Constructing Institutional Measures: Indicators of Political and Property Rights inMozambique, 1900–2005

Abstract

In this article, we focus on the role of political and economic institutions in Mozambique's development. We produce a set of institutional indicators for Mozambique for the period 1900–2005. The first index tracks political freedoms and is unique in its duration and complexity. The second index is a measure of property rights for Mozambique, and such a measure has not existed previously and certainly not for this length of time. The construction of these indices is a painstaking process through historical records but it provides us with a richness of institutional data previously not available. The new institutional indices will allow us to explore the role of the institutional environment in determining economic growth and development in Mozambique over time.

Cape Verde and Mozambique as Development Successes in West and Southern Africa

“…According to Tibana (2003), economic activity increased from 1991 until 1995, but slowed down during the preparation and implementation of the megaprojects that came to define the country's export behavior and high rates of economic growth. Over the past decade, Mozambique has again become one of the attractive economies in the subregion, as revealed by Luiz, Pereira, and Oliveira (2013), from where figure 7.3 is reproduced.…”

“…We also note that these measures must be used and interpreted with caution due to well-known issues, most of which derive from the process of index construction itself, as pointed out by Oman and Arndt (2006) and Luiz (2009), and that Fedderke, de Kadt, and Luiz (2001) applied an improved method to South Africa. Below we draw on Luiz, Pereira, and Oliveira (2013), which have computed indexes of political and economic governance for Mozambique over the last 100 years.…”

“…Furthermore, the widely used indexes include low taxes, a small share of government spending in GDP, and flexible labor markets, and this appears to some as too extensive a definition of economic freedom. Once again the Luiz, Pereira, and Oliveira (2013) index for Mozambique avoids some of these pitfalls by distinguishing carefully between the rules of the game and their outcomes. Macedo (2001) reports that trade openness reduces perceived corruption, even after correcting for its endogeneity, and claims that this is the way in which globalization improves governance, given highly significant historical control variables (e.g., Protestant tradition, de facto democracy, and OECD membership).…”

“…In comparative terms, Cape Verde ranked seventh out of forty-six countries in sub-Saharan Africa, with a regional score much higher than the average. 35 Luiz, Pereira, and Oliveira (2013) present a set of institutional indicators for Mozambique for the period 1900 through to 2005, reproduced in figure 7.3. The first tracks political freedoms and is unique in its duration and complexity, even though it correlates highly with the Freedom House combined index of political and civil liberties.…”

Escape FDI and the dynamics of a cumulative process of institutional misalignment and contestation: Stress, strain and failure

“…Immovable property, especially land, and given the importance of mining to South Africa's economy, also mineral rights, are precursors of economic activity, and are used in the index. (For further discussion see Fedderke, de Kadt & Luiz;2001;Luiz, Pereira & Oliveira, 2013. ) For both political and property rights, the primary source documents were laws and regulations that had been passed in the different years in the study.…”