example is the ‘crisis of governance’ in India after the mid-1960s. Atul Kohli
(1990) defined this crisis as a failure of political coalitions to endure, policy
ineffectiveness and the incapacity to accommodate political conflict without
violence. The competitive politics of distribution, he suggested, had politicized
existing divisions in society such as class, ethnicity, language, religion, region
and caste. The spread of democratic values had hastened the decline of tradi-
tional sources of authority such as the ‘big men’, often of high caste, who had
previously controlled lower-caste voters. This was exacerbated by the decline
of party organization and the rise of low-quality leaders with demagogic rather
than programmatic appeal. This mobilization had been focused on the state,
which by the mid-1960s was responsible for half of all investment in India and
a key source of livelihoods in a poor developing country.
Culture 261Box 12.1 The ‘vampire state’ in GhanaGhana the world’s largest producer of cocoa, had strong initial conditions at the
time of independence. Ghanaians had gradual experience of internal self-govern-
ment in stages between 1951 and final independence in 1957, and the country had
ample foreign exchange reserves. The new President Nkrumah was committed to
promote industrialization, welfare and economic independence and was widely
praised among donors and political commentators. Nkrumah was overthrown in
1966 and a series of governments in the late 1960s and 1970s presided over
economic collapse that lasted until the 1980s. GDP per capita declined by 40 per
cent between 1974 and 1984 and several million people migrated. Gareth Austin
(1996) termed the Ghanaian state a ‘vampire state’, one that sucked out so much
wealth and gave so little in return that it destroyed the economy.
In post-independence Ghana there was a dominant coalition among urban
groups (largely the Akan tribe) that included the bureaucracy, the military, police,
trade unions and students. The formation of this coalition dated to Nkrumah’s
defeat of the federalist National Liberation Movement (NLM) in 1955–56 led by
the minority wealthy rural cocoa producers (mainly the smaller Ashanti tribe).
This was followed by an end to the tradition of independent cocoa farmers’ asso-
ciations. Two particular sets of government intervention have been identified by
many as the principal instruments of the vampire state. The Cocoa Marketing
Board was a statutory export monopoly whose main purpose was made clear by
Nkrumah in 1954 when the government responded to a sharp rise in the world
price of cocoa by freezing the price paid to producers to raise revenue to fund
urban-industrial expenditure. The second mechanism was the Ghanaian currency
which became progressively overvalued after 1961, and especially after 1975.
This made imported inputs and equipment cheaper for urban industry and
consumer goods cheaper for urban consumers at the cost of less competitive
export prices for cocoa growers. The brutal extraction of resources through these
two means destroyed the productive base of the rural Ashanti and created an inef-
ficient urban-industrial economy that functioned only as long as subsidies were
flowing; as they dried up urban declined followed quickly.