2. 2
According to Collier…
Ceiling to growth rate = 10% (no matter the govt.)
Terrible govt. CAN destroy economy
Zimbabwe experienced econ collapse due to inflation created
by President Mugabe
“Good governance and policy can help a country to realize
opportunities, but can’t generate them where there are
none”
What This Means…say you have two equally bad governments
Bangladesh = lack resources export labor-intensive
manufacturing and services
Chad = resource-rich landlocked
In which country does a “bad government” have a worse
effect?
3. 3
CHAD!
Why?
Because it is LANDLOCKED, meaning
that it cannot export easily…the
government would have to be ACTIVE
to help aid the economy, which in
the case of “bad” government, it is not.
Bangladesh is able to have a sufficient
economy despite their bad government
because they can export easily;
the government doesn’t have
to do much to foster trade.
4. 4
Believe it or not…
Bad governance and policy don’t need to be a trap—
countries can LEARN from their MISTAKES:
China
India
5. 5
So why does bad governance still
persist?
Not everyone looses from it
Leaders of poorest countries are some of super rich (want
to keep citizens poor & uninformed)
Shortage of people with requisite knowledge for reform
Lack of popular enthusiasm for reform because it has
been given a bad name (“conditionality”)
6. 6
Case Study: Country Policy and
Institutional Assessment (by World
Bank)
Measures the pace of reform and who “wins”
There is a certain “cut-off” and those below it are
considered “failing states”
Fail citizens (stagnating population)
Failing to growdangerous living
Have to be below the cut-off for at least 4 years to be
considered “failing”
7. 7
Do failing states turn around on
their own accord?
7
•Turnarounds are rare because reformers are often
suppressed or persecuted for their actions.
•Two conditions for a turnaround:
1.) Large improvement
2.) Sustainability (for more than 5 years.)
8. 8
Preconditions: with failing states, a country
was more likely to achieve sustained
turnaround when…
Larger population
Greater proportion of population has secondary
education
can work out reform strategies
Recently emerged from civil war – relatively easy to get
change
8
9. 9
Achieve sustained turnaround when…
(continued)
NOT NECESSARY to a have democracy or political rights
Probability of sustained turnaround = 1.6%
most countries remain as failing states
Mathematical expectation- (average length of time it takes
to get out of a failing state) = 59 years
9
10. 9
Incipient Turnarounds: the
beginning
Progresses a sustained turnaround if:
Larger population
Greater proportion of population is with an education
Less likely to progress to sustained turnaround if…
Leader in office for long time
Favorable shift in trade
Recently emerged from civil war
Post conflict situation reforms will fail because it’s harder to
sustain any continuous course of change
Post conflict situations = failing states, but change is relatively
easy
*Post conflict situations act as major opportunities
9
11. 10
The Costs of Neglect: Why it
matters for G8 Policy
Cost of failing state is built up year by year
Growth rate of failing state and states around it is
sharply reduced
$100 billion (lower bound estimate of what sustained
turnaround is worth for a failing state over its entire
history of failure)
10
12. 11
Top Ten Corrupt
Countries
11
10.) Equatorial Guinea
9.) Uzbekistan
8.) Bangladesh
7.) Chad
6.) Democratic Republic of Congo
5.) Sudan
4.) Guinea
3.) Iraq
2.) Myanmar
1.) Haiti
13. 11
Pakistan
11
Pakistan is currently suffering from the affects of bad governance; one of the major reasons is the aftermath of the
furious floods in the area. One of the biggest reasons for the country’s consistent governance disasters is the absence
of strong institutions that can prevent or at least limit the circumstances and consequences of corruption. The
government did not use the aid, given by other countries and organizations, to the areas suffering from natural
disasters. The government disaster mismanagement is leading the country into even larger issues. 300million dollars
in aid was given and has been diverted to other projects, for example the Pakistani Prime Minister gave a large amount
of the money to his home city, Multan. This has become such a huge issue that the government will need to find a way
to rework all its development and non-development budgetary expenditure, and must think of Pakistan as a whole if
they ever want to recover.
14. 11
Kenya
11
The area of Kenya is suffering the effects of bad governance and has been engulfed in violence and disorder as
a result of disputed electoral results declaration. Hundreds of people have been killed, millions worth of
properties destroyed and thousands of people displaced from home. They are blaming this on 5 failures:
Manipulation of electoral process to remain in power
Electoral Commission bowing to pressures of leader and failure to uphold independence
Failure of police and other security to keep law and order
Failure of courts of law to protect independence and offer resolution of disputes
Failure of rich donor countries and United Nations to take practical measures to reign in dictatorships.
15. 11
Nigeria
11
Government corruption in Nigeria has led to the deprivation of human rights in the country. According to the
Human Rights Watch, state officials in Rivers, Nigeria have stolen money from the people which has taken
away from the health and education of the Nigerians. Corruption in this country began when the country began
making large sums of money from the sale of oil which led to large amounts of greed among government
officials. Some of the main causes of corruption in Nigeria include weak government institutions, acceptance of
corruption in by the people, lack of transparency in public service, and poverty. Corruption in Nigeria is very
hard to crack because of the greed and selfishness within the government, the secrecy of the government, and
the corrupt bribery tactics within the government.
