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The importance of liberty and property in
Africa (and the misuse of science in
undermining both)
Roger Bate, [email protected], Resident Fellow American Enterprise
Institute
MPS Regional Meeting Iceland 21-24 August 2005
Abstract
This has been Africa’s year, with the continent enjoying the attention of the EU, G8 and
soon the UN. So far the focus has been on aid and debt relief; each rich nation or bloc is
eager to give more in fiscal support to overcome the myriad tragedies on the continent.
But Africa provides many of the most important reminders of why countries grow rich –
and as importantly, why they don't. For as the Commission on Africa said recently, lack
of “good governance…is what we believe lies at the core of Africa’s problems.”1 More
specifically, it is governance in the form of the institutions of free societies that matter
most.2 Of secondary importance to this essay, but no less remarkable, is how badly
served are the continent's poorest and sickest by political misuse of toxicological and
climate science and skewed data assessment.
By looking at the tragedy unfolding in Zimbabwe and more briefly
discussing Niger’s famine, this paper provides empirical support for the
notion that liberty, sound science, and property rights provide the answers
for African development.
Zimbabwe’s lesson: Property Rights are the key to growth
When I first visited Zimbabwe in 1996, $1 US would buy about $8
Zimbabwe. When I was there last November, $1 would get you Z$7000 at
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the official rate, but Z$12,000 when traded on the black market (from those
desperate to get hard currency for their increasingly worthless Zimbabwe
dollars). Today the $1 rates are respectively Z$30,000 and Z$45,000. For the
past year, bank notes have been printed on only one side and with an
expiration date; bank collapses occur regularly; the economy has halved in
the past five years and not surprisingly, official unemployment is about 80
percent.3
Much has been written about Government-backed violence in Zimbabwe
and the fraud at the polls in 2000, 2002 and this March. Similarly, a great
deal has been written about attacks on independent journalists, the rising
disease burden from malaria and HIV, and the systematic rape of opposition
women by President Robert Mugabe’s youth league. Mugabe has enacted a
slew of policies designed to maintain his power base but which have caused
the steady collapse of the economy. His recent Operation Murambatsvima
(literally, “driving out the trash”), which targeted businesses and residences
owned by supporters of the opposition party, the Movement for Democratic
Change, has destroyed the informal economy over which Mugabe had no
power but which sustained approximately a third of the population. Having
rewritten laws to prevent an independent media, to disallow other forms of
freedom of expression and to suppress independent election monitoring,
Mugabe may well rewrite the constitution to delay handing over power and
allow him to hand-pick his successor rather than engage in a true democratic
process.
Certainly, it is not helpful for an economy to be run by a power-crazed
tyrant. But the fundamental reason for the recent collapse in Zimbabwe is
not the loss of freedom of the press, or unsound monetary policy, or high
military expenditure from fighting wars in other countries that benefit
cronies, or low health expenditure--although all these factors have a negative
impact.
No, the real reason that Zimbabwe has collapsed is that there is no protection
of private property. The executive rides roughshod over the judiciary in all
matters of property, especially land rights. The result, to use Hernando De
Soto’s phrase, is ‘dead capital’ and total economic annihilation. The
economy is now worth a fraction (in US$ terms) of its value in 2000, when
the ‘land reform’ program really started.
In short, Zimbabwe provides the reverse of the good news offered by De
Soto. In The Mystery of Capital, De Soto builds on the works of great
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economists like Coase, Knight, Hayek, Mises, North and Adam Smith, to
exhaustively demonstrate that inter alia, where private property rights are
delineated and enforced, economies grow rapidly. When someone can
borrow against their one large asset (for nearly everyone this is their home)
they can establish businesses, buy supplies, design marketing programs, sell
products and make a profit and thrive for themselves and their children. For
some countries the vast majority of capital is dead - one cannot prove one
owns it outright, and hence no capital market will lend against it. De Soto
found that 90% of Egypt’s property rights were effectively untitled. As he
jokes, by barking at strangers the dogs demonstrate they know where the
property boundaries are even if the people don’t.4
Zimbabwe, on the other hand, had a system of property rights and the rule of
law which, until recently, was more than adequate. Rights were based on a
decent, largely unambiguous titling system and a judiciary that upheld rights
of landowners in the face of an executive branch that (like so many African
economies) was largely Marxist in orientation. And this same judiciary
continued to try to do this in the face of mass expropriation of land rights in
2000. Even as late as 2003, as the final major swathe of white farmers were
thrown off their property and their land left idle, some judges tried to uphold
the constitutional rights of these farmers. But finally all the good judges
were fired, resigned or run out of the country. I met one such judge in late
2004 in Johannesburg. He had stood up for individual rights and free speech
in a case in mid-2003. First, he was quietly told to drop the case by a junior
minister, then the authorities attempted to bribe him with a farm of his own,
then they threatened him with the sack, then publicly humiliated him with a
smear campaign in the government-run Herald newspaper, claiming he was
the recipient of bribes, and finally he was told by a friend with police
contacts that he was going to be arrested on bribery charges, so he fled the
country. This 42-year-old, former Appeals Court judge, was gaunt and
without visible means of financial support.
While his story is upsetting, the thousands who have died and the millions
who have fled Zimbabwe with even less than this judge are all victims of the
destruction of rights in Zimbabwe, which led to the almost instantaneous
collapse of the economy. I am not alone in this assessment. Craig
Richardson, an economist at Salem College, North Carolina, claims that the
land seizures broke a vital “trust” and everyone “wondered if their assets
were safe.”5 His analysis leaves no room for doubt about the cause of
collapse. While the international community (and certainly African
commentators) blamed the drought for the collapse of food production in
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Zimbabwe, Richardson shows that the drought of 2001/2002 was only 22%
below average rainfall levels. It at most counted for 13% in the drop in the
value of the agricultural economy; 87% of the drop was due to the collapse
of property rights. Furthermore, he estimates that the 12.5% average decline
in GDP growth was caused by land reforms, with poor rainfall playing a
minimal role.6
In addition to Richardson’s work, analysis by the Center for Global
Development shows that there has never been a two year period when low
rainfall in Zimbabwe was not associated with low rainfall in neighboring
countries, Zambia and Malawi. According to the United States Department
of Agriculture, maize production (the most important regional staple crop) in
Zimbabwe fell by 74% between 1999 and 2004, whereas it fell by only 31%
in Malawi and actually rose in Zambia.7
But to smooth over African political debate, and more defensibly to enable
food aid provision, the drought in Zimbabwe has been played up as the
cause of the food shortage.8 This does long run discussions of the
importance of institutions no favors. Indeed, most worryingly, Malawi,
Namibia and South Africa have been flirting with the notion of ‘land reform’
– Mugabe style. And Malawi is even beginning to destroy urban property
(businesses and homes) of those opposing the ruling regime. It is imperative
that politicians and their advisers (especially in Africa) accept the reality of
the causes of Zimbabwe’s collapse.
But the situation is not as hopeless as it seems. The property rights collapse
has happened elsewhere, and has been reversed. By way of hope,
Richardson draws a parallel with Nicaragua, which also suffered economic
collapse based on the destruction of property rights under the Sandinista
government in the early 1980s. But in recent years, with a more capitalistminded government, the Nicaraguan economy has grown at over four
percent annually, with inflation below 10 percent, which, he claims, is
mainly due to protection of property rights and private sector development,.9
Richardson found that the other institutions of a free society matter, but, as
predicted by De Soto, none matter so much as the right to the rewards of
one's own labor.
Zimbabwe needs reinstatement of land rights and compensation to those
robbed. Some landowners, both black and white, I spoke to still hold on to
their original title deeds in the hope that they will be able to reclaim their
land and rebuild their lives.
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But ignoring issues of justice and compensation, it is vital that individuals
(in economic terms anyone will do) are given transferable rights to land in
Zimbabwe. Turning dead capital into something with life will do more than
anything else to reverse the disaster that is Zimbabwe. This cannot happen
with the current government. But Mugabe will die, become too infirm to
govern or be the victim of a coup at some stage, when there will be a chance
for democratic reform. While political reform is a necessary condition for
economic growth, it is not sufficient – only private property right
enforcement adds sufficiency for growth.
Niger’s famine – real and imagined causes.
Tragedy is striking the former French Colony of Niger. An estimated 3.5
million people are short of food and hundreds may be dying daily. Drought
and poverty are among the reasons for the lack of food; another is the plague
of locusts that has been ravaging West Africa for the past year. As with
Zimbabwe, Niger has one of the least free economies in Africa. Based on a
systematic assessment of certain key factors of economic freedom, such as
trade policy, government intervention in the economy, monetary stability,
property rights etc., the authors of the 2005 Index of Economic Freedom
determined Niger to be a ‘mostly unfree’ country and Zimbabwe (not
surprisingly) to be a ‘repressed’ state. Of the 155 countries surveyed, Niger’s
overall rank was 118, while Zimbabwe trailed at 151.10 According to
Transparency International’s Corruption Perception Index, Niger is also one
of the most corrupt countries (122 out of 146 in 2004).11 If its citizens were
living in a country that protected their property better, encouraged free
enterprise and trade, and was less corrupt, it is likely that fewer would be
starving now.12 "No famine has ever taken place in the history of the world
in a functioning democracy," wrote Amartya Sen. This, he explained, is
because democratic governments "have to win elections and face public
criticism, and have a strong incentive to undertake measures to avert famines
and other catastrophes."13 This proposition, advanced in a host of books and
articles, has shaped the thinking of a generation of policy makers, scholars
and relief workers who deal with famine. And although there may be
occasional exceptions to his thesis, it tends to hold – and if listened to more
widely by commentators it would maintain focus on domestic institutional
failures, such as those of the Government of Niger. Unfortunately many
commentators prefer to concentrate on other factors, such as rainfall levels,
stalled western aid and other policy ‘failures.’
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For example, probably the most trusted news source in Africa is the BBC.
And the BBC’s man in Niger, David Loyn, is blaming western policies for
some of the cause of the Niger famine: “Climate change has made Niger a
more precarious place to live,” he avers.14 A country as poor and badly
managed as Niger will undoubtedly be affected by western policies – largely
through conditions attaching to aid packages. But greenhouse gas emissions
are the least of their problems. The effects of western emissions on Niger are
unknown and would be so indirect as to be difficult to detect from noise.15
The thesis that climate-change caused the famine in Niger is weakly
supported by the fact that the current drought has moved into a second year,
and climate scientists say that droughts are more likely as a result of
emissions. Not since the great famine of 1973 has there been a cycle of three
drought years in a row, but that came at a time when global temperatures
were at their lowest for most of the past century.16 If we weren’t talking
about thousands of lives lost, it might be amusing to joke that perhaps
cooling caused that famine. The reality is that global emissions of
greenhouse gases may affect the climate in the future, but the current
drought in Niger, much like the drought and famine of 1973, is not ‘caused’
by our emissions.
What is tragic is that while we cannot control the weather (although
according to the BBC, Zimbabwe’s Herald newspaper claimed in 2004 that
imperialist forces from America and Britain were harming Zimbabwe’s
weather) the devastation of the recent locust plague could have been
halted.17 The desert locust can devour its own weight (about an ounce) in
fresh food in 24 hours. A ton of locusts, which is a tiny part of the average
swarm, eats the same amount of food in a single day as 10 elephants, 25
camels or 2,500 people.18
Locusts first moved south last summer from their breeding grounds in North
Africa towards West Africa, causing widespread problems last September.
But now, a new wave of locusts is hatching and as vegetation disappears in
the semi-desert of the Sahel (Mauritania, Senegal, Mali, Niger and Chad) at
the end of the rainy season, they are heading back north. After years of
drought, this year's heavy rains have provided the perfect conditions for the
locusts to breed.
Before they mature, locusts proceed through various stages of development.
They can be easily eradicated with simple insecticides when they are
juvenile ‘hoppers’ – the stage before flight. Once locusts mature and can
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swarm, only crop-duster-style spraying of massive amounts of
organophosphate insecticides, such as fenitrothion can stop them. Of course,
this latter aerial approach is far more expensive and requires a more
sophisticated public health program and infrastructure – and this from
countries many of whose people live on less than a dollar day. Chad and
Algeria have been hit by swarms and all their domestic politicians could
fund, with the help of the UN Food and Agricultural Organisation, was
occasional airplane spraying. Cape Verde, Senegal, Mauritania, Libya and
Niger on the other hand, have all had significant hopper presence and could
have significantly reduced future swarms, but they couldn’t afford to do very
much.
And that is because they couldn’t use Dieldrin, an insecticide banned by the
UN Stockholm Convention on Persistent Organic Pollutants. Dieldrin used
to be sprayed across the path of the approaching hoppers and its toxicity and
persistence meant that a single spray of a thin barrier strip was enough to
wipe out vast swathes of hoppers for weeks. There are alternatives to
Dieldrin – such as the newer generation of benzophenyl urea insect growth
regulators, which are almost as effective against the hoppers as Dieldrin, but
are twice as expensive and are effective for a shorter period of time. There
are also fungal pathogens that can attack the locust. One such biopesticide
spray consisting of a natural fungus called Metarhizium kills the locusts
within three to four weeks. Other products affect the insect growth
regulators and disrupt the molting process, so the locusts never reach
adulthood. But these alternatives are either expensive or untested and for the
debt-laden cash-strapped countries of the Sahel, lack of Dieldrin meant not
stopping the hoppers.
Dieldrin was often stored and used improperly in farming, which caused
bioaccumulation and problems for some wildlife species. Even when used as
directed, it led to some small bird reproductive problems (far smaller
environmental impacts than locust plagues, of course). Dieldrin’s persistence
means it should not be used for anything but stopping locusts, but because
the countries that are now sending food aid to West Africa don’t have locust
infestations they forgot to exempt it for such use within the Stockholm
Convention.
It is possible that the recent drought and famine in West Africa have been
exacerbated by man’s emissions of greenhouse gases, but it is certain that
the ban on Dieldrin is contributing to loss of life. This wasn’t the intention of
the Treaty’s authors, but it is an inevitable consequence nevertheless19.
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DDT and Malaria
Thankfully locusts only swarm occasionally, but the impact of the Persistent
Organic Pollutants (POPs) Convention on another insecticide, DDT, has had
perennial deadly consequences.
61 years after DDT was used for the first time to spectacular effect (in
Naples to rid the city of a typhus epidemic), it is still the best and most costeffective method to control many insect-borne diseases, notably malaria. Yet
POPs have made DDT harder to procure despite pressure from malaria
specialists, which have permitted its use for combating the disease.
Pervasive, unsound science from green pressure groups has sidelined
support for the chemical from its former champions, the WHO and USAID,
making its deployment sporadic.20 Only those nations which are wealthy
enough to ignore traditional aid and can afford their own health programs
are impervious to western green criticism and choose DDT to protect their
citizens.
Malaria rates have increased by at least 15% over the past decade, with a
child dying every 30 seconds or so in Africa – at least a million deaths a
year. Many of those children would be alive today if DDT were deployed.21
Climate Change and disease
Much like the example of Niger mentioned above, climate change is blamed
for the increase in insect-borne death, notably malaria. But as noted malaria
historian, Paul Reiter, of the Pasteur Institute in Paris has explained: “it is
immoral for political activists to mislead the public by attributing the recent
resurgence of these diseases to climate change, particularly in Africa.”22
There simply is no evidence linking climate change to increase in malaria,
drought or anything else in Africa (local deforestation, land use changes
causing desertification and local pollution have by contrast caused serious
problems).23 Making the case that it does distorts scientific discussion, often
leading to costly energy-restriction policies in rich countries. At the same
time, and with far more devastating consequences, such beliefs change
policy in poor countries by allowing domestic politicians to blame western
profligacy and emissions rather than looking closer to home for policy
failures.
But times are changing.
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It is well established that 'wealthier is healthier', and hence priorities for
African nations must be on economic growth.24 Fortunately, there is a new
breed of African business leaders, politicians and opinion formers. Just prior
to the recent G8 summit, businessmen met in London for the Business
Action for Africa summit. Pascal Dozie, chief executive of Nigeria’s
Diamond Bank said “[t]he key to eradicate poverty is wealth creation, and
you can only create wealth through the private sector through investment
and job creation…. But to thrive, Africa's private sector needs help to
grow.”25
There was enthusiastic support from the floor for Mr. Dozie. The institutions
of a free society were being discussed as though at some libertarian rally –
notably that property rights must be protected and the rule of law must be
respected. Other institutions being pressed upon a somewhat surprised media
were that stable and democratic governments should focus on creating
predictable environments for business to operate in. And beyond that, “the
state should adopt a hands-off regulatory approach.”26
Businessmen seemed intent on telling G8 leaders that the way to help Africa
was to allow it to help itself, since aid is no long-term solution. For Andrew
Rugasira, chief executive of Rwenzori Coffee of Uganda which is about to
start shipping its produce to the Waitrose supermarket chain in the UK, it
was obvious that there was a better way. Mr. Rugasira was scathing about
the way aid creates a chronic dependence which he believes stifles
creativity. “Trade is the engine for growth,” he almost shouted.
Mr. Rugasira was not finished. “Although aid and debt forgiveness is
necessary in the short term, the only way to secure economic prosperity in
Africa is to open up western markets to African companies eager to
compete,” he insisted.27
Perhaps, the most encouraging comment repeated throughout the event was
that all were demanding the removal of tariffs and agricultural subsidies in
the West, and as importantly the removal of tariffs between African nations,
which are often far higher than in the wealthy North.
And while political leaders were still demanding vast amounts of new aid,
they were, at the least, paying lip service to the requirements of democracy
and free institutions. Indeed, given that there have now been nearly 20
peaceful power transitions in Africa in the past 15 years (there was one prior
to 1989), with exceptions, policy is moving in the right direction.
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In South Africa, Zambia, Uganda, Kenya and Mozambique there are
domestic health experts who, emboldened by health allies in the west, are
prepared to stand up to the overseas donors and health authorities and
demand health interventions that work. For much of the past 20 years they
had to follow donor demands, which were often based on inappropriate
western green (anti-insecticide) or anti-corporate (not using brand names
drugs) ideologies rather than the most effective policies.
There are still too few people discussing the vital role that private property
rights play in the economy, but at least, as witnessed at the G8 meetings,
there is a rhetorical improvement in that governance and individual liberty
make it into discussions.
Africa, and as importantly western politicians, are learning what makes
countries wealthy – free institutions. What is still far from well understood,
however, is that unsound science can scupper policies essential to the
survival of the poorest.
Commission for Africa (2005), “Our Common Interest: Report of the Commission for Africa,” Penguin
Books Ltd, London, UK, p.25
2 Ibid
3 Roger Bate (2005a), “Zimbabwe’s Impending Elections: What Other Countries Can Do and Why” AEI
Online, On the Issues, February 23, 2005.
4 Hernando De Soto (2000), “The Mystery of Capital: Why Capital Triumphs in the West and Fails
Everywhere Else” US, Basic Books.
5 Craig Richardson (2005), “The Loss of Property Rights and the Collapse in Zimbabwe” mimeo.
6 Ibid
7 Source: USDA (2005), Foreign Agr. Service, PSD Online db.
8 “Food Imports Head into Zimbabwe” BBC Online, July 14, 2005.
9 Richardson (2005), mimeo.
10 Miles et. al (2005), “2005 Index of Economic Freedom” The Heritage Foundation, Washington DC; Dow
Jones & Company, New York, NY, p. 301.
11 Surprisingly, Zimbabwe did slightly better with an overall ranking of 114 out of the 146 countries
surveyed for 2004. This may be because Mugabe’s regime was among the better governed, with relatively
low corruption until the recent past.
12 Roger Bate and David Montgomery (2005b), “Beyond Kyoto: Real Solutions to Greenhouse Emissions
For Developing Countries” AEI Environmental Policy Outlook Series, July-August, 2005.
13Amartya Sen (1999) “Democracy as Freedom,” Oxford: Oxford University Press.
14David Loyn (2005), “Niger’s people living on the edge” BBC Online, July 30, 2005 (accessed 08/08/05:
http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/4727495.stm).
15 Roger Bate (2005c), “Man Aggravates a Natural Disaster” Business Day, August 5, 2005.
16 Ibid
17 “UK, US caused Zimbabwe droughts,” BBC Online, June 28, 2005.
18 Bate (2005c), ibid.
19 What is possibly even more instructive, is that all the countries with food crises all have one thing in
common, poor private property right structures. But this is not discussed in media reports. (See ‘Food Crisis
Runs Across Africa’ http://news.bbc.co.uk/2/hi/africa/4138120.stm)
20 Bate (2004), “Climate Change and Mosquito-Borne Disease: Causal Link or Green Alarmism,” AEI
Environmental Policy Outlook Series, March-April 2004.
21 Roberts et. al, “The Green Killing Fields” forthcoming AEI Press.
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22
Paul Reiter, "Could Global Warming Bring Mosquito-Borne Disease to Europe,"
in Kendra Okonski (ed.), Adapt or Die, (London: Profile Press, 2003) p. 37: Taken from, Bate (2004),
“Climate Change and Mosquito-Borne Disease: Causal Link or Green Alarmism,” AEI Environmental
Policy Outlook Series, March-April 2004.
23 Bate (2004), “Climate Change,” p. 4
24 L. Pritcett and L. Summers (1996), “Wealthier is Healthier,” Jnl of Human Resources 31 (4): 841-868.
25 Jorn Madslien (2005), “African leaders in push for trade” BBC Online, July 5, 2005 (accessed
08/08/2005 :http://news.bbc.co.uk/1/hi/business/4653149.stm)
26 Ibid
27 Ibid