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Why Poor Countries Are Poor

The clues lie on a bumpy road leading to the world's worst library.

(Page 2 of 4)

"The roads, they have not been fixed for 19 years."

President Paul Biya came to power in November 1982 and had been in office for 19 years by the time I visited Cameroon. Four years later, he is still in power. He recently described his opponents as "political amateurs"; they are certainly out of practice.

"Don't people complain about the roads?"

"They complain, but nothing is done. The government tells us there is no money. But there is plenty of money coming from the World Bank and from France and Britain and America--but they put it in their pockets. They do not spend it on the roads. "

"Are there elections in Cameroon?"

"Yes! There are elections. President Biya is always re-elected with a 90 percent majority. "

"Do 90 percent of people vote for President Biya?"

"No, they do not. He is very unpopular. But still there is a 90 percent majority. "

You do not have to spend a long time in Cameroon to realize how much people resent the government. Much of government activity appears to be designed expressly to steal money from the people of Cameroon. According to the global watchdog Transparency International, Cameroon is one of the most corrupt countries in the world. I was warned so starkly about government corruption, and the likelihood that officials at the airport would attempt to relieve me of my wad of West African francs, that I was more nervous about that than the risk of malaria or a gunpoint mugging in the back streets of Douala.

Many people have an optimistic view of politicians and civil servants--that they are all serving the people and doing their best to look after the interests of the country. Other people are more cynical, suggesting that many politicians are incompetent and often trade off the public interest against their own chances of re-election. The economist Mancur Olson proposed a working assumption that government's motivations are darker still, and from it theorized that stable dictatorships should be worse for economic growth than democracies, but better than sheer instability.

Olson supposed that governments are simply bandits, people with the biggest guns who will turn up and take everything. That's the starting point of his analysis--a starting point you will have no trouble accepting if you spend five minutes looking around you in Cameroon. As Sam said, "There is plenty of money...but they put it in their pockets."

Imagine a dictator with a tenure of one week--in effect, a bandit with a roving army who sweeps in, takes whatever he wishes, and leaves. Assuming he's neither malevolent nor kindhearted, but purely self-interested, he has no incentive to leave anything, unless he plans on coming back next year. But imagine that the roaming bandit likes the climate of a certain spot and decides to settle down, building a palace and encouraging his army to avail themselves of the locals. Desperately unfair though it is, the locals are probably better off now that the dictator has decided to stay. A purely self-interested dictator will realize he cannot destroy the economy and starve the people if he plans on sticking around, because then he would exhaust all the resources and have nothing to steal the following year. So a dictator who lays claim to a land is a preferable to one who moves around constantly in search of new victims to plunder.

I cannot confirm that President Biya fits Olson's description of a self-interested dictator. But if he did, it wouldn't be in his interest to take too much from the Cameroonian people, because then there would be nothing to take next year. As long as he feels secure in his tenure, he will not wish to kill the golden goose. Like the virus whose very existence relies on the bodies it afflicts, Biya would have to keep the Cameroonian economy functioning in order to keep stealing from it. This suggests that a leader who confidently expects to be in power for 20 years will do more to cultivate his economy than one who expects to flee the country after 20 weeks. Twenty years of an "elected dictator" is probably better than 20 years of one coup after another.

Staying with the simplifying assumption that Biya has absolute power over the distribution of Cameroon's income, he might decide to steal, say, half of it every year in the form of "taxes" that go into his personal bank account. That would be bad news for his victims, of course, but also bad news for Cameroon's long-term growth. Think of a small business owner considering an investment of $1,000 in a new power generator for his workshop. The investment is expected to generate income of $100 a year. That's 10 percent, a pretty good return. But since Biya might take half of it, the return falls to a much less attractive 5 percent. The businessman decides not to make the investment after all, so he misses out and so does Biya.

Olson does not predict that stable dictatorships will do good things for their countries, just that they'll damage the economy less than unstable ones. Of course, Biya might make his own investments--for instance, providing roads or bridges to encourage commerce. While they would be expensive in the short term, they would help the economy to prosper, leaving Biya with more opportunities to steal later. But the flip side of the businessman's problem applies: Biya would be stealing only half of the benefits, not nearly enough to encourage him to provide the infrastructure that Cameroon needs.

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charles|10.19.09 @ 7:05PM|

I accidentally arrived at this article because of libraries and Africa and the magic name of TH. I was reminded of a grand new impressive library in East Africa, opened by a British PM. I took notice when several students at that university told me there were no books in it for the students. Of course libraries shouldn't have books. Libraries are buildings; just in case of books. Excuse me, I'm now off to get a sparkling new international airport built with my name on it, from whence no planes will really fly. So what? More importantly, it will bear my name.
PS Thank you for reminding us of Mancur Olson.

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…(And in any case, you can’t borrow money for school fees because the bank can’t collect on the loan.) An enlightening yet somewhat depressing take on Africa’s situation: http://reason.com/archives/2006/03/01/why-poor-countries-are-poor Say your words Click here to cancel reply.  Name (required)  E-mail (required, hidden to public)   URI (your blog or website) Notify me of follow-up comments…

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Richardhg|1.20.10 @ 11:02PM|

The rest of the world have been complicit in propping up disastrous regimes, providing money to despots without requiring change that would benefit the people.

If we are going to continue to give them money, we should insist on some changes; a free press, Government transparency (public bids for large projects and Government service providers), and put a permanent office in place to overview progress, staffed by people who understand the projects in hand. Food assistance should be distributed directly without local Government intervention: oversight is OK.

bstew|1.21.10 @ 11:06PM|

Very wordy way to say "it's culture" Culture runs very deep and lasts for generations. If the culture doesn't change neither will the country.

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A Life Lesson from Poor Countries links to this page. Here’s an excerpt:

…( follow me on Twitter ) , February 17, 2010 Advertisements I always like to extract life lessons from seemingly unrelated ideas. This time I want to discuss an interesting article titled Why Poor Countries Are Poor. The article, which talks about the reasons some countries are poor, takes Cameroon as an example: The average Cameroonian is eight times poorer than the average citizen of the world and almost…

|3.30.10 @ 6:38PM|

Hi!
I agree with the whole good piece. Apart from one claim: Cameroon has an average IQ of 70. That is 30 points lower than the US. We know that IQ is very very strongly correlated with other abilities, indeed any moderate success in US college require at least IQ100. Imagine a whole country below that and you do have an explanation for all the bad decisions and institutions. The writer is probably at IQ 120, so for him to say that the average Cameroonean is no dumber than him, is completely false. Otherwise great little piece.

|9.4.10 @ 1:05AM|

thank you, you have just insulted an entire nation!

where did you get that fallacious information? It too easy to say "oh it s because they are dumb"; and not look further. taking the easy way and not putting anymore thought into it. Hmmm I wonder, if you don t think too much and take the easy way, what does that make you?...{u actually don t deserve that use the word}

from a proud cameroonian.

|3.4.11 @ 9:29AM|

I too disagree with Putty. The reason why IQ is low is the lack of investment in education (and everything in Cameroon). This includes food, which is essential in providing the body with so much) The government are deliberately keeping the population down to satisfy their own desires. If they had one chance for change, we would see a different Cameroon.

It isn't fallacious|12.16.11 @ 3:19PM|

Its based on general intelligence assays which have demonstrated that West African blacks have an average IQ of ~70

see: Race Differences in Intelligence: An Evolutionary Analysis (2006) Lynn

|12.20.11 @ 6:44AM|

There is a huge talent drain in countries such as these. People who are smart enough to get out of these countries do. Those who stay should be applauded because in society as corrupt as this, they will never be appreciated or fairly compensated. Any study of West African IQ's will have an extreme survivor bias.

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How do people know when their lives lack abundance? The most common‘ give away’ is that they are deeply unhappy with some phase or other of their situation. It is often the case that people think of material possessions when they consider abundance. But the truth of the matter is that the people that have accumulated a great deal of personal wealth, but who still remain unhappy, do not experience an abundant life. It is often a sad fact of life that there are many wealthy individuals who despite

|9.23.10 @ 5:02AM|

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Jester|12.4.10 @ 10:37PM|

rebellion? :-S

it would be difficult, probably even more than that. with so much corruption for so long it could easily escalate into full scale domestic war or bloodbath in the worst case scenario. whit global and massive lack of motivation and probably fear of retaliation for such uprising this task becomes even more hard, verging on the unimaginable.

but then again, it's either that, or slow and painful death of the country. maybe 'death' it's not the best word here.., well, only if mentioned 'thieves' have enough brain power to recognize that they need someone to steal from.., although, they can always steal from each other, no? :-S
seem like the 'people' get screwed either way..

maybe my view is to grim..
please do comment, I would like to see other opinions too.

|2.17.11 @ 11:00AM|

Can investors who fund these endeavors set up clauses, etc. that follows the money? Meaning, take part in the planning/regulating of monies spent? All too often, throwing money somewhere and waiting for a return simply is not enough. I suppose we need to further support social responsibility, or at least fight corporate waste. Thanks for the article. Indeed, I am a few years late in reading it.

|3.4.11 @ 9:44AM|

The developed world and former colonial powers of African countries have to share the blame for some of the problems that Africa is still experiencing.

With so many Charity Orgs. in the world why do we still have so much suffering in Africa today? Why?

As a child I saw TV reports of children in Africa dying of starvation and disease. I still see these TV reports today. Utterly shocking, and yet I know the reason why.

The reason is not that the people cannot help themselves or do not want to, the reason is because of the government in power (dictator).

Why and how can the international community not erradicate this? Is this all too 'political' for them to intervene?

I'm so angry that the world still allows one sixth of the worlds population to starve and live in abject poverty and live under violence.

What is the purpose for all these International groups, UN, NATO etc.

From my perspective and I'm sure from the perspective of many Africans, is that they are not helping enough.

I am aware of the help that is provided but the simple fact of the matter is that the world is simply not doing enough.

RobS|12.11.11 @ 4:42AM|

"Why and how can the international community not erradicate this? Is this all too 'political' for them to intervene?"

Because that would be a return to colonialism.

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RobS|12.11.11 @ 4:39AM|

"Cameroonians are no smarter or dumber than the rest of us."

[citation needed]

|12.18.11 @ 9:22AM|

Countries stay poor for two main reasons: government and culture.

Elite academia can't state the obvious, and neither can their progeny in big government, as the cannot be critical of foreign cultures or institutions. Multiculturalism and relatvism have stripped the "brain trust" of their ability to state the obvious.

The second order effect is that if you cannot name something, then you can't look for solutions.

British colonial efforts got this part right, they were there to reform another society.

While the US is often in this business, the inability to discuss it directly substantially reduces the ability to achieve a worthwhile result.

moop|12.22.11 @ 11:53AM|

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