Arnold Kling  

How to Achieve Backwardness

The Philosophy Major... Dear Prudence...

Craig J. Richardson writes,

But while many problems cited by the IMF and others are important, they do not provide a full explanation for how a country can lose fifty years of economic progress in only five years. In fact, Zimbabwe’s collapse can be traced to a single policy: its fast track land reform program, under which the Mugabe government, beginning in 2000, seized thousands of white-owned commercial farms, leading to a sharp drop in agricultural output. The other “inappropriate” policies adopted by the Mugabe government exacerbated the damage, but they were not the underlying cause.

...As Christopher Dell, U.S. ambassador to Zimbabwe, has noted, “Nothing rattles investor confidence more than the prospect of expropriation. The [February 2000] constitutional amendment striking down the right to redress for victims of land expropriation sent a shockwave through the community of investors who keep an eye on the climate in Zimbabwe.” Between 1998 and 2001, foreign direct investment dropped by 99 percent. In addition, the World Bank risk premium on investment in Zimbabwe jumped from 3.4 percent in 2000 to 153.2 percent by 2004.

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COMMENTS (9 to date)
Chris writes:

I'm certain that the land grab didn't help things, but, unless I am missing something, I don't see the correlation.

He cites at fall of investment from 98-01 yet the land grab didn't take place until 2000. So what initiated the decline in 98 and 99? From what I've Googled, it looks like land redistribution didn't even become discussed until 99.

John writes:

There may have been a drop in investor confidence that early, but the full-scale destruction of the Zimbabwe economy has happened since the land-grab.

Arnold Kling writes:

chris, maybe you should follow the link to the article and read it. they address the timing issue

Chris writes:

No fair making me think for myself.

John S Bolton writes:

To each generation of our contemporaries, it has been given, an example or two, of the realization of their dishonest or depraved ideals. Someone had to experiment with communism, with Nazism, with eco-egalitarianism in Cambodia, and with anticaucasianism in Zimbabwe. They said fast-track land reform coincided with the fast downslide of production; but the lower-track land reform had already been underway, and doing damage for 20 years prior.
Major moves to the right are associated with publicity of leftist outrages of this national scale; Germany and the USSR may have instigated the 1950's, Cambodia the rightward trend of 1979 on, and Zimbabwe may have an effect too.

Robert Schwartz writes:

It is impressive how fast rulers can wreck a country if they put their minds to it.

liberty writes:

This is why it bothers me when public figures pretend that we do not understand growth. Growth, as Adam Smith understood hundreds of years ago, is due to specialization, trade and protection of private property rights. Leaving the market free, protecting rights of life, liberty and property, people will specialize and trade and the economy will grow. Yet, in order to make socialism more palatable, many pretend that we do not know this still:

Wild Pegasus writes:

To whom does the land rightfully belong? If we're talking about white farmers living on land that was stolen from these blacks (or their recent ancestors), redistribution is a just solution. Whether it is the optimal just solution is a question of economics, and monetary damages might be more appropriate. But you can't justify land theft - if it's occurred - by pointing to high output.

- Josh

Craig J Richardson writes:

Regarding Wild Pegasus' comment,this white owned commercial land was not stolen- more than 80 percent had been purchased through the commercial real estate market, and less than 5 percent of the land owners were related to the original British colonizers from the 1890s. The government issued certificates of 'no interest' to these landowners- which promised this land would not be taken. Moreover, the history of land theft goes back further than the British- the Ndebele and Shona tribes also fought and took land from each other. In any event, the "cure" for the illness may end up killing the patient.

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