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Africans Need Capitalism

Karol has a superb letter published in today’s edition of the New York Times:

To the Editor:

In “‘Patient’ Capital for an Africa That Can’t Wait” (column, April 20), Thomas L. Friedman is spot-on in his diagnosis of Africa’s poverty as rooted in a lack of capitalism.

If this diagnosis is correct, what is the prescription?

Africa’s leaders have the power to encourage patient capitalism (where returns are 5 to 10 percent and payback is over a longer period of time) by reducing barriers to businesses, by improving tenure security for both men and women, and by respecting indigenous institutions and customs.

Policies that push entrepreneurs into the informal sector, promote tenure insecurity, limit women’s property rights and are based on central planning rather than decentralized experimentation will only stymie progress.

The examples that Mr. Friedman cites are not aberrations. Africans are as entrepreneurial as any people. With some basic legal reforms, they can be empowered to capitalize on their talents.

Karol Boudreaux
Arlington, Va., April 20, 2007

The writer is a senior research fellow at George Mason University and research director of Enterprise Africa.