Association for Public Policy Analysis & Management

In many African countries the public sector was the main provider of regular, wage-earning jobs in the first decades of independence, and a particularly important employer of highly educated employees. This was in part a colonial legacy: limited educational opportunities (particularly so in East Africa) initially threatened the pace of Africanization of the public service and therefore encouraged governments to tie their educational policies to the manpower needs of the state. Furthermore, the abolishment of racially-differentiated salary scales in British East Africa in 1954 brought the educated African cadre onto a salary scale set by wage conditions in the UK. Most high income earners in Kenya and Tanzania in the 1960s therefore worked for the government. Among the top 1% of African wage earners, over 70 percent were public sector employees. Academics were already speculating about the consequences of these government employment policies at the time of independence. Frantz Fanon famously argued in 1961 that civil servants in postcolonial states would come to form a narrow rent-seeking ‘bourgeoisie of the civil service’ that would subsume the role of their colonial predecessors, stifle entrepreneurship, and perpetuate the social inequalities of the colonial era (Fanon, 1961:179).

Yet counter to these predictions public sector pay began to fall shortly after independence in many former British colonies, dropping to extremely low levels over the course of the fiscal crises of the 1980s and 1990s. While in-kind benefits may have partially compensated for this fall in cash earnings, there is little doubt that middle and higher-level employees were considerably worse off by the mid-1990s than they had been 20 years earlier. The 1970s – 1990s therefore saw a relative decline in the earnings of those comparatively well-educated formal sector employees who had previously constituted the top 10-20% of labour income earners. It may also have influenced the geographic distribution of earnings as public sector salary payments tend to be more evenly distributed geographically than private sector earnings.

Using two case studies (Kenya and Tanzania), this paper assembles and analyses descriptive data on employment, earnings and income distribution to show how wage setting in the public sector influenced labour income distribution in the postcolonial era. It also relates these empirical findings to the political economy literature on economic interest groups in postcolonial Africa.

NOTE: Author is a PhD Candidate in Economic History at the London School of Economics. This paper will form part of a PhD thesis on public sector employment and pay in Kenya, Tanzania and Uganda.