The Second Generation Problems

  • George B. N. Ayittey


The previous chapter examined the first-generation effects of statism: state direction of economic activity and planning with a plethora of state controls (price controls) and establishment of state enterprises to forge Africa’s industrialization drive. To recap, state controls created commodity shortages while inefficient and unprofitable state enterprises—established with foreign loans—failed to deliver the goods. These initial problems may be considered “innocent,” but they fed on each other, creating additional problems or secondary unintended consequences. In this chapter, we examine these second generation problems. For example, a food or agricultural crisis was produced when African agriculture—the livelihood of the majority of Africans—started its decline. The decline was not the result of a deliberate and malicious government policy to destroy agriculture. In fact, most African governments acknowledged the importance of agriculture. Rather, agriculture atrophied in many African countries because of the neglect occasioned by government obsession with industrialization, the imposition of price controls, civil war, and crumbling infrastructure.


Central Bank Foreign Exchange Budget Deficit Price Control Foreign Debt 
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Copyright information

© George B. N. Ayittey 2005

Authors and Affiliations

  • George B. N. Ayittey
    • 1
  1. 1.USA

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