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Developing Zimbabwe Economically
Economic development results from increases in productivity, which is created by
innovation. Greater economic development is experienced in a market economy, with a
strong legal system, and most often in a democracy. Zimbabwe’s current economic
system is a command economy. The current political system is a totalitarian government.
The current legal system does not have strong protection of intellectual property. The
formal education of Zimbabwe does not have enough access to individuals before the age
of 15. Zimbabwe is one of the many poor, less-developed countries in the world, with a
GDP per capita of only $1900 according to the Central Intelligence Agency’s (CIA)
World Factbook. In order to become a more economically developed country, Zimbabwe
should shift from a command economy to a market economy. It should have stronger
protection of property rights, and it should have more access to formal education.
The political economy of a country has a large impact on economic development.
A political economy includes the economic, political, and legal systems of a country; the
three systems interact and influence each other and affect the level of economic wellbeing in a country. An economic system can be defined as a process for answering the
fundamental questions of economics which are what goods and services to produce, how
the goods and services are going to be produced, and for whom the goods and services
are produced. Zimbabwe’s economic system is a command economy which answers
questions by government decision, and the government owns the resources. A command
economy is usually associated with collectivism and is government controlled.
Collectivism is the form of government that says what matters most is what is best for
society as a whole.
The best outcome for society is better than individual rights
according to collectivism. Countries with government control such as Zimbabwe are
historically known to be relatively poor with low incomes. The political system of
Zimbabwe is totalitarianism where one person or one political party controls or is in
charge of everything; opposing points of view are not allowed. Totalitarianism usually
goes hand in hand with collectivism. The legal system of Zimbabwe is a mixture of
Roman-Dutch and English common law (CIA World Factbook). Common law is based
on custom and precedent; the interpretation of current law is based on how it has been
applied in the past. According to the U.S. Department of State in the Index of Economic
Freedom, “Judicial cases involving high or prominent ruling party or government
officials usually do not reach court, regardless of the magnitude of the offense.” The
protection of intellectual property rights in Zimbabwe exists, but is not extensive, for
patents, copyrights, and trademarks. Culture can be defined as a system of values and
norms shared among a group of people that when taken together constitute a design for
living. Religion, an important aspect of culture, in Zimbabwe is 50% syncretic (part
Christian and part indigenous), 25% Christian, 24% indigenous, meaning those beliefs
originate in and characterize a particular region or country, and 1% Muslim or other (CIA
World Factbook). Literacy reports in Zimbabwe show that individuals age 15 and over
can read and write English (CIA World Factbook). Ethnic groups in Zimbabwe are 98%
African, 1% mixed and Asian, and less than 1% is white (CIA World Factbook).
Zimbabwe’s economic system is not good for economic development because
command economies are proven to be poor. The political system of Zimbabwe could be
good for economic development because a few totalitarian systems have achieved rapid
economic development, but many other totalitarianism governments have not.
Zimbabwe’s protection of property rights system is not good for economic development
because the protection needs to be much stronger than it is currently. The culture of
Zimbabwe is good for economic development, but it could become even better. If
Zimbabwe had a much higher percentage of Christianity and if formal education was
offered before the age of 15, then there would be a better chance of greater economic
development.
Zimbabwe should reform its economic system from a command economy to a
market economy because a market economy has been proven to lead to greater economic
development. Countries with more market-like economic systems have a greater increase
in GDP per capita than the countries with less market-like economic systems. In 19751995, a study provided evidence that the more economic freedom a country had then the
more economic growth it achieved, and the citizens became wealthier (p.69 Global
Business Today).
Shifting away from a command economy to a market economy has
been proven in another country to be effective. “In 1991, India moved toward a marketoriented economy by allowing private Indian companies to enter most industries without
prior government approval, eased the high tariffs and quotas that kept out foreign goods,
and loosened the tight curbs on direct foreign investment” (Becker).
According to
Becker, “The result was an acceleration of GDP growth to about 6% a year since 1991,
among the fastest of any nation, but considerably lower than China’s 8% to 10% pace.”
Becker stated, “The path of reform chosen in 1991 may mean that talented Indians no
longer have to go abroad to find economic success.” The top six command economies
with the most government control from a list available in 2003 show that these countries
were all relatively poor. The six countries include: North Korea, Libya, Zimbabwe, Laos,
Burma, and Cuba. The political system of Zimbabwe does not need to be reformed
because totalitarian governments in some countries have achieved rapid economic
development. South Korea, Taiwan, Singapore, and Hong Kong all had rapid economic
development with a totalitarian system. It is difficult to determine whether or not a
totalitarian government or a democracy would be better for Zimbabwe because in many
other countries in Africa and Latin America, they have totalitarian governments and are
relatively poor. Zimbabwe should reform its legal system to have strong protection of
property rights and not such heavily controlled regulation. For example, China is not
good with copyrights, so U.S. products are sold in China without a copyright which
results in the U.S. receiving less money. Also, the high regulation of business in Italy
affects the incentives on workers, so they are less productive. Due to these labor laws,
many Italian men in their 30’s live with their parents, and the number of unemployed
workers is high.
Zimbabwe should reform its education system so that a formal
education is available to individuals before the age of 15. The more people with access
to formal education, the greater the ability to innovate. It was historically known at one
point, that Spain and China both cut off access to education and knowledge to limit it to a
small group of people and this lead to a decrease in their rank of wealthy countries from
rich to poor.
If Zimbabwe desires an increase in economic development, then it should
consider a market economy, have a stronger legal system, and have more access to formal
education.