Africa’s Singapore or Uganda waiting to happen?

Yet Rwanda has one huge advantage: the rule of law. No African country has done more to curb corruption. Ministers have been jailed for it. Transparency International, a watchdog, reckons Rwanda is less graft-ridden than Greece or Italy (though companies owned by the ruling party play an outsized role in the economy). “I have never paid a bribe and I don’t know anyone who has had to pay a bribe,” says Josh Ruxin, one of the owners of Heaven, a restaurant in Kigali, the capital.

The country is blessedly free of red tape, too. It ranks 45th in the World Bank’s index of the ease of doing business, above any African nation bar South Africa and Mauritius. Registering a firm takes three days and is dirt cheap. Property rights are strengthening, as well—the government is giving peasants formal title to their land.

That is the Economist on Rwanda. I remain cautiously optimistic about Kagame’s brand of effective authoritarianism. I just hope that he will not be tempted to degenerate into the Musevenis of this world.

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reality check

Recently I have been reminded over and over again of the fact that in the sixties South Korea, Ghana, Kenya, the Congo etc had roughly similar per capita GDP (I just started reading economic gangsters and have attended two very interesting lectures by Francis Fukuyama). Assertions of this nature are usually accompanied by accounts of what happened post-60s that made South Korea several times richer than its African counterparts in the present day. But an equally important question to ask is how different pre-60s Korea was from the African countries? (Korea’s long history with some form of organized polity, the nature of Japanese colonization, geographic location near the economic giants Japan and the US, relative importance in cold war politics, etc etc).

These are real issues with real consequences. Briefly stated, the differences between say the Congo and Singapore extend beyond those between Lee Kwan Yew and Mobutu Sese Seko. Pre-independence history and realities (including culture and forms of socio-economic organization) played a significant role in determining the respective trajectories of the  post-independence states of Asia and Africa.

While I am not a believer in historical institutional determinism, I find the reality of findings such as this hard to ignore. The short of it all is that everything is endogenously determined – institutions, quality of leaders, rates of capital accumulation, savings etc etc.