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Community Economic Development

‘ubuntu’ - 'I Am Because We Are'

and economic gains within a country. It was an inward-looking economic theory practiced
by developing nations after World War II. Many economists then considered the ISI

approach as a remedy to mass poverty by bringing a developing country to a developed
status through national industrialization
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ISI policies were implemented in various forms across Africa from the early 1960s to the

mid-1970s to promote indigenous economic growth within newly-independent states.
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The underdeveloped political and economic structures inherited across post-colonial
Africa created a domestic impetus for ISI.

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In all of the countries that adopted ISI, the state oversaw and managed its

implementation, designing economic policies that directed development towards the
indigenous population, with the aim of creating an industrialised economy.

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A state-controlled economy has been criticized by scholars such as Douglas North who

claim that the interests of political elites may be self-serving, rather than for the good of
the nation. That correlates with the theory of neo-patrimonialism, which claims that post-

colonial elites used the coercive powers of the state to maintain their political positions
and to increase their personal wealth. Ola Olson opposes that view by arguing that in a
developing economy, the government is the only actor with the financial and political

means to unify the state apparatus behind an industrialization process
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Sub-Saharan Africa's experiment with ISI created largely-pessimistic results across the

continent by the early 1980s. Manufacturing, which formed the core of the big push
towards industrialisation, accounted for only 7% of GDP across the continent by 1983.
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ISI efforts also suffered from a comparative disadvantage in skilled labor for industrial
growth.

A 1982 World Bank report stated, "There exists a chronic shortage of skills which
pervades not only the small manufacturing sector but the entire economy and the over-

loaded government machine. Tanzania, for example, had only two engineers at the
beginning of the import-substitution period.

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The failure of ISI to generate sufficient growth in industrialisation and overall

development led to its abandonment by the early 1980s. In response to the