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This essay will overview the Malagasy enigma, a country endowed with comparative advantages after its independence but that is still struggling today in terms of development, and economic growth. Despite its abundant resources, Madagascar is considered among the poorest countries in the world, with 75% of the population living on less than 1.95$ Dollars per day ( World Bank, June 6, 2019). In this essay, we will privilege comparative data with Sub-Saharan countries. This essay will first attempt to position Madagascar's level of development, by focusing on three usual suspects, the quality of institutions the geographic/environmental factor, and the ethnic factor. The essay will then switch to two other factors that are paramount for Malagasy development.
The first assumption is that the Malagasy colonial legacy explained to some extent the poor quality of institutions. Acemoglu et al ( 2001 ) differentiate the extractive colonies from the settlement colony. The scholars linked the level of settlement to the rate of settlement mortality during the colonial period. From this point, Acemoglu et al ( 2001 ) deducted that a low level of settlement equals less incentive for institution building. The linear regression made by Acemoglu shows that for very high settler mortality, Madagascar provides a very low protection against expropriation risk, showing the lack of institutional inclusiveness (Acemoglu et al, 2001). Madagascar was indeed an extractive French colony, highly demanding in resource extraction. However, the poor quality of institutions and governance is not exceptionally low in Madagascar, compared to its neighbors in Sub-Saharan Africa. The Worldwide Governance Indicators, from 2000 to 2008 situated Madagascar above the WGI average in Sub-Saharan Africa, with results varying from 40 points to 50 points. Razafindrakoto et al (2017) choose to focus on the specific elements of the indicator; corruption control, the State and law, or political stability. As a result, the scholars concluded that ‘Madagascar is dominating Sub-Saharan Africa, Cameroon, and Ivory Coast on all the fronts’ (Razafindrakoto et al, 2017).
An environmental and geographical explanation is also to be nuanced. Easterly and Jared Diamond explored the link between geographic and ecological forces with state-building and economic development. Madagascar is often considered sensitive regarding the natural catastrophes. Data from the emergency event database (EM-DAT) show that 76 events/natural disasters occurred in Madagascar since 1968, and more importantly, 48 out of the 76 events occurred after 2000, affecting nearly 16 million people. However, those data are to be nuanced, with 3 episodes per million inhabitants, Madagascar is as impacted by natural disasters as the average in Sub-saharan Africa, 2.5 episodes per million of inhabitants. Natural events occurrence is far lower than in countries such as Burkina Faso or Benin (EM-DAT). Finally, according to Wisner et al (2004), ‘the vulnerability is closely related to the socio-economic position (…), in general, poor suffer more of a natural hazard than the rich’. From this perspective, the impact related to natural hazards depends on the level of human development in the country.
The ethnic theory could also be nuanced, in the context of Malagasy development. Studies led by Easterly show that ‘political instability, rent-creating economic policies (…) reflect a fundamental country characteristic, ethnic division’ (Easterly and Levine, 1997). At first sight, Madagascar fits in this assertion, as the level of ethnic fragmentations in the country is one of the highest in Africa, with 0.88 /1 (Afrobarometer, 2008 ). This assertion should be nuanced as Madagascar is one of the less linguistically fragmented countries in Africa 0.02/1 and is also one of the countries where ethnic groups have a low impact on political and economic life (Afrobarometer, 2008).
Compared to its neighbors, Madagascar is not in an alarming position. Now, we will dwell on a more in-depth analysis of the real issues of development in Madagascar.
This part will focus on the human capital factor and the cultural factor as the main barriers to development and institution building. Studies led by Edward, Glaser, et al (2004) show that improving human capital is paramount. Setting values among the communities, and enhancing the level of education among the communities is essential and will in return offer institutional opportunities (Edward, Glaser, et al, 2004). Referring to Lipset (1960) ‘more educated people are more likely to resolve their dispute, through negotiation’, and build a better life in the community. Razafindrakoto et al (2017) asserted the disconnection between the rural area and the political system is a barrier to development, in the Southern part in particular. According to the scholars, the associations and intermediaries ( political parties, communal groups, …) are very few, and people are disconnected from public life, 77% of the Malagasy people are not members of any organization or local association, one of the lowest rate in Sub-Saharan Africa. In rural areas, this is mainly due to a lack of alphabetization inside the community ( Razafindrakoto, Roubaud et al, 2017).
Further on, the disconnection between the population and the institutional system goes beyond the lack of education. Indeed, the cultural factor, expressed through a lack of trust also undermines the institution. The theoretical debate revolving around this issue is to know whether trust is endogenous to the institutions ( Institutionalist theory - North, 1990) or if trust is ‘exogenous’ to the institution development ( Cultural theory - Inglehart 1997). In the case of Madagascar, the progressive decay of the institution is due to the cultural aspect. Among 18 countries under investigation by Afrobarometer (2008), Madagascar is the country where the institutional legitimacy is the lowest, for instance, 39% of the Malagasy people interrogated think that tribunal decisions should be respected, compared to 69% in the other Sub-Saharan countries.
To sum up, we have seen in the first part that the institutional theory, the geographic/environmental theory, and finally the ethnic theory failed to explain the issue of development in the case of Madagascar, but rather provided us with the main comparative advantages of the country. In the second part, human capital and cultural factors remain the main issues for sustainable growth and institutional development.
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