Multinationals, Capital Export, and the Inclusive Development Debate in Developing Countries: The Nigerian Insight

In this paper, we employed a blend of multiple and historical case study design, and a mix of institutional, behavioral, resource-based, and multinational theories, to examine the nature of multinational companies’ (MNC) engagements in local economic development and capital export practices in an African context. Evidence from our Nigerian case analysis (FrieslandCampina, Nigerian Breweries Plc. and Dangote Cement) confirms the proposition that, faced with a similar degree of uncertainty and constrained institutional environment and laying claims to differing sources of competitive advantage, both local and foreign MNCs would repatriate profits and limit exposures to local value chains (LVCs) mainly as a strategy for mitigating country risks and preserving corporate value. Such limited exposures detach MNCs, especially the foreign ones, from the LVCs, and by doing so push them to deeper reliance on the global value chains (GVCs). Linking local businesses to the GVCs is central in the inclusive development (ID) debate essentially because it allows for the redistribution of economic benefits, helps in building a complementary (rather than competitive) relationship between MNCs and local businesses, and facilitates local businesses’ access to international markets. We, therefore, recommend that in pursuit of the inclusive and sustainable development projects in Africa, industrial policies need to be tailored toward stabilizing the policy environment, protecting investments from risk of expropriation, and incentivizing MNCs’ participation in the LVCs.

Evaluating the Success of Decentralisation in Facilitating the Inclusion of Rwanda’s Marginalised

Decentralisation plays a key role in Rwanda’s efforts to overcome the violence and instability of the past by fostering national unity and by bringing governance closer to the people. This paper examines the impact of decentralisation on the feelings of inclusion of Rwanda’s most marginalised group, the Batwa. Drawing on a 4-year empirical project, our findings suggest that, despite impressive improvements in the living standards of the poorest and efforts to encourage participation in local decision making, many Twa do not feel included. This suggests that the government has not yet succeeded in creating downward accountability. We attribute this to two factors: continuing economic inequality and poor communication.

How Inclusive are the Local Economic Impacts of Social Protection in Uganda?

Inclusive growth and development are essential for the sustainability of poverty reduction and growth. Social protection has been promoted as part of the inclusive growth and development agenda by emphasising the positive impacts of social transfers on people’s participation in economic processes. However, the focus on the positive economic impacts of social transfers has led to the neglect of concerns regarding inequality of opportunity. Taking the case of Uganda’s Senior Citizens Grant, this paper critically assesses how inclusive the impacts of social transfers are on economic processes. This is done by examining the extent to which local economic structures interplay with the impacts of the Grant. Based on a qualitative case study design, the analysis reveals that the scheme has unwittingly reinforced spatial patterns of economic exclusion and disadvantage. Recipients in remote areas are more likely to stay or fall back into poverty compared to people in integrated areas. For social transfers to contribute to inclusive growth and development for all, it will be vital to invest in complementary development interventions in economically disadvantaged areas.

Trust, Efficient Contracting and Export Upgrading

Informal contracting institutions constitute an essential part of a country’s overall contracting institution, however, the nascent literature examining the effect of contracting institutions on the quality of products a country produces and exports, have paid a limited attention on the role of informal contracting institutions. We fill this gap in the literature by examining whether higher trust levels, as an informal contracting institution, leads to product-quality upgrading by reducing contractual frictions and opportunistic behaviors. Using industry-level data spanning 1995–2014, we examined this relationship using the generalized difference-in-difference method. We find that contract-intensive industries in trust-intensive societies experience a disproportionally higher increase in the production and export of higher-quality products compared to those industries in low-trusting societies. This result holds after controlling for conventional sources of comparative advantage and formal contracting institution. Hence, the result underscores the importance of informal contracting institutions for improved economic performance and stress the crucial fact that countries with strong and efficient informal institutions can still benefit in market-related activities even in the presence of weak formal institutions.