Madagascar, a land of natural beauty and cultural richness, remains trapped in a cycle of poverty and political instability. Despite its vast potential, the island nation has struggled to realize its economic promise. The 2024 Nobel Prize in Economics, awarded to Simon Johnson, James Robinson, and Daron Acemoglu for their work on the impact of institutions on economic development, may be able to offer a valuable lens through which to understand Madagascar’s predicament.
The laureates’ research underscores the critical role of institutions in shaping economic outcomes. Countries with extractive institutions, which concentrate power and wealth in the hands of a few, often struggle with corruption, inequality, and slow growth. Madagascar’s history is marked by such institutions, dating back to pre-colonial times and reinforced by French colonial rule. This legacy has left the country with a deeply entrenched elite, a weak state, and a population largely excluded from the benefits of economic growth.
In contrast, inclusive institutions empower a broader segment of society, fostering participation, protecting property rights, and encouraging innovation. By creating a level playing field and incentivizing long-term investment, these institutions can drive economic development and reduce poverty. Madagascar’s future depends on its capacity to shift from an extractive model to a more inclusive one.
To achieve this transformation, the country must prioritize several key areas. Investing in education is paramount, as a well-educated population is the foundation of a prosperous society. Infrastructure development is also crucial, as it can connect rural communities to markets and improve access to essential services. Furthermore, protecting property rights and empowering local communities can stimulate economic growth and reduce poverty.
By embracing transparency, accountability, and democratic principles, Madagascar can break free from its past and build a prosperous future. The time for change is now. The country’s future hinges on its ability to harness the power of inclusive institutions and create a society where all citizens can flourish. As the Nobel laureates remind us, strong institutions are the foundation of sustainable growth and positive change. This is not new but it is useful to remember it every once in a while.
