Countries: Ghana

Michael Danquah

Michael Danquah
Development Economist

Michael Danquah is Senior Lecturer at the Department of Economics, University of Ghana, Legon, and a Research Fellow at the Transfer Project. He is also an International Growth Centre (IGC) researcher and was recently selected as a Visiting Research Fellow at the Centre for the Study of African Economies (CSAE), Department of Economics, University of Oxford, UK. His research interest is in economic development in sub-Saharan Africa and he has published extensively on issues such as informality, inequality and poverty reduction, and productivity growth.

Inequality and Institutions

What does politics look like in sub-Saharan Africa? How does it work and whom does it benefit?

Development Economist and Senior Lecturer at the University of Ghana, Michael Danquah, explains the power plays in place to keep only a privileged few in rule of his country, while the rest of the population faces a stagnant economy that puts education, health, and public policies at risk.
Improving education, raising awareness and restructuring old and faulty concepts of power become keys to leading a country out of the darkness, and to help start to position them, little by little, on the path to economic, democratic and social development.

We spoke with Dr. in Geneva during the conference: Overcoming Inequalities in a Fractured World: Between Elite Power and Social Mobilisation, organized by The United Nations Research Institute for Social Development (UNRISD).

The title of his presentation was:
Inequality and Institutions: Exploring the Mediating Role of Political Settlements in Some Selected African Countries

“In this paper, we quantitatively examine the interplay of legal, political and economic institutions and political settlements on income inequality. We focus on the marginal effect of the institutional variables on income inequality conditioned on political settlements. The findings show that the marginal effect of legal, political and economic institutions contingent on competitive clientelist political settlements exacerbates income inequality significantly. This means that politics and power play in competitive clientelist political settlements are detrimental to equality and poverty reduction.”

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Michael Danquah: My name is Michael Danquah. I am a Development Economist and also a Senior Lecturer at the Department of Economics, University of Ghana, Legon.

Nerina Finetto: Thank you so much for joining me. What do you focus on in your research?

Michael Danquah: My main research interest is in development economics where the focus is on issues of poverty, inequality and inclusive growth. Issues of poverty, issues of inequality, issues of informality are key issues that if we are able to confront, would open the door to improved welfare in our part of the world.

Nerina Finetto: The title of your presentation here at the conference is ”Inequality and Institutions: Exploring the Mediating Role of Political Settlements”. What are the main issues here?

Michael Danquah: The issues are quite clear here. For any country to grow, to develop it would need what we call institutions. The institutions would facilitate the growth and the development process. But, the institutions don’t just grow. The institutions don’t just develop. There are things that go into it. One of them is what we call political settlement. Political settlement is a big word, but what it means is the distribution of the balance of power within a state. All right, so how does that balance of power within the state, how does it affect institutions and how does that affect the development outcomes, just as I said earlier, on issues of inequality and that of poverty?

Nerina Finetto: What is the situation and what is happening in Ghana and in the other sub-Saharan countries that you have analyzed?

Michael Danquah: Excellent. What actually happens is this: the political elite or the elite feed on the states. They actually derive their influence, their power, their wealth, and their status right from the states. They are much interested in this: how can they continue to hold on to power so that they can always gain from it? That’s what we call the politics of holding power. That is the bigger issue. How do they hold onto power?

One way of doing this is through patronage, what the political scientists would call clientelism. That is one way of doing that. But, once they begin to do that, we lose focus on the people. It’s just on them. How do they hold on to their power? How do they win the next elections? That is all that they’re actually interested in. So that’s politics of holding power, which is centered on a few people at the detriment of the entire population. And this would, in turn, perpetuate poverty and inequality.

If you take a country like Ghana and some other sub-Saharan African countries, what happens is this: I mean patronage is very intense, it’s very deep. It starts even within the parties themselves. If there are elections within a party to elect even local executives, there’s loads of patronage. To elect the leader, there’s patronage. Then, there’s the bigger patronage, the bigger clientelism, when the main parties have to go into elections, as well. This is what is going on, but the main thing is that it shifts the focus from the people, from the welfare of the people to the welfare of a few individuals.

Nerina Finetto: Is this not somehow the norm for politics everywhere?

Michael Danquah: Excellent. This is one question that I have been asked over and over. This is not the same politics. Yes, it is politics everywhere, but it is a bit different when you come to sub-Saharan Africa. Yes, there is patronage, but the intensity of the patronage in parts of sub-Saharan Africa is quite deep.

I’ll give you a very good example. I mean , one would actually expect that if a new party rises to power and starts work, yes, definitely there will be changes of the justice ministry or the … but it goes far beyond that. It gets to the point where civil servants, public servants, public relation officers … I mean it’s quite intense that many of the public servants are even removed from office. Anyone who is seen to be allying with the other political party is also removed, so it’s quite … Then, we have the entire corporate governance thing where boards of corporations and government institutions are already formulated by the government.

If you have a new government in power the President would make more than 6,000 to 10,000 appointments, but he’s appointing everybody, but that’s not what happens in the developed world. Yes, there is room for the President or Prime Minister, but it’s not an open doorway where he can do whatever. This tends to affect the institutions, so there is that politicization. They use their institutions for their own gain, so they would appoint brothers, sisters, family people, party people who may not even have that expertise, but they will still put them there.

Michael Danquah: There’s that bigger question. Why do they do that? It’s the politics of holding power. They’re so consumed with staying in power that they would do anything to stay in power at the detriment of the people. That is what is actually going on. That’s quite different from what happens. If you take many of the developed countries there are some checks and balances, so you can do A, but you cannot do B, C, D.

Nerina Finetto: What do you think is needed? How do you think it is possible to change the situation?

Michael Danquah: That is a very big question. Yesterday in my presentation, I talked about the dark wave that is brewing because what actually happens is this: many of the countries in sub-Saharan African are becoming increasingly clientelistic in terms of the form of democracy that we have. This is quite evasive. Then, what can be done to harness the power of this political elite and then also what can be done on the part of citizens, as well?

One thing that comes up, and I would have to look into it again, is trying to improve the levels of literacy. Most of the people in sub-Saharan Africa, yes, they’re poor, but they don’t have education, as well. Those higher levels of illiteracy give that room for the political elite to actually exploit. We should be looking at how we educate our people, so we need higher levels of literacy and that may reduce the extent to which the political elite can actually do what they want to do. That may not solve the problem, I mean all the problems, but I think that if we have a population that is educated, that may – yes, some of them will still go the other way -, but I think many of them can now look into what is going on, reason into it and then it may not….

Some of the things we would have to look at: trying to educate. Then, maybe the other thing may be the power of the media, trying to get an independent media. I mean you take places like many sub-Saharan African countries; yes, media is vibrant, but they have their own issues. They’re not paid well, so there is that tendency for them to be aligned to political parties and actually do the bidding of those … once they can influence them with money and on and on. So we need to get to that level where we have that independent media. Strong, vibrant, that can stand up against the elite.

Then, also, with regards to the media as well, yes, we still need to look at the content of media. Back in sub-Saharan Africa, one would say the quality of the journalists that we have, journalists who can research and bring out developmental content to their people, try to open their eyes as to what is actually going on. This may be able to dampen the power of the political elite. Knowing that if we do A, B and C, these may be the repercussions. No matter how much money we give to them that that may not help us. These are some of the things. Trying to look at the levels of literacy, then using the media more or less as a tool that can help us.

Nerina Finetto: If you could change one thing tomorrow, what would you do?

Michael Danquah: I would look into how we can harness even the power of the political elite so that they would actually reduce that incentive to hold onto power. That would be very difficult. I don’t know how that could be done, but we need to get to a point where we can reduce that incentive of the political elite to hold onto power. One of them … I mean like you said, what I would do would be to reduce the incentives that the elite gains when they come to power.

I mean when one comes to power he’s got everything. Within the twinkle of an eye, he has a house, he has a 4×4, he has a bodyguard who is a policeman, he’s got almost everything. It’s quite difficult to let go of some of these massive incentives. That is one thing I would do, basically to bring to the barest minimum the incentives that the political elite is essentially giving to the political elite.

We need to find ways to rechannel all these incentives into the development of the welfare of our people. That’s what I’d do. Basically, bringing it down from say 100% to like 5%, so they would realize that they are there not for themselves, but they are there to serve the interest of the people.

Nerina Finetto: Why are you doing what you are doing? Why this research? What motivates you or how personal is it?

Michael Danquah: I came to realize that all the efforts by the development partners: the UN, the SDGs and all of them. It is more or less fruitless, the efforts by the World Bank, it’s more or less fruitless if the underlying and all the shifting political settlements are not addressed. If these things are not addressed I am sorry, we can roll out a million incentives, we can have MDGs, SDGs, we can extend the dates over and over, but Africa, sub-Saharan African and the rest in the Global South will still be where they are, because there are some fundamental things we would have to address and that is the balance of power and how it’s actually influenced the equality of institutions and therefore the development outcome. If the balance of power is not addressed and it’s ”business-as-usual”, we would have to keep on drumming this. Most of the development partners seem to appreciate it for now, but we would have to keep drumming this at home, doing more research on this.

That’s why I carried out this research which was a quantitative research. Most of the research is more argumentative, trying to put the pieces together. I felt, look, why not do something quantitative, that yes would tell the story from a different angle. Look, there is a dark wave, it’s quite gloomy if we don’t address the … unblinding politics under the power ray. That’s why I’m doing it and I hope I have much more research going on looking at the deals, environment and how it affects the development outcomes and so many other things. But, this is more of an advocacy more or less in terms of the research I do so that the development partners and then the political elites themselves would realize that ‘Look, we are going in circles and will not get anywhere if we don’t address this’.

Nerina Finetto: Do you have a dream?

Michael Danquah: Yes, I have a dream. As a development economist, one would want to see improvements in the welfare of our people. That is the key. That’s why we do what we do. You take many other countries – like I am from Ghana, poverty levels have actually stagnated over the last five, six years. We haven’t seen any, not even a 1% decline in terms of poverty. Inequality is actually going up and it’s up from about 0.423 to about 0.43, so we’re not making progress. We’re just not making progress. Whatever is being done is not being translated into the welfare of our people, and that’s my dream, that’s what I would want to see.

I always say this: we would have to move from what I call ‘business-as-usual’. There’s that thing, people like just doing the things they’re doing, but they’re not looking at the outcome. There are no outcomes. You are going back and forth, you are paid, you’re doing it all, but there are no outcomes. That’s my dream to try change the narrative here, but, no, no more ‘business-as-usual’ in terms of politics and way of doing. No more, but let’s change that narrative. Let’s make sure that whatever we are doing there are outcomes to it.

How can a country go for the past six years with so many programs, spend millions of dollars, but there is nothing to show for it? It is because we just do the things we do and really don’t care, but we need to change that narrative and begin to do things in a different way. Do it in a different way. I mean if we do it well, we would get outcomes. Definitely, when we put in that effort, there will be outcomes. We could see outcomes that reflect improvement in the welfare and that’s what I would want to see across many sub-Saharan African countries, changing the mode of doing things. Let’s inject some efficiency, let’s inject some innovation, let’s inject some level of seriousness into what we are doing and then let’s know that whatever we’re doing is in the interest of the people we serve and not us.

That’s my dream: changing the entire way of doing things across the length and breadth of the continent. If you go back and forth, it’s ‘business-as-usual’ in our universities, in our hospitals, in our various governments. It’s ‘business-as-usual’. Let’s just go to work at anytime. That shouldn’t be the case, that wouldn’t bring about the change we want to see in the Global South. We need to, that’s my dream. We would have to move, shift from the ‘business-as-usual’ way of doing things into more serious, outcome-oriented way of doing things in our part of the Global South.

Nerina Finetto: What is life about?

Michael Danquah: For me, life actually has to do with more or less seeing others, getting past where I have gotten to. I have many students that I have supervised and have taught and that is the only message I give. ‘Don’t grow up to become like me, but you need to grow up to be better’. I’ve seen that through many of my students who are now doing excellent things across the world. For me, that’s life. I mean trying to encourage our younger ones, trying to let them know that there is hope, they can do better. Why? They can do better because they have more opportunities than we had 40 years ago. What stops them from doing more than we did? That’s what I do. I tried. For me, that is life and that’s whats gives me that joy: seeing, trying to encourage them, trying to push them up and then trying to let them know that they can get anything, they can get anything if they put their hearts and mind to it.

Nerina Finetto: Thank you so much for this conversation.

Michael Danquah: Thank you so much.

Nerina Finetto: Thank you so much for watching, thank you so much for listening and thank you so much for sharing.


Michael Danquah is Senior Lecturer at the Department of Economics, University of Ghana, Legon, and a Research Fellow at the Transfer Project. He is also an International Growth Centre (IGC) researcher and was recently selected as a Visiting Research Fellow at the Centre for the Study of African Economies (CSAE), Department of Economics, University of Oxford, UK. His research interest is in economic development in sub-Saharan Africa and he has published extensively on issues such as informality, inequality and poverty reduction, and productivity growth.

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