East African development, better than expected

This morning I had the pleasure of hearing Yuri Maltsev talk about his visit to East Africa to study developlement in several countries there. It's widely known that bad governance in Africa is the primary factor in Africa's lack of economic success. It's less widely known that at least a handful of countries there are making progress. Maltsev was uniquely qualified for this trip because he is Russian and has had experience with economies in transition, and because one of his former students is now the chief economic advisor to the president of Kenya.

The anecdote is that several years ago Maltsev got his hands on a copy of a book by some guy named Hernando de Soto, and not having time to read it he assigned it to the student to read and give a presentation on. When the student was graduating he asked Maltsev to borrow it and Maltsev said he could just keep it. Now there's a newly-formed government office whose mission is to formalize property titles.

Start the howls now, but the primary antagonist of property rights in countries where these are held informally is usually the government. Maltsev said the office has met with some success as one Minister of Agriculture has already had to resign: when he and his minions tried to tell the farmers what to plant and when they sent him packing, titles in hand.

Per-capita GDP is an interesting and useful statistic to judge an economy by, one we're pretty used to. Another is the percentage of GDP that comes from foreign aid. The problem of foreign aid has recently been discussed quite a bit, so we don't have to go into it here, but as we know it's no silver bullet against poverty, and in fact its perpetuation generally means the stagnation of economic growth. One data point does not a pattern make (others have been discussed before and were this morning), but I was surprised to hear that Malawi's government's budget is 90% composed of foreign aid money. Malawi is very bad off even by regional standards. It's pretty clear that the government there needs only to please the donors and not its own citizens. Ironically, being less desperately in need of help means you're actually free to improve: in countries that get a lot less aid, the governments are pressured more by the actual conditions than by the need to please distant, faceless donors. Start second round of howls now, but at least it's a small step.

Share this

Howls of approval

Howls of approval

Seconded. Bravo :grin: Is

Seconded. Bravo :grin:
Is his talk available anywhere? (electronic or transcript)