Particularistic concertation

In the last few decades, the analysis of state—business relations (SBRs) has returned to the research agenda in the political economy of development. Discourse and research on these relations are theoretically diffuse because ‘business’ is variously conceptualised as capital, firm, sector, association or network. One argument from recent scholarship is that, although their forms vary widely between countries, synergistic SBRs are a necessary condition for economic progress. Most of the literature has been concerned with the economic outcomes of different patterns of SBRs. This chapter answers a neglected but important question: how do the institutional arrangements that shape SBRs form and evolve? The question is answered through the analysis of the evolution of SBRs in colonial Malawi. This chapter makes three main empirical claims:

That the evolution of SBRs in colonial Malawi dovetailed with the formation of state institutions. Consequently, SBRs were central to the politics of state formation and the evolution of state—society relations.

That, from early acrimonious relations, SBRs developed into a collaborative governance pact based on a balance of power between the state and the business sector, i.e. concertation. It was a pattern of regular meetings characterised by consultations, negotiations, bargaining and cooperation between representatives of peak business associations and the government. While the state sometimes behaved as an obedient servant of private European capital, at other times the quest for hegemony and legitimacy made it pursue policies that pitted it against the business community.

That the practice of SBRs was particularistic along racial lines. Concertation was exclusive to Europeans through their Chamber of Agriculture and Commerce. Indians were not organised for SBRs until in 1923, when the Nyasaland Indian Traders’ Association (NITA) was formed ¹ and became the Nyasaland Indian Chamber of Commerce (NICC) in 1936. ² However, SBRs for the Indian community were ad hoc, mostly through written correspondence. African entrepreneurs were very few and mostly plied their trade in the informal sector. Their earliest business association, The Nyasaland African Industrial Union (NAIU), was founded in 1907 but was short-lived, because of low membership density. Except for a few instances where the Blantyre Native Association (BNA) asked for government intervention on specific business issues, Africans were excluded from formal SBRs until after the first general election in 1961.