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Understanding Africa's Persistent Poverty
2006-01-20
Augusta Chronicle, The

By Craig Richardson< Guest Columnist

On the eve of the U.N. World Summit in New York last fall, I attended the launch of a new global initiative called the High Level Commission on Legal Empowerment of the Poor.

Headed by former Secretary of State Madeleine Albright and Peruvian economist Hernando de Soto, the commission will use a nontraditional "bottom up" approach to address the problems of extreme poverty. Unlike other U.N. anti-poverty initiatives that focus on increasing foreign aid, this one will emphasize giving the poor a greater stake in their economies by strengthening property rights and extending the rule of law.

Make no mistake: Some U.N. and World Bank programs, such as vaccinations and anti-malarial drugs, have accomplished a lot for relatively little money. But as an overarching plan to promote economic independence, the top-down approach the international community has pursued for the past five decades has failed. In sub- Saharan Africa, for example, most countries are poorer today than 30 years ago. And they will stay that way so long as the people being "helped" remain passive recipients waiting for the next aid truck to arrive, rather than active participants in creating economic success.

CONSIDER SOMETHING as unexceptional as the shade tree. In his compelling book Dark Star Safari (2003), author Paul Theroux recounts an overland trip along the eastern rim of Africa and describes a memorable train stop in Tanzania. As the train idled, Theroux glanced out the window and noticed a single mango tree. Under that tree, in its circle of shade, sat 30 people tightly pressed against one another. There was no room for even a goat, which stood miserably by in the baking sun.

Theroux noted with an air of frustration that "no one in this hot exposed place had thought to plant more mango trees for the shade they offered ... or if anyone had, the tree had been cut down."

How might this problem be solved?

The top-down solution would be to provide Africans with more money, expertise and resources. To solve the metaphorical shade tree problem from the bottom up we need to know why so few trees are being planted in the first place and how the incentive structure can be changed to induce Africans, not well-meaning foreigners, to plant more trees and conserve the ones they have. This, in a nutshell, is the approach of the new U.N. Commission. Against the larger and far more complicated problems Africa faces, the shade tree shortage can serve as a useful metaphor for the continent's lack of capital investment.

The answer to the question is that trees, like many other things, are considered communal property in much of rural Africa. Since no one owns the trees, they are routinely chopped down for firewood and building materials. Few people replant trees because no one will own the new ones. The result is barren land and massive soil erosion.

IF ONE COULD own trees, and have ownership defended by secure rule of law, people would begin to think about the future of trees, how tall they might grow, and how much shade and wealth they might provide in the future. If not trees, then perhaps parcels of land, houses or factories. Yet without property titles for such assets, and the legal framework to ensure them, there are few incentives to think long term, few incentives to invest, and no way to leverage the wealth locked up in these assets, which de Soto calls "dead capital."

Virtually all the economic success stories in Africa today revolve around property rights improvements, not increases in foreign aid.

As a result of property rights reforms, Tanzania, Mozambique, Botswana, Rwanda and Uganda all have experienced impressive economic growth in recent years. By contrast, Zimbabwe's economy is now shrinking faster than any in the world. Why? Because the government's 2000-2003 farmland seizures destroyed property rights.

An ancient Chinese proverb says: "One generation plants trees, and another gets shade." If the United Nations takes the path of securing property rights and supporting sound government, free markets, and focused small-scale aid projects, future generations in Africa will have the best chance ever for securing more than just shade.

(Editor's note: The writer is visiting research fellow at the American Institute for Economic Research in Great Barrington, Mass., and associate professor of economics at Salem College, Winston- Salem, N.C.)

Knight Ridder/Tribune Information Services


Hernando deSoto, a Peruvian economist, 'bottom up approach if implemented global wide in third world countries will make the the West doing business in third world countries an quite expensive and more local to the inhabitants. Cost of goods and services in the Western world will most likely be too expensive even for a clean millionaire and cause a great economic stress load.
This bottom-up approach of Hernando deSoto is a solution not tried except here in Western countries. And we see the success of this approach. Laws and constitutions have been made around property rights. For me though I just see this as 'A' very pragmatic exceptional reasonable solution to poverty and Third world but not 'THE' solution. Black enterprise, stepping outside the media box.

Here is some links on Hernando deSoto.

http://www.cato.org/special/friedman/desoto/

http://www.kentlaw.edu/perritt/courses/seminar/DESOTO.804-2.htm

http://www.theglobalist.com/DBWeb/StoryId.aspx?StoryId=2023
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quote:
IF ONE COULD own trees, and have ownership defended by secure rule of law, people would begin to think about the future of trees, how tall they might grow, and how much shade and wealth they might provide in the future.


If you own the tree then you make those people pay for being in your shade. You must do capitalism right. lol

Yeah spread the stupid imperialist thinking.

I have emailed 2500 economists about the depreciation they ignore. 15 responses so far.

umbra
Yeah I had too laugh initially with the shade tree part of the article. But I think Black Enterprise did that to save them some grace of supporting Hernando deSoto ideas outright in their article. But only a capitalist thinks and turn profit off anything they touch. Didn't the story the King Midas golden touch is a European capitalist type of thinking. So this type of thinking isnt rare.

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