Daren Acemoglu and James Robinson in 2010, in a highly topical and bold paper in the Economic History of Developing Regions titled “Why Africa is poor”, tries to provide an empirical explanation for why Africa, especially south of the Sahara is the poorest part of the earth. As institution scholars, they expectedly traced Africa’s poverty to its highly extractive political and economic institutions, which do not provide incentives to Africans as citizens to save and invest, and also provide no incentives to politicians/leaders to provide public goods. But even before then, in another path defining paper “The Colonial Origins of Comparative Development” they explained how the European colonisation enterprise created these institutions in some places while also creating exactly the opposite set of institutions in some other parts. Hear them:
“At one extreme European powers set up extractive institutions to transfer resources from a colony to themselves, and this led to the creation of economic institutions supporting such extraction, particularly forms of labour coercion such as slavery, monopolies, legal discrimination, and rules that made the property rights of the indigenous masses insecure.”
At the other extreme, Europeans settled and tried to replicate, or in fact improve over, European institutions. This led to inclusive institutions, which were much better for economic growth.”
Of course, the determining factor for the type of institutions created in a particular colony was the feasibility of settlements.
As they explained “….in places where the European mortality rate from disease was relatively high, the odds were against the creation of settler colonies with inclusive institutions, and the formation of extractive institutions was more likely.
Sadly, these colonial institutions have tended to persist even after the colonies have won their independence. For the most part, independence leaders in Africa were more interested in inheriting the throne of the departing colonialists than in promoting genuine and inclusive growth and development of their countries. Therefore, they sought to retain the character of the colonial state with its over-reliance on violence to maintain order and neutralise oppositions and deepen the extractive institutions left behind by the colonial state. Rather than work to dismantle the colonial ‘gatekeeper’ state set chiefly for revenue generation and for balancing the instability of internal political control against the influence of external factors, they even became more reliant on the gate keeping role of the state to extract revenue and maintain control.
Even more tragic is the tendency of post-colonial leaders in Africa to jettison, circumvent or even destroy inherited formal state institutions. Early independent leaders, who claimed to be so much in a hurry to develop their countries, were impatient with the workings of the formal institutions of state bequeathed by the colonialists and in most cases sidelined or altogether destroyed these institutions and personalised power.
Over fifty years down the line, none of these countries has developed. Rather, they have been turned to virtual wastelands, ravaged, as it were, by tyranny, bad governance, impunity, mindless orgies of crime and death, poverty, hunger and diseases. Yes, these countries now have the worst socio-economic indices in the entire world!
What these leaders – and unfortunately, even succeeding ones – specialised in doing is what Ricardo Hausmann terms ‘isomorphic mimicry’ – the creation of institutions that act in ways to make themselves “look like institutions in other places that are perceived as legitimate,” but which in reality are not.
So, for instance, countries will have Central Banks that are supposedly independent, but in reality are mere puppets of the regime in power and whenever the regime is facing revenue shortfalls, rather than going the conventional, and I dare say difficult route of undertaking hard reforms to bring the economy back to shape, it takes a short-cut by directing the Central Bank to keep printing it more money. The end result will be the case of Zimbabwe or even Venezuela, for instance, where inflation rose millions of percentages and rendered the country’s currency absolutely worthless leading to its abolition. Even Nigeria’s central bank has joined the trend printing over N7 trillion for the government as loan.
This is not even talking about African leaders’ penchant for disregarding the rule of law, disobeying court orders and even undermining or destroying the judiciary. Most of them do not respect the sanctity of contracts. The template for most African leaders – regardless of whether they are democracies or not – is that they must exercise absolute authority and their powers cannot be constrained or checked by whatever institution. It was even the legendary Leopold Sedar Senghor of Senegal who scuffed at the idea of sharing power in Africa describing it as inherently un-African and impracticable.
One lesson these African countries and leaders ought to have learnt by now is that strong inclusive institutions are the best guarantees for sustainable growth and development and not strongmen. Strong institutions are enduring and guarantee societal progress no matter the people inhabiting them. Having a regime of strong institutions though, has a particular drawback: No one person no matter how important, can exercise absolute powers. It comes with constraints, checks and balances on the powers of all office holders, including that of the president. It is built on the premise that absolute power corrupts absolutely and that personal rule is subject to the whims and caprices of rulers and tends to fizzle out when the ruler departs.
Christopher Akor
