The Malawian experience

By Casper Gelderblom

In his book about state-directed development, Atul Kohli distinguishes three different state types: cohesive-capitalist states, fragmented multiclass states and neo-patrimonial states. While the relatively strong organizational underpinning of the first two types renders growth-stimulating industrialization possible, neo-patrimonial states’ interventions in their economies have led to “disastrous results,” Kohli claims. Illustrating this argument with the case of Nigeria, he shows that neo-patrimonial regimes’ treatment of resources and companies as their own patrimony keep the country from achieving economic development. Convincing as the Nigerian illustration may be, not all historical evidence supports Kohli’s presentation of neo-patrimonialism as necessarily destructive.

In the first 15 years after independence, the
neo-patrimonial state of Malawi, for example, achieved a rate of economic development which the World Bank at the time lauded as “impressive”. Despite president Banda’s personal ownership of more than half of the shares of an enormous corporation that largely controlled the country’s largest chains of supermarkets and shops, hardware stores, the tobacco industry and its two banks, his neo-patrimonial rule was characterised by truly impressive growth numbers. Between 1964 and 1979, Malawi’ average annual GDP growth rate was 5.9%, the annual increase of real GDP per worker about 3%, the growth of manufactured output averaged 5.6% p.a. in the 1970s and, most telling in relation to industrialization, the share of the manufacturing sector in the country’s GDP increased from 7% in 1964 to 13% in 1980.  

The early post-colonial Malawian experience indicates that neo-patrimonialism is not necessarily destructive - it might even
lead to strong economic performance. This raises interesting questions for political economy scholars: what characteristics of neo-patrimonial states stimulate or hinder economic development? Given the obvious differences between Nigeria and Malawi, does the presence/absence of resources matter for the economic impact of neo-patrimonialism? And what role does regime type play? Whatever the answer to these questions, one thing is certain: the case of Malawi calls for a more differentiated consideration of the nature and impact of neo-patrimonialism than the one Kohli presents.