The politics of Institution Formation, Maintenance and Change: A Historical Analysis of State Business Relations in Mala

1. The politics of Institution Formation, Maintenance and Change: A Historical Analysis of State Business Relations in Malawi (1890-2004) Henry G. Chingaipe Department of Politics email: henrychingaipe@yahoo.co.uk or hcno500@york.ac.uk

2. Presentation outline This presentation has three main concerns: 1. To provide an overview of my research 2. To provide an overview of the itinerary of my research idea. 3. To provide a sketch of emerging findings about State- business relations in colonial Malawi.

3. My Research Topic My empirical interest is to analyse state business relations. The theoretical objective is to see what the empirical analysis of SBRs in Malawi contributes to the theory of institutional formation, maintenance and change. Analytical framework: historical institutionalism and elite theory Data Collection: Documentary analysis (primary and secondary); key informant interviews Structure: 8 chapters, of which three are ‘cases’ based on the political institutional structures of the state .

4. The Itinerary of my Research Idea My empirical interest has been resilient but my theoretical concerns have been shifting. Earliest concern was with the theory/model of developmental states but shifted because both the nature of states and the patterns of SBRs that they forged were rooted in the politics of state formation. Second concern revolved around the relationship between state formation and patterns of SBRs in Botswana and Malawi but shifted to the present one t because of financial constraints.

5. Research question, hypotheses The main question is: How did state-level political processes including power configurations shape institutional and organisational patterns of SBRs? Three hypotheses: Confluences of factors provide a structural context that conditions attitudes and behaviours of the state and business sector towards each other. The institutional and organisational patterns of SBRs arise from and are continuously shaped by inter-elite politics . Interactions between institutions and organisations; formal and informal institutions are bases of change of institutional patterns of SBRs

6. SBRs in Colonial Malawi: Background British interest began in 1859 with the visit of Dr. David Livingstone ; sustained by missionaries (UMCA in 1861, FCS in 1875, ECS in 1876) Business interests came after the missions and the first was Livingstonia Central Africa Company in 1878; then other settlers, mining and agricultural interests . The first British consul was appointed in 1883 (Capt. Foot) and a protectorate was declared over the southern districts in 1889 to forestall a Portuguese advance. In 1890, Alfred Sharpe was jointly employed by Consul and Rhodes to negotiate treaties with chiefs to accept protectorate and give mineral rights. Protectorate extended northwards in 1891; named ‘British Central Africa Protectorate’ in 1893 and placed under the charge of ‘commissioner and consul general -CCG

7. Background, cont. • In February1891, BSA’s charter extended to cover all the area under British influence north of the Zambezi (covering Malawi) and the company wanted ‘direct administration’. • In 1904, the office of CCG was abolished, replaced with Governor and responsibility for protectorates within the ‘home’ government shifted from foreign office to colonial office. • In 1907, the name ‘Nyasaland’ resumed and nominated EXCO and LEGCO were established

8. State organisation vis-a-vis business • Before 1908, the local colonial state was concentrated in the Governor who reported to the secretary of state for colonies • The authority of the colonial state was shared between London (Home) and Zomba (local). • The colonial state was neither parliamentary nor presidential; but the evolution of its structure was shaped by the parliamentary tradition. • From 1908 the structure of the local state included EXCO and LEGCO

9. Business organisation vis-a-vis the state • There were three major interests in the business sector: Agricultural, mining and Trading. • The business sector was segmented on racial lines: 1.Europeans were predominantly in agriculture and commerce (and in Government) 2. Asiatics/Banyans were predominantly traders and store-keepers 3. Half-castes were mostly in Trading, transport and agriculture • The colonial polity had a vibrant associational life. The European associations had sufficient capacity to push political demands and had privileged access to the state. • Business associations began in the early 1880s.e.g. Nyasaland Planters Association, The Nyasaland Merchants Association, The Nyasaland Motor Association , The Indian Chamber of Commerce, etc

10. Business organisation • Peak associations began with the Chamber of Agriculture and Commerce in 1892 to interface with the new government and as a ‘countervailing force’ in view of the BSA charter. • At least one association, The Nyasaland Tobacco Association, was created at the request of Government and was facilitated by government. It led to the imposition of a tobacco cess . • Isomorphism: The institutional and organisational structure of the colonial state also shaped that of the business sector - Local-home linkages, and later local-local linkages with the Rhodesias.

11. Patters of SBRs Formal, Interactive state-business relations involved the ‘official community’ and the ‘the unofficial community’. SBRs were characterised by mutual dependency. The business needed state power to subjugate the native and to regulate economic relations among them. The state needed the business sector to sustain its legitimacy but also to achieve imperialist objectives. Mutual hostages? Until 1908, there was no institutionalised public-private dialogue mechanism but there several ways of accessing the state: ad hoc meetings, correspondence on policy issues, social clubs especially the Gymkana club in Zomba and the Limbe club in Blantyre. The process of institutionalisation began with the formation of EXCO and LEGCO with the latter requiring the membership of the European ‘unofficial community’.

12. Patterns of SBRs-2 The unofficial members of LEGCO were proposed to government through an electoral process in the association of conventions. Later the Tobacco Association and the Indian federation asked for direct representation in LEGCO but were refused. The regular meetings of the Chamber of Agriculture and Commerce and the Convention of Associations were ‘public forums’ where resolutions were made and passed on to government through direct correspondence, mandates to unofficial members of LEGCO and through ‘parliamentary petititions’ SBRs were a complicated web of interactions within and between two levels owing to the authority structure of the colonial state (Boomerang effect). Both the state and the business chose whether to interface at local, home or both levels and whether to do that formally or informally.

13. Patterns-3 European business associations had both the political capacity and the space to contest economic policy-making but also the creation of institutions governing SBRs at macro- and sectoral levels e.g. the creation of tobacco marketing institutions. Business had nominees on advisory boards, commissions of inquiry, and introduced private bills Some business firms were more privileged at both local and home levels of the state, apparently because of the role of their founders in founding the protectorate – but does not appear to have come to ‘state capture’ as what flowed was persuasion not bribes e.g. BSA –Rhodes(Mining ordinance), Zambezi Mining Development –Sharpe (development of coa l fields) There was an interlocking pattern of elites between the state and the business sector: Prominent members of BAs served in LEGCO; also the official community was transferable.

14. Patterns-conclusion • The general pattern of SBRs in the colonial period was ‘concertation’ with three main features: 1.the state was relatively autonomous from particularistic interests but was segregative on racial lines. 2.the state had high concentration of decision powers with formal SBRs taking place at higher levels of state structures 3. European business was highly mobilised and shared actively in the creation of institutions and economic policy through direct negotiations. • The colonial state was founded by business interests and its sustenance and legitimacy at the local level depended on mutual cohabitation

15. Formation of institutional & organisational patters of SBR • British legacies: Traditions of political culture, practices and institutions of power and authority modelled on those of Britain (Institutional Transfer?) • Instructions from colonial office and application of British law e.g. Trade unions, company law • Bargaining – most dominant because the British loved regulation by law e.g. SBRs in the tobacco industry –creation of Tobacco Association, tobacco cess ordinance, tobacco marketing ordinance –which provided a foundation for post colonial political economy • In the early years there was no institutional thickness so creating institutions was relatively easy.

16. Maintenance and Change • Partly affected by change and stability of rules in the UK • The notion of CJ has limited explanatory power in relation to formation and change of SBR institutions in the colonial period – CJ to be defined based on ‘expectations of change’? • The notion of path dependence is useful but institutions governing colonial SBRs were not static and ‘stuck’ on a path –there was constant change (PD embodies a paradox!)

17. Institutional change, cont. • Institutional change was on going, often contested and took several forms: 1.Institutional drift i.e. Alteration of the effect of existing institutions because of because of changing circumstances in the environment e.g. The shift to using encompassing associations for policy dialogue (e.g. The motor vehicle bill). 2.Layering i.e. creation of new institutions without the elimination of old ones e.g. Many ordinances including company law. 3.conversion i.e. Adaptation of existing institutions to new goals e.g. The NTB –from registering tobacco growers to being a native tobacco when the auction system was introduced, to becoming ADMARC after independence.

18. Conclusion The pattern of SBRs in the colonial period was ‘concertation’ Institutional formation mostly to be explained from the perspectives of conventions and bargaining Institutional change mostly by layering, rarely by drift and conversion. Questions, Comments, Criticisms!