In Benin, top businesspeople not only capture the economy but also the executive, and possibly legislative power. This book develops a comprehensive analysis aimed at identifying and reducing the institutional constraints that impede Benins rapid, sustainable, and inclusive development. The research reveals a chain of causality between four main categories of institutional weaknesses in Benin, namely corruption, inefficiencies in governance, opacity in public decision-making, and excessive informality in the Beninese economy. These institutional weaknesses are traced back to proximate and ultimate causes. The immediate causes include political instability, elite capture of key state functions, weakness of the state, and the possibility of easy but illegal rents. In turn, these causes are linked to deep-rooted underlying factors such as the nature of the political game, essentially neo-patrimonialism with multiple economic and/or political Big Men, but also geographical or ethnic factors. We elaborate on policy reforms aiming at overcoming or circumventing these institutional problems.

It is widely accepted that countries’ institutions play a major role in their economic development. Yet, the way they affect, and are affected by, development, and how to reform them are still poorly understood. In this companion volume, State and Business in Tanzania diagnoses the main weaknesses, root causes, and developmental consequences of Tanzania’s institutions, and shows that the uncertainty surrounding its development paths and its difficulty in truly ‘taking off’ are related to institutional challenges. Based on a thorough account of the economic, social, and political development of the country, this diagnostic offers evidence on the quality of its institutions and a detailed analysis of critical institution- and development-sensitive areas among which state-business relations rank high, even though the institutional features of land management, civil service and the power sector are shown to be also of prime importance. This title is also available as Open Access.

The power sector has long been a major obstacle to development in Tanzania. This chapter reviews the reasons that make it so difficult to move from an institutional industry equilibrium that does not bring about desired outcomes in terms of power supply (investment, system expansion, and technical performance) to one that does. The Tanzanian power sector is largely organised as a vertically integrated state-owned monopoly. This model has largely failed across the region for decades. The (difficult) introduction of private power providers and the establishment of an independent regulator have not changed the situation substantially in Tanzania. Political interference has been a constant feature of Tanzania’s power sector. Through pressure on tariffs, this is responsible for its precarious financing. Several high-level corruption scandals involving top officials related to deals made with private providers have turned public opinion against greater reliance on privatisation. As reforming the power sector is hindered by political economy factors, Antonio Estache suggests in his discussion that more reliance should be put on the decentralisation that is being made possible by renewable energy technology.

It is widely accepted that countries’ institutions play a major role in their economic development. Yet, the way they affect, and are affected by, development, and how to reform them are still poorly understood. In this companion volume, State and Business in Tanzania diagnoses the main weaknesses, root causes, and developmental consequences of Tanzania’s institutions, and shows that the uncertainty surrounding its development paths and its difficulty in truly ‘taking off’ are related to institutional challenges. Based on a thorough account of the economic, social, and political development of the country, this diagnostic offers evidence on the quality of its institutions and a detailed analysis of critical institution- and development-sensitive areas among which state-business relations rank high, even though the institutional features of land management, civil service and the power sector are shown to be also of prime importance. This title is also available as Open Access.

In Benin, top businesspeople not only capture the economy but also the executive, and possibly legislative power. This book develops a comprehensive analysis aimed at identifying and reducing the institutional constraints that impede Benins rapid, sustainable, and inclusive development. The research reveals a chain of causality between four main categories of institutional weaknesses in Benin, namely corruption, inefficiencies in governance, opacity in public decision-making, and excessive informality in the Beninese economy. These institutional weaknesses are traced back to proximate and ultimate causes. The immediate causes include political instability, elite capture of key state functions, weakness of the state, and the possibility of easy but illegal rents. In turn, these causes are linked to deep-rooted underlying factors such as the nature of the political game, essentially neo-patrimonialism with multiple economic and/or political Big Men, but also geographical or ethnic factors. We elaborate on policy reforms aiming at overcoming or circumventing these institutional problems.

In Benin, top businesspeople not only capture the economy but also the executive, and possibly legislative power. This book develops a comprehensive analysis aimed at identifying and reducing the institutional constraints that impede Benins rapid, sustainable, and inclusive development. The research reveals a chain of causality between four main categories of institutional weaknesses in Benin, namely corruption, inefficiencies in governance, opacity in public decision-making, and excessive informality in the Beninese economy. These institutional weaknesses are traced back to proximate and ultimate causes. The immediate causes include political instability, elite capture of key state functions, weakness of the state, and the possibility of easy but illegal rents. In turn, these causes are linked to deep-rooted underlying factors such as the nature of the political game, essentially neo-patrimonialism with multiple economic and/or political Big Men, but also geographical or ethnic factors. We elaborate on policy reforms aiming at overcoming or circumventing these institutional problems.

It is widely accepted that countries’ institutions play a major role in their economic development. Yet, the way they affect, and are affected by, development, and how to reform them are still poorly understood. In this companion volume, State and Business in Tanzania diagnoses the main weaknesses, root causes, and developmental consequences of Tanzania’s institutions, and shows that the uncertainty surrounding its development paths and its difficulty in truly ‘taking off’ are related to institutional challenges. Based on a thorough account of the economic, social, and political development of the country, this diagnostic offers evidence on the quality of its institutions and a detailed analysis of critical institution- and development-sensitive areas among which state-business relations rank high, even though the institutional features of land management, civil service and the power sector are shown to be also of prime importance. This title is also available as Open Access.

This chapter stresses several important features related to the society and polity of Benin.The country has a long history of regional trade facilitated by direct access to the sea, which has fostered entrepreneurial talent. Also, there is considerable ethnic fragmentation and multiple factions compete and may enter into shifting alliances. Consequently, political power does not belong to one group at the definite expense of the other groups. However, the fact that the contending factions tend to take a ‘winner-takes-all’ approach to power has the effect of raising the stakes of elections and promoting particularised privileges instead of policies aimed at the country’s long-term economic development. In addition, the political system is dominated by Big Men or oligarchs who have accumulated big fortunes and tend to see state power as an instrument to advance their economic interests. Because they succeed each other rather frequently in power, great political instability is created that further undermines long-term national development.

We review evidence on the institutional weaknesses underlying economic development problems in Benin, analysing various sources of information including cross-country databases and an original opinion survey among decision makers in Benin. Three pressing institutional issues are found. First, the most serious impediment is corruption, which is seen as responsible for several key dysfunctions in almost all sectors: the political and electoral systems (vote buying), the relationship between business and the public administration (rigged procurement) or the judiciary system, land rights, or complicity between politicians and the media. Second, weak public management deteriorates the quality and the delivery of public services. It is most characterised by opacity of government policy-making to the public, ineffective regulation of the power sector, and a complex tax administration grossly inefficient in tax collection. Third, the level of informality is much higher in Benin than in the average sub-Saharan African country. This generates several economic costs including tax revenue loss, job precariousness, unfair competition for formal firms, and lack of control over the economy.

The final chapter first aims to synthesise what has been learned from the previous chapters, emphasising the institutional challenges that have been identified there and identifying the main common factors behind those challenges, as well as the policies and reforms most able to weaken their effects. Most of the identified institutional challenges in theTanzanian economy result from a small number of basic institutional weaknesses, which logically form the core of our final diagnostic. In turn, these weaknesses are shown to be the symptoms of dysfunctional institutions that the diagnostic seeks to identify by delving into the proximate causes of identified weaknesses, and then by investigating the deep political economy factors likely to prevent corrective action. Even though political economy considerations rarely lead to consensual policy reform recommendations, they may point to general principles that may guide the reflection of policy makers, political actors, and civil society when thinking of potential reforms. The concluding pages of the chapter insist that transparency and accountabilty are two of these principles.

This chapter provides a description and an analysis of the relationship between government and the business sector, mostly large firms, a key aspect of Tanzanian development. The situation observed today, with a lack of a well-articulated industrial policy and the executives volatile attitude with respect to market rules and the role of big business, may be seen as strongly path-dependent in a country that went in a few decades from a colonial market economy to a socialist nationalized economy and then transitioned back to the market amid great disorder. The chapter emphasises several key challenges in the regulation of the business sector. The most important of these is the strong link between businesspeople and factions within the dominant political party, whose interests may diverge from those of the executive. The chapter elaborates on the need for better central control by the government to counteract this situation, while drawing the lessons of a move in that direction by the previous president. In her discussion of the chapter, Hazel Gray underscores the downsides of too much centralisation while emphasising the regional dimensions of Asian-led firms’ strategies.

In Benin, top businesspeople not only capture the economy but also the executive, and possibly legislative power. This book develops a comprehensive analysis aimed at identifying and reducing the institutional constraints that impede Benins rapid, sustainable, and inclusive development. The research reveals a chain of causality between four main categories of institutional weaknesses in Benin, namely corruption, inefficiencies in governance, opacity in public decision-making, and excessive informality in the Beninese economy. These institutional weaknesses are traced back to proximate and ultimate causes. The immediate causes include political instability, elite capture of key state functions, weakness of the state, and the possibility of easy but illegal rents. In turn, these causes are linked to deep-rooted underlying factors such as the nature of the political game, essentially neo-patrimonialism with multiple economic and/or political Big Men, but also geographical or ethnic factors. We elaborate on policy reforms aiming at overcoming or circumventing these institutional problems.

It is widely accepted that countries’ institutions play a major role in their economic development. Yet, the way they affect, and are affected by, development, and how to reform them are still poorly understood. In this companion volume, State and Business in Tanzania diagnoses the main weaknesses, root causes, and developmental consequences of Tanzania’s institutions, and shows that the uncertainty surrounding its development paths and its difficulty in truly ‘taking off’ are related to institutional challenges. Based on a thorough account of the economic, social, and political development of the country, this diagnostic offers evidence on the quality of its institutions and a detailed analysis of critical institution- and development-sensitive areas among which state-business relations rank high, even though the institutional features of land management, civil service and the power sector are shown to be also of prime importance. This title is also available as Open Access.