What is more important for the growth of an economy? Governance structures, the oft heralded democratic wave, or a dynamic private sector?
Why has Zimbabwe collapsed so spectacularly, is it the seeming lack of
a vibrant base of private enterprise or is it the collapse of the
system of governance? The idea that private capital, investment and growth alone could deliver a country from an under-developed impoverished state and and into the community of advanced nations was the thinking of the World Bank, IMF, and the old growth models of Harrod-Domar and Robert Solow. The mantra was get prices rights, accumulate capital and the prosperous kingdom will be delivered. The World Bank and other development agencies now recognize that trying to divorce the accumulation of capital inputs from institutional and political-economy considerations is a very flawed approach to development. Everything seems to work just right, until we consider the crucial question, whence cometh the productive local capital? Would you invest in a country with a vampire and predatory state, weak property rights and weak enforcement of contracts? Would you invest in a country where you do not have a reasonable expectation of a decent return on your capital?
The classic case of this model's frailty is the former Soviet Union. That global economic and political giant accumulated capital in an unprecedented fashion in the 1950s, growing and transforming itself at an immense, but eventually collapsed in on itself because of a weak institutional environment.
Now, it is indeed true that Western countries use double standards and have their own parochial interests to protect. However, there is no point in crying over split milk. They will not change their ways and the mere fact of these double standards and hypocrisy is no reason to hide ourselves from that reality. The great problem across Africa is that we cannot commit to free and fair elections. Kenya can't do it, Nigeria can't do it, Togo can't do it, Ethiopia, Egypt, Uganda; the examples are countless. What follows then is that the entire state structure is built on a faulty premise and these frailties conducted outward to the periphery and the functioning of the state.
In Botswana, the BDP (the late Seretse Khama's party) has won every election since independence in 1966. Botswana's current president, Ian Khama is the son of Botswana's first president, Seretse Khama. Botswana has had four presidents since independence: Seretse Khama, Quett Masire, Festus Mogae, and Ian Khama. Quett Masire is the only president serving or former who does not belong to the Bamangwato tribe. Masire comes from the Bangwaketse tribe. However, Botswana's elections have always been seen as free and fair. There haven't been allegations of foul play. It appears that once a society has agreed on a system of political transition that is conducted in a free and fair manner, the outcome, even if dominated by one group, may be politically sustainable. But even more importantly, the BDP has governed in a very inclusive manner. They have shared the wealth of the nation through investments (across the country). Using the revenue from diamond exports, the BDP has invested in public goods: roads to virtually all parts of the country, health care, schools, education, housing, electricity generation and distribution, etc. The revenue from diamonds was not used to line the pockets of politicians but was instead used to create the modern infrastructure required for economic progress. That is why Botswana is one of the few stars of Africa.
Sereste Khama set the tone by not engaging in the politics of tribalism and division. One of the most crucial decisions of Seretse Khama's presidency was the passing in 1967 of the Mines and Minerals Act that vested sub-soil mineral rights in the national government. Prior to this, the tribes held these rights. Given that the main diamond mines were under the lands of the Bamangwato, whose paramount chief was Seretse Khama, this was ample demonstration of the fact that Seretse Khama put the interest of the nation ahead of tribal, ethnic, or parochial interests.
I am not arguing that democracy is panacea for development. Indeed, Francis Fukuyama (2008, p. 27-28) argues that:
Neither South Korea during the 1960s or 70s, nor China from the period 1978-present, had a strong rule of law; property rights were partial and insecure, and there was a weak legal infrastructure in both countries. They, did, however possess strong developmental states that maintained political order and pursued pro-developmental rather than predatory policies. Their growth rates were not worse than territories like Hong Kong or Singapore that inherited modern rule-of-law systems from the British." He continues "Property rights are more important to growth than individual human rights (e.g., freedom of speech, association, religion) or political rights. We know of many fast-growing regimes that offer full, partial, of quasi-property rights without protecting other types of individual rights (China, Malaysia, Singapore, United Arab Emirates).
I do not disagree with Fukuyama (2008) nor do I wish to claim that there are general rules for every country. If de jure or de facto autocracies like China or Singapore have been able to sustain high levels of growth, then democratization or strengthening their democracy may not be necessary insofar as their citizens have an instrumental value for democracy as opposed to an intrinsic value for democracy. However, there are autocracies and pseudo-democracies whose politico-economic history is sufficiently bad to warrant democratization or the need to strengthen their existing democracies. In other words, policy reform must be guided by the politico-economic track record and history of the country. And most of Africa's politico-economic track record has been terrible. Indeed, Fukuyama (2008, p. 29) recognizes this point when he argues that:
In countries ruled by competent development states, greater political participation , particularly if introduced suddenly, may lead to increased demands for redistribution and rent-seeking, both of which may be detrimental to growth. On the other hand, in countries with some combination of predatory states, low capacity, and high levels of corruption, democratic accountability may be the only route available for institutional change and long-term growth.
In the particular case of Robert Mugabe's Zimbabwe, the question really is not one of capital growth or enterprise. How did we go from a simple demand for free and fair elections to talk of liberation, re-colonization and his opponents being characterised as puppets of the west? No one is suggesting, one hopes, that Robert Mugabe must be removed at all cost. But in a country with millions of people one person or a group thereof cannot lay exclusive claim to good ideas, intelligence, or the right to govern in perpetuity especially after 28 years of being in power. Let Zimbabwe have free and fair elections. If Robert Mugabe wins these, that's fine. You can't eat your cake and have it. You cannot be a predatory and vampire state, terrorize your citizens, share the wealth of the country with your cronies and expect local productive capital to fall from the sky and step in where the state has left a massive chasm. Capital and politics are inextricably linked.
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I think the model where there is significant economic growth in the absence of the rule of law specifically the lack of property rights works only in the short run. When the growth goes from purely export driven and the investors are primarily local and intend to stay local; it is inevitable that they will need protection for their assets from the state, unless the investors are the state.