Growth and development. Leading sector and institutions role in economic development: a case study of Botswana and Mauritius

Abstract

This thesis focuses on the extent to which entrepreneurial actors can be considered as the engine of economic development in the cases of Mauritius and Botswana. Based on the theoretical approaches used in this thesis I found that, from a take-off approach, entrepreneurial actors played a substantial role in cases of Mauritius and Botswana (in Mauritius to a much greater extent than in the case of Botswana) in boosting investment rate, government revenues, and trade performance which other sub-Saharan African states could envy. In Botswana, diamond production contributed significantly to the high and sustainable performance of the economy. In order accelerated the engine of growth and development, entrepreneurial actors need to actively venture more into the manufacturing sector to give the economy’s growth a sustained and cumulative character. As regards Mauritius, the country decided to create an export-processing zone (EPZ) in the 1970s, and it has been recognized as a uniquely successful EPZ implementation. The creation of EPZ is considered as the main driver of Mauritius' growth and development. In addition, I find that, from an institutional evolution framework, entrepreneurial actors have been a decisive factor in building institutions that are favorable for growth and development. In Botswana, the key institutions that were determinant for the country’s economic growth and development were the tribal institutions and the importance of the cattle industry; while in the case of Mauritius it is worth noting the pivotal role of the inherited institutions from its colonizers. The French left a legacy of formal institutions for the landowning elite and the French language while the British colonizers brought a number of important inclusive institutions such as democracy, the rule of law and a constitution that guaranteed the protection of private property.