Jul 27, 2012
Africa|Building|Innovation|System|Africa|North America|South America|South Africa|United Kingdom|Energy|James Robinson|Nelson Mandela|Power
© Reuse this
For that reason, I sat up and paid serious attention when Professor James Robinson – the Harvard academic who co-authored the acclaimed book Why Nations Fail: The Origins of Power, Prosperity and Poverty with Daron Acemoglu – downplayed leadership as a major determinant of a country’s economic and developmental success, or otherwise.
Speaking in South Africa recently, Robinson argued that “leadership is great when you can get it, but seems hard to rely on” to explain systematic facts around the comparative advances made, for instance, in North America, as opposed to South America.
“Sitting in South Africa, you tend to think about Nelson Mandela and his amazing leadership,” he mused. “But Mandela can only do so much . . . he can push in a particular direction, but he can’t determine any kind of future.”
Instead, Robison and Acemoglu fixate on “institutions, institutions, institutions” and, in their book, they describe two kinds of political and economic institutions: extractive and inclusive.
The former involves a narrow distribution of political power and economic institutions that fail to create the incentives needed for private citizens to save, invest and innovate.
Inclusive political and economic institutions, by contrast, involve a broad distribution of political rights across society, a State that is sufficiently centralised and strong to be in a position to provide basic public goods and economic institutions that harness the talent, innovation and energy of the broadest spectrum of the citizenry.
The details vary, but the book shows that many of the world’s prevailing extractive institutions have direct links to the colonial period and the course that colonisation took in different countries. It also shows that these institutional patterns can persist (even re-invent themselves) following political conflicts designed primarily to remove such constraints.
For South Africa, where the policy of apartheid is arguably an archetypal extractive model, this raises many questions.
Will the move toward political inclusivity ensure greater economic inclusivity? Or, will the formal restrictions be replaced by a series of informal, or underground, institutional arrangements that further entrench inequality.
Will black economic empowerment compensate for past discrimination and serve to deracialise and broaden the business milieu? Or will it simply result in a new oligarchy, whereby the new economic elite captures the political system?
The main safeguard against the worst, Robison and Acemoglu argue, is the creation of a broad societal coalition that is able to defend inclusive institutions from attack by predatory elites.
The example held up in the book is the so-called ‘Glorious Revolution’ of 1688 in England, where more pluralistic political institutions laid the foundation for a State that relied more heavily on talent than political appointments and, in turn, fostered more inclusive economic institutions. These institutions favoured innovators and entrepreneurs just at a time when major advances were being made in transportation, metallurgy and steam power.
Without question, the task of building a broad-based coalition that is supportive of inclusivity over extraction is easier said than done. But it is arguably a more realistic, and ultimately a more rewarding, endeavour than one that obsessively hankers for one messianic leader after the next.
Edited by: Terence Creamer© Reuse this Comment Guidelines (150 word limit)
Creamer Media Editor
Other Editorial Insight News
Updated 1 hour 18 minutes ago Construction company Murray & Roberts (M&R) on Tuesday said board members Mahlape Sello and Royden Vice would be excluded from any discussion and documents relating to the investigation of the October collapse of a support structure of a pedestrian bridge being built...
Updated 1 hour 47 minutes ago The Nuclear Industry Association of South Africa (Niasa) is not sitting by idly while National Treasury and the Department of Energy mull over the various options for the country’s controversial 9 600 MW nuclear build programme. While Energy Minister Tina...
Updated 1 hour 53 minutes ago While a resurgence in manufacturing in Africa has been popularly touted as the silver bullet that will accelerate the continent’s economic growth prospects, The Economist management editor and columnist Adrian Wooldridge has suggested that Africa’s industrial...
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...