 D Ragdorog, ddod i ni'n gwybod, yw Danny, ac yn ymlaen i ddod y ddod i ddod nhw'n unig yma, o'ch dweud i y tu'r zyfrifiadau sydd yn ymlaen i ddod i'r pethau cyllidol, a'i weld yma ffaint o'r ddod i ni. A ydych chi'n gweithio ymlaen i ymlaen i ddod i ddod o gyfannau yma, byddwch i'r ddweud y cwestiwn o'r awr, ac mae'n ddweud y dyfodol i'r panel o'r ddweud y cwestiwn. Yn ymgyrch yn ymgyrch? Rwy'n cael ei fyddi'r ddweud ydym yn gweithio? Ion Rand, Cofa-Main. Dwi'n credu'r ddweud y ddweud i Dan, a dwi'n credu'r ddweud i John. Rydyn ni'n iddyn nhw'n gallu bod y ddweud fe wnaeth gweithio beth ydw i ddweud yn gweithio'r ddweud i Dan ond ddelwydio cyd-fastrydedd. Fel yw'r grilyddau sydd wedi'i ddechrau am y ddysgu dryerau a'u gyrparu cyd-fastrydeddau? Mae'r eu tydlau gwasanaeth rcastingodd y sprwydd. Mae'r ddiongar ei gwelio ymdeg, eich gwrthgor. Mae'r ddelwydio'ch'r gwrthgor. I have a question related to, you started out and you followed up a bit on this idea of sector policies, right? So you talk about industrial policies as focusing on particular sectors. But I wonder whether this type of approach is still relevant nowadays if you think about global value chains. There has been a huge reduction in coordination and communication costs, which has led to a transition of firms and other business. We tend to think of one of the most successful US firms, the Apple company. It doesn't do any production anymore, US, but instead it's doing all the designs. If you look on the back of the Apple, it's designed in California, right? So it's different. If you now think of what you want to do as a country, you want to focus on particular tasks or activities, right? So the US Apple firm is no longer classified as a manufacturer by the US national accounts, it has become a wholesale. I was thinking whether you could frame your industrial policies with respect to these particular tasks or activities to be undertaken, especially in labour-abundant African context. Right. Okay, thank you. The third question. Yes, please. Could you introduce yourself as well? Could you introduce yourself? My name is Sajel Rahgiriam at Southern Illinois University. The question is about the scope of the councils that you're talking about. Are they just for meeting the microeconomic policies relating to their industries, or policies about tax policies that you are talking about, or even human capital policies that you are talking about? Okay, thank you. So we have three different questions or four questions and one for at least each panelist. So Lindsay, would you like to... It was a general question to all, but I was just to say something. My answer would be that global value chains actually make a sector approach even more important because being able to access global value chains still requires in certain activities going through a certain sector. Maybe it's a bit less important or different in manufacturing, but in agro-processing and in high value agriculture, it's still extremely important. Then things focus on in terms of functional and process upgrading and all these things that the global value chains talks about. I mean there's lots of ways to maneuver within global value chains of how you can increase the income and wealth that an industry and firms can generate. So it's about learning how to maneuver within those global value chains. But I think your question linked it to another process which is really coming out in recent work about the commodification of manufacturing goods and the decmodification of previous agricultural based goods which means that we do need to think about things differently and all types of manufacturing while they may provide jobs, don't create much wealth. And then in that sense, African countries can't look to manufacturing or any type of manufacturing good to create the kind of wealth it did before. But I still think sectors in terms of targeted activities, what do African countries need to do to create the kinds of firms that can enter into export markets and global value chains still requires a sector approach. But when do we get to engage with each other? On this question of binding constraints, there is no evidence from the case studies that the work on binding constraints has found its way back through into the deliberation of the councils. And I think that's in part, again, the fact that much of that work has been sponsored by the African Development Bank since the councils are owned a bit by the World Bank, they've tended to be driven by the World Bank's agenda. And that, of course, is one of their major failures, that there's not an openness in the process. I think it's also the case that it is symptomatic of the fact that different kinds of activities, even donor sponsored activities within Africa have been taken by different elements of government. So you don't get a lot of communication often times across these. But the question would be, why doesn't someone in the business community raise his hand and say, well, wait a minute, didn't we do this study of binding constraints, shouldn't we talk about that? And that's a bit the problem, I think, both of capture, but also of the fact that the working groups are not working as well as they might, that you're not picking up on new items on the agenda. Yeah, back to sectors and picking winners and so forth. There's a broader view of industrial policy, I think, than sectors. And I think actually, from the point of view of coordination mechanisms, it has to work at two levels. It has to work at the level of broad strategic choices. In fact, much of my writing about Africa over the last several years has been saying the problem in Africa is not a problem of nitty gritty industry level industrial policy. It's the fact that you don't have a strategy. Like Danny's stuff, do you have a strategy for structural transformation? Do you have a strategy for promoting those areas of activity that have unconditional convergence? If you believe that there's learning by exporting, do you have an export push strategy? These are the sorts of things that are broad strategic interventions, but nevertheless are very important, and in most cases are simply not thought about, and the only point I would make here is governments make strategic choices every day through the budget. In Africa, they make strategic choices every day through their engagement with the donors, but do they have a plan? And the answer is no, they don't really have a plan, and I think some coordination with the private sector is useful in thinking through the plan because it can identify some of the large-scale issues. Then when we get down to the sort of squeaking wheel issues, that's where I think bringing it down to a much finer level of coordination makes sense. And Danny's point about courses for courses I think is highly relevant there. So the scope issue I think is really one of trying to say at this point in the development of this economy, what are the major issues that we need to address? Where are these binding constraints? And what is the appropriate institutional framework within which to do that? So it again suggests don't import something that somebody thinks was a great idea because it worked in Korea, if in fact it's not going to work in Ghana. OK, Danny? I'm interested in how strongly John has come out against doing business indicators. So I'm not a big fan of them, but it's interesting that in a way it shouldn't hurt you having those things, but when the story you're telling is once you have these things it becomes an almost irresistible dynamic that they turn into your priorities without digestion and analysis. Ideally that's one of the sources of information you want to use in a diagnostic analysis of what your priorities ought to be. But as part of that analysis, not take that as presuming that the answers are already there. The interesting question, why does it turn out that once you have a piece of input into the analysis it turns itself into the result and the objective? With respect to services convergence, the short answer is no, there isn't unconditional convergence in services as a whole. We don't have data disaggregated. Ideally if we had data what I would like to be able to do is look at tradeable services or some of the more modern services vis-à-vis others. My suspicion is that many tradeable services behave like the manufacturing sectors that I've identified here. But that's just a guess. What I do know is that if you break the economy into manufacturing, non-manufacturing with manufacturing essentially being the organized manufacturing part, the non-manufacturing part, the rest of the economy, the 95% of the economy doesn't exhibit unconditional convergence, which is why of course you don't get unconditional convergence if you do this with economy-wide data. Right, thank you very much. I think it's maybe interesting also to direct to each other as Lyncia mentioned, you started that. So there is this discussion about this externally supported investor councils. Vis-à-vis the discussion that Lyncia has highlighted that you need to have the political settlement behind the good and effective industrial policy. And also Donnie mentioned about the three factors. So one of the questions of course is could these investor councils work at all if they're externally supported? Those you need a political settlement and you need it, everything needs to be homegrown. But vice versa, if you have built only on the political settlement, don't you run the risk that they stay very inward looking and you don't import sort of foreign ideas and foreign technology. I don't know whether you three have any thoughts on that coltomy. Lyncia. Well I just wanted to, I mean I don't disagree with what they said but I just wanted to bring some counter examples to show how in the kind of approach that I was talking about can explain some things and one in particular I think is on the Ghana example that you were talking about. I worked on Ghana for a long time and I've done the study for our project. And I would argue that it's not really about, I wouldn't interpret it as President Kuford becoming board. I mean you need to understand what's going on within his ruling coalition. If someone is bored it's because their attention lies elsewhere and the MPP party is intensely contested inside. Kuford had very limited authority within his own party. He was constantly battling to shore up his support by shifting around factions, by rewarding and punishing people within the party as well at the same time as having a strong party outside in groups and society battling his everything. I had that last side I didn't get to go through but when you have that kind of intense contestation and I would say that Ghana probably represents one of the most extreme cases in Africa of intense contestation within the ruling coalition at all levels there's no coherence within the ruling elite at all. It means that his attention is elsewhere. It's an immediate politics of survival and it doesn't focus on the kinds of things that need to be done because he's focusing elsewhere and we can see this in many cases of when he has money to pursue productive sectors, what does he do with it and these same kind of things. So just showing how you can use this kind of approach to have a different interpretation on what is going on about why and I would also say my research shows that the president himself, him herself we don't think is the key factor having a president interested we can see many cases in Tanzania where the president led an initiative that totally failed in implementation do again to the internal politics of the ruling coalition and then just to engage a little bit with Danny Roderick on your last point about ideas we have debated this in our group a long time what role does ideas play some of this. By own personal opinion there's my reading and understanding of East Asian countries experiences and elsewhere I'm not sure if it was the role of ideas or actually special economic opportunities that came with being close to Japan and the same thing applies with China and this thing after that Japan provided this kind of opportunity for shifting to export oriented and then some writers say there were ideas embedded with that but maybe it was more the opportunity to do this which was much more stronger than the ideas because Japan provided the access to the US markets in the very beginning and the same story is told about China in the hopping so we can have this debate as ideas or is it the special economic opportunities which the East Asian region including Southeast Asia and China has really had in which Sub-Saharan Africa, North Africa Latin America have not had to the same extent and then you have to bring in the global economy in a way in which we don't in our model but we're very aware about how it affects opportunities and external actors Thanks, Tom Let me answer Danny's question on why I'm so down on doing business Danny never had the opportunity or I should say really the displeasure of sitting through meetings between presidents of African countries and the president of the World Bank in which the president of the World Bank pulled out his doing business book and said Mr President, do you realize that your country ranks 143 out of 187 on doing business what the hell are you going to do about it Now the reason why that's a bad thing is not because league tables are necessarily bad and certainly Danny's absolutely right the more information you have in a systematic way in evaluating your regulatory regime makes sense but it resulted in some very perverse outcomes and I'll just give you one for many years Rwanda was one of the top ten reformers in the world on doing business one year in about 19 I guess it was around 2003-2004 they dropped off the top ten list Palkigummy called together 70 of the most senior people in his economy people who ought to have something better to do and put them together as a working group to find out how they could game doing business the next year so that they could then be once again in the list of top ten reformers that to me if you're a development institution is a cardinal sin you do not divert the attention of government from doing serious things in order to have your publicity machine derail economic progress so you have to think now just to be fair to the world bank they have something else I think is fabulous the trade logistics index I think makes perfectly good sense but the point in terms of the councils was that this was really a circularity we have this neat thing our president really likes this thing we are going to make sure that the councils become the means by which this thing is implemented and we are going to keep score for the councils on the basis of the thing that just destroys any possibility that this could be a coordination mechanism recognizing Lindsay's point that that's part of one size fits all I mean there's a line in my paper which says look when you looked at the original world bank blueprint it looked like the blue house which is the capital of Korea and it had his famous meetings with the heads of the chai bull papered over with the language of business government communication of the 21st century that was what it was so if you have that you're not paying attention to these kinds of issues the only question I would have is why was president before foolish enough to agree to do it if he knew he didn't have the scope except that you don't say no to the world bank so councils might work as long as they don't have a specific target agenda Danny do you want to say anything on this on this point no no I agree and I don't want to overdo the point about the role of ideas in East Asia but my guess is that if President Park had decided to keep the South Korean economy closed as it had been under Sigmund Rey and it followed a heavily state led autarchic policies that 40 years later would have said that the political logic was that given the threat the military threat from North Korea that the country faced that this was the choice and I think it was a similar change in ideas about how best to respond to the mainland Chinese threat in Taiwan in the late 50s I think that was a change in ideas about how to respond to that threat and I think the Japanese model and the trade opportunities obviously facilitated and greatly leveraged and multiplied the results we had from the change in strategy but I think it was agency alright there's chance for maybe one or two questions from the audience the lady over there there should be a microphone somewhere it's been difficult to get to you but could you introduce yourself as well please thank you my name is I'm from the in South Africa the question maybe just a point of discussion that I may have across for all the presenters I just want to look at it from the point of view of say regional integration we are having we are talking about the firms and these firms are expanding into the region and obviously focusing in terms of trade for these firms because they are trying to expand as well I'm just wondering in your experience or maybe what do you think how this state business relations or the councils actually may have a relationship with this and how would you say regional grouping how would one discuss that or would we move to discuss it at a different level because obviously you have different states you have different governments so how would this state business relations or the councils because for example John is talking about why he doesn't like doing business but when they are looking at that they are focusing on president X but sometimes those countries are in a regional grouping so I'm just wondering around that whether you would comment I show one more hand here I have a question regarding this oh sorry regarding the power of ideas and what the panel would think what the panel would make of these what would seemingly be the kind of a new trend in the power of ideas with the emergence of so-called state capitalism and resource nationalism and I asked this also in the context of the charts that's particularly Danny Rudrick and sorry and Lindsay used in terms of their the triangle and I noticed that aside from state capitalism would pretty much subsume the triangle that you have Lindsay the role of finance isn't really identified within that and obviously just taking John's presentation the role of donor influence directly to the financial question and I just wonder if state capitalism and resource nationalism highlights the need for more attention on finance to provide the policy space for this experimentation that we were talking about in policy okay so two very good questions to conclude particularly the first one on regional business associations and their role they might be different from national business associations and state business relations and the other question about capital influence of donors so if you'd like to finish off one or two minutes each and your final say in this session Lindsay shall we start with you the question on regional integration is a difficult one there are lots of good economic arguments for it particularly for the very small African countries who have very small domestic markets therefore need to go to export markets and also to have the kind of volume of supply and you could think of really good examples like northern Ghana and Burkina Faso should have a thing where companies can work together and export what they're doing organic may go now but politically it's extremely difficult to go into why it would take a long time but there are also so many countries particularly like Ghana are so consumed with this politics of survival that liaising into regional way I mean ECOWAS anyway as far as regional economic groupings go is totally dysfunctional compared to the East African or Southern one but even in East Africa I mean conflicts of interest are going to arise like with Tanzania's new manufacturing exporting assembly appliances to other East African countries that's going to create a conflict if they want to do that and we see constant fights between Nigeria and Ghana over who's cassava starch or palm oil processing so there are still immense conflicts of interest in politics around that that have to play themselves out and not very optimistic now I think we have to see a role where domestic capitalist firms in these countries and particularly in Ghana or a country like Ghana would come to have more clout before any kind of politics of regional integration might work on state capitalism I'll be short in some way I think your question is predicated on misreading of state capitalism because I don't have a triangle up there but I mean there's a lot of literature saying that in China and in other countries state owned companies maybe state owned in nature but there's quite a degree of separation they have their own interest I mean they very much fit into a mutual interest model I was talking about same thing if we look at countries in businesses play a large role like in Taiwan in the earlier period and also perhaps in Ethiopia today so I mean state capitalism doesn't mean actually that all those boxes are subsumed together you still have these dynamics and that requires a much more nuanced reading of what is actually going on in these different forms of whatever is put in this box of state capitalism alright thank you, John the regional integration story in Africa is operating at two levels one is at the level of the heads of state and this comes back to some of Lindsay's politics in which everyone is in favor of regional integration and the other is operating at the matter of reality in which nobody is doing anything about it I think there is a role for coordination mechanisms here but it's coming back down to the very specific thing if in a border crossing it takes five days for a truck to get across and people know that there's an existing problem you may be able to frame up business government communications even on both sides of the border in a way that focuses on that specific problem and tries to resolve it the issue here I think would be that recognizing the difficulties of doing that with some kind of imported model it has to be an African model it has to figure out how you do that but it becomes an accountability mechanism and that's particularly important for the regional bodies because the regional bodies today are really accountable to no one there's high level political support high level political rhetoric but really no accountability and they're not accountable to any individual citizenry so I think there is a role in here for a kind of non-state actor to begin to try to push that agenda but I'm a great believer in solving the small problems first because I think if you do that you create a dynamic of success and we've seen that I'm always fond of remembering that the most disintegrated region in the world is the Middle East and North Africa yet there's a power grid that runs from Morocco that works with intercommunications and as a result of nothing more than the will of one man the minister of power in Egypt who for 25 years got all of his colleagues beat them up and made them form a power grid so that works nothing else works you can do small scale things and I think that's the first step remember that the European Union is the result whether you like it or not of the iron and steel community so that I think is the on ideas let me just reflect back on this question of experimentation I mean I've got to read the latest thing that Danny's done so I see where it comes into but I think a lot of what we saw in East Asia at least a lot of what the grizzled old guys who I was privileged to talk to back in the 1980s and 1990s were saying is yes ideas were important but the way in which we got ideas was not in a big and abstract way the way in which we got ideas was observing things that seemed to work in other places in Asia and that may be your proximity story and then thinking about whether or not they would work in our context and then trying it and seeing if it would work and I'll be frank the idea that all bad ideas were abandoned is certainly not true but one of the hallmarks of the difference between the implementation of economic policy in Asia I would argue and elsewhere is that say unlike India which managed to hold to an economic model for 45 years it manifestly wasn't working the Asians were a little bit more flexible in terms of saying gee it looked like a good idea let's crack like a good idea let's get rid of it and try something else very good, Danny I really don't have anything to add except to say that if the Africans should go the way of the European cold and steel community I suggest they stop before they get to the single currency state right, thank you very good thanks very much so this session comes to an end session of broken wheels triangles and ideas and what we will try and do is bring together the session of yesterday and today in sort of a publication moving forward but let us thanks very much John, Lindsay and Danny