Democracy, Development and Comparative Institutional Advantage in Africa

Development in Africa has been stalled for decades in a vicious cycle of poverty, underdevelopment, corruption, and conflict. In this paper, we argue that donors should focus on democracy and accountability as a first priority in development aid. We use the theory of comparative institutional advantage to identify the key institutions that are most likely to facilitate economic development in communities in the modern world. These institutions include an efficient non-corrupt government sector. Subsequently, we discuss how a lack of democracy and accountability inevitably undermines development efforts and investment, referring especially to the Ethiopian experience but also considering the experiences of other African dictatorships. Finally, we discuss how donors, by emphasizing democracy and accountability along with other policies that support democratic institutions, have a greater chance of effectively contributing to African economic development.