Undercover Economist Underperforms On Why Poor Countries Are Poor


Tim Harford
has a new book out called

The Undercover Economist
that
offers a fairly good introduction to economics. (I
reviewed it in the

New York Post
.) Now, Reason magazine`s
website is running a chapter from the book describing
Harford`s visit to Cameroon in West Africa under the
headline "Why
Poor Countries Are Poor.
"

Harford begins:

"They
call Douala the `armpit
of Africa
.` Lodged beneath the bulging shoulder of
West Africa, this malaria-infested city in southwestern
Cameroon is humid, unattractive, and smelly."

That reminds me of an old friend
from Douala, the largest city in Cameroon, who was
getting his Ph.D.

at UCLA
a quarter of a century ago. On the rare
occasions when the July temperature in Westwood reached
90 degrees, he`d complain bitterly about how hot it was.
When I`d point out that his hometown was just

north of the equator
and it had to be 90 degrees
there every day, he`d respond:

"Ah,
but, Steven, you don`t understand. That is the
soooooothing African heat."

So, while Cameroon might seem like
an armpit to you, me, or Tim Harford, to 16 million
Cameroonians, it`s home. And I wish them well.

Harford`s explanation for Why Poor
Countries Are Poor is

corrupt and predatory government
and other
institutions, which he documents with many depressing
examples from his visit.

He goes on to make the ambitious
claim:

"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."

Well, yes, that is indeed news to
me. For one thing, there are obvious noninstitutional
problems with trying to get work done in Cameroon, such
as

endemic malaria
and all that soothing

African heat
that just makes you want to

lie down and take a nap
.

But Harford`s assertion raises an
obvious question: how can he know "why poor countries
are poor"
from inspecting just one of them? Wouldn`t
it also be useful to compare countries?

Surely, a few of the dozens of

sub-Saharan African
countries must have better

policies
and institutions than Cameroon and thus
must have closed "almost all of the gap"?

Unfortunately, it turns out that by

African standards
, Cameroon`s government is not so
bad. Granted, it`s a

completely crooked dictatorship
run by a gang
representing only the interests of one of the many
ethnic groups. But it`s not a civil war zone like the

Congo
or

Liberia
. Over the decades, the government has more
or less kept the peace.

The CIA World Factbook
notes:


"Cameroon has generally enjoyed stability, which has
permitted the development of agriculture, roads, and
railways, as well as a petroleum industry."

With a per capita income of $2,000,
Cameroon is well above average in sub-Saharan

Africa`s income tables
.

So are there African exceptions
that prove Harford`s proposed rule that untwisting
institutions could close almost all the income gap?

Not really.

The highest African GDP per capita,
at an amazing $50,200, even higher than the $41,200 in
the U.S., is found in tiny Equatorial Guinea. But that`s
solely because of big oil strikes there. The

CIA World Factbook
reports:


"Despite the country`s economic windfall from oil
production resulting in a massive increase in government
revenue in recent years, there have been few
improvements in the population`s living standards."

Then comes South Africa, which I
think you`d agree is not representative, and then one of
the continent`s success stories,

Botswana
, at $10,100, just richer than Mexico.
Botswana`s wealth owes to having big diamond mines and a
small population, but its government deserves credit for
not stealing many of the diamonds or wasting the income.

Next comes Namibia (Botswana Jr.),
oil-rich and corrupt Gabon, and some South African
statelets.

The richest representative African
country is

Ghana
at $2,500, 25 percent better than Cameroon.
Although Ghana had notoriously bad government in the
post-independence era, it has enjoyed relatively
public-spirited rule recently and is now considered a
democracy. So, the difference of $500 per year in per
capita income between Ghana and Cameroon might represent
the bonus that accrues for fairly good government by
African standards. That doesn`t close much of the gap
with the West.

So, why do African countries
mostly have such bad governments? Why haven`t they done
what the Chinese did under Deng from

1978 onward
and unleash the

power of free enterprise?

Well, some have

tried
. But the results have been less impressive
than in China.

The fundamental problem is that it
doesn`t really pay in Africa to be a good ruler. In  China,
the Communist Party dictatorship finally

figured out
that if they merely stopped perpetrating
the

wacky ideological brainstorms
of Chairman Mao, such
as ordering the peasants to build steel mills in their
backyards and inciting junior high school students to
assault and batter their teachers, the economy would
improve. If they then allowed

foreign investment
and the government invested in
education and infrastructure, the Chinese people could
generate so much wealth that the Communist Party bosses
would get filthy rich.

It worked.

In contrast, the ruling classes of
sub-Saharan African countries have a lower opinion of
the wealth-generating capacity of their own people. They
don`t see much point in investing in their own people
because they don`t think their people could repay the
investment. So, if there is mineral wealth in their
country, the

Big Men
fight civil wars to

get the checks
from the foreign oil and mining
companies. And if there are no minerals, they just shake
down the populace for petty bribes.

Now, it could be that the African
elites are blinded by stereotypes about Africans, that
they indulge in the


"soft bigotry of low expectations."

Or it could be that they are right.

I suspect the answer lies in
between, but the whole concept is almost unthinkable to
Harford. He rules out the possibility that the African
ruling classes view of their own people`s potential is
right a priori:

"It`s
all too tempting for the visitor in Cameroon to shrug
his shoulders and explain the country`s poverty by
presuming that Cameroonians are idiots. Cameroonians are
no smarter or dumber than the rest of us.

[Emphasis added.]

To prove that assertion, Harford
[email
him
] offers up this remarkable sentence, a
classic example of Occam`s Vegematic slicing and dicing
logic:


Seemingly stupid mistakes are so ubiquitous in Cameroon
that incompetence cannot be the whole explanation."

Well, okay … But could incompetence
be part of the explanation?

Napoleon supposedly said

something like,
"Never
attribute to malice that which can be adequately
explained by incompetence."

And that`s a wise rule in thinking about Africa.

We know from

Richard Lynn and Tatu Vanhanen`s
groundbreaking 2002
book

IQ And The Wealth Of Nations

that the correlation between IQ and per capita income
across countries is a remarkably high r = 0.73.
Furthermore, dozens of intelligence studies over the
decades have shown that the average IQ in Africa is very
low, somewhere around 70.

We also can
surmise that the low African average IQ is probably
being depressed by environmental causes like bad
nutrition and disease, since 70 is about 15 points (or
one standard deviation) lower than the average IQ of
African Americans, who share at least 80 percent of
their genes with West Africans.

And, in fact,
so far we know of two specific environmental
shortfall—shortages of the

micronutrients iodine and iron
—that
according to a

2004 report by UNICEF
appear to lower national
average IQs in the Third World by a few points. Western
countries have been fortifying salt with iodine and
flour with iron to prevent cognitive damage since before
WWII. But most of the Third World does not.

I`ve written
about this UN study repeatedly in VDARE.com, but it has
otherwise gotten almost zero attention in the Western
press because the whole topic of African IQ is banned.

At Leeds
University in England, for example, Prof. Frank Ellis is
currently the subject of a

furious campaign on campus
and in the press against
his right to teach for

merely mentioning
such

forbidden topics
.

Fortunately,
this taboo does not exist in Africa, so the press there
has taken up

the issue
, as has the

forward-looking government of Ghana.
Whether African
governments have the money, skills, and motivation to
institute effective fortification of staple foods
without international help is unknown, however.

Just as it

proved in America in the 1930
s, micronutrient
fortification could be a highly cost-effective way to
raise the overall competence level of African
populations. As a

conference in Copenhagen
hosted by

Bjorn Lomborg
in 2004 pointed out, micronutrient
fortification makes more sense than any other kind of
foreign aid, other than AIDS prevention.

But we can`t do
much to help Africans with this problem if we`re not
allowed to talk about it.


[Steve Sailer [email
him] is founder of the Human Biodiversity Institute and


movie critic
for


The American Conservative
.
His website


www.iSteve.blogspot.com
features his daily
blog.]