Why is Africa poor?

In this paper, Daron Acemoglu and James Robinson explain how they think weak institutions are the reason that Africa has lagged behind economically in comparison to the rest of the world. The history it had with slavery and colonialism weakened democratic institutions and impoverished the people. However, the core issue he is putting forward is that democratic countries with rule of law, free markets and independent judiciary perform better economically then those that don’t. 

He justifies this by referencing Botswana, which is one of the only countries in the region that has managed to sustain enormous long-term economic growth. The reason he argues is that through property rights, rule of law et.c., people were incentivised to work and invest in the country knowing that they would reap the benefits of their work. This also applied with public goods such as education and infrastructure, which the government had an incentive to provide due to its need to serve all of the people.

He contrasts this with authoritarian regimes such as Sierra Leone, where leaders do not have incentives to provide goods for their entire people’s, but instead only for their allies. This putting of one’s own interests over that of the country inevitably leads to weaker economic growth, along with stifling competition and dissent. This further exacerbates the economic situation of the country and initiates a downward spiral.

Overall, the nature of democracy is more conducive to economic growth, with that of authoritarian regimes far less likely to stimulate it long term

What do you think about this? Feel free to add it to the comments section and join the group discussion.

By Gabriel Daudy

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