You might find yourself wondering just what the solution to poverty in Africa is, if it is not government aid. Professor Philip Booth’s book provides a pretty good checklist of the necessary preconditions for economic development. In other words, if these things are not in place, you can forget about growth.
• Good governance
• The protection of private property
• Freedom of contract
• Enforcement of contracts
• The rule of law
• The authority of law
• The absence of corruption.
None of this sounds very glamorous but they are all things that we take for granted in a country like Britain. None of these things pertain in a country like Somalia, which is one reason why Somalia is not going to develop any time soon. Imagine you own a field in Somalia and try to raise a loan on it – you can’t. Some warlord might confiscate your field tomorrow, so what bank would accept it as collateral? Again, how is business or trade possible when contracts are worthless, and where the only enforcement comes from the barrel of a gun? Without rule of law or the authority of law there is no marketplace for business. Who would invest in Somalia, given that no investment is safe from predation by bandits?
Somalia is an extreme example, but similar conditions prevail even in outwardly civilised countries like Kenya. Numerous Kenyans have been driven off their land in civil strife and become “internally displaced persons”. That means that they own farms and houses which they cannot visit without risking their lives. Thus their property rights are rights on paper only.
Again, Kenya is a land where powerful people are able to have their enemies killed, and evade justice for years. Consider the case of Tom Mboya, assassinated in 1969. Or the case of Dr Robert Ouko, murdered in 1990. And what about the case of Fr John Kaiser, killed in 2000?
None of this makes Kenya an inviting place to do business in. And as for the ordinary people living in squalid conditions in Nairobi, in places like the Kibera slum, most of them would be able to better themselves if they were given legal title to their dwellings. If they owned their own houses (all of which are illegal shanties) they could repair and improve them, perhaps build another storey, rent out rooms, and thus make progress. But such investment is simply not possible in a land where property ownership is such a shaky concept.
Unless these things are sorted out first, any aid money given to a government like that of Kenya will not alleviate poverty. Indeed it might make it worse, as the aid will serve to prop up the structures that perpetuate poverty.
One thing that Professor Booth asks is how is it possible for countries that do not have the rule of law to develop the necessary legal structures and the culture that goes with it. Such change is possible – all countries that enjoy the rule of law today once did not. So it is possible for the rule of law to emerge, as it did in Europe. There can be Magna Carta moments. One reason for confidence in the future is globalisation. People in Kenya can see that things can be different, for they can look at the example of other countries; and people in Kenya can make their opinions heard these days, thanks to a free press and a free and pretty uncensorable radio and internet. Kenya is changing and is probably, despite the debacle of the elections of December 2007, better ruled than it has ever been, simply because the world is watching, and the people of Kenya are watching – and they want change.
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