PER DIEM, The Petty Corruption That Hurts: How the scramble for daily allowances jeopardises the development of the African continent by Nkamleu Guy Blaise

Author:Nkamleu, Guy Blaise [Nkamleu, Guy Blaise]
Language: eng
Format: epub
Publisher: Unknown
Published: 2015-10-21T16:00:00+00:00

4.3 Per diems: a development parasite

The underdevelopment of the continent

Nowadays, the underdevelopment of the African continent is perhaps one of the biggest burdens facing development experts. All efforts to date have shown these experts’ inability to create sustainable growth on the continent. Even outside Africa, the theme of development and growth remains quite a challenging subject. On a scientific level, the experts face difficulties as far as the identification of growth determinants is concerned. As further stipulated by William Easterly, nearly three decades of growth research has failed to identify robust growth determinants. If things seem to be theoretically simple, reality is sometimes disconcerting. Robert Solow in 2007 advanced this thought: “In real life, it is very difficult to permanently change the growth rates. When it happens that the growth rates vary, the causes can be quite mysterious even after the fact.”

Regarding the African continent, growth determinants identified in the literature can be grouped into three large categories: non-economic factors, macroeconomic factors, and microeconomic factors.

A large number of econometric studies explain weak African economic performance via non-economic factors:

- Ethno-linguistic fragmentation, demographic factors (high rates of addiction, low life expectancy, high fertility rates);

- Geographic factors (remoteness affecting 40% of the population, distance from the coast, soil poverty, diseases, etc.);

- Historical factors (poor specialization, colonial legacy);

- Political factors (the state being unable to fulfill its functions; authoritarianism creating transaction costs, including corruption);

- Infrastructural factors (inadequate and costly telecommunications, electricity, transport, and public utilities);

- Legal factors (lack of secure rights and the state of the law);

- International factors (exposure to external shocks increasing due to primary specialization and the small size of economies).

According to a study by Ndulu et al. (2007), a comparative analysis of Sub-Saharan Africa (SSA) and other developing countries (LDCs) over the period 1960–2004 shows gaps of 1.12% a year in the rate of growth of per capita income. Demographic factors explain a gap of 0.86%. Unfavorable initial conditions in terms of school enrollment and life expectancy, as well as low population density explain almost the entire residual, while external shocks or differences in economic policies have weak explanatory power.

Macroeconomic factors are generally used to explain the performance of rent-seeking economies. These countries are specialized in primary products that have experienced little progress in total factor productivity. They usually have a limited rate of savings and investment and high capital intensity, and they experience distortions in favor of directly non-productive sectors and a weak demand. The model based on the export of raw materials and import substitution did not trigger a self-reinforcing process leading to a diversification of production. A few countries, including Mauritius and Botswana, are the most notable examples escaping this “impoverishing specialization.”

Microeconomic analyses highlight the fact that in a risky and uncertain world, priority is given to security, risk coverage, and insurance against hazards and disasters. In such a world, the big economic and financial players exhibit short-sighted behaviors and target a rapid rate of return of capital. In this rent-seeking and low-competition context, the need for efficiency is replaced by a need for adaptability, flexibility, and accommodation.

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