New diagnostic exercise provides first steps to building a comprehensive analytical framework that identifies institutional constraints to growth.

We’re pleased to announce the publication of a major new EDI report that will provide policymakers in Benin with a comprehensive analysis aimed at identifying and alleviating institutional obstacles to faster sustainable and inclusive development. The report also provides new insights and material for the development of a country institutional diagnostic framework of more general application.

The Benin Institutional Diagnostic is EDI’s second comprehensive country study designed to develop a common approach to diagnosing institutional weaknesses and elaborating reforms. (The first study focused on Tanzania, and was published in September 2018.) The report contributes to EDI’s efforts to pioneer a new framework that will help policymakers identify weak institutional areas that constrain development and inform appropriate directions for change. No such instrument is presently available in the literature. The report was co-edited by four EDI researchers, and its chapters are authored and commented by Beninese academics and foreign scholars with deep knowledge of the country or the areas analysed.

Overall, the research reveals a “chain of causality” between four basic areas of institutional weakness in Benin, namely corruption, weak public management, opacity of public-decision making and excessive informality, and their proximate causes such as political instability, the elite capture of key state functions, the weakness of the state or state capacity and the availability of quick, easy but illegal rents. In turn, these causes are related to deep underlying factors, including the nature of the political game, essentially neo-patrimonialism with multiple economic or political “Big Men”, but also geographical or ethnic factors.

François Bourguignon, who leads the overall EDI institutional diagnostic research area, summarizes the institutional diagnostic of Benin as follows: “We know about the natural resource curse and its strong institutional roots. Benin has no significant mineral or non-mineral resources. Yet, it faces a double handicap. It is a mono-exporter of an agricultural commodity with uncertain future – cotton- and it is a small country lying next to a badly cursed giant oil producing country, Nigeria, that offers huge, quick and easy rents through smuggling. Behind an apparently quiet democratic façade, both factors had devastating effects on institutions and the economy. Other paths are possible, however, provided courageous institutional reforms are undertaken.”

The Benin institutional diagnostic elaborates on these ideas, showing the channels through which the two key factors mentioned above, together with fierce political struggle, curb development through confusing and changing laws and policies, a lack of attention to general public goods, poor investment climate, an excessive vulnerability to external shocks and chronic aid dependence.

The report then reflects on ways to remedy such challenges while recognizing the heavy constraint and uncertainty arising from the political economy context, including the evolving structure of political power.    

It is this positive note that Romain Houssa, a Beninese economist who teaches at the University of Namur in Belgium and a co-editor of the Benin institutional diagnostic, emphasizes:

“Benin has major cards in its hands: entrepreneurial people, well-experienced traders and merchants, and a comparative advantage not only in traditional products such as cotton, but also in new agricultural products that can be processed locally to be sold at a profitable price in domestic, regional and global markets. In short, Benin has great potential for development that could be unleashed with a better institutional and policy environment.”

Download a copy of the official news release (pdf) to announce this publication.

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