African Success Story
Mauritius is a top performer among African countries. It developed a manufacturing sector soon after independence and responded well to new external shocks. What explains this success? Mauritius has followed growth-promoting policies such as creating an Export Processing Zone, conducting diplomacy regarding trade preferences, spending on education, avoiding currency overvaluation, and facilitating business. These policies can be traced back to its institutions including forswearing an army, protecting property rights, and creating a parliamentary structure with comprehensive participation. From where did these institutions come? Some fundamental geographic and historical determinants of trade and rule of law help explain why average income is lower in Africa than elsewhere, and trade and rule of law help explain performance within Africa and worldwide. Despite these findings, the more fundamental determinants do not help explain relative performance within Africa. Fundamental determinants that work worldwide but not within Africa are remoteness, tropics, size and fragmentation. A case in point is the considerable ethnic diversity in Mauritius, which could cause dysfunctional politics but here brings cosmopolitan benefits. The institutions manage to balance the ethnic groups. Interestingly, the three African countries with the highest governance rankings (Mauritius, Seychelles and Cape Verde) are all islands with no indigenous population.
Keywords: Mauritius, Africa, success, development