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Bureaucracy in Kenya and Africa?

by Visitor


Can you explain something to me about the problem of bureacracy in Kenya and Africa as a whole?

Many thanks for your time.

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Bureaucracy in Kenya and Africa?

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Feb 16, 2010
Bureaucracy in Africa
by: Arjen (webmaster)

Bureaucracy is certainly a problem in Africa (and in Kenya too, although not any stronger than elsewhere), but you have to take a nuanced look at it.

You have a good kind of bureaucracy and a bad kind. The good kind makes sure a country is organized, people can run their own (business) affairs smoothly, people get what they have payed for and can enforce business deals, etc. A good bureaucracy supports the productive activities of the citizens. One of my favorite economists, Hernando de Soto, has shown (in his book "The mystery of Capital") that because many developing countries have no adequate records of ownership of houses, lands, stocks and other properties, they have less "capital". Think about it: in the United States, the private homes of entrepeneurs is the most used underlying security for getting small business loans. Because of the government-run public records of home ownership, banks exactly know who owns which house, and the courts can easily enforce contracts because everything is on paper. That's why banks are not afraid to lend out money to entrepeneurs. That's also why in North America and Europe, people who don't know each other can still easily do business - they know they can always enforce deals and payments because everything is on paper and courts can easily enforce this. They don't necessarily have to have a high level of personal trust in other persons.

In Africa and other developing countries, there are few records of ownership, capital cannot be allocated so easily to those who can use it productively, business is limited because it can only happen if people know and trust each other. So Kenya and other African countries have too little of the good kind of bureaucracy.

On the other hand, you have the bad kind of bureaucracy. This means unnecessary limitations on trade, unpracticle and complicated rules that nobody understands (including the officials), government officials who withhold permits just because they don't like the applicant or because he has not payed a bribe, etc.

Hernando de Soto has made extensive research how much time it costs in a range of developing countries (in South America, Africa and Asia) to have a house officially registered in your name, or to get all the permits that you officially need to start your own business, etc. It appeared it's almost impossible to play by the book. You literally need 5 years to start your own business if you do it officially. That's why many people do it UNofficially. But then you get a black economy and you need to rely on private methods to enforce deals you've made, or you have to pay bribes to get things done.

The bad kind of bureaucracy is not meant to ensure average citizens can run their affairs smoothly, but it's used by government officials for their own ends. They see owning a business as a privilige, not a right that everybody has. And they can withhold that privilige unless you are of the right clan, pay them a bribe, etc.

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