Dec 20, 2022·edited Dec 20, 2022Liked by Noah Smith
Indeed, this is sad to see. Another worry in this area is increased terrorist threats which appear to be getting deeper into Burkina Faso, Ghana's northern neighbor: http://news.aouaga.com/h/146172.html
That this might happen so far south when I lived there 9 years ago was unfathomable. But here we are.
Lived in Burkina Faso for two years seven to five years ago (and had to leave in a hurry due to security reasons). The collapse in state capacity and public safety in Burkina these past couple of years is astonishing and among the worst in modern history. Today, BF is a near-failed state that cannot guarantee security any beyond the outskirts of Ouagadougou, and the desperate government is apparently turning to actually evil Russian private security grifters, the Wagner Group, in a flailing attempt to seize back lost territory. Just an immense tragedy that hardly anyone is talking about here in the States, and one is already spreading to Burkina's southern neighbors, with recent attacks in northern Ghana, Togo, and Benin.
Oh wow, were you in the last Peace Corps group there? I was in Koudougou from 2012-2014, so I got to see the end of the Blaise regime. I don't think anyone who was out there at the time would think that one day they might look back on those times as "the good old days".
I have heard about the growing influence if Russia in BF and Mali and this seems like a story that is overlooked by English language media. Ukraine is not the only theater of conflict for Russia unfortunately.
Noah, if you're listening, this could be a good story for you to cover-- the influence Russia has on some of the countries whose populations are growing the fastest could have an outsized effect on future world events.
Hah yep, figured we both were PC Burkina folks. Koudougou, I didn't get the explore the west much before we were evacuated, sadly, but I did make it there and really enjoyed it. I was about 2/3s of the way through my service there before we got evacuated, lived in the East, near Pièla north of Fada. Hard to comprehend that even my time there really was the good old days compared to now, where where I lived is effectively beyond the reach of the state. And yeah, Russian influence is definitely increasing and played a large part in the recent Ouaga anti-French protests that coincided with the most recent coup (never a good sign when you have to clarify between coups). Totally second that tip for Noah, there is a lot to talk about here (unfortunately). For instance, just today there were meetings between Ghana and BF over the Ghanian president talking about Russian involvement in Burkina while visiting the US last week.
How can this analysis ignore lockdowns and a panicked pandemic response globally as a proximate cause for the crisis?
Ghana spent billions on lockdowns, closed schools (for a year!) and scared people into not seeking immunisations for diseases far more serious than Covid. From an early point it was clear that the population was never at risk of covid being a serious health burden due to age structure.
More broadly, this is the result of rich nations spending trillions to shut down the global economy and printing money to keep people compliant. The resulting debt bubbles, inflation and interest rate rises were always going to affect developing economies with weak currencies the most. These costs were barely, if ever, mentioned in domestic media or academic discussions of pandemic policy. It’s much harder to conceptualise the health damage of 100 young people kept in poverty over a decade than it is to imagine the death of a single elderly person due to a disease that dominated every news discussion for two years. That’s why “shut it down” won so comprehensively globally, despite the lack of any cost/benefit proportionality.
Developing countries who were teetering on the edge of progress decided to collectively shoot themselves in the foot and take hundreds of millions of children out of schools and into poverty. The global financial crisis created by lockdowns is now pushing them over the edge. History will look back on the episode very poorly.
This assumes that the economy and education is not linked to public health. They very strongly are, especially in the developing world. And especially when covid was not going to meaningfully make the populace less healthy, regardless of ineffectual and self destructive lockdowns.
That was a damn fine read. Like you, I find it fairly fascinating that they went with a preemptive default. You wrote, "Having the government borrow all that money in the first place was not smart. - At this point the IMF needs to start looking at how to gently but firmly cut Ghana off, so that they don’t keep doing this." I recently read and reviewed the book Confessions of an Economic Hit Man,
And one of the key themes is that the bailouts are a *feature* not a bug, in that they allow the IMF and other western institutions to exert political/financial control over the country stuck in the debt doom loop. Do you see that type of thing happening in Ghana? You mentioned there was some hope of finding oil, maybe the IMF was hoping to exert influence over the production of that oil had it materialized. I realize that sounds slightly conspiratorial, but just reading the book you see how this thing has happened over, over and over again.
At any rate, go Ghana defaulting on that debt. Smart move.
Ghana is repeatedly bailed out by the IMF and then always defaults on its new debts. How is that a form of financial control? That looks a lot more like Ghana controlling foreign institutions rather than the other way around. If Ghana was really under the control of the IMF, presumably they'd insist on getting their money back before bailing them out for the 13th time, and presumably they wouldn't be allowed to do known-to-be-unsuccessful things like rack up huge debts to set up nationalized oil industries.
I mean, I don't know the specifics of Ghana. Maybe the situation is different, however, the general idea is that institutions like the IMF and others deliberately give developing countries large loans that they know they won't be able to repay. Once the country defaults, the IMF or whoever uses that opportunity to gain political control, dictate financial terms, take control of commodity production, etc.
i guess the question to resolve is what pounds of flesh IMF extracted for the previous dozen bailouts. Did Ghana have to hand over control of key resources to foreign firms in exchange? is that kneecaping their financial capacity today? did IMF force policies onto government like austerity programs that was against interests of country? I don't know anything about the place so no idea what answer is. But making loans and not getting paid back is in itself not a form of exercising control, just stupidity / charity depending on how you look at it.
More to the point, it's Ghana's 13th rodeo doing this. I think Noah is being very polite by burying that deep in the article.
I think the IMF is an influence tool on some covert levels as well as many overt (and mainly benign) ones, but the default response that happened pre-emptively suggests a bit of gaming the system - Ghana gambled big with borrowed money and knew the routine to follow when the bet went sour.
I'd blame them more, but sadly I really doubt they had a wealth of better options.
Surely at least some of the conceptual blame here lies in Ghana's creditors, though? "They've defaulted twelve times before, surely it won't happen again?"
The lenders took a -- in retrospect foolish -- risk by buying Ghanaian sovereign debt, and Ghana basically declared bankruptcy. This is not only something that's implicitly priced into every debt transaction (particularly for debts that can't be inflated away because they're denominated in foreign currencies) but in this case also something that was the opposite of unforeseeable.
It sounds like Ghana's central bank is actually trying to be reasonably prudent as far as addressing the inflationary issues and, as Noah says, the country was wise to default early on in this context, so depending on interest rates it might not even be insane to lend to Ghana early on in the next go ground before the debt-to-GDP ratio becomes manifestly unsustainable, and the bigger issue is cutting off the tap before Ghanaian profligacy starts to take off in earnest again -- and, ideally, to commit to and communicate this to the government well enough in advance that they're incented to make positive-EV bets with borrowed money instead of just shoveling it all into resource extraction. The failure to do so heretofore seems to have really been an enabling behavior by sovereign creditors that came back to (predictably and foreseeably) bite them in the ass.
Thank you for your insightful post, Noah. As a Ghanaian, I am grateful for your commitment to follow up on your 2020 Blomberg post and bring attention to the current crisis, as well as to offer potential solutions. Going forward, it would be beneficial to see more discourse from you on Africa as a whole.
As the continent is projected to make up 25% of the global population by mid-century, it is important to consider it in a more nuanced way than just as a place of poverty or disarray. While Africans are happy to do business with other global powers like China and Russia, we have a clear bias for America and polls show 7 in 10 Africans (69%) say “democracy is preferable to any other kind of government.” Africans want the US society, as a whole, to pay more attention to us. While the continent faces many challenges, there is also much potential for growth, development, and progress.
If President Biden's promises at the recent US-Africa summit to go "all in” on Africa's future are to be taken seriously, it is essential that America's intellectuals, not just its capital, direct their focus towards the continent. Your commentary is an excellent example of how this attention can be paid. Again, thank you for the post and I hope that you continue to bring attention to the various opportunities and solutions available to African nations and to inspire other US/Western intellectuals to similarly engage on Africa and, where possible, collaborate with African intellectuals.
Look, I know nothing about Ghana, but of all the things a government could spend money on free universal (or at least widely available) secondary education sounds like one of the better ones.
The economic returns to education are pretty indisputable, at least to secondary level. Furthermore, it’s a service that seems best provided by government, both from an equity and a quality of service perspective.
It’s also a government service that’s pretty much universal across developed and most middle-income countries.
If you want to raise government revenue, surely there has to be somewhere else you can collect some taxes?
The economic returns to education comes from giving poor people and middle income people access. It doesn't make sense to give rich Ghanaians who send their kids to elite private schools and international schools free education. I have neighbors with 2 indoor swimming pools in their house in Accra. I promise you they don't need free schools. Data is hard to come by, i have been all over Ghana and there's probably 100K(at low end) to 1.2M households (at high end) that have 0 need for free schools since they are well off. (There's 8.3M households in Ghana, 32M people.)
Obviously free education is ideal but Ghana has to deal with terrible budgetary constraints.
President Nana did many policies like free education for all because it would make him politically popular for reelection. Now that the IMF is coming in, they will force fiscal discipline and one of the things that could be on the chopping block would be free schooling. It was economically unfeasible before it was implemented and now it's going to be removed anyway. Nana has been somewhat unpopular in Ghana due to him having to basically change the entire banking system, have so many state fundrd projects fail, and covid and the inflation crisis (which aren't his fault). He is doing whatever he can do to win another term.
Ghana raises revenue through VAT, social security, tarriffs, property tax, personal tax and corporate tax. But that only raises like 13% which is lower than average even in Africa. Obviously we should raise property taxes (the real estate sector in Accra is beyond absurd there's money to tax there) but there needs to be a campaign to find a way to incorporate the informal sector into the economy.
Is the Ghanaian informal sector characterized by electronic transactions where one could feasibly engineer VAT taxation withholding and accurate transaction records into the software or hardware, or is it mostly cash transactions where enforcement is going to be extremely hard?
Property taxes and tariffs seems like they have a huge advantage over other forms of government revenue collection in that they're much easier to enforce with a limited budget, because imports and property ownership tend to be extremely legible to government in a way that informal transactions aren't. Even more industrialized nations like Mexico and Italy have serious problems with smaller and informal enterprises being able to consistently dodge tax collection.
how is corruption situation in Ghana? did that play a role in directing investments towards stuff like oil & gas where it probably was easier to skim off top than other forms of spending? I don't know anything about country so this is not a loaded question, just curious.
My Ghanaian friends say the curse of Africa, tribalism, interferes with every decision, my highly educated friends, primarily in British schools, gave up and fled to our shores, they have no hope that Ghana, or any other African nation can survive internecine tribal animosity
That saddens me, though I've heard similar stories before. I'd like to see Africa turn the corner rewards prosperity, and I'm sure the vrain drain isn't helping. But I certainly can't blame people for wanting out when instability and violence loom.
Great recap of how Ghana has sadly gone off the tracks. If you are looking for a new candidate for regional leader, I would suggest looking at Kenya. I am biased since I'm from there, but I think it would score well on a lot of the parameters that made you optimistic about Ghana and then some...
I think it would be tremendously interesting and informative for you to do a debate/interview/adversarial-collaboration with Garett Jones about the root causes of, and possible solutions to, these sorts of emerging market crises. My guess is that you wouldn't entirely share his bullishness on the Deep Roots literature or his view of the level of importance of average national IQ-- but understanding where your disagreements come from and how they might be resolved could be very useful!
Sad news, the country had gotten many things right and when I was there in the latest 2000's there really was an overall confidence in economic progress everywhere, even in poor neighborhoods (which unlike in many areas, were safe in Ghana).
The resource curse seems to be a concept that's important to look at in depth for many developing countries.
I wonder though, what part of it is simply cold calculation by the leaders living in networks of favours and compensations. Leaders have much more control over oil production and wealth, than over a diversified economy that includes manufacturing (though if you like at China...).
Also cultural perhaps, if most leaders are born in inherited wealth and far from examples of wealth creation, their view of the world would readily adapt to selling the inherited oil wealth, and not so readily deal with the complexity of letting economic actors run the show.
Excellent article. I think we need to be patient with Sub-Saharan Africa. We forget how long it took to develop, through trial and error, the modern states that work so well.
Random question, when you write articles about x country, do you see a large bump in readership from that country? I’m not sure if yes would be an optimistic answer but it’d be interesting.
There’s a lot there with Ghana. As with the influence of their last 19th century colonializer, Britain, today they are English-speaking, but surrounded all-around by their Franco-phone neighbors.
Could it be that their sandwiched position along the Ivory Coast makes them look more to Europe for cues & influence than their neighbors—ie, with their choice of their flavor of culture, education, business and finance savvy?
Foresight, with good planning, for the larger African Good, also goes hand & hand with the Ghana mix of attributes that this African nation are—in normal times—capable, ready, and willing to provide.
English speaking countries look to the US, in general, for cultural, educational and business savvy. Conversely francophone countries probably look to France.
I'm sure you get a lot of requests like this, but I'd be interested to read a piece about Rwanda, how it's managed economic development since the genocide, and if you buy the hype about Kagame's leadership (in terms of economics, not human rights).
Indeed, this is sad to see. Another worry in this area is increased terrorist threats which appear to be getting deeper into Burkina Faso, Ghana's northern neighbor: http://news.aouaga.com/h/146172.html
That this might happen so far south when I lived there 9 years ago was unfathomable. But here we are.
Lived in Burkina Faso for two years seven to five years ago (and had to leave in a hurry due to security reasons). The collapse in state capacity and public safety in Burkina these past couple of years is astonishing and among the worst in modern history. Today, BF is a near-failed state that cannot guarantee security any beyond the outskirts of Ouagadougou, and the desperate government is apparently turning to actually evil Russian private security grifters, the Wagner Group, in a flailing attempt to seize back lost territory. Just an immense tragedy that hardly anyone is talking about here in the States, and one is already spreading to Burkina's southern neighbors, with recent attacks in northern Ghana, Togo, and Benin.
Oh wow, were you in the last Peace Corps group there? I was in Koudougou from 2012-2014, so I got to see the end of the Blaise regime. I don't think anyone who was out there at the time would think that one day they might look back on those times as "the good old days".
I have heard about the growing influence if Russia in BF and Mali and this seems like a story that is overlooked by English language media. Ukraine is not the only theater of conflict for Russia unfortunately.
Noah, if you're listening, this could be a good story for you to cover-- the influence Russia has on some of the countries whose populations are growing the fastest could have an outsized effect on future world events.
Hah yep, figured we both were PC Burkina folks. Koudougou, I didn't get the explore the west much before we were evacuated, sadly, but I did make it there and really enjoyed it. I was about 2/3s of the way through my service there before we got evacuated, lived in the East, near Pièla north of Fada. Hard to comprehend that even my time there really was the good old days compared to now, where where I lived is effectively beyond the reach of the state. And yeah, Russian influence is definitely increasing and played a large part in the recent Ouaga anti-French protests that coincided with the most recent coup (never a good sign when you have to clarify between coups). Totally second that tip for Noah, there is a lot to talk about here (unfortunately). For instance, just today there were meetings between Ghana and BF over the Ghanian president talking about Russian involvement in Burkina while visiting the US last week.
https://www.voanews.com/a/ghana-repairs-rift-with-burkina-faso-after-wagner-claims/6887721.html
That was an informative read, thanks for sharing! I unfortunately never got to visit the east-- my project (teaching IT) kept me pretty busy.
Things were surprisingly normal in Koudougou until recently but I've heard it's taken a turn for the worse more recently.
How can this analysis ignore lockdowns and a panicked pandemic response globally as a proximate cause for the crisis?
Ghana spent billions on lockdowns, closed schools (for a year!) and scared people into not seeking immunisations for diseases far more serious than Covid. From an early point it was clear that the population was never at risk of covid being a serious health burden due to age structure.
More broadly, this is the result of rich nations spending trillions to shut down the global economy and printing money to keep people compliant. The resulting debt bubbles, inflation and interest rate rises were always going to affect developing economies with weak currencies the most. These costs were barely, if ever, mentioned in domestic media or academic discussions of pandemic policy. It’s much harder to conceptualise the health damage of 100 young people kept in poverty over a decade than it is to imagine the death of a single elderly person due to a disease that dominated every news discussion for two years. That’s why “shut it down” won so comprehensively globally, despite the lack of any cost/benefit proportionality.
Developing countries who were teetering on the edge of progress decided to collectively shoot themselves in the foot and take hundreds of millions of children out of schools and into poverty. The global financial crisis created by lockdowns is now pushing them over the edge. History will look back on the episode very poorly.
This assumes that the economy and education is not linked to public health. They very strongly are, especially in the developing world. And especially when covid was not going to meaningfully make the populace less healthy, regardless of ineffectual and self destructive lockdowns.
That was a damn fine read. Like you, I find it fairly fascinating that they went with a preemptive default. You wrote, "Having the government borrow all that money in the first place was not smart. - At this point the IMF needs to start looking at how to gently but firmly cut Ghana off, so that they don’t keep doing this." I recently read and reviewed the book Confessions of an Economic Hit Man,
https://theunhedgedcapitalist.substack.com/p/book-review-confessions-of-an-economic
And one of the key themes is that the bailouts are a *feature* not a bug, in that they allow the IMF and other western institutions to exert political/financial control over the country stuck in the debt doom loop. Do you see that type of thing happening in Ghana? You mentioned there was some hope of finding oil, maybe the IMF was hoping to exert influence over the production of that oil had it materialized. I realize that sounds slightly conspiratorial, but just reading the book you see how this thing has happened over, over and over again.
At any rate, go Ghana defaulting on that debt. Smart move.
Ghana is repeatedly bailed out by the IMF and then always defaults on its new debts. How is that a form of financial control? That looks a lot more like Ghana controlling foreign institutions rather than the other way around. If Ghana was really under the control of the IMF, presumably they'd insist on getting their money back before bailing them out for the 13th time, and presumably they wouldn't be allowed to do known-to-be-unsuccessful things like rack up huge debts to set up nationalized oil industries.
I mean, I don't know the specifics of Ghana. Maybe the situation is different, however, the general idea is that institutions like the IMF and others deliberately give developing countries large loans that they know they won't be able to repay. Once the country defaults, the IMF or whoever uses that opportunity to gain political control, dictate financial terms, take control of commodity production, etc.
You can repeat the claim all you want, but it doesn't make it true.
Ok, sure. But what exactly is your counterpoint? Can you lay out your argument?
i guess the question to resolve is what pounds of flesh IMF extracted for the previous dozen bailouts. Did Ghana have to hand over control of key resources to foreign firms in exchange? is that kneecaping their financial capacity today? did IMF force policies onto government like austerity programs that was against interests of country? I don't know anything about the place so no idea what answer is. But making loans and not getting paid back is in itself not a form of exercising control, just stupidity / charity depending on how you look at it.
You literally did not give a counterpoint to the comment you were replying to.
More to the point, it's Ghana's 13th rodeo doing this. I think Noah is being very polite by burying that deep in the article.
I think the IMF is an influence tool on some covert levels as well as many overt (and mainly benign) ones, but the default response that happened pre-emptively suggests a bit of gaming the system - Ghana gambled big with borrowed money and knew the routine to follow when the bet went sour.
I'd blame them more, but sadly I really doubt they had a wealth of better options.
Surely at least some of the conceptual blame here lies in Ghana's creditors, though? "They've defaulted twelve times before, surely it won't happen again?"
The lenders took a -- in retrospect foolish -- risk by buying Ghanaian sovereign debt, and Ghana basically declared bankruptcy. This is not only something that's implicitly priced into every debt transaction (particularly for debts that can't be inflated away because they're denominated in foreign currencies) but in this case also something that was the opposite of unforeseeable.
It sounds like Ghana's central bank is actually trying to be reasonably prudent as far as addressing the inflationary issues and, as Noah says, the country was wise to default early on in this context, so depending on interest rates it might not even be insane to lend to Ghana early on in the next go ground before the debt-to-GDP ratio becomes manifestly unsustainable, and the bigger issue is cutting off the tap before Ghanaian profligacy starts to take off in earnest again -- and, ideally, to commit to and communicate this to the government well enough in advance that they're incented to make positive-EV bets with borrowed money instead of just shoveling it all into resource extraction. The failure to do so heretofore seems to have really been an enabling behavior by sovereign creditors that came back to (predictably and foreseeably) bite them in the ass.
Thank you for your insightful post, Noah. As a Ghanaian, I am grateful for your commitment to follow up on your 2020 Blomberg post and bring attention to the current crisis, as well as to offer potential solutions. Going forward, it would be beneficial to see more discourse from you on Africa as a whole.
As the continent is projected to make up 25% of the global population by mid-century, it is important to consider it in a more nuanced way than just as a place of poverty or disarray. While Africans are happy to do business with other global powers like China and Russia, we have a clear bias for America and polls show 7 in 10 Africans (69%) say “democracy is preferable to any other kind of government.” Africans want the US society, as a whole, to pay more attention to us. While the continent faces many challenges, there is also much potential for growth, development, and progress.
If President Biden's promises at the recent US-Africa summit to go "all in” on Africa's future are to be taken seriously, it is essential that America's intellectuals, not just its capital, direct their focus towards the continent. Your commentary is an excellent example of how this attention can be paid. Again, thank you for the post and I hope that you continue to bring attention to the various opportunities and solutions available to African nations and to inspire other US/Western intellectuals to similarly engage on Africa and, where possible, collaborate with African intellectuals.
I'm Ghanaian-American myself. One thing I hated what Nana did was give free high school to everyone. He should have means tested it.
Ghana also desperately needs to raise tax revenue from the informal sector some how. It doesn't collect enough in tax revenue at all..
Look, I know nothing about Ghana, but of all the things a government could spend money on free universal (or at least widely available) secondary education sounds like one of the better ones.
The economic returns to education are pretty indisputable, at least to secondary level. Furthermore, it’s a service that seems best provided by government, both from an equity and a quality of service perspective.
It’s also a government service that’s pretty much universal across developed and most middle-income countries.
If you want to raise government revenue, surely there has to be somewhere else you can collect some taxes?
The economic returns to education comes from giving poor people and middle income people access. It doesn't make sense to give rich Ghanaians who send their kids to elite private schools and international schools free education. I have neighbors with 2 indoor swimming pools in their house in Accra. I promise you they don't need free schools. Data is hard to come by, i have been all over Ghana and there's probably 100K(at low end) to 1.2M households (at high end) that have 0 need for free schools since they are well off. (There's 8.3M households in Ghana, 32M people.)
Obviously free education is ideal but Ghana has to deal with terrible budgetary constraints.
President Nana did many policies like free education for all because it would make him politically popular for reelection. Now that the IMF is coming in, they will force fiscal discipline and one of the things that could be on the chopping block would be free schooling. It was economically unfeasible before it was implemented and now it's going to be removed anyway. Nana has been somewhat unpopular in Ghana due to him having to basically change the entire banking system, have so many state fundrd projects fail, and covid and the inflation crisis (which aren't his fault). He is doing whatever he can do to win another term.
Ghana raises revenue through VAT, social security, tarriffs, property tax, personal tax and corporate tax. But that only raises like 13% which is lower than average even in Africa. Obviously we should raise property taxes (the real estate sector in Accra is beyond absurd there's money to tax there) but there needs to be a campaign to find a way to incorporate the informal sector into the economy.
Is the Ghanaian informal sector characterized by electronic transactions where one could feasibly engineer VAT taxation withholding and accurate transaction records into the software or hardware, or is it mostly cash transactions where enforcement is going to be extremely hard?
Property taxes and tariffs seems like they have a huge advantage over other forms of government revenue collection in that they're much easier to enforce with a limited budget, because imports and property ownership tend to be extremely legible to government in a way that informal transactions aren't. Even more industrialized nations like Mexico and Italy have serious problems with smaller and informal enterprises being able to consistently dodge tax collection.
how is corruption situation in Ghana? did that play a role in directing investments towards stuff like oil & gas where it probably was easier to skim off top than other forms of spending? I don't know anything about country so this is not a loaded question, just curious.
Indeed, corruption is the worst under the current government I've seen, and I've lived here pretty much my whole life.
To me that is the crux of the matter. What exactly were the billions of dollars for COVID spent on? The government refuses to account for it.
Good
My Ghanaian friends say the curse of Africa, tribalism, interferes with every decision, my highly educated friends, primarily in British schools, gave up and fled to our shores, they have no hope that Ghana, or any other African nation can survive internecine tribal animosity
That saddens me, though I've heard similar stories before. I'd like to see Africa turn the corner rewards prosperity, and I'm sure the vrain drain isn't helping. But I certainly can't blame people for wanting out when instability and violence loom.
Great recap of how Ghana has sadly gone off the tracks. If you are looking for a new candidate for regional leader, I would suggest looking at Kenya. I am biased since I'm from there, but I think it would score well on a lot of the parameters that made you optimistic about Ghana and then some...
I think it would be tremendously interesting and informative for you to do a debate/interview/adversarial-collaboration with Garett Jones about the root causes of, and possible solutions to, these sorts of emerging market crises. My guess is that you wouldn't entirely share his bullishness on the Deep Roots literature or his view of the level of importance of average national IQ-- but understanding where your disagreements come from and how they might be resolved could be very useful!
Really enjoy these reads on developing economies. Thanks Noah.
Sad news, the country had gotten many things right and when I was there in the latest 2000's there really was an overall confidence in economic progress everywhere, even in poor neighborhoods (which unlike in many areas, were safe in Ghana).
The resource curse seems to be a concept that's important to look at in depth for many developing countries.
I wonder though, what part of it is simply cold calculation by the leaders living in networks of favours and compensations. Leaders have much more control over oil production and wealth, than over a diversified economy that includes manufacturing (though if you like at China...).
Also cultural perhaps, if most leaders are born in inherited wealth and far from examples of wealth creation, their view of the world would readily adapt to selling the inherited oil wealth, and not so readily deal with the complexity of letting economic actors run the show.
Anyway, hope it goes better soon.
Excellent article. I think we need to be patient with Sub-Saharan Africa. We forget how long it took to develop, through trial and error, the modern states that work so well.
Random question, when you write articles about x country, do you see a large bump in readership from that country? I’m not sure if yes would be an optimistic answer but it’d be interesting.
In fact, the answer is that Substack's reader analytics are still too rudimentary for me to even be able to answer this question!
How about now!
There’s a lot there with Ghana. As with the influence of their last 19th century colonializer, Britain, today they are English-speaking, but surrounded all-around by their Franco-phone neighbors.
Could it be that their sandwiched position along the Ivory Coast makes them look more to Europe for cues & influence than their neighbors—ie, with their choice of their flavor of culture, education, business and finance savvy?
Foresight, with good planning, for the larger African Good, also goes hand & hand with the Ghana mix of attributes that this African nation are—in normal times—capable, ready, and willing to provide.
English speaking countries look to the US, in general, for cultural, educational and business savvy. Conversely francophone countries probably look to France.
I wrote about Ghana myself here:
https://yawboadu.substack.com/p/how-countries-get-into-currency-crises
I'm sure you get a lot of requests like this, but I'd be interested to read a piece about Rwanda, how it's managed economic development since the genocide, and if you buy the hype about Kagame's leadership (in terms of economics, not human rights).