In the two years since the Government of National Unity (GNU) was formed and Zimbabwe dollarized fully, there have been encouraging developments on the economic front.
Everyone seems to agree that most, if not all, policy problems have their roots in politics.
Today we are trying something new.
I wanted to share with you the reasons why I think we can be optimistic about Africa's development prospects, but rather than writing something up, I thought of using video.
Please, share your feedback, not only on whether you agree that Africa is on the right track, but on the video itself. If you like it, I would like to do more of this short video "Development Talks" with the readers of this blog.
Let me know what you think.
My colleagues Justin Lin and Celestin Monga have proposed a six-step plan for identifying industries that could help developing countries industrialize.
The first step in the plan is to find countries that have a per-capita income that is roughly double yours and have a similar endowment, and observe what they are producing. These industries would then serve as the basis for possible government intervention to either protect or create, depending on the country’s situation.
However, the six-step plan seems to gloss over the fact that countries, even seemingly successful ones, produce certain goods for political rather than economic reasons.
On October 26, we learned that Kenya’s rank in Transparency Interational's Corruption Perceptions Index dropped seven places since 2009. Kenya now ranks 154 out of 178 countries—well below most of its EAC neighbors. But how bad is it, in fact? Will the new Constitution do anything to make the situation better?
In Kenya, no one seriously doubts that corruption is a key constraint to greater growth and prosperity.
Corruption comes in two forms. Petty corruption occurs when citizens are asked for kitu kidogo (“a little something”): to get a document stamped, a service provided, or an infraction overlooked. The amounts are small, but hardly petty to the many victims living on less than $1 a day. Kenya also has large-scale corruption—public purchases made at inflated prices; public benefits handed out to people who are not entitled; fictitious companies being paid for contracts that they never executed.
Update: This post has generated a very interesting discussion in a different blog. See it here.
I gave a lunch talk at a recent conference of civil society and technology people organized by the Tech@State people at the U.S. State Department. I thought I’d share it more widely.
In the old days—that is, the 1950s and 1960s—development was about correcting market failures. Influenced by the “big push” theories of economists like Rosenstein-Rodan, post-war Keynesian economics and the apparent success of the Soviet Union, policymakers in developing countries saw the role of government as providing public goods (bridges, roads and ports), addressing externalities (protecting “infant industries”) and redistributing income to poor people (by, for instance, keeping food prices low). Donors supported these countries by financing some of the public goods—a bridge, say. Knowledge assistance consisted of helping to identify the market failure, and then designing the “optimal bridge”.
I am often asked whether Kenya's new constitution, approved in a referendum in August 2010, will actually improve governance in Kenya. There are many people who seem to believe that it will not. A prominent journalist was recently quoted in Nairobi's Daily Nation as saying that the constitution is just a piece of paper, and "a piece of paper can't transform society". I disagree.