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.

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',

Furthermore,

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."

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.

Dibussi Tande runs the Cameroon News weblog "Scribbles from the Den" at www.dibussi.com

Comments

[rexon]

I agree with most issues cited by the author. however, i think he has generalised the very corrupt actions of citizens of la republique du cameroun and their poor mannagerial skills to reflect even southern cameroonians. The author should have specified that the republic of southern cameroons has the ability to govern itself with a proper democracy. Our culture, values and way of life has been destroyed by the francophonie way of life that is geared towards corruption, bribery, theft of state properties, etc. The author fails to understand that this vices have been imported to the southern cameroons only by french agents like sous prefets, gerndarmes, etc.

[Nalo P]

Rexon,

Whatever West Cameroon may have been, the fact is that as we speak, corruption is a generalized malaise in Anglophone and Francophone Cameroon. We can advance whatever reason we want for this situation but that IS the situation. So spare us the drivel about SDOs and Gendarmes.

BTW, the problem is not that there was no corruption in West Cameroon. Far from it! the Powercam and Cameroon Bank scandals of the late sixties prove this point. The problem is that back then, there were mechanisms to restrain and punish corrupt individuals who exist in every society. One more time LA Republique does not have the monopoly of corruption and vice neither does West Cameroon have a monopoly of Virtue.

[Ma Mary]

Corruption exists in every society, but the historical record shows that the Southern Cameroons or West Cameroon used independent judicial mechanisms for dealing with corruption. The commissions that investigated and punished corruption were truly independent of the executive. That is not true of la Republique du Cameroon.

Corruption was also something of shame. Open bribery was not possible, because it was a thing of shame and dishonour. We also had sting operations to trap habitual bribe takers. La Republique refuses to use sting operations to catch corrupt people. The difference between our approaches to this societal ill was like night and day.

[Fritzane Kiki HK]

Individuals are the engine that makes a healthy local economy grow. It is individuals, working independently and collectively, that form the fabric of community life. It is the skills, abilities, and experience of these individuals that can be mobilized to develop a vibrant local economy.This is not the case in Cameroon.Little doubt why they can't follow a favorable policy that will lead us to a healthy economic growth.

Economic growth is the ultimate objective of much public policy, and that in turn because it is economic growth which gives us choices, the ability to enjoy better quality housing, the ability to have better health care, the option of choosing more leisure, the ability to invest in environmentally-friendly production techniques, the freedom to choose between an array of options denied to those where economic growth is low or non-existent.

But in Cameroon there is no good environment for investing your capital.The corrupt La Republique stooges will only embezzle state funds into their private coffers and levy high taxes to small and medium size enterprises.

So today if we want to discuss the issue of economic growth in the broadest terms we should aim at providing a framework for thinking about what is a reasonable expectation for Cameroon's growth, to identify some of the factors that will determine whether we are able to achieve that potential, and to discuss the linkage between growth and other investment interest.

Sick and tired of being sick and tired of the state of affairs lol....I reserve my comments....

Fritzane Kiki
Hong Kong

[Funwi Joshua]

I wish to chip in something on this issue coz it has to do with development; a domain in which I intend to professionalise, from the direction of Resource Management.
We all know that Cameroon is sick and concerned Cameroonians spare their time to carry out findings and make contributions to the different topics raised in these columns so that the policy makers, in the course of reading through (if at all they do), may pick vital points to constitute their decisions for the development and advancement of our fatherland.
I have lived and even worked with Cameroonians of Francophone and Anglophone origins, both back home and here abroad. I will like to remark without any bias that the francophone Cameroonian is a carefree somebody who doesn't give a damn to the consequences of his actions, so long as he achieves his personal interest(s). The Anglophone Cameroonian copied this only later, when he discovered that his continuous "goody goody", was not appreciated and he seemed to be the loser all the time.
My father used to tell me stories of the West Cameroonian Police of old and discipline as well as respect within administrative ranks. A set up where law breakers were subjected to punishment proportional to their crimes. These, really, were nice stories to listen to and today, it all seems to be a different country in its entirety. The poor are bound to get poorer coz the little they have is taken away in the form of bribe (think of our ENS annexe graduates) and they end up getting just a fraction of what they deserve as salary ; the poor are the last to be served in all circumstances.
Has anyone ever gone to pay just the simple electricity bills? It is normal to stand in the cue and someone packs his car, by-passes the cue, goes in and pays his bill and those of other family members of his, while u have been standing under the sun for countless hours, only to approach the cashier and the window is shot with a notice indicating closed.
Compare this to a situation in the Belgian Embassy in Yaounde, where a 3 star uniform officer, manipulates at the gate and finds himself inside, moves up to the window and the receptionist tells him: " Sir, I'm sorry, I don't know u coz u didn't book an appointment besides not being on the line".
When shall we learn to serve everyone equally, irrespective of position or money? How do we feel, when we go for a service here in the West and the same service back home? One can be done in a few mnutes and the other takes weeks, if not months. My Belgian Professor does not need to be in a suit and drive a big car, all that count are his publications and works; you may not necessarily call him professor even.
In the University of Buea, a professor sent out a student for addressing him, "Sir", instead of professor. Cameroonian professors don't publish nor do any research, they go to tell lies on politcal campaign podiums, abandoning the students to the mery of God and in turn, they are rewarded administrative and political positions. Government offices open at 10:30am instead of 8:oo am, right in the nation's capital (I faced this when I went to buy fiscal stamps at the treasury near the Univ of Y'de 1). People are on seat for 3 hours instead of 8 hours per day and they go away with it. No one serves you as though he/she loves the job; it's always with a frown and some harsh words as cadeau, call it a present, if u want. Public offices have no data bank, no records/statistics of their activities, book-keeping is still via the analogue system despite the fact that computers are donnated to ministries almost on a daily basis.
Where then is the development going to come from? From the laxed and carefree service providers with no one to check, let alone talk of imposing sanctions?
I end my contribution with one question: Can federalism (call it decentralisation) be a means to achieve effective control of our resources and enhance development? Political analysts, pls, help me out here!

[Funwi Joshua]

I wish to chip in something on this issue coz it has to do with development; a domain in which I intend to professionalise, from the direction of Resource Management.
We all know that Cameroon is sick and concerned Cameroonians spare their time to carry out findings and make contributions to the different topics raised in these columns so that the policy makers, in the course of reading through (if at all they do), may pick vital points to constitute their decisions for the development and advancement of our fatherland.
I have lived and even worked with Cameroonians of Francophone and Anglophone origins, both back home and here abroad. I will like to remark without any bias that the francophone Cameroonian is a carefree somebody who doesn't give a damn to the consequences of his actions, so long as he achieves his personal interest(s). The Anglophone Cameroonian copied this only later, when he discovered that his continuous "goody goody", was not appreciated and he seemed to be the loser all the time.
My father used to tell me stories of the West Cameroonian Police of old and discipline as well as respect within administrative ranks. A set up where law breakers were subjected to punishment proportional to their crimes. These, really, were nice stories to listen to and today, it all seems to be a different country in its entirety. The poor are bound to get poorer coz the little they have is taken away in the form of bribe (think of our ENS annexe graduates) and they end up getting just a fraction of what they deserve as salary ; the poor are the last to be served in all circumstances.
Has anyone ever gone to pay just the simple electricity bills? It is normal to stand in the cue and someone packs his car, by-passes the cue, goes in and pays his bill and those of other family members of his, while u have been standing under the sun for countless hours, only to approach the cashier and the window is shot with a notice indicating closed.
Compare this to a situation in the Belgian Embassy in Yaounde, where a 3 star uniform officer, manipulates at the gate and finds himself inside, moves up to the window and the receptionist tells him: " Sir, I'm sorry, I don't know u coz u didn't book an appointment besides not being on the line".
When shall we learn to serve everyone equally, irrespective of position or money? How do we feel, when we go for a service here in the West and the same service back home? One can be done in a few mnutes and the other takes weeks, if not months. My Belgian Professor does not need to be in a suit and drive a big car, all that count are his publications and works; you may not necessarily call him professor even.
In the University of Buea, a professor sent out a student for addressing him, "Sir", instead of professor. Cameroonian professors don't publish nor do any research, they go to tell lies on politcal campaign podiums, abandoning the students to the mery of God and in turn, they are rewarded administrative and political positions. Government offices open at 10:30am instead of 8:oo am, right in the nation's capital (I faced this when I went to buy fiscal stamps at the treasury near the Univ of Y'de 1). People are on seat for 3 hours instead of 8 hours per day and they go away with it. No one serves you as though he/she loves the job; it's always with a frown and some harsh words as cadeau, call it a present, if u want. Public offices have no data bank, no records/statistics of their activities, book-keeping is still via the analogue system despite the fact that computers are donnated to ministries almost on a daily basis.
Where then is the development going to come from? From the laxed and carefree service providers with no one to check, let alone talk of imposing sanctions?
I end my contribution with one question: Can federalism (call it decentralisation) be a means to achieve effective control of our resources and enhance development? Political analysts, pls, help me out here!

[rexon]

Hello Joshua,
I wish to answer your last question posted. I think the only way to end the current trend of affairs happening in the southern cameroons is full independence. constitutionally, we have been colonised illegally by la republique francaise du cameroun. We need our full independence to manage our affairs independently, so i think that is what matters to us most. So i will advise you to throw your efforts towards appraising the work of the current SCNC Leadership in building a sound future for your children.

[Ma Mary]

Joshua - Decentralization as they call it will not work. These frogs will not relinquish control as long as there are resources to be milked, people to be exploited. The only thing to do is a long hot shower, with a strong kucha and disinfectant soap to remove all traces of frog. And don't forget to brush your teeth as well.

[Roland Ngong]

This reminds me of some incident this year - 2006 - when I raised the issue of red tape with a distinguished civil servant in Cameroon. I was told with a straight face (no blinking!!)that it takes 300 days on the average to secure a permit to open a bakery in Egypt (UN Human Development Report 2005).It sometimes would actually take two years.
I did not believe this until I read the UN Report. Can you really believe it - just to open a bakery (to bake bread not to produce a weapon of mass destruction)? God forbid!!
Why is anyone complaining? Cameroon is not doing that bad - and I am not trying to be or to sound cynical.

[julius]

Here is another reason why Cameroon is poor.
I found this article in the Washingtonpost about french corruption in Africa, although the country written about is Congo, you can easily subsitute Congo for Cameroon. If anyone is interested, here is a link to the article. http://www.washingtonpost.com/wp-dyn/content/article/2006/03/12/AR2006031201109.html

Julius

[Funwi Joshua]

May I start by making a spelling correction that I committed last time: "queue, not cue".
Commenting on the publication by the Washington Post, I will like to know if the World Bank and the IMF consist of French staff only. If not, what was the opinion of the other staff members from the other Western Nations on the cancellation of Congo Braza's debts vis à vis Congo's position to that of the other heaily indebted countries?
This is an indication that the West is not playing any fair game on Africa. I, as an individual, am not convinced that any Western Country can grant help to Africa with no strings attached. If the so called aid were genuine, the West would not only encourage production in the primary sector but would go ahead to train us on processing our primary products into finished goods. This, they haven't done coz they want to maintain a sure market for their own products. I see the so called aid as a weapon to help the big nations acquire what they spot as useful to them in the developing countries. Where do our corrupt leaders bank all their booties? Recently, gunmen made away with the sum of 50 million pounds from a financial institution in the UK and there was a comment over the BBC that the money can only be hidden in a developping country where banks accept money without questioning the source. Do the Western banks question the sources of the money they get from their African customers. If so, how many of these Cameroonian ministers and directors have ever been reported and the money put back into the Cameroonian treasury? Is this money not in foreign accounts? Why did the French bank, in the Washington Post, not question all these illegal deals from Congo Braza's oil sales?
We need more processing industries in Cameroon and a more computerised system of management. We are tired of paying high charges on simple goods whose origin, if traced, points back to Cameroon. An inventory of our natural resources does not even permit us to be seeking foreign aid. If our leaders are unwilling to adopt a management strategy that exposes embezzlers to punitive measures, simply because they also have skeletons in their cupboards, then it is high time we began to think of how to approach this monster of human induced poverty. It is a shame that we cannot even assign a value to what we have; sell a tea estate and the buyer takes two weeks to recover the cost!

[Funwi Joshua]

Roland, May I ask u this question. While in school, do u compete with the bright ones or with the dull ones? I think we are advocating progress and not regression.