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Niger has No Market Economy

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Tim Harford, over at Private Sector Development, did some research [2] and found these sad but unsurprising facts about Niger – the same Niger that the Washington Post recently alleged [3] 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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