-ment was led by a strong capitalist ideology. The idea that developing countries should follow the exact path and mirror the evolution of the U.S. and Europa prevailed. Development was seen as a positive and irreversible process all societies had to pass through sooner or later. The Third World countries were stimulated to adopt Western capital, technology and values as a toolkit for development and growth (Power, 2002; Daniels et al., 2012).

The Evolutionary Theory

The idea of modernization was drafted on the experience of Europe on their development history. Hereby, there is a distinction between modern economies and traditional societies. Modern economies were characterized by the process of rationalization with its goal-oriented hard-working philosophy and high productivity, whereas the dominant ethos in the more traditional societies was based on leisure, recreation, and culture. Talcott Parsons - sociologist and one of the main proponents of the modernization theory – emphasized this dichotomy and claimed that changes in attitude and ethics were essential for development and economic progress. Traditional societies would have to abandon their orientation to family, religion, and community to develop into a more modern, entrepreneurial and rational economy. Culture, religion, and traditions were framed as obstacles for development that had to be vacated. In other words, echoing economist Bert Hoselitz, hindrances to development were internal to societies and needed to be reconstituted to pursue the European example (Chant & McIlwaine, 2009).

Stages of Development

The development theorists of the 1950s and 1960s viewed the process of development as a series of consecutive stages every nation had to pass through. This unilinear model reappeared in Rostow’s book published in 1960: The Stages of Economic Growth: A Non-Communist

Manifesto. The title shows the emphasis on the process of economic growth rather than

development in this period. Economic growth was a synonym for development and this economic growth could be reached by passing through five ‘development stages’. These five phases would turn any peasant agrarian nation into a modern industrial economy through the process of modernization. Walt Whitman Rostow drafted five universal stages of economic development built on the evaluation of the Industrial Revolution in Europe. The five stages are: (1) Traditional society, (2) Conditions for take-off, (3) Take-off, (4) Drive to maturity and (5) Age of high mass consumption, further explained below (Chant & McIlwaine, 2009).

(1) Traditional society

The first stage is characterized by production and trade that is based on custom and barter. Technology and science are of primitive nature placing a ceiling on productivity. Small-scale

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agriculture is the main occupation in these societies. Fatalism – the doctrine that assumes that man has no influence on his own destiny – prevails neglecting personal capabilities.

(2) Conditions for take-off

The first phase after the traditional society is marked by an invasion of advanced societies. This invasion tears down the cultural and traditional values by showing alternative and new ideas of living a better life in the form of economic progress. Entrepreneurship and capital investment are developed together with the build and centralization of an effective nation-state and the expansion of education.

(3) Take-off

After the stage of preparation, economic growth can commence. The last traditional barriers are removed to further increase investments – from 5% to 10% of Gross National Product (GNP) - and commercialization of agriculture. More industrialization leads to the rapid emergence of leading sectors that will later stimulate the growth of other sectors.

(4) Drive to maturity

The fourth phase is characterized by a further increase in investment – from 10 to 20 percent of national income and an extension of modern technology to other resources. The agricultural and industrial sectors become more diversified and the nation-state is able to produce more of their own goods; import starts decreasing. The nation becomes part of the international economy.

(5) Age of high mass consumption

In the final stage the main focus of economic growth shifts to a more socially-oriented perspective. The real incomes rose, and society pays more attention to social welfare and security (Rostow, 1990; Chant & McIlwaine, 2009).

After this theoretical review on the modernization theory, some key features can be distinguished. The most prominent one is the requirement for nations to embrace the process of industrialization and commercialization of the agricultural sector – from subsistence farming to the large-scale cultivation of cash crops. Hereby, the experience of the West would serve as an instruction manual. Although the western influence in the aid for modernization was considered crucial, it was also accepted that the driving force of industrialization and economic growth had to come from within. The middle-class entrepreneurs would, therefore, turn to be vital in forming a modernizing elite. The social change in attitude among the population was stressed to be essential to sustain economic prosperity and industrialization (Chant & McIlwaine, 2009).

In practice, the modernization discourse ruled the field of development in the 1950s and early 1960s. Modernization became the reference point for the bulk of development projects in the Global South, especially by the US government and UN agencies. Projects were directed to enhance agricultural efficiency, urban industrialization and support large-scale infrastructural projects such as transport infrastructure and power plants. The dilation and improvement of technologies were therefor indispensable (Chant & McIlwaine, 2009).

Criticism of Modernization

In the late 1960s, criticism of the modernization theory rose in response to the analysis of previous development policies. These policies under the modernization discourse did not provide the results that were anticipated. In particular, the economic growth that was

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promised by the policies was rather limited. Instead, the poverty in the developing countries persisted, often together with the widening gap between rich and poor. This polarization was also increasing at the international scale as the disparity between the most and least developed countries enlarged.

The Modernization theory was criticized for denigrating the traditional economies and their cultures and only valuing Western modern norms. Modernists ignored the diversity and value of ancient non-Western societies and cultures. The main critique on modernization was that it neglected the historical development of nations that were shaped by international relationships, especially the impact of colonialism on developing countries. It frames the underdevelopment of the Global South as a choice disregarding the lack of freedom to develop independently of colonial rule or, subsequently, the dominance of the international organi-zations such as the World Bank or the IMF. The recognition of these accusations led to the development of a new discourse: the dependency theory (Chant & McIlwaine, 2009).

Dependency and World Systems Theory

The foundation of the dependency theory was the argumentation that the persistent poverty and the low economic development rates in the Global South were a result of the exploitation of the advanced nations. In other words, by considering the global historical context, the dependency discourse argues that the growth of one nation can only be reached by the active exploitation of another less developed country (Chant & McIlwaine, 2009).

Neo-Marxism

The theory of dependency was built on two prominent intellectual trends: neo-Marxism and Latin American structuralism. The neo-Marxist perspective analyzed the different stages of capitalist expansion and how these affected the exploitation of underdeveloped nations. The most prominent period was the era of colonialism that involved control of Western nations over the politics, administration, economy and legal system of countries in the South. The neo-Marxist theorists argue that this period of control was the starting point of severe exploitation making it exceptionally difficult for underdeveloped nations to escape from foreign rule and develop independently. Even after being decolonized, the development trajectories of these nations were still dictated by Western actors such as multinational organizations or international financial institutions (IFIs) through the process of neo-colonialism (Thomas, 2000; Chant & McIlwaine, 2009 - p.32-33).

Latin American structuralism

Structuralist thinkers claim that to develop underlying economic and social structures needs to be altered. This argument was a result of the Great Depression in Latin America in the 1930s. Latin American exporters experienced heavy competition with other producing areas. This competition imposed low prices for their products making them less able to buy manufactured goods. Latin America experienced a structural disadvantage in the world economy leaving them heavily dependent on Western markets. Raúl Prebisch - an Argentinian economist and director of the Economic Commission for Latin America (ECLA) - argued that the global economic order was divided into two: the industrial core and the agricultural periphery. The former reigned world politics and trade and depleted the peripheral countries. This word order shaped the peripheral nations as exporters of raw materials and importers of manufactured

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goods. The national income from export was relatively low - mainly due to international competition – pushing these nations into a forced cycle of poverty because of imported high-value goods, which they actually could not afford. As a result, ECLA composed policy propositions focused on protectionism and the increase in domestic production to decrease the import costs. These policies were aimed at withdrawing Latin American countries from the international economy. Paul Baran – often called the ‘father of dependency’ – suggested that the exploitation of the periphery is inherent to capitalism. One cannot thrive without the deprivation of the other. The industrialized West needs raw materials to offer economic opportunities. To secure this supply of resources, industrialized economies hold close partnerships with the elites of the Global South. It was only these elite groups that were reaping the benefits of international collaboration increasing the wealth gap in the underdeveloped nations. André Gunder Frank – who elaborated on the work of Baran – even stated that true progress in the developing world could only be reached by de-linking from the Western world. The lack of progress in the underdeveloped countries is thus not inherently cultural but lays in their unequal participation in the global economy (Chant & McIlwaine, 2009).

Criticism of Dependency

Criticism of the dependency discourse was that both Baran and Frank oversimplified and overgeneralized their theories. They had built their theories on the experiences of Latin America and had generalized it to the global level ignoring the diversity between nations. Dependency approaches also failed to look for true causes of underdevelopment besides blaming the Western capitalist system. They never focused on internal factors that influence the poverty and development of the nation. Consequently, it was not able to present workable policy advises. The dependency theorists, on the other hand, were able to create a more critical understanding of the role of the West in the field of international development (Chant & McIlwaine, 2009).

World Systems Theory

The World systems theory was created in the mid-1970s until the 1980s by Immanuel Wallerstein. This period was characterized by rapid economic growth in several East Asian countries opening up new research grounds for development. The World Systems approach rejects the one-way relationship between the South and the North of the dependency theory but builds on the statement that underdevelopment is indeed influenced by global capitalism. Wallerstein’s perspective agrees with the fundamentally unequal nature of the global system; there is a diversity in the possibilities of economies to develop that correlates with capital accumulation. World Systems theorists added a category to the core-periphery model: the semi-periphery to further distinguish developing areas with a higher potential such as Brazil or Hong Kong. In other words, the World Systems theory adds dynamism to the possibilities of nations, in contrast to the more static approach of dependency, but is still being criticked for its overgeneralizing character. It does offer a more positive view on integration into the world economy; not every integration is negative (Chant & McIlwaine, 2009).

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The criticism of previous theories on development destabilized the field of international development thinking. Not one discourse could withstand the counterarguments. There was room for alternative perspectives to come forward. This is where neoliberalism appears. The neoliberal approach starts developing in the early 1980s and prevails in this decennium. The oil price rose drastically in 1973 and 1979 stirring up an economic relapse in the world economy that impelled the ‘debt crisis’ in the Global South in the early 1980s. The belief in the state as a market regulator and provider of social support lost ground. As a result, a decline in state involvement in the economy was construed as stimulating economic growth and development. This ideology was quickly adopted in the Global North and then translated into development policies to import neoliberalism in the South (Simon, 2008).

Keynesianism - that pleas for the intervention of the state in the economies of developing nations to control the development – was replaced by the opposite neoliberalism that rejects such role of the state. The idea of capitalism and free markets regained interests after two decades of anti-capitalist attitudes of the dependency and later World systems theory. If we would let market forces take over, growth and prosperity would follow logically. The argument of protectionism of the Western society of the dependency theory was moved aside and thrust in the integration into the world market increased. Some elements of the modernization theory - such as export, international competition and the obstacle of tradition – resurrected (Chant & McIlwaine, 2009).

The limited development of the South was the result of misguided policies and an over-concentration on the public and domestic sector. Neoliberal policy proposals were aimed at the privatization of state-owned enterprises, allowance of the free market to prosper with its expansion and free trade and inviting foreign investors. The provision of goods and services by the government is limited to those that cannot be offered by the private sector. The focus lays – just like with the modernization theory – on creating economic freedom for individuals by focusing on their capabilities and entrepreneurial opportunities. These new entrepreneurs are seen as the engines of bottom-up development and economic progress. Short-term investments will lead to long-term growth.

Neoliberalism in practice

Because of the economic recession of the early 1970s, banks were not able to offer loans to their former clients in the industrial countries and turned to less developed nations – who were not deemed creditworthy before. The second escalation in oil prices causes Northern countries to raise their interest rates dramatically. Suddenly, developing countries found themselves in a plight as they had to pay back large amounts of money to the banks. This resulted in the so-called ‘debt crisis’ as developing nations were not able to meet the deadlines of their repayments. Consequently, most countries turned to the World Bank and the IMF to reschedule their loans. These International Financial Institutions (IFIs) – in their turn – imposed policies in the shape of Structural Adjustment Programs (SAPs) to stimulate economic growth and stability in order to ensure loan repayments (Simon, 2008; Chant & McIlwaine, 2009).

Structural Adjustment Programs

The Structural Adjustment Programs were designed to maximize the outlook of repayment by debtors; this was their main goal. The inability to repay the debts was thought to be the result of corruption and overly bureaucratic government. Subsequently, the structural adjustment of developing nations in favor of the free market was outlined as the solution to secure

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repayment. This reshaping of the economy had to be initiated by national governments of the South but was subject to large pressure of the World Bank and the IMF. The loans were granted under certain conditions – the so-called ‘conditionalities’ - namely structural reformation and opening of the economy to the international market (Kovach & Fourmy, 2006). To ensure the refund of the loans, national income had to increase. That was only possible by liberalizing the economy so export revenues could transcend the import costs.

The World Bank and SAPs

The World Bank was mainly involved in ameliorating economic effectiveness through the adaptation of structures in which transactions occurred. Such measures considered downsizing social welfare support and cutting government expenditures, trade liberalization and export augmentation, privatization and tax diminution. Without these adjustments, countries would be subject to increasing poverty and stagnation of the economy. Neoliberal academics thought, at least initially, that restructuration would bring economic stability and progress (Chant & McIlwaine, 2009).

Criticism of SAPs

However, in the late 1990s, skepticism on the outcomes of the SAPs increased; even the IMF acknowledged that economic growth rates had not reached expectations (Kovach & Fourmy, 2006). Many development and non-governmental organizations (NGOs) criticized the structural adjustment programs for causing poor economic functioning while the IFIs held on to the argument that what-if-SAPs-were-not-implemented situations were impossible to measure and so thus also the true effect of the SAPs. The SAPs were producing a widespread dependency of emerging economies on the World Bank and the IMF and were accused of being too superficial. They lacked a holistic perspective on economic problems by disregarding the volatility and inequalities of international markets – previously address by the World Systems theory – and the relation between history and socio-economic structures of developing nations as cited by the dependency school. This lack of understanding resulted in the unjustified blame of Southern economies for not executing the adjustments correctly and causing the debt crisis themselves (Chant & McIlwaine, 2009).

On top of these economic shortcomings, structural adjustment programs were associated with social deterioration in welfare. The 1980s was referred to as the ‘lost decade’ of development as several social factors aggravated rather than improved; the unemployment rate grew, real wages decreased and government expenses on social welfare were reduced increasing the price of food and basic products. People had to pay for health and education due to the cut of services provided by the government. As a result, dropout rates from especially secondary school increased, infant mortality improvements stagnated and the number of diseases and malnutrition rose. Governmental services proofed to be vital in supporting human health. All these processes led to a rise in poverty under the neoliberal regime of the SAPs of the World Bank and the IMF. The export-oriented nature of the SAPs made the agricultural sector of developing nations vulnerable to global demand as self-sufficiency was replaced by profitable crops. A sudden drop in world prices of cash-crops could trigger a dramatic ripple effect resulting in famine and poverty as was the case in Sudan when cotton prices fell in the mid-1980s (Kovach & Fourmy, 2006). Those reaping the benefits of the adjustment policies were therefore mainly large trading companies and merchants (Simon, 2008). It took the World Bank and the IMF another decade to recognize

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these anti-neoliberal claims and look for alternative policies more concentrated on the social welfare of the state and poverty alleviation (Chant & McIlwaine, 2009).

Alternative policies

It became impossible for the World Bank and the IMF to ignore the ubiquitous criticism and protest against their neoliberal Structural Adjustment Programs. The SAPs needed to be rethought. A transformation in purpose from structural adjustment and trade liberalization to poverty reduction and social welfare was the outcome. This was primarily translated into Emergency Social Funds (ESFs) that were set up to counteract the negative outcomes of the SAPs discussed before. These, however, were often of short-term existence, seldom serving the poorest population, invested only in infrastructure and did not address the sources of the growing poverty. The IFIs soon realized that ESFs were not the solution to their problem; growing poverty was inherent to the SAPs.

Poverty Reduction Strategies

The only solution was to overthrow the Structural Adjustment Programs and replace them by the Poverty Reduction Strategies (PRSs) at the start of the 1990s as part of the HIPC (Heavily Indebted Poor Countries) initiative. The PRSs had three main goals: reduce poverty, tackle the debts of developing nations and include Southern countries in the decision-making process (Simon, 2008). The IMF and the World Bank stimulated indebted countries to come up with their plans and programs to reduce poverty in exchange for debt relief. Governments had to present a Poverty Reduction Strategy Paper (PRSP) to the International Financial Institutions to apply for a loan and receive assistance. By introducing this measure, the IFIs tried to move away from the imposed conditionalities of the SAPs (Simon, 2008; Chant & McIlwaine, 2009).

Poverty Reduction Strategy Papers are based on several core principles: country driven good governance to promote empowerment and independence, ameliorate security by investing in human capital - instead of physical capital – and the provision of a social safety net to support the most disadvantaged in the society (Craig & Porter, 2003). PRSPs have to provide a long-term approach to poverty alleviation that is oriented towards partnership and outcomes; poverty rates had to decline. The PRSPs abandoned the monoconcentration on economic parameters to achieve development. Until now, economic growth and participation in the world markets had been synonyms for development. Evaluation of development was measured using income statistics such as Gross National Product (GNP). The discipline of international development now demanded a plural, multidimensional approach to development and poverty. A key economist and philosopher in this multidimensionality of poverty was Amartya Kumar Sen. Sen addresses in his article A decade of human

development (2000) the different concerns on international development: hunger, epidemic

outbreaks, social injustice and growing disparities between rich and poor. These different discontents highlighted the multidimensional nature of development and poverty that is central to the PRSPs (Sen, 2000; Chant & McIlwaine, 2009).

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Criticism of PRSPs

Although the PRSPs seem to have numerous improvements in comparison to the SAPs, some criticism arose of the Poverty Reduction Strategies of the World Bank and the IMF. Several commentators argue that the underlying neoliberal discourse of the International Financial Institutions is still present. Neoliberal principles - such as privatization and trade liberalization – must be followed to develop; neoliberal macroeconomic reform and economic growth will – in other words- reduce poverty (Kovach & Fourmy, 2006). The power of the developing nations in PRSP is also debatable given the persistent dominance of the IFIs. The prescriptive and imposing nature of the SAPs may indeed have disappeared, but the financial support still heavily depends on the judgment of the IFIs on the applied Poverty Reduction Strategy Papers.

The financial institutions still hold power over the approval of funds. As Chant & McIlwaine (2009) put it into words:

PRSPs do not address the causes of poverty but, rather, the symptoms.

(Chant & McIlwaine, 2009 - p. 47) Another criticism is directed to the lack of transparency of PRSPs for civil societies. There is seldom public participation or consultation in the composition of the Poverty Reduction Strategy Paper; often only sympathizers of the government are involved. Additionally, gender issues have frequently not been included in the papers or at a minimal level. PRSPs have found to be stereotyping towards women and neglecting children’s issues (Chant, 2007).

To conclude, PRSPs are an improvement to the SAPs in their commitment towards poverty reduction in the Global South. On the other hand, the neoliberal discourse is still prevailing giving many activists food for protest against the World Bank and IMF. The field of international development has not satisfied us yet.

Post-development

Development is the new religion of the West … it is the imposition of science as power … it does not work … it means cultural Westernisation and homogenisation … and it brings environmental destruction. It is rejected not merely on account of its results but because of its intentions, its world-view and mindset.

(Pieterse, 2000 – p.175)

It is not the failure of development which has to be feared, but its success.

(Sachs, 1997 – p. 147) The second half of the twentieth century was the era of development. Since 1950, global prosperity and total eradication of poverty were believed to be achievable through international development. After nearly fifty years, nothing of these promises became reality: poverty had increase together with undernourishment and violence, large regions remained underdeveloped and exploitation and oppression were still largely present (Escobar, 2011). Additionally, development had required the loss of culture and tradition and thus also of rich and diverse modes of life. It reshaped but never really abandoned prior colonial discourses. All these dilemmas of development led to a growing anti-development movement (Pieterse, 2000).

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The most recent discourse on development is the post-development movement advocated by critical thinkers as Arturo Escobar, Gustavo Esteva and James Sidaway. The post-development discourse found his roots in the dependency school as it goes against the idea of modernization and highlights the perspective of the South on development. Post-developmentalists are not concerned with the question of how to achieve development but rather with the questions: what is development, what are the assumptions on progress and who claims to have the key to it (Sidaway, 2002).

Postmodernism

The post-development discourse is rooted in the postmodern view. According to Jean-François Lyotard – a French philosopher who assembled various strands under the overarching term of postmodernism – postmodernists hold an incredulity towards metanarratives. A postmodern developmentalist studies the narrative about the narratives on the meaning of development; they question the assumptions of the modern age. Postmodernism highlights the sense of invincibility of the West that results in a universal knowledge on how to achieve progress. Thereby, they doubt the ability of Western academics in understanding the world and imposing solutions. Postmodernists accentuate the complexity of life as a lived experience. The previous European discourses are no longer seen as truths but as dominant silencing dissident perspectives (Marchand & Parpart, 2003).

The rise of the postmodernist movement coheres with the emergence of the term

discourse. Michel Foucault - a prominent postmodernist thinker – underlines the need for the

analysis of discourses to reveal the power relations related to knowledge and language. According to Foucault, a discourse is the site where meanings are disputed, and power relations established. A discourse analysis can expose the power of hegemonic knowledge so that this supremacy can be contested by counter-hegemonic discourses to provide new ideas on “reality”. These arguments were further elaborated in chapter one (Marchand & Parpart, 2003).

The Colombian anthropologist Arturo Escobar argues that the ubiquitous perspectives on development divide the world in First, Second and Third World, in developed and underdeveloped, in the North and the South, generally the modern and the primitive. This homogenization of a collection of totally different nations – which he calls discursive

homogenization - overgeneralizes and devalues the South. It creates an oppositional block

against the developed world (Escobar, 2011). Additionally, development in the Global South can be gained by simply modernizing and westernizing. Mimicking Western political, social and economic systems is the key to the development of the Third World (Parpart, 1995).

The superiority of western values in the field of international development is rejected in the postmodern arena. People have the right to their own culture, history, values, and world view. A new approach to development is needed; one that includes the knowledge and requirements of the people in the Global South rather than Western expertise. Postmodernism pleas to render the populations of the South agency so they have the freedom to choose independently what they consider as development (Parpart, 1995). Development is no longer seen as a one-way street but as a diversity of pathways that are context-specific and not related (Chant & McIlwaine, 2009)

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The most extreme post-development thinkers ask for the abandoning of the term ‘development’ altogether. However, opponents argue that related issues such as poverty, malnutrition and social unrest in underdeveloped nations won’t disappear with it. Furthermore, critics debate that post-development is not truly beyond or outside development discourse but rather represents the reformulation of a collection of critics that were long acknowledged in the field of development. It was generally accepted that there are winners and losers in development but the post-developmentalism, according to the contradictors, exaggerates on the negative outcomes and cases. The failures of development are seen as a failure of the concept, not because of the political and social context. To reject the term development is to deny the possibility of progress and improvements in well-being (Sidaway, 2002; Chant & McIlwaine, 2009).

Conclusion

The history of international development discourses has been tumultuous. In general, we can distinguish an oscillating trend between oppositional ideas. The modernization theory and neoliberalism plea for economic expansion to facilitate export and access to the international market. Both discourses are economically oriented and stimulated by the industrialized West. They both nominate the free market as the provider of welfare and development and follow a top-down approach. According to these discourses, there is one path to development. Furthermore, these discourses favor globalization, international market, capitalism, international interference, and development aid. The other camp consists of the critical discourses of the dependency and world systems theory and post-development. These too contain large similarities. These discourses advocate for different perspectives on development to tackle Western domination in the field. Their opinion reflects the neo-Marxist perspective on capitalism; development aid maintains the international inequalities as capitalism cannot exist without the exploitation. They plea for a bottom-up approach to development where local knowledge is the stimulant and a protectionistic attitude prevails against foreign interference. There is not one road to development, rather development is a context-specific concept.

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CHAPTER 4:

International Development and Trade

Liberalization in Ghana

After theoretically outlining the different discourses on development and their evolution over the past decades, this chapter will investigate the tangible outcomes and consequences of these discourses. This will be done by delving into the case of international development – mainly focused on trade liberalization - in Ghana. Therefore, the historical situation and development will be outlined to link them with the discourses of the IMF and the World Bank. The power relations between these multilateral agencies and the Ghanaian government are the focal points of this chapter.

The Bretton Woods institutions

Multilateral agencies such as the World Bank and the International Monetary Fund (IMF) cannot be disregarded when speaking of international development. They play an extensive role in steering development in the Global South by prescribing various development programs. By implementing their idea on development in these programs, they hold the discursive power to spread their discourse amongst the Third World nations.

Multilateral institutions are inter-governmental organizations that are funded by multiple member states. Although they are depending on their member nations for their financial resources, multilateral organizations such as the World Bank and the IMF operate separately of the members and the United Nations (UN). In contrast to global public organizations, multilateral agencies are not governed by their member states (Boas, 2008). By becoming a member of the World Bank or the IMF, states approve the power of these agencies. States that want to get involved in global governance – the rules, norms, and institutions that function on a global scale – receive a lot of pressure to join the International Financial Institutions. In other words, developing countries that want to attract foreign investors and capital need to have a membership to the international financial system (Chant & McIlwaine, 2009).

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The Bretton Woods institutions – the World Bank and the IMF – where established in the aftermath of world war two to regulate the reconstruction of Europe and later support the development of the South (Ruger, 2005). To obtain membership to the World Bank, states first need to be a member of the IMF. The main difference between both institutions is that the IMF offers short-term loans to absorb sudden economic decrease and aims to maintain international economic stability while the World Bank is more concerned with the long-term development of countries in the South by providing long-term loans to governments mainly for infrastructural projects (Boas, 2008).

The voting power of the member states of the World Bank is not equally distributed. It depends on the national financial contribution. The more financial aid a nation provides, the more power it holds in the decision-making process. This resulted in an overrepresentation of the high-income countries – collectively holding sixty percent of the votes – and a smaller role for the low- and middle-income countries. Put differently, the World Bank is firmly controlled by the wealthiest industrialized countries overrepresenting their discourse on development in the programs and policy advises. The western hegemony with its largely neoliberal standpoint prevails within the Bretton Woods institutions (Wade, 2002).

The neoliberal policies of the World Bank and the IMF included the Structural Adjustment Programs and later the Poverty Reduction Strategy Papers. The overarching idea is the reduction of the power of the State and increased interference with the international market. The SAPs were focused on the cut of governmental expenditures and a diminution of the social welfare support. Tax reduction, privatization of State-owned institutions, trade liberalization and a rise in export were the main principles of structural adjustment to bring economic progress and stability (Chant & McIlwaine, 2009). After a decade of rising poverty and economic dysfunctioning, the SAPs had proven to be less effective and sometimes even detrimental to national development. The IFIs started with a new policy strategy aimed at wealth distribution and the reduction of poverty. Investment in human capital instead of physical capital - according to the Bretton Woods institutions – would eradicate poverty with a bottom-up approach (Simon, 2008; Craig & Porter, 2003).

The next section shapes the economic and political history of Ghana since its independence. The emphasis lies on the political leaders and their discourse on development. Here too, political discourses are presented as static entities with clear historical demarcations. This, on the other hand, was not the case in reality. Ideas and perspectives of political leaders still lived on after they were ousted and had major impacts by for example creating opposition to later dominating political parties.

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THE REPUBLIC OF GHANA

The following section of this chapter describes the political discursive history of the Republic of Ghana. This will be done – like the chapter on international discourses – starting at the end of World War II. Furthermore, the Ghanaian political evolution is divided into two: the period before SAPs were implemented and after. This partition helps in understanding the influence of the World Bank and the IMF on the economic development of Ghana.

Ghana in the pre-SAPs era

On 6 March 1957 Ghana gained independence. It was the first African state to detach from the colonial rule of the West that would trigger other African nations to follow. The first president, Kwame Nkrumah was optimistic about the future of his country; Ghana was finally free to grow and gain its place among other nations in the international order. Ghana – with its focus on democracy, the social sector and the expansion of education and health, and with a strong economic basis – became an example for the modern African state. The Ghanaian state gave the West hope in the development of Africa in general; other African states had to follow the path of Ghana (Brydon & Legge, 1996). The Ghanaian development story takes off with the prominent politician – Kwame Nkrumah.

Pre-independence

Nkrumah started his political carrier as secretary general of the United Gold Coast Convention (UGCC), an organization of intellectuals and leaders founded in 1947. Through the affiliation of the young radical populist - Kwame Nkrumah – the previously rather elitist political party

received more public attention. This was a result of the more engaged attitude of Nkrumah reflected in his organization of demonstrations, strikes, and boycotts. Two years later, in June 1949, Nkrumah separated from the UGCC and founded his own political party: the Convention People’s Party (CPP). Nkrumah’s full political commitment was launched. The rising