causes of poverty, economics, governance, poverty

The Causes of Poverty (44): Bad Institutions

botswana-map

(source)

Botswana is a largely tropical, land-locked country with insignificant agriculture in a geo-politically precarious location. When the British granted independence, they left 12 km of roads and a poor educational system. Making headlines for its devastatingly high HIV rate, Botswana suffers from high inequality and unemployment. Officially a democracy, it has yet to have a functioning opposition party. 40% of Botswana’s output is from the diamond industry, a condition that in other countries casts the resource-curse.

Zimbabwe and Botswana GDP per capita

Zimbabwe and Botswana GDP per capita

Still, Botswana is a growth miracle. Between 1965 and 1998, it had an average annual growth rate of 7.7%, and in 1998 it had an average per capita income four times the African average. Rule of law, property rights, and enforcement of contracts work; the government is efficient, small, and relatively free from corruption. Indigenous institutions, persisting through colonization, encourage broad-based participation, placing constraints on elites. Institutional quality and good policies are responsible for success against the odds. (source)

Of course, high GDP growth rates don’t always imply low poverty rates, but often they do. About a third of the population still lives in poverty, but this rate has been declining sharply, from 59% in 1985 and 47% in 1992 (source).

(image source)

More posts in this series are here.

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3 thoughts on “The Causes of Poverty (44): Bad Institutions

  1. As a Group working in the African music industry “The Causes of Poverty (44): Bad Institutions | P.a.p.-Blog, Human …” is of great interest to us
    well written thank you :-)

  2. Pingback: Measuring Human Rights (31): Which Changes in the Spatial Pattern of Human Rights Are Most Likely? | P.a.p.-Blog, Human Rights Etc.

  3. Pingback: The Causes of Poverty (75): Different Types of Colonization | P.a.p.-Blog // Human Rights Etc.

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