Agriculture Reference
In-Depth Information
The fundamental public good that goes missing first under these circumstances is
the simple rule of law, including basic safeguards against loss of property or breeches
of contract. Well-functioning national governments provide such safeguards by operat-
ing capable and noncorrupt civil and criminal justice systems. Without such systems,
incentives to invest in wealth creation—including in the farming sector—tend to dis-
appear. One indirect measure of how well African governments provide the rule of
law can be found in the Index of Economic Freedom compiled yearly by the Heritage
Foundation and the Wall Street Journal . One dimension this index measures is the pro-
tection of property rights, defined as security from government expropriation, the pres-
ence of an efficient court system to enforce contracts, and a justice system that punishes
those who unlawfully confiscate private property. Of forty-two sub-Saharan African
countries ranked in 2010 on a scale of 1 to 100, only three of the smallest (Botswana,
Cape Verde, and Mauritius) scored higher than 50. Nigeria and Ethiopia scored only 30,
the Democratic Republic of the Congo only 10, and Zimbabwe only 5. By contrast the
United States scored 85, and Singapore scored 90 (Heritage Foundation 2013).
Weak property protection in Africa is particularly important as a key to understand-
ing the persistence of slow economic growth across all sectors in the region, includ-
ing agriculture. Economic growth in Africa would be higher if the level of investment
were higher, but incentives to invest are weak because essential public goods such as
property protection and contract enforcement are so often missing. It is significant that
Africans as well as non-Africans are reluctant to invest in the region. A study by Collier
and Gunning (1997) compared the portfolio choices of wealth holders across all regions,
using data on capital flight and domestic capital stocks. They found that wealth owners
in Africa relocated 37 percent of their wealth outside the continent. This compares to
a 17 percent capital flight rate in Latin America and only 3 percent in East Asia. It led
Collier and Gunning to conclude that if Africa reduced its own total capital flight to the
level of Asia, its capital stock might increase by half.
Colonial Legacies and
Postcolonial Influences
Low public investments in rural welfare and agricultural productivity in Africa can
also be traced to colonial and postcolonial influences. Africa's early rural development
was strongly shaped by the institutions that European colonizers introduced to sup-
port cash-crop export farming. While making no investments at all in the smallholder
farming sector that produced staple food crops, European colonial authorities in the
early twentieth century did make large investments in the production and export of
tea, coffee, groundnuts (peanuts), cotton, and tobacco. To support this agricultural
enterprise, the colonizers—French, British, Germans, Belgians, Portuguese—built
infrastructures of road and rail designed to move products not to local population
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