From 'Best Practice' to 'Good Fit'

Natural resource-driven development in Africa has emerged as a hot topic. One important stand in this new focus on extractive industries is linkage development. The huge (potential) resource wealth of many African countries is opening up considerable opportunities for the acceleration of economic transformation and sustained poverty alleviation through industrial policies. The interest among governments, firms and donors in these industries hinges on the assumption that they will be positive for development outcomes by generating revenues to spend in productive and social sectors, create jobs and boost economic growth. This new report from DIIS and the Research and Communication on Foreign Aid (ReCom) programme, review the potential and analyse how (potential) linkage development can best be realised.

Realizing the potential

The realization of this potential in many African countries has, nonetheless, been rather elusive so far. The report identifies the main factors which influence the economic and political incentives for governments in African countries to use industrial policies and other measures to create linkages between extractive industries and other parts of the economy so as to generate more jobs, sustain growth and alleviate poverty. This governance perspective complements analyses of the economic implications of resource-based development strategies, and it helps to identify some main implications for donor assistance of support to extractive natural resource-driven development.

Towards ‘Best Fit’

A new development agenda is (slowly) emerging in many African countries, which will have many and important implications for donor agencies. Working with linkage formation in extractive industries is a relatively new field for donors. The report argues that interventions should reflect the ‘good fit’ with local contexts, institutions and politics, and not only the ‘best practices’ on which donors typically base their advice. There is a tendency to discuss linkage formation purely in terms of economic efficiency terms, thus neglecting especially the political context in which such polices are implemented.

Links:
The research area, Natural resources and development

The Elites, Production and Poverty programme

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