Friday, March 21, 2008
As we turn to Olson's Power and Prosperity, you might be interested in considering the views of MORGAN TSVANGIRAI, a presidential candidate in Zimbabwe's upcoming elections:
As the March 29 election in Zimbabwe approaches, the cards are clearly stacked in favor of President Robert Mugabe and his ZANU-PF party. Draconian legislation has curtailed freedom of expression and association. Daily, the representatives of the Movement for Democratic Change (MDC), the political party that I lead, are harassed, tortured, imprisoned without trial and even killed.If you lived in Zimbabwe, would you vote for this candidate? His views certainly seem consistent with Olson's Power and Prosperity. Come to think of it, I would like to hear candidates for our presidency who seemed to understand as much about power and prosperity as Mr. Tsvangirai does.
Economic mismanagement by Mr. Mugabe's government is an even more serious problem. Zimbabwe's inflation and unemployment rates are 150,000% and 80% respectively. Infrastructure is crumbling, and education and health-care systems have collapsed. Life expectancy is now among the lowest in the world, having declined, since 1994, to 34 years from 57 years for women, and to 37 years from 54 for men. Some four million of my fellow citizens have fled the country, taking with them both human and financial capital.
Out of the many reasons for Zimbabwe's decline, three stand out. First is the ruling regime's contempt for the rule of law. The government has repeatedly stole elections, and intimidated, beaten and murdered its opponents. It has confiscated private property without compensation and ignored court rulings declaring such takings illegal. Such behavior only scares away investors, domestic and international. Current circumstances make it impossible to have a growing economy that will create jobs for millions of unemployed Zimbabweans.
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The second reason for Zimbabwe's decline is the government's destruction of economic freedom, in order to satisfy an elaborate patronage system.
Today, Zimbabwe ranks last out of the 141 countries surveyed by the Fraser Institute's Economic Freedom in the World report. According to 2007 World Bank estimates, it takes 96 days to start a business in Zimbabwe. It takes only two days in Australia. Waiting for necessary licenses takes 952 days in Zimbabwe, but only 34 days in South Korea. Registering property in Zimbabwe costs an astonishing 25% of the property's value. In the United States, it costs only 0.5%.
[ . . . ]
The third factor responsible for the country's decline is the size and rapaciousness of the government. Today, that size is determined by the requirements of patronage. But a government that provides hardly any public services cannot justify the need for 45 ministers and deputy ministers, all of whom enjoy perks ranging from expensive SUVs to farms that were confiscated from others.
The Central Bank too has departed from its traditional role of stabilizing prices. Instead, it dishes out money to dysfunctional, government-owned corporations that are controlled by the ZANU-PF and are accountable to no one. The result is runaway growth in the money supply, and the highest inflation rate in the world. Zimbabwe's potential for economic growth cannot be realized without macroeconomic stability. Hyperinflation must be tamed, in part by taming the government's appetite for spending.