fbpx
01 / 05
Botswana's Remarkable Success Is Due to Markets

Blog Post | Economic Growth

Botswana's Remarkable Success Is Due to Markets

Botswana's policies of economic and political freedom can and should be embraced by other African nations looking to improve the lot of ordinary citizens.

This originally appeared in CapX. The original can be found here

Classical liberalism, as the economist Deirdre McCloskey argued in her trilogy The Bourgeois Era, was chiefly responsible for the Great Enrichment in Western Europe and North America. However its main tenets – including limited government, equality before the law, free trade and fiscal probity – are not the exclusive preserve of the West. Just look at the rise of Hong Kong.

Another success story that speaks to the universal applicability and adaptability of classical liberal principles is Botswana. While by no means perfect, Botswana has outperformed the rest of Africa economically and, to some extent, politically. Other African nations would do well to learn from its experience.

Let’s start by looking at Botswana’s economic performance. In 1966, when the Bechuanaland Protectorate gained independence from Britain, GDP per capita was just amounted to $518 a year. By 2018, it stood at $8,031 – an increase of 1,450%. Over the same period, the global average rose 136%, from $4,625 to $10,894. Put differently, Botswana’s economy grew 10 times faster than the rest of the world. The country’s economy is even more impressive compared to its immediate neighbors. Between 1966 and 2018, South Africa’s GDP per capita rose 32%, from $5,631 to $7,434, and Zimbabwe’s just 35%, from $981 to a meager $1,322.

Botswana’s life expectancy, which is a good proxy for the overall standard of living, also stands up well, rising from 52 years in 1966 to 69.3 years in 2018. This means the gap in life expectancy between Botswana and the world average has shrunk – albeit by less than a year (from 4 years to 3.3 years). The same cannot be said of South Africa and Zimbabwe, whose life expectancy gap to the global average grew in that time, from 5.3 to 8.7 years for the former, and from less than one year to a whopping 11.4 in the latter.

Why did Botswana succeed, where her neighbors have failed? The dominant theory, proposed by the likes of Professor Scott Beaulier, is that the colonial imprint in Bechuanaland (1885-1966) was, on account of the territory’s poverty and geopolitical insignificance, very light. Indigenous institutions, such as tribal assemblies and traditional norms of conduct, were permitted to continue unmolested. That meant that when Botswana became independent, traditional structures provided the backbone of the new government. In many other parts of Africa, in contrast, governmental structures imported from the West (or imposed by the withdrawing colonial powers) rubbed against tradition to deleterious effect.

Beaulier acknowledges other salutary aspects of the Batswana (the main ethnic group that accounts for 90% of the population) society. One was its “liberal cosmopolitanism”, which welcomed immigrants and refugees from other African countries who, in turn, contributed to economic innovation and growth. It helped, I suspect, that Botswana was a poor and sparsely populated country, and immigrants were not seen as a threat – something that would change over time, as immigration from surrounding countries, especially Zimbabwe, increased from a trickle to a flood. Beaulier does not seem to think that the ethnic homogeneity of Botswana played much of a role in the country’s success, though ethnic diversity certainly played a role in the collapse of a number of African states over the last 80 years.

Good leadership also played a role. Between 1966 and 1980, Botswana was run by Seretse Khama, a tribal chief who managed to obtain education in South Africa without becoming resentful of whites (he would marry a white woman later in his life) and lived in 1950s Britain without becoming a socialist. Defenseless Botswana (the country would not have an army until 1977) was also surrounded by fundamentally anti-communist regimes – South Africa in the south, South Africa’s mandate territory of South West Africa (later Namibia) in the west and Rhodesia in the east. During the 1960s and the early 1970s, when South African and Rhodesian powers were at their height, socialism in Botswana would not have been tolerated.

All in all, for much of its independence Botswana was, according to the Economic Freedom of the World report, one of Africa’s most economically free countries. While many other nations embraced some form of socialism, Botswana was, broadly speaking, capitalist. Its fruitful relationship with De Beers, a giant South African mining corporation, is worth noting. Botswana’s world-famous diamonds were discovered in the late 1960s and diamond extraction began in the early 1970s. To this day, the profits from the enterprise are shared equally between the company and the Botswana government. Why did Botswana not nationalize its mining industry, as was the case in much of the rest of Africa? Was it out of commitment to freedom or out of fear of the South African hegemon? Perhaps a bit of both.

Today Botswana is not only prosperous but also relatively free. According to the Human Freedom Index published by the Cato Institute, the Batswana enjoy the highest degree of freedom on the African continent (that is, if we discount two African island nations, Mauritius and Cape Verde). The country’s success was, without doubt, highly contingent. But that does not mean Botswana’s experience is irrelevant. Its policies of economic and political freedom can and should be embraced by other African nations who are serious about improving the lot of ordinary citizens.

Wall Street Journal | Housing

California Ditches Environmental Law to Tackle Housing Crisis

“California lawmakers on Monday night rolled back one of the most stringent environmental laws in the country, after Gov. Gavin Newsom muscled through the effort in a dramatic move to combat the state’s affordability crisis.

The Democratic governor—widely viewed as a 2028 presidential contender—made passage of two bills addressing an acute housing shortage a condition of his signing the 2025-2026 budget. A cornerstone of the legislation reins in the California Environmental Quality Act, which for more than a half-century has been used by opponents to block almost any kind of development project…

The California Environmental Quality Act was signed into law in 1970 by then-Gov. Ronald Reagan, at a time when Republicans were at the forefront of the nation’s burgeoning green movement. President Richard Nixon also signed groundbreaking protections, including the Endangered Species Act.

CEQA, as it is known, requires state and local agencies to review environmental impacts of planned projects and to take action to avoid or lower any negative effects. Opponents of projects have used the law to delay them by years.”

From Wall Street Journal.

Axios | Infrastructure

NC Bill to Eliminate Parking Minimums Passes House

“The North Carolina House passed a bill unanimously Wednesday [6/26/25] that would block local governments from forcing developers to build parking.

Why it matters: An issue that has been controversial in Charlotte received bipartisan support in Raleigh.

The big picture: With a starting price tag of about $5,000 per space, parking mandates add to the rising costs of new construction. Those expenses are then passed on to residents and businesses as higher rent.”

From Axios.

New York Times | Energy Production

World Bank Ends Its Ban on Funding Nuclear Power Projects

“The world’s largest and most influential development bank said on Wednesday it would lift its longstanding ban on funding nuclear power projects.

The decision by the board of the World Bank could have profound implications for the ability of developing countries to industrialize without burning planet-warming fuels such as coal and oil.

The ban has been formally in place since 2013, but the last time the bank funded a nuclear power project was 1959 in Italy. In the decades since, a few of the bank’s major funders, particularly Germany, have opposed its involvement in nuclear energy, on the grounds that the risk of catastrophic accidents in poor countries with less expertise in nuclear technology was unacceptably high.

The bank’s policy shift, described in an email to employees late on Wednesday, comes as nuclear power is experiencing a global surge in support.

Casting nuclear power as an essential replacement for fossil fuels, more than 20 countries — including the United States, Canada, France and Ghana — signed a pledge to triple nuclear power by 2050 at the United Nations’ flagship climate conference two years ago.”

From New York Times.

The Verge | Food Production

Lab-Grown Salmon Gets FDA Approval

“The FDA has issued its first ever approval on a safety consultation for lab-grown fish. That makes Wildtype only the fourth company to get approval from the regulator to sell cell-cultivated animal products..

Wildtype salmon is now on the menu at Haitian restaurant Kann in Portland, Oregon, and the company has opened a waitlist for the next five restaurants to stock the fish. It joins Upside Foods and Good Meat, two companies with permission to sell cultivated chicken in the US, while Mission Barns has been cleared by the FDA but is awaiting USDA approval for its cultivated pork fat.”

From The Verge.