Institutions, Governance and Economic Development in Africa: An Overview

Abstract

As poor policies are blamed for dismal economic outcomes in many African countries and institutions and governance have assumed greater importance in explaining policy making, this article overviews a set of papers appearing in the current volume on ‘institutions, governance and economic development in Africa’. The following results emerge. First, while politically accountable governments can lead to improved economic outcomes, they are unlikely to adopt economically desirable policies that are unpopular with the populace. Unfortunately, such governments also tend to increase the risk of political disorder in Africa, which may in turn be growth-inhibiting. Thus, recent attempts by African countries to adopt more democratic governments may not lead to the expected improved growth and development outcomes unless successful attempts at minimising political disorder can be achieved. Second, the existence of ethnically based interest groups is likely to result in sub-optimal provision of public goods, which can be critical to the development process. Hence, the challenge of attenuating ethnic polarisation is a salient one. Third, as the Botswana case indicates, the ability to appropriately accommodate minority interests, coupled with the existence of external threats and natural resource endowments that foster the delineation of property rights, augers well for state building required for good governance, notwithstanding the existence of low population density.

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