The Impact of Agricultural Investments on State Capacity

The impact of agricultural investments on state capacity:

A comparative analysis of Ethiopia and Ghana

Tom Lavers and Festus Boamah

Accepted for publication in Geoforum

Abstract

The first wave of research on the ‘global land grab’ largely focused on the international drivers of investment and impacts of individual projects in host countries. More recent studies have acknowledged the important roles played by both host states and societal organisations in these deals. However, there has been little attempt to analyse how processes of agricultural investment also transforms the state itself. The present paper builds on theories regarding the social roots of state power and the literature on the links between land and authority, to construct a framework that can be used to explore these linkages. The core argument of the paper is that in situations of overlapping authority between state and societal organisations—as is common in Africa—increased agricultural investment requires infrastructure development and can provoke changes in power relations between state and society that have important implications for state capacity. To illustrate this argument, the paper examines recent investment trends in two countries that have figured prominently in the ‘land grab’ literature but where land tenure regimes and state-society relations take markedly different forms—Ethiopia, where a ‘strong’ state has actively promoted agricultural investment as part of a developmental and state-building project that has enhanced its territorial control; and Ghana where chiefs have taken advantage of increased demand from investors in an attempt to (re-)assert their authority over land vis-à-vis the state and other societal organisations.

Keywords: agricultural investments; state-society relations; land; Ethiopia; Ghana; Africa

Introduction

Much of the first wave of the ‘land grab’ literature focused on the drivers of increased demand for land, emphasising the role of transnational actors and processes (Zoomers 2010, McMichael 2012, Sassen 2013), or examined the local-level socioeconomic impacts of new projects.[1] Subsequent research has complemented this work by highlighting the important roles also played by state and societal organisations at national and sub-national levels in shaping patterns of investment and outcomes (AuthorA 2012a, 2012b, Dwyer 2013, Fairbairn 2013, Wolford et al. 2013, AuthorB 2014). This paper goes beyond the focus on the patterns and trends of agricultural investment itself. In contexts in which multiple authorities overlap or exist in fragments, the recent surge in land deals can provoke competition over resource access between these state and societal organisations. In doing so, these processes transform both state and society, and the relationships between them. In this paper we focus on one aspect of these changes, namely the implications of agricultural investments for state capacity, as encapsulated by Mann’s (1984)concept of ‘infrastructural power’.

The divergent experiences of agricultural investment in Ethiopia and Ghana, examined in this paper, serve to demonstrate how changes to state capacityresulting from agricultural investment are contingent on specific historical patterns of state building. For example, in Ethiopia, a highly centralised and hierarchical state historically made comparatively little attempt to build state institutions in the lowland areas currently targeted for agricultural investments. Recent government promotion of investment therefore forms part of a state building strategy that aims to exploit the resources of these areas as part of the government’s developmental vision. In Ghana, chiefs have constituted powerful actors in both local and national politics and controlled a large proportion of landfrom the pre-colonial and colonial periods through to thepresent day.Following initial state interest in biofuels in 2003, which subsequently diminished, chiefs have re-asserted their position in rural communities by leasing land to biofuel investors, re-definingentitlements to land and other productive resources in project villages. These changes are detrimentalto theinfrastructural power of the state.

The empirical base of this study is the growing literature on recent agricultural investment trends in Ethiopia and Ghana, including past research conducted by the two authors of this paper. Drawing on this material, this paper seeks to makethree main contributions and, in doing so,to address significant gapsin the emerging literature on what has become known as the ‘global land grab’. First, the paper outlines an analytical framework that can be used for comparative analysis of the connectionsbetween investment and state capacity, an area that has received scant attention to date. Second, the paper applies this framework to two countries—Ethiopia and Ghana—that have figured prominently in the ‘land grab’ literature.While frequently placed together under the heading of ‘land grabs’, our framework highlights that the two countries constitute very different cases in terms of land tenure regimes, the centralisation/fragmentation of state authority and the relationship between the central state and customary political elites. The result is that the key actors promoting agricultural investment and the transformations to state and societal actors resulting from investment are starkly different. Third, this paper analyses the two cases in a comparative case study framework (George and Bennett 2004, Gerring 2006) and therebymakes an important methodological contribution. While there are a growing number of excellent case studies of agricultural investments in different countries, to date there have been limited attempts to conduct systematic comparative analysis. We believe that comparative research is essential to develop a more theoretically grounded understanding of the socio-political changes resulting from recent investment trends.

The paper proceeds as follows. The next sections outline the analytical framework and methodology used in the paper, before examining the cases of Ethiopia and Ghana. The following section then synthesises the findings of these case studies and reflects on their implications for state capacity. The final section concludes.

Conceptualising the links between agricultural investment and state capacity

State capacity consists of the competence of state bureaucracies and their embeddedness in society, as well as their territorial reach (Soifer and Hau 2008, vom Hau 2012). It is this last dimension—the territorial reach of the state—that, we argue, is particularly susceptible to agricultural investment processes. Territorial reach is perhaps best encapsulated by Mann’s concept of ‘infrastructural power’ (vom Hau 2012), namely ‘the capacity of the state actually to penetrate civil society, and to implement logistically political decisions throughout the realm’ (Mann 1984, p. 113). Importantly, the concept of infrastructural power extends our conception of state capacity by, first, acknowledging the likelihood of sub-national variation in state capacity and, second, highlighting its relational nature (Soifer and Hau 2008). As such, state capacity is the product of both state-society relations and internal relations between different state organisations (Migdal 1988, Soifer 2015).

This paper draws on the political sociology literature that examines the social roots of state power and regards state capacityas the outcome of processes of negotiation and competition between state and societal organisations (Migdal 1988, Boone 2003, Hagmann and Péclard 2010). From this perspective, the state is seen as a loosely connected network of semi-autonomous organisations, each with their own distinct interests. Following Migdal (2001, p. 48), societal organisations in this sense include ‘informal and formal organizations, ranging from families and neighbourhood groups to mammoth foreign-owned companies, [that] use a variety of sanctions, rewards, and symbols to induce people to behave according to the rules of the game’. Thus, state organisations are both involved in competition for domination with formal and informal societal organisations, and are embedded in society itself, through the ties of state officials to families, clans, ethnic groups and business associations (Migdal 2001). This perspective emphasises the importance of examining state-society relations as the outcome of historical processes of state formation, negotiated between state and societal organisations across multiple arenas of the disaggregated state (Migdal 1988, Hagmann and Péclard 2010). Furthermore, societal organisations may not be so different from the state in their capacity to exert authority over people and territory (Migdal 2001, Boone 2007).

Contrasting historical patterns of state formation result in significant variation in control of relevant revenue flows, authority over land tenure and class structures, both within and across countries. Indeed, in many African countries an important legacy of colonialism is the existence of overlapping authorities between state and societal organisations regarding land tenure. Consequently, both state and societal organisations have the potential to play important roles in promoting, facilitating or vetoing investments (AuthorA 2012a, Fairbairn 2013, Wolford et al. 2013, AuthorB 2014). Moreover, the potential revenues associated with authority over investment offer considerable incentives for these actors to (re-)assert their control. Such economic incentives are, however, only one influence on the decision making of state and societal organisations considering whether and how to support new investments. Additional political economic factors that may complement or compete with these economic motivations include an assessment of the relative strength of key interest groups—for example organised along class or ethnic lines—and patron-client relations and norms of reciprocity.

This paper explores three main ways in which agricultural investment transforms state infrastructural power.First, is the extent to which agricultural investment requires or results in change in patterns of authority between state and societal actors through processes of negotiation, bargaining or contestation. In this instance, we are concerned with de jure and de facto changes in authority over land;authority over people; and authority over (potential) revenue streams. Different forms of land tenure have quite distinct implications for state-society relations (Boone 2007, 2014, Lund 2008, Lund and Boone 2013)and thereby state infrastructural power. For example, neo-customary tenure requires the devolution of power from the state to a neo-customary authority, essentially a form of indirect rule (Boone 2007). Strong neo-customary authorities limit state infrastructural power because the autonomy of the state to enforce its decisions throughout the realm is undermined; consentor cooperation from neo-customary authorities becomes the sine qua non for the state to enforce its decisions. Inasmuch asthis cooperation can only be secured through negotiation, compromise or coercion (Mann 1984, Scott 1998, Boone 2003), state capacity is vitiated. In contrast, where state ownership of land prevails, the state directly administers territory and has a direct relationship with landholders, providing the state with greater enforcement capacity and thereforeinfrastructural power. Demand for agricultural investment provides opportunities for revenue generation that can lead state and societal actors to claim authority over resources and people, drawing on laws or custom, in the process transforming de jure or de facto land tenure. The direction of these changes is not predetermined, however, and agricultural investment may result in the strengthening or weakening of state andneo-customary authorities.

Second, for commercial agriculture to flourish, basic infrastructure—transportation in the form of roads, bridges, railways and/or ports; irrigation infrastructure;facilities for workers, for example—is required. In areas targeted for investment where basic infrastructure islimited or non-existent, its development is a necessity. Whether this work is undertaken by the state itself or private companies, expansion of infrastructure for commercial purposes also expands the infrastructure required by the state to administer territory and people, and thereby its enforcement capacity (Mann 1984).

Third, as Scott (1998)has argued, state building and the expansion of state enforcement capacity is, in part, about rendering illegible local systems legible and therefore manipulable to state authority. This legibility is achieved throughprocesses of naming, standardising and mapping the human and physical landscape. The promotion of private agricultural investment inevitably requires some form of surveying and demarcation of land by the relevant authority, since investors want to know basic information about what they are investing in. Where investment is promoted or regulatedby the state, this will likely involve some combination of formalisation of land tenure, land registration, GIS mapping and fencing boundaries. In doing so, these acts render territory and population legible to the state, hence enhancing the state’s infrastructural power. In contrast, agricultural investment promoted by customary authorities will not necessarily enhance visibility to the state. Indeed, local elites have frequently used local systems of record keeping or measurement as explicit strategies to limit state oversight (Scott 1998). In the case of agricultural investment, customary authorities involved in leasing land may—deliberately or otherwise—fail to notify state authorities of leases or the precise location of investments. Such acts serve to curtail state infrastructural power, for example, by limiting the state’s ability to regulate or tax investors who operate without the state’s recognition.

This theoretical discussion implies that there is likely to be considerable path dependency from historical patterns of state building through to the administration and direction of agricultural investments. Decisions about the types of agricultural investment that will be permitted or promoted are likely to be dominated by the most powerful authorities at the time and, indeed, these authorities are likely to use their power to reinforce their authority. There is, however, no theoretical reason why large-scale agricultural investment cannot result in path switching—eroding the powers of an established authority, while strengthening the other (or others). For example, where significant political economic shifts—significant economic incentives from price increases or class conflict—changethe balance of power between state and societal actors, this may provide sufficient economic incentives for states to invest in the expansion of infrastructural power in order to claim authority over potential revenue streams.

Methodology and case overview

The paper applies this framework to the cases of Ethiopia and Ghana.Since the mid-2000s, both countries have attracted considerable interest from foreign and domestic agricultural investors and have, consequently, figured prominently in academic and journalistic debates. Despite this similarity, in terms of our framework the two countries represent two extremes. Ethiopia, where land is state owned, is effectively a one-party state with highly centralised and hierarchical structures of state authority, while rural elites tend to be weak and/or co-opted by the state. The exception to this characterisation, however, is the peripheral areas that are currently targeted by the state for agricultural investment, where the state has historically been much weaker, with local customary authorities retaining a considerable degree of autonomy. Throughout Ghana, in contrast, customary authorities have retained considerable influence, not least through their constitutionally enshrined powers regarding land tenure, while state authority is fragmented and subject to considerable competition between two main political parties.

These two cases therefore constitute an example of ‘diverse case selection’ where two or more cases are selected to demonstrate extreme values of the key variable of interest(Gerring 2006), in this case the balance of power between state and society. This approach to case selection is useful for testing our initial hypotheses regarding the causal mechanisms linking agricultural investment and state capacity. Evidently, this diverse case selection strategy implies that the majority of countries in Africa lie in between these two extremes. As such, the case selection is not intended to be representative, but rather illustrates the causal processes at work and thereby provides a starting point for research that seeks to explore these processes in other, less extreme cases.

One important task of case selection is to establish the comparability of the two cases. In this instance, in order to support our argument that socio-political structures are the key cause of the divergent paths of state-society relations highlighted in the following sections, it is essential to rule out the scale and type of agricultural investmentsas the cause of the variation observed. Data on land transactions are notoriously unreliable and inconsistent(Oya 2013, Cotula et al. 2014).[2]There have been two broad methodological approaches to documenting the scale of recent land transactions: online databases based on publicly available information, with cross-checking of information—the Land Matrix database is the main example here; and analyses which rely on government maintained inventories of land deals. Comparison between these two approaches for Ethiopia and Ghana show only limited consistency (Cotula et al.2014).

Based on national inventories, Cotula et al.(2014) find that the total area leased is some ten times larger in Ethiopia than Ghana, while that for ‘land under transaction’—including Memoranda of Understanding that have not necessarily resulted in actual leases—is two and a half times larger in Ethiopia (see table 1). However, Ethiopia is also a much larger country in terms of surface area and population, with the result that land under transaction as a proportion of land suitable for agriculture is an identical figure of 1.9 per cent for both countries. The Land Matrix data also suggests that more land has been leased in Ethiopia;however, the difference between the two countries is considerably smaller.

Table 1: Agricultural investment trends in Ethiopia and Ghana

Ethiopia / Ghana
Population / 96,958,732 / 26,786,598
Surface area (km2) / 1,104,300 / 238,540
From Cotula et al. (2014)
- Aggregate land area leased (ha) / 1,055,975 / 112,485
- Total land area under transaction (ha) / 1,055,975 / 402,941
- Total land under transaction as percentage of land suitable for agriculture / 1.9% / 1.9%
From the Land Matrix
- Contract size (ha) / 999,710 / 782,816

Source: Cotula et al. (2014), Land Matrix (2015), World Bank World Development Indicators.

The considerable discrepancy between different estimates is worthy of some discussion. Some of the variation is attributable to the different methodologies used. First, different estimates reflect slightly different criteria for inclusion in databases in terms of the scale of land deals considered relevant, the time period covered and the progress of implementation of reported deals. Regarding the last point, there are frequently large discrepancies between the sizes of initial agreements, actual leases and the land actually developed.