AN ASIAN MIRACLE IN AFRICA? A case study of Rwanda

This research paper challenges the conventional view on domestic institutions that contribute to economic growth from an Institutionalist Political Economy perspective (Chang 1994). It argues that the conventional set of market enhancing institutions and limited government does not contribute to the structural transformation of the economy. Instead, it argues that the institutional context of developmentalism is a condition for successful structural change because it allows for effective state intervention in the process of industrialisation, technological upgrading and fostering entrepreneurship in developing countries. This argument is based on the experience of the Developmental States in East Asia that achieved sustained high rates of economic growth and improved the welfare of the population. Some have argued that the Developmental State is sui generis to East Asia (Onis 1991). The International Financial Institutions see no hail in the lessons of developmentalism for other developing countries. This paper will challenge this by analysing the institutional context of developmentalism in Rwanda as the determinant factor for a successful development strategy. It will consider what attributes of a prototype of a Developmental State are applicable to the Rwandan institutional context. It concludes that Rwanda‟s historical institutional context and élite political identity allow the country to overcome barriers to developmentalism. While it complies to the conditionalities of the IFIs, the government takes on an entrepreneurial role to structurally transform the economy. The institutional context does reflect those of the East Asian Miracle countries – partly because the government intended it to do so. However, this development strategy does still face a number of challenge and only the future can teach us whether it will become an “African Miracle”.