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This article investigates the World Bank policies termed the Washington Consensus in the context of infrastructure development in Africa. The concept was developed during the 80’s and 90’s in the World Bank (WB) and was also influential for the International Telecommunications Union (ITU) as well as for the donor community in general. The differences amongst these relate to how much weight should be put on the different elements of the reform package.
The specific element of the WB policies was its advocacy of privatisation. Privatisation is defined by the WB as any transaction that reduces a government’s ownership in, or control over, a public or results in the liquidation and sale of assets of a public enterprise. The distinction between ownership and control is important because control can co-exist with minimal ownership. Since the intent behind privatisation is often to transfer control over public enterprises to the private sector, a change in the degree of government control over public enterprises is probably a more meaningful measure of privatisation than change of ownership. The definition is thus wider than divesture and is broadly speaking intended to increase private sector involvement. The World Bank connected conditions to its Structural Adjustment Loans (SAL) to member states, and they tended to grow more specific over time. One such condition was deregulation. Within the telecommunication sector this is a specific term involving a transition from a monopoly system to a regulated competition through licensing of the operators.
The relationship between design in the World Bank and outcome from implementation by African states can be composed of the following: Design – Conditional ties – Implementation – Outcome. The relationship is not a simple causal chain. Thus, the responses to the design by the African states were not uniform. The implementation might also be subject to neo-patrimonial practises. The outcomes were also influenced by e.g. demand, regulatory framework, political risks and nature of local capital markets.
The intention here is not to evaluate the success of Structural Adjustment Loans (SAL), which tend to proceed by comparing selected indicators of performance of adjusting and non-adjusting economies, or for adjusting countries “before and after” SAL (LALL 1995, 2021).
What is attempted is to narrow the scope of the analysis by clarifying the underlying theory of adjustment to see how realistic its assumptions are, and then to trace the impact of those components of the policy package that relate specifically to service provision. Penetration per 100 inhabitants is taken as a basic measure for the service provision.
The implementation of privatisation and deregulation in Africa has produced very weak results compared to Latin America and South East Asia in terms of growth of service provision of telecommunications services. The problem of this article is how these results can be understood within the World Bank paradigm. The World Bank concepts of the state, the market and strategy are presented below. Whether privatisation or deregulation strategies were chosen, good governance premises were a pre condition. An alternative conception is presented in chapter three, describing the Neo Patrimonial State, giving insights into the actual implementation of policies. The outcome of the implementation is described in chapter four and five. The distinctive trends discerned are primarily the different patterns between the sectors for fixed and mobile network service provision.
Area and sector define this investigation. The area relates to countries of Africa, south of the Sahara and north of South Africa and Namibia (SSA), characterised by having some of the most undeveloped economies on the globe. The telecommunication sector is characterised by a potential for becoming one of the most dynamic sectors of development.