Staying Poor

Economic journalist Tim Harford recalls a recent visit to Douala, “the armpit of Africa” (via):

As our car slowly bumped and lurched through the crowds, I tried to make sense of it all by asking Sam, the driver, about the country.

“Sam, how long was it since the roads were last fixed?”

“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. ”

His conclusion?

The rot starts with government, but it afflicts the entire society. There’s no point investing in a business because the government will not protect you against thieves. (So you might as well become a thief yourself.) There’s no point in paying your phone bill because no court can make you pay. (So there’s no point being a phone company.) There’s no point setting up an import business because the customs officers will be the ones to benefit. (So the customs office is underfunded and looks even harder for bribes.) There’s no point getting an education because jobs are not handed out on merit. (And in any case, you can’t borrow money for school fees because the bank can’t collect on the loan.)

It is not news that corruption and perverse incentives matter. But perhaps it is news that the problem of twisted rules and institutions explains not just a little bit of the gap between Cameroon and rich countries but almost all of the gap. Countries like Cameroon fall far below their potential even considering their poor infrastructure, low investment, and minimal education. Worse, the web of corruption foils every effort to improve the infrastructure, attract investment, and raise educational standards.

We still don’t have a good word to describe what is missing in Cameroon and in poor countries across the world. But we are starting to understand what it is. Some people call it “social capital,” or maybe “trust.” Others call it “the rule of law,” or “institutions.” But these are just labels. The problem is that Cameroon, like other poor countries, is a topsy-turvy place where it’s in most people’s interest to take actions that directly or indirectly damage everyone else.