Modern Mining August 2024

why it’s misplaced

2022 and 2023 were the worst load-shedding years since 2008.

world-class economists (Daron Acemoglu and James Robinson among them) ran several complex econometric regression models to try and isolate the impact of democratisation on economic growth. They found that “democratisations increase GDP per capita about 20% in the long run.” This is mostly likely due to democracies (on average) “enacting economic reforms, improving fiscal capacity and the provision of schooling and healthcare, and perhaps also by inducing greater investment and lower social unrest.” Clearly, as Michael Ross points out, under-5 mortality (a sensitive indicator of poverty) has not necessarily reduced due to democracy being better than autocracy at reducing poverty per se. Nonetheless, the results democratisation are not heterogeneous at different income levels. In other words, countries with more inequality and lower average income levels did not fare worse than their richer or more equal counterparts in terms of long-run growth. The idea that democracy is bad for growth at early stages of economic development has been debunked. Dictators can do great damage, as Kagame continues to do, even while having made some incremental gains on the CPIA score. Civil liberties, to the contrary, can equip citizens to call for accountability that will likely produce pro-poor growth (though it’s never a guarantee).  from Acemoglu and his co-authors show that the economic benefits of

checks and balances. Accountability goes out the window. Even patronage beneficiaries start to live in fear. So, what to do then, given that democracy appears to not always deliver? An under-appreciated 2006 paper by Michael Ross - “Is Democracy Good for the Poor?” – is worth consulting: “Over three decades [1970-2000, in which there was a radical reduction in child mortality rates across the world], there was also a dramatic rise in the prevalence of democracy; yet we find little evidence that the rise of Democracy unquestionably produces noneconomic benefits for people in poverty, endowing them with political rights and liberties. But for those in the bottom [income] quintiles, these political rights produced few if any improvements in their material well-being. This troubling finding contradicts the claims made by a generation of scholars.” However, a 2019 paper by a group of democracy contributed to the fall in infant and child mortality rates.

country’s institutional framework is for catalysing and sustaining growth and poverty reduction. Rwanda’s score has climbed from 3.3 since 2005 and stabilised at 3.8 (by 2022). Kenya started in the same place but has only moved up to 3.5 (by 2022). Zambia, by contrast, has declined from 3.2 in 2005 to 2.9 by 2022. The hope is that under Hichilema’s leadership, the country

will implement the right institutional changes and reverse the decline. By the above, one can understand

The idea that democracy is bad for growth at early stages of economic development has been debunked. Dictators can do great damage, as Kagame continues to do, even while having made some incremental gains on the CPIA score.

why the Rwanda model seems

attractive. When one considers

the long-term risks, though, it is harder to understand. Kagame is a ruthless operator, and civil liberties are

deeply repressed in Rwanda. Aspirant autocrats – especially when they become entrenched dictators – start to make mistakes that hurt the citizens who were perhaps willing to forego liberties such as a free press, an independent judiciary and a credible vote. “Big men” surround themselves with yes-men and avoid any

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