Institutions and economic performance in Africa, a comparative analysis of Mauritius, Botswana and Uganda

Institution building and economic performance

Institutions and economic performance in Africa, a comparative analysis of Mauritius, Botswana and Uganda
Examining the relationship between institution building and economic performance in three successful African economies by Kiiza, J. World Institute for Development Economics Research (UNU/WIDER) , 2008

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The purpose of this paper is to examine the relationship between institution building and economic performance in three successful African economies, Mauritius, Botswana and Uganda. While all three have been super-economic stars in their own right, they have achieved substantially different outcomes.

• Mauritius has achieved Asia-type rapid and sustained growth, backed by the structural transformation of the economy from colonial commodity production to post colonial higher value-added industrial and information outcomes.
• Botswana has delivered rapid and sustained growth with no structural economic transformation.
• Uganda has attained rapid growth for a shorted postcolonial period and with no structural transformation.

This study aims to find out why Mauritius outperforms Botswana which in turn outshines Uganda. The paper identifies developmental nationalism as a key explanatory factor. A clear understanding of developmental nationalism calls for an outline of the history of mercantilism and institution building.

Results of the study show the following:

• the Mauritius-Botswana-Uganda differences are associated with differences in commitment to developmental nationalism and the Weberianness of state institutions
• while developmental nationalism is strongly associated with growth, it cannot deliver durable developmental dividends unless it is institutionalized in and through Weberian bureaucracies
• Sub-Saharan African countries that have stifled their post-independence developmentalism need to rethink their preferences
• developing countries that have implemented orthodox institutional reforms need to know that building Weberian institutions is a difficult and tedious process