Good Governance in the 21st Century

Good Governance in the 21st Century

Conflict, Institutional Change, and Development in the Era of Globalization

New Thinking in Political Economy series

Edited by Joachim Ahrens, Rolf Caspers and Janina Weingarth

This book explores the interdependences of economic globalisation, political tensions, and national policymaking whilst analysing opportunities for governance reform at both national and international levels. It considers how governance mechanisms can be fashioned in order to both exploit the opportunities of globalization and cope with the numerous potential conflicts and risks.

Chapter 9: Africa: Sad Proof that Institutions Do Matter

Janina Weingarth and Alfred Wiederer

Subjects: development studies, development economics, economics and finance, development economics, institutional economics, political economy, politics and public policy, international relations, political economy


Janina Weingarth and Alfred Wiederer 1. INTRODUCTION Africa 1 is 'the largest and most complex development challenge facing the world today' (Bloom et al. 1998, p. 273). Is the 'hopeless continent' (Anon. 2000) and 'worst economic disaster of the XXth century,2 the tragic result of incredibly bad external conditions such as, e.g., geography and international integration? Is insufficient development aid condemning Africa to a slow, painful decay? How is it possible that East Asian states showed average annual GDP growth rates of7.3 percent in the 1990s (World Bank 2004a, pp. 183-184) while Africa at the same time suffered from negative per capita growth rates (Bigsten 1999, p. 16; World Bank 2004a, p. 176)? As institutions are often seen as the prime cause for East Asia's positive development, can they also be used to explain Africa's lack of development? To answer these questions, a thorough analysis of the factors influencing Africa's development is needed. The mere size and complexity of the topic makes it necessary, however, to limit the analysis to certain aspects. We thus focus on the importance of institutions for economic development and the role of the state in determining the quality of these institutions. Theoretically, this analysis is based on the Northian approach of the New Institutional Economics (NIE) and more specifically on the governance framework which is portrayed in Chapter 1 of this book. By applying the tools of the NIE, this investigation seeks to answer the following questions: • What is the relevance of institions for...

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