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«ISSN 1864-6638 Bonn, May 2013 ZEF Working Paper Series, ISSN 1864-6638 Department of Political and Cultural Change Center for Development Research, ...»

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Working Paper 113

Jonas Ayaribilla Akudugu and Wolfram Laube

Implementing local economic development in Ghana:

Multiple actors and rationalities

ISSN 1864-6638 Bonn, May 2013

ZEF Working Paper Series, ISSN 1864-6638

Department of Political and Cultural Change

Center for Development Research, University of Bonn

Editors: Joachim von Braun, Manfred Denich, Solvay Gerke, Anna-Katharina Hornidge and Conrad


Authors’ addresses

Jonas Ayaribilla Akudugu Center for Development Research (ZEF) University of Bonn Walter-Flex-Str. 3 53113 Bonn, Germany Tel: 0049-(0)228-734980 Fax: 0049-(0)228-731972 Email: akujonaya@yahoo.com Dr. Wolfram Laube Center for Development Research (ZEF) University of Bonn Walter-Flex-Str. 3 53113 Bonn, Germany Tel: 0049-(0)228-734914 Fax: 0049-(0)228-731972 Email: wlaube@uni-bonn.de www.zef.de Implementing Local Economic Development in Ghana: Multiple Actors and Rationalities Jonas Ayaribilla Akudugu and Wolfram Laube Abstract International development agencies continue to influence the development agenda of many developing countries. One of the latest development strategies being promoted by these bodies is local economic development (LED). The introduction of contemporary LED practice, where local stakeholders and authorities, in partnership with national planning agencies and international donors, jointly identify, design, and implement initiatives aimed at stimulating the local economy, is supposed to mark a paradigm shift from top-down approaches to bottom-up approaches of local development. Through this approach, development actors operating at the sub-national level are expected to mobilize local resources to implement LED initiatives, thus reducing reliance on central government and donor funds.

This LED approach, in the estimation of international development agencies, eventually promotes subsidiarity and self-reliance at the district level. However, in Ghana, soon after the introduction of this presumably promising development strategy, it became clear that LED approaches are only partially adopted in local development planning and are hardly implemented, as they do not match the strategies and rationalities of key actors planning and implementing local development initiatives. While nationaland district-level planning agencies remain devoted to top-down development planning, local stakeholders are instead interested in infrastructure development and the direct transfer of funds, rather than participatory planning exercises meant to enhance local economic dynamics and competitiveness. This paper shows how LED as an externally introduced development strategy that does not fit well into the technical, social, economic, and political rationalities of local actors and as such is bound to fail, irrespective of its theoretical potential and the external support provided for its implementation. This paper explores the structural environment as well as multiple rationalities and interests that seem to impede the implementation of LED in Ghana.

Key Words: Development intervention, local economic development, actors, rationalities, policy implementation.

1 Introduction LED is gaining ground fast as a regional or territorial development strategy in many parts of the

developing world. Its practice in the South is however limited as compared to the North (Nel 2001:

1003). The origin of the LED concept can be traced to North America and Western Europe, where it is widely practiced in various countries or cities (Blakely 1989; Nel 2001; Rodriguez-Pose and Tijmastra 2005; Blakely 2009). Nonetheless, the LED concept is now being introduced gradually into developing countries as an alternative or complementary development strategy (Maharaj and Ramballi 1998;

Rodriguez-Pose and Tijmastra 2005). In recent times, we have witnessed efforts by international development and donor agencies, such as the World Bank, the International Labour Organization (ILO), the United Nations Development Programme (UNDP), and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) among others, to transfer LED approaches to the South.

Blakely (1989) traces the emergence of the LED concept in the United States of America as far back as the Great Depression in the 1930s, when local communities explored options for creating job opportunities in response to the closure of factories or the reduction of workforces. The World Bank (2006: 1) sees the early 1970s, when LED became an important policy response to municipal governments realizing that businesses and capital were moving between locations for competitive advantage, as the time when the LED paradigm emerged. This competition for investors and investments greatly intensified and geographically expanded with globalization. The fast development of financial and banking systems, as well as innovation in telecommunications and in the area of transport and logistics, allowed investors much more flexibility with regard to the choice of the location of their investment, which subsequently prompted cities to reposition themselves, not only to attract much needed investment, but also to enable them to be competitive in their own right. According to Blakely and Leigh (2010: 1), “cities, towns, countries and all local entities in a global economy have the challenge and opportunity of crafting their own economic destinies.” Globalization therefore has not only brought about an unprecedented level of competition among businesses, but it also threatens the welfare of many, presumably uncompetitive, local economies. Global competition is thus forcing people, places, and businesses to reassess their status and to develop new plans for the future, in order to create competitive advantage and to enhance their visibility and chances of economic success in the global economy. The shift from `business as usual´ to a stage at which localities have to position themselves in the global economy finds expression in the concept of LED – an approach to local development that seeks to mobilize actors and resources to initiate actions jointly that will stimulate the local economy and make it competitive.

With respect to Africa, the adoption of neoliberal economic policies in the 1980s served as fertile ground for private sector development, which is the focus of LED intervention. Helmsing (2001: 60) points out that the forces that brought about the change in the context of LED are “structural adjustment and liberalization policies; ideological disenchantment with the state and state-led development; as well as aid fatigue and decline of Overseas Development Assistance.” Prior to the adoption of neoliberal economic policies and the implementation of decentralization reforms, central governments, often assisted by (international) donor agencies, were the main actors promoting economic development. Around the world, especially in the developing world, central governments set up agencies and designed and implemented policies to promote economic development across their respective countries. But most of these state-led, top-down interventions, designed and implemented at the national level, have proven ineffective in tackling developmental challenges in the targeted localities (Rodriguez-Pose and Tijmastra 2009: 6). The same is true for many donor-funded projects, which at times had limited success but were seldom continued after donor funding stopped. The failure of governments and donors to address and effectively promote (local) economic development in many developing countries called for a rethinking and re-fashioning of development strategies. The emergence of LED as an alternative development strategy can thus be seen as a response to the failure of top-down development programs promoting economic development on the local level.

Interestingly, LED approaches became more widely promoted in the developing world as earlier development discourses and policies became increasingly criticized after the 1980s and 1990s. While post-development scholars critiqued the hegemonic nature and exploitative consequences of modern mainstream development efforts since World War II (e.g.: Esteva 1985; Escobar 1988), neo-liberalists identified the intervention of states and governments in economic affairs as the main pitfall of failed development efforts (e.g.. De Soto 1989 ; Williamson 1993). LED approaches paradoxically married the formers’ concern for local development initiatives and civil society with the latters’ concern for competitive capitalist economic development and international market integration. However, focusing mainly on economic development, LED approaches remain largely within the ideological framework of development economics and pay little attention to alternative development pathways.

The obvious “need for an alternative or complement to traditional development strategies has become more evident and LED strategies are increasingly regarded as a valid and viable way to overcome the development problems of territories around the world, regardless of their level of development or institutional conditions” (Rodriguez-Pose and Tijmastra 2009: 6). In Africa, increasing private sector development and the promotion of decentralized local government systems have created the basis for the introduction of contemporary LED strategies. LED is supposed to mark a shift from nationally or internationally owned top-down development programs to participatory bottom-up development processes that are locally owned. LED is also supposed to be propelled by local resources and actors, who identify, design and implement the LED strategies.

Thus, the prospects for and promises of LED seem to be huge. Although attempts have been made to appraise LED implementation in Sub-Saharan Africa (Helmsing 2001; Rodriguez-Pose and Tijmastra 2005;

Hindson 2007), these efforts are very limited and often focus on only the South African experience (Maharaj and Ramballi 1998; Rogerson 1999; Davis 2006; Brennan, Flint et al. 2009). In view of the expansion of LED practices beyond South Africa to other parts of the continent in recent times (Rogerson and Rogerson 2010) there is the need to appraise LED efforts in those areas to better understand their experiences and challenges. As Meyer-Stamer (2003: 2) points out, it remains unclear whether “the popularity” of LED is arising out of “desperation” or from the evidence of success stories in areas where it has been practiced for some time. So far, is not fully clear how far the supposed advantages of LED can be fully realized, or whether LED constitutes just another development discourse that masks inherently teleological and hegemonic development practices adhered to by governments and donor agencies throughout the developing world. Rogerson and Rogerson (2010) who recently undertook a comprehensive review of LED practice and research in Africa, emphasized the need to broaden LED research to better capture the “role of international development agencies as key actors shaping and reshaping LED practice in Africa.” As can be seen, the discourse on LED is dominated by international development agencies.

In Ghana, although the LED experiences of the GIZ and ILO at the district level have not been evaluated fully, the UNDP is striving to take LED discourse and practice further, and efforts are being made to scale up and institutionalize LED as a national development blueprint. However, while the policy process that started in 2009 has proven to be lengthy and slow, the local implementation of LED is also proving difficult. As the examples from the Bongo District detailed here will show, LED is far from being a dominant, let alone hegemonic, discourse, as little momentum is generated by local actors to support the process. In light of this observation, and in order to gain a better grasp of the role of LED in development practice, this paper assesses the conceptualization and implementation of LED as an alternative development strategy in Ghana. Furthermore, it critically examines the structural environment and different rationalities and interests that affect the implementation of LED initiatives in Ghana.

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