Tim Harford, over at Private Sector Development, did some research and found these sad but unsurprising facts about Niger – the same Niger that the Washington Post recently alleged had become a victim of a recent move toward a free market:
– It costs nearly four years’ income to pay the fees required to set up a limited liability company in Niger; entrepreneurs also have to deposit minimum capital of over seven years’ income.
– Niger has the most rigid employment laws in the world.
– If you want to get a loan, it costs nine months’ income to set up some kind of collateral. Coverage by credit registries is almost nonexistent.
– Trying to collect an unpaid invoice by going through the courts will take nearly a year and cost over 40% of the invoice’s value.
I would also bet that Niger is no great practitioner of free trade. (Although Niger has been a member of the WTO since 1996, the WTO probably does too little to influence Niger to adopt genuinely open-trade policies. Recent research concludes – as reported in last week’s Economist – that the WTO "demands too little of its poorer members." [See the "Economic Focus" section of the August 6th issue of The Economist.])
But even if I’m wrong about Niger’s trade policies, the facts that Tim uncovered are sufficient evidence against the proposition that Nigeriens enjoy a market economy. They don’t. And therein is Niger’s problem.
