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Twenty-eight female guards were unfairly dismissed by a security company because the client‚ Metrora.

Rich country or poor country - we can choose, says new book

By unknown | Nov 01, 2006 | COMMENTS [ 0 ]

Creating prosperity is not miraculous - it's what people do when they are allowed to go about their business in a safe and secure environment.

Creating prosperity is not miraculous - it's what people do when they are allowed to go about their business in a safe and secure environment.

The new book, The Habits of Highly Successful Countries, published by the Law Review Project, describes how the policy choices of governments determine if countries become prosperous or mired in poverty. It is a matter of choice.

However, policy makers need information if they are to copy proven successes, anticipate pitfalls and avoid failure, but they seldom get it.

Our new method of measuring outcomes counteracts the pressures from vested interests, self-serving bureaucrats, ideologues and sensationalist media - and aims to relieve long-suffering citizens of the exorbitant costs of reinventing the wheel.

The 20-20 method simply takes the 20 best and the 20 worst policies and analyses the common traits among them to determine how they became best or worst.

Our focus has been South Africa. For successful policies to be adopted, policy makers need to ask the policy makers' question: which policies cause which consequences?

They need to know why some countries are rich and others are poor; what explains high and low levels of crime and corruption; which factors give longer, healthier lives; why illiteracy is often rampant where education budgets are biggest; why Africa has been the only regressing continent for a generation; why the average South African was poorer in 2004 than in 1970.

South Africa resisted enormous temptation, pressure and criticism when it persisted during its first decade with "neo-liberal" economic policies. Should it have done so?

Yes, according to the world's experience. The neo-liberal policies reversed the country's declining score on economic freedom and related indices.

Paradoxically, a left wing revolutionary regime reversed the economic dirigisme of its right wing, supposedly pro-market predecessor. It applied market fundamentals and wondered why it was not rewarded with instant success. Our research revealed that many, but not all of the fundamentals were in place.

Frustrated by relatively low growth during the first decade of democracy, there is now talk among policy makers of reversing course - of rejecting "market fundamentalism" and embracing a greater role for government. If this policy is pursued, evidence suggests it will be snatching defeat from the jaws of victory.

Our analysis provides considerable certainty about probable causes and consequences, but it is not prescriptive: it answers policy makers' questions and is an aid to good government.

lLeon Louw is executive director of the Free Market Foundation (southern Africa) and of the Law Review Project. He writes in his personal capacity.


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