Why Nations Fail: The Origins of Power, Prosperity, and Poverty

the farmers of palm kernels were getting 56 percent of the world price from the marketing board; cocoa farmers, 48 percent; and coffee farmers, 49 percent. By the time Stevens left office in 1985, resigning to allow his handpicked successor, Joseph Momoh, to become president, these numbers were 37, 19, and 27 percent, respectively. As pitiful as this might sound, it was better than what the farmers were getting during Stevens’s reign, which had often been as low as 10 percent—that is, 90 percent of the income of the farmers was extracted by Stevens’s government, and not to provide public services, such as roads or education, but to enrich himself and his cronies and to buy political support.
    As part of their indirect rule, the British had also stipulated that the office of the paramount chief would be held for life. To be eligible to be a chief, one had to be a member of a recognized “ruling house.” The identity of the ruling houses in a chieftaincy developed over time, but it was essentially based on the lineage of the kings in a particular area and of the elite families who signed treaties with the British inthe late nineteenth century. Chiefs were elected, but not democratically. A body called the Tribal Authority, whose members were lesser village chiefs or were appointed by paramount chiefs, village chiefs, or the British authorities, decided who would become the paramount chief. One might have imagined that this colonial institution would also have been abolished or at least reformed after independence. But just like the marketing board, it was not, and continued unchanged. Today paramount chiefs are still in charge of collecting taxes. It is no longer a hut tax, but its close descendant, a poll tax. In 2005 the Tribal Authority in Sandor elected a new paramount chief. Only candidates from the Fasuluku ruling house, which is the only ruling house, could stand. The victor was Sheku Fasuluku, King Suluku’s great-great-grandson.
    The behavior of the marketing boards and the traditional systems of land ownership go a long way to explain why agricultural productivity is so low in Sierra Leone and much of sub-Saharan Africa. The political scientist Robert Bates set out in the 1980s to understand why agriculture was so unproductive in Africa even though according to textbook economics this ought to have been the most dynamic economic sector. He realized that this had nothing to do with geography or the sorts of factors discussed in chapter 2 that have been claimed to make agricultural productivity intrinsically low. Rather, it was simply because the pricing policies of the marketing boards removed any incentives for the farmers to invest, use fertilizers, or preserve the soil.
    The reason that the policies of the marketing boards were so unfavorable to rural interests was that these interests had no political power. These pricing policies interacted with other fundamental factors making tenure insecure, further undermining investment incentives. In Sierra Leone, paramount chiefs not only provide law and order and judicial services, and raise taxes, but they are also the “custodians of the land.” Though families, clans, and dynasties have user rights and traditional rights to land; at the end of the day chiefs have the last say on who farms where. Your property rights to land are only secure if you are connected to the chief, perhaps from the same ruling family. Land cannot be bought or sold or used as collateral for aloan, and if you are born outside a chieftaincy, you cannot plant any perennial crop such as coffee, cocoa, or palm for fear that this will allow you to establish “de facto” property rights.
    The contrast between the extractive institutions developed by the British in Sierra Leone and the inclusive institutions that developed in other colonies, such as Australia, is illustrated by the way mineral resources were managed. Diamonds were discovered in Kono in eastern Sierra Leone in January 1930. The diamonds were alluvial, that is, not in deep mines. So the primary method of mining them was by panning in rivers. Some social scientists call these “democratic diamonds,” because they allow many people to become involved in mining, creating a potentially inclusive opportunity. Not so in Sierra Leone. Happily ignoring the intrinsically democratic nature of panning for diamonds, the British government set up a monopoly for the entire protectorate, called it the Sierra Leone Selection