Niger has No Market Economy

by Don Boudreaux on August 14, 2005

in Foreign Aid

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.


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