Great Data, Wrong Lesson

In The Atlantic is an article about the rapid development of sub-Saharan Africa over the past decade that describes dramatic improvements in the economies of many of its nations:

What changed? Partly, the boom in commodities. Sky-high copper prices have lifted copper-rich Zambia. Record cocoa prices are bringing $2 billion annually into Ghana. Kenyan farmers, mostly small, are responsible for $1 billion in annual exports of fruits, vegetables, and flowers, a figure that dwarfs the country's traditional coffee and tea exports. And, of course, high demand for oil and gas has helped a number of countries enormously. But even countries without such natural resources, such as Rwanda, have seen significant gains, mostly because of improved economic governance and the return of money and skills from Africans who left their countries during the dog days. Rwanda, for instance, long an importer of food, now grows enough to satisfying the needs of its people, and even exports cash crops such as coffee for the first time. [bold added]

Along the lines of the phrasing "improved economic governance", the article credits an alliance between "a diverse group of determined African technocrats" and "technologically savvy, globally oriented capitalists" with this boom, as if government planning had finally worked "this time". Unfortunately, African governments have in the past so egregiously violated individual rights, especially the right to property for so long that almost any mixed-economy arrangement will lend surface credibility to such a claim, if only because some parts of the economy would function freely by default (i.e., because the government isn't yet trying to run things), as happened in parts of Iraq shortly after the American invasion.

Indeed, the article both alludes to the real savior of Africa in passing and allows a peek at some evidence for this contention in the following three paragraphs.

Technology also plays an important part in the new African boom. Probably the most astonishing development success since 2000 in Africa has been the communications revolution. A dozen years ago, merely making a phone call (or receiving one) was virtually impossible even in Africa's most important commercial centers. An elite business person might hire two or three people fulltime simply to repeatedly dial phone numbers over the crumbling, puny, and perversely sub-optimal government-owned telephone systems. Nigeria, at the time a country of 100 million people, had at most 100,000 working dial tones. It was not remarkable for one call out of every 50 made to be completed. Naturally, the effect on productivity was devastating, but equally as bad was the sense of isolation. Everything had to be done face to face, consigning people to long trips for even trivial maneuvers. Waiting became a way of life.

No longer. The advent of mobile telephones has brought instant communications to hundreds of millions of Africans, rich and poor, urban and rural. Africans are now on the move. Text messaging and digital money-transfer services, such as Safaricom's M-pesa in Kenya, have transformed ordinary life. Yet this most visible of all African advances, this gigantic step forward in linking Africans to each other and to people around the world, occurred with virtually zero assistance from the professional development community of donors and economists, aid workers and development agencies. Uniformly, these "experts" said Africans were simply too poor to benefit from mobile telecommunications, so they provided scant assistance in the 1990s and early 2000s when African governments, in the main, relaxed their long hegemony over telecommunications and permitted private companies to lead the push into mobile phones.

Some Africans have made fortunes. The Sudanese engineer Mo Ibrahim even became a billionaire from piecing together a regional network of mobile companies. In virtually every single African nation, the leading mobile phone company is now the leading taxpayer to the government, the leading local donor to local causes, and one of the leading employers. [bold added]

Please note that the mysterious "advent" of modern telecommunications in Africa is belatedly mentioned as being due to the efforts of entrepreneurs, at least one of whom has become a billionaire -- in Africa. During the world's "Great Recession". Please do note that the agricultural booms mentioned above are a direct result of the telecommunications boom.

Of course, these companies are being taxed and, worse, the "lesson" this article claims Western development gurus are drawing from this is that, "The new thinking on development is to share Africa's wealth more equitably." Do they not see that governmental chopping-down of the likes of Mo Ibrahim has been the problem all along and that this is precisely what needs to be stopped entirely for Africa's development to continue and accelerate?

If Africa attempts to "share wealth" by redistributing -- i.e., stealing and giving away -- the money and property of individuals, its boom will prove short-lived. A society can either pretend to share wealth by violating property rights -- or share prosperity by respecting them.

-- CAV