Why Cameroon is Poor and Corrupt

A Review By Dibussi Tande

Tim Harford. The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor—and Why You Can Never Buy a Decent Used Car! Oxford University Press, 2005. 288 pages.

In his book, The Undercover Economist, Tim Harford, a World Bank economist and columnist for the Financial Times, dedicates a chapter to the reason why poor countries remain poor. The chapter draws extensively, if not exclusively, from the Cameroon experience. An abridged version of that book chapter is published in the March 2006 issue of Reason magazine. This posting is a review of that article.

Harford argues that there is a flaw in the basic economic theory on how nations create wealth:

Economists used to think wealth came from a combination of man-made resources (roads, factories, telephone systems), human resources (hard work and education), and technological resources (technical know-how, or simply high-tech machinery). Obviously, poor countries grew into rich countries by investing money in physical resources and by improving human and technological resources with education and technology transfer programs.

According to Harford, this theory has a missing jigsaw piece: “Government banditry, widespread waste, and oppressive regulations are all elements in that missing piece of the puzzle.” This, he argues, is why Cameroon is poor:

“Nobody who sees a Douala street scene can conclude that Cameroon is poor because of a lack of entrepreneurial spirit. But poor it is. The average Cameroonian is eight times poorer than the average citizen of the world and almost 50 times poorer than the typical American.”

Harford backs up his argument by citing Mancur Olson’s theory that “governments are simply bandits, people with the biggest guns who will turn up and take everything.” And in the case of Cameroon, he states unequivocally that there are “bandits, bandits everywhere”:

“A little traveling in Cameroon reveals that whether or not Biya is the bandit-in-chief, there are many petty bandits to satisfy… Biya needs to keep hundreds of thousands of armed police and army officers happy, as well as many civil servants and other supporters. In a “perfect” dictatorship, he would simply impose the least damaging taxes possible in whatever quantity was necessary and distribute the proceeds to his supporters. This approach turns out to be impracticable, because it requires far more information about and control over the economy than a poor government can possibly muster. The substitute is government-tolerated corruption on a massive scale.”

Death by Red Tape
To make matters worse, Cameroon’s development is severely hampered by a cumbersome and crippling bureaucracy:

To set up a small business, an entrepreneur must spend on official fees nearly as much as the average Cameroonian makes in two years. To buy or sell property costs nearly a fifth of the property’s value. To get the courts to enforce an unpaid invoice takes nearly two years, costs more than a third of the invoice’s value, and requires 58 separate procedures. These ridiculous regulations are good news for the bureaucrats who enforce them. Every procedure is an opportunity to extract a bribe. The slower the standard processes, the greater the temptation to pay ‘speed money’,

Inflexible labor regulations help ensure that only experienced professional men are given formal contracts; women and young people have to fend for themselves in the gray market. Red tape discourages new businesses. Slow courts mean that entrepreneurs are forced to turn down attractive opportunities with new customers, because they know they cannot protect themselves if they are cheated. Poor countries have the worst examples of such regulations, and that is one of the major reasons they are poor. Officials in rich countries perform these basic bureaucratic tasks relatively quickly and cheaply, whereas officials in poor countries draw out the process in hopes of pocketing some extra cash themselves.

Harford points out that "self-interested and ambitious people are in positions of power, great and small, all over the world. In many places, they are restrained by the law, the press, and democratic opposition.” He laments, however, that “Cameroon’s tragedy is that there is nothing to hold self-interest in check." To back up his claim, he narrates a visit he made to the Northwest Province to "one of the country’s most prestigious private schools—Cameroon’s equivalent of Eton" (Sacred Heart?), which constructed a new library it did not need, and never used the new library because it was poorly constructed.

money that was provided because of social networks rather than need; a project designed for prestige rather than use; a lack of monitoring and accountability; and an architect appointed for show by somebody with little interest in the quality of the work. The outcome is hardly surprising: A project that should never have been built was built, and built badly.

In the last section of the article, Hardford asks the fundamental question: “Does development have a chance?” His response is one that anyone remotely concerned with the development of Africa in general, and Cameroon in particular, should study carefully:

It is not news that corruption and perverse incentives matter. But perhaps it is news that the problem of twisted rules and institutions explains not just a little bit of the gap between Cameroon and rich countries but almost all of the gap. Countries like Cameroon fall far below their potential even considering their poor infrastructure, low investment, and minimal education. Worse, the web of corruption foils every effort to improve the infrastructure, attract investment, and raise educational standards.

We still don’t have a good word to describe what is missing in Cameroon and in poor countries across the world. But we are starting to understand what it is. Some people call it “social capital,” or maybe “trust.” Others call it “the rule of law,” or “institutions.” But these are just labels. The problem is that Cameroon, like other poor countries, is a topsy-turvy place where it’s in most people’s interest to take actions that directly or indirectly damage everyone else. The incentives to create wealth are turned on their heads like the roof of the school library. 

End Note
So can Cameroon be saved? Harford offers a sobering analysis which shows how much needs to be done to get things right:

…kleptocracy at the top stunts the growth of poor countries. Having a thief for president doesn’t necessarily spell doom; the president might prefer to boost the economy and then take a slice of a bigger pie. But in general, looting will be widespread either because the dictator is not confident of his tenure or because he needs to allow others to steal in order to keep their support... The rot starts with government, but it afflicts the entire society.

The pillage of national resources may very well just continue, anti-corruption drive or not…

In just one chapter in his book, Tim Harford has successfully described in the simplest (and most entertaining) terms, the nature of the Cameroonian political system. Political scientists such as Jean Francois Bayart and Michael Bratton have described it as a neopatrimonial and prebendal system, i.e., one that is controlled by a rapacious and unaccountable ruling class that under-develops the country by continuously “eating the state”, and promoting widespread corruption in order to survive.

The Undercover Economist is an easy read even for individuals with no background in economics. The chapter in Cameroon is strongly recommended to anyone who grapples daily with the socio-political and economic mess that Cameroon finds itself in today.

For starters, however, click here to read the article in Reason magazine.

Tags: Cameroon Africa Corruption

Furthermore,

Comments

[Nkosi Jacob]

Dibussi
Thanks so much for providing us this link. It is an interesting experience to read what others have to say about us. Sadly enough the task to put the country back on the rails is enormous and tedious! Poor us!

[manga che]

Hi jacob,
I think that if we look at this primarily as "how they see us", then we lose the essence of what is going on. This is more of "how we are". An observant Cameroonian could would write the very same thing. Here is an excerpt from the blog of a Peace Corps Volunteer which adds more weight to what Mr. Tande has called death by red tape:
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"Corruption To The Left Of Me, Corruption To The Right..."

"The song my kids are doing goes something like: "Stand up, I say, oh youths of Cameroon and help fight corruption. Corruption is a disease which is killing our nation's economy. I say no to corruption! I say no to alcoholism, smoking, and I say no to corruption!" Catchy, not so? Why do 10-year-olds have to say no to corruption? It sounds ridiculous, I know, but Cameroon is riddled with corruption like Johnstown is with cocaine. (So I hear.)

"Let me give you a por ejemplo: At my clinic we're trying to get the mother and child care unit up and running. To do that, we need to get a grant from PLAN. To get that grant, we need to be recognized by the government. To be recognized, we need to be approved by the district medical officer in Mbengwi. To be approved, he needs to come to one of our staff meetings to hear our proposal. To have him come, we need to bribe him. Officially, we need to 'pay for his transport" which, from Mbengwi to Guneku is 300 CFA. He requires 50,000. Shoot me.'
http://eskimolinds.blogspot.com/
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Yes my brother, our country is as good as dead and buried!!!

[JN NGOH]

As far as I'm concerned this article has no ground-breaking revelations. It only buttresses what I knew all along; Cameroon is suffering from a leadership problem or the absence thereof. But I applaud the author's candid analysis. At least he acknowledges that Cameroonian are not responsible for Biya being in power but he stopped short of naming his sponsors- for he needs sponsors to wield the power he's being wielding over the suffering populace for the past quarter of a century. Even chief bandits pay due to their bosses. Who is Biya's boss(es).

[Ma Mary]

As if you do not know.

BIYA's MASSA in rare form.

[Ma Mary]

Biya's Massa's sphere of influence in Africa.

[JK Bannavti]

Just when I have begun giving up hope that the stupor in Cameroon could no more be captured in any succinct form, here comes a most graphic depiction of the reason for the decay of the entire nation.
He has just run short of prescribing a most radical approach to cleaning the mess.
The issue though, has never been the inability to identify what is wrong with Cameroon; it has always been how to go about effecting true change. God has endowed Cameroonians with a lot of potential; one of them is not the type of risk associated from such clean-up.

[Matt Clarke]

My sister, Lindsay Clarke, is currently living in Dschang and helping to improve the condition of schools in Doumbouo. I think she'd appreciate your blog. Any ideas on how to get her project some more exposure? Her blog is "Breaking Ground - Cameroon."

http://breakinggroundcameroon.blogspot.com