The country of Botswana has a per capita income of $13,392 — one of the highest in Africa. (It’s neighbor’s GDPs are closer to $1000/year) This is remarkable because culturally, Botswana is much like any other Sub-Saharan African country in dealing with issues such as the world’s highest HIV/AIDS rate and millions of refuges from Zimbabwe. If you want to know why Africa lags behind the rest of the world, there’s no need to study colonialism, psychology, tribal myths, political bickering, natural resources, or racial IQ levels. As one blogger notes, just observe that the constitution of Botswana prohibits the nationalization of private property and it is the freest economy in mainland Africa.
(Edit: My GDP statistic is for purchasing power parity and not the nominal income.)
{ 28 comments }
I understand the rankings, but there is a much stronger case that Botswana is simply the Norway of Africa. Botswana produces 25% of the world’s diamonds, and 50% more diamonds than any other country…40% of GDP.
In addition, 50% of government revenue comes from leasing mining rights, so they can keep taxes low even though they spend about the same amount per GDP as we do (1/3).
I suspect that if they had no Diamonds, they would resort to their communal African culture and loot the productive class.
The key statement here is that they “produce.” Many African countries could produce many natural-resource-based materials but they don’t. Ownership, capital accumulation, and production are prevented but the state/dictators. They key to success–whatever the means to produce–are freedom to be able to own, create, work, exchange, profit, price, etc.
Are you saying that if African nations had similar political institutions to the West, they would be as prosperous as the West? Or are you only saying they would be more prosperous than they are now? Because David Veksler clearly confuses these two different notions.
Doesn’t my overall point suffice as is? I’m saying at least the latter. Obviously they would be more prosperous. Could they become as wealthy as we are now? I think it’s obvious they wouldn’t. If they would, we would be getting more prosperous faster currently. But if the had the level of freedom we used to have, then certainly they could become this prosperous.
Oil accounts for 65% of government revenues in Nigeria, but it has a per capita GDP of $2,400. Natural resource exploration and exploitation is (to an extent) a consequence of economic freedom, not the cause.
Excuse me, the usual GDP figures I see are the ones right off google, but they don’t appear to be right. Where are you getting the GDP Per Capitas from?
Happy Holidays Man
It looks like he is using the GDP based off of purchasing power parity, instead of GDP based off the currency exchange rate.
One of John Stossel’s best pieces explained this very fact, that no amount of “giving” to Africa could ever lift them out of poverty like the forces of capitalism could through the means of being able to own your own property.
I read Stossel’s article on that a few weeks ago. Besides property rights, I think that the enforcement of contracts is also important. What else?
Here is the link to Stossel’s “Why Do The Poor Stay Poor”. Besides private property rights and the enforcement of contracts, what else takes people out of poverty? http://stossel.blogs.foxbusiness.com/2010/12/08/this-weeks-column-why-do-the-poor-stay-poor.
According to the CIA’s World Factbook — I would appreciate knowing your alternative source — the per capita income of Botswana is less than that of Gabon.
You’ve offered a plausible explanation of non-Botswanan African poverty, but cannot guess your explanation of “why Africa lags behind the rest of the world,” the question you raised. Botswana’s economy may be the freest on Africa’s mainland, yet it lags behind economies that suffer much greater governmental interference. I fail to see how we can get to the bottom of this vexing question without considering the aspects you dismiss (“colonialism, psychology, tribal myths, political bickering, natural resources, or racial IQ levels”) and “just observe” what written constitutions say about private property.
Length of time under said government.
The west has been under fairly free government for hundreds of years, you can’t expect instant recovery from nothing.
Great, that explains why it’s ahead of the rest of SSA. But you still need racial IQ data to explain why it’s not as wealthy as countries rated less free like Belgium, South Korea, the Czech Republic, Spain, Norway, Italy, etc.
Markets and property rights are important, no doubt. But they are still only the second best predictor of wealth.
IQ is very dependent on circumstances. Even in the West, IQ tests given 10 years later will result in much higher scores on the same type of individuals.
Most likely you are confusing cause and effect.
“IQ is very dependent on circumstances. Even in the West, IQ tests given 10 years later will result in much higher scores on the same type of individuals.”
Although this is far too vague a statement to be able to evaluate, let’s assume it’s true for sake of argument. What does it have to do with the point under debate, which is the *gap* between black and white IQs?
What you’re referring to is the Flynn Effect and you’re right that IQ has changed over decades. However, that doesn’t mean that all groups are likely to ever converge on the same average, any more than the fact that height has increased over the 20th century means ethnic groups will ever, or can ever, be equally tall.
The evidence that there are significant genetic racial differences in intelligence is too extensive to go into here. If you’re interested, google a paper called “Thirty Years of Research on Racial Differences in Cognitive Ability.”
I’ll venture an answer: the countries you mention are all much closer (both in terms of geographic distance and of logistics) to international trading partners (and therefore much moe exposed to healthy competition) than Botswana, a landlocked country surrounded by poverty.
Tom: “According to the CIA’s World Factbook — I would appreciate knowing your alternative source — the per capita income of Botswana is less than that of Gabon.”Sorry, my source used PPP GDP per capita. Wikipedia lists it as $13,992. I guess it’s not the highest GDP in Africa, but it’s one of the highest.
http://en.wikipedia.org/wiki/Botswana
For those interested on the topic, Making Poor Nations Rich is a very good collection of essays.
The book Jonathan recommends has an essay dedicated to the case of Botswana by Scott Beaulier. He has several essays on this issue. See, e.g., http://www.cato.org/pubs/journal/cj23n2/cj23n2-6.pdf
Also, the mainstream economists Acemoglu, Robinson and Johnson have a very interesting paper on the success of Botswana: http://www.colby.edu/economics/faculty/jmlong/ec479/AJR.pdf
i have my doubts on the methodology behind the extremely high aids numbers produced by some african countries.
http://www.lewrockwell.com/lewrockwell-show/2010/09/22/163-dissent-on-hivaids/
Jared Diamond does an amazing job of evaluating all of the factors (above) in his work Guns, Germs, and Steel: The Fates of Human Societies, for those interested in serious study of this topic. Not to diminish the importance of free markets, but Diamond soundly argues the prominence of factors, ones we often consider irrelevant, in the development of civilization and prosperity.
Michael Levin on Diamond:
http://www.lrainc.com/swtaboo/stalkers/ml_ggs.html
David Gordon on Levin:
http://mises.org/misesreview_detail.aspx?control=117
Thanks for all the links everyone.
This is all fascinating stuff.
Its always stupid to posit dichotomies where none exist. Racial IQ can conspire with horrible marxist policies to produce vicious circles of poverty and war. Why must we choose one over the other? The world is more complicated than that.
And therefore of course Botswana’s constitution ensures it the most wealth of an african nation (dont you mention resources! Many many African countries have natural resources – remember the resource curse?). Now, the IQ also affects the actual composition of the ruling class due to both the median voter theorem and public choice. These are second and third order causes of poverty in Africa.
So yes both policies and IQ matter. Lets combine free trade with private property and forget about “gaps” as that will only perpetuate the destructive foreign aid scam.
I live and work in Botswana and can accurately comment on it. Botswana is not more free, or easier to do business in. It is a fact that Botswana is very difficult for a foreigner and the red tape involved in getting a work permit, getting a residence permit etc., is probably worse than in any other country in Africa. I personally know of various foreign businesses that moved to other destinations due to the inability to negotiate a deal that would have allowed them to bring in foreign “expertise”.
The positive side of Botswana (and the real reason for its success compared to other African states) is the democratic and good leadership. Botswana always had a very good president and leadership structures and was mostly free of the corruption, nepotism and greed that destroyed nearly every other African country. In Botswana the wealth is spread and shared with the people. A citizen of Botswana can count on top medical aid, education, and the government even provide land for its citizens. With education nearly everything is paid for and most cases students get government sponsored degrees from top universities all over the world.
It is true that Botswana have a huge HIV problem, however, it is probably the only country in Africa with accurate statistics and also have a fantastic program in place to curb the affects.
That should be the lesson learned from Botswana. Good governance. Botswana never had leaders in the Mobutu, Mugabe, Gaddafi and Mbeki mould that only promoted their own interests, Botswana always had leaders who promoted the best interest for the country.
“It is a fact that Botswana is very difficult for a foreigner and the red tape involved in getting a work permit, getting a residence permit etc., is probably worse than in any other country in Africa.”
It sounds like Botswana doesn’t want to be overrun with, well, other Africans. Much like the Dominican Republic strictly enforces its border with Haiti.
Any statistics on child abuse ? That is the first place I would look when trying to make sense of a country.
Comments on this entry are closed.