President Bush’s new Africa initiative, and the recent events unfolding in Liberia, raise the question why, despite decades of aid, Africa remains impoverished. Over the years, the continent has been the site of large-scale experiments to reform its economies. But however ambitious, these projects have failed to generate sustained economic growth, say Stephen Haber, Douglass C. North and Barry R. Weingast (all of the Hoover Institution).
As a result:
The main lesson is that no attempt at economic reform in Africa can hope to succeed if it ignores the concomitant need for political reform, say the authors. Without attention to their political foundations, markets cannot flourish. Donor governments and agencies must ensure that African countries indeed, developing countries everywhere undertake market reform, as the economists emphasise. But they must attend to the political security of markets as well as to the economic policies creating them.
Source: Stephen Haber, Douglass C. North and Barry R. Weingast (all of the Hoover Institution), If Economists Are So Smart, Why Is Africa So Poor? Wall Street Journal, July 30, 2003.
For text (WSJ subscription required) http://online.wsj.com/article/0,,SB105952321523586100,00.html?mod=opinion%5Fmain%5Fcommentaries
For more on International (Institutions and Growth) http://www.ncpa.org/iss/int/
FMF Policy Bulletin/ 5 August 2003
