It's pretty dark in Alaska right now. Of course the shortest day came shortly before Christmas.
In Juneau, the light that day lasted about 6 1/2 hours. But Juneau's daylight might not be considered real daylight elsewhere. Clouds screened out a lot of the light we might have had. Moreover, the sun lies low on the horizon, even when it's up, and much of the time we're in the shade of the mountains that crowd close around us.
It's worse further north - in Barrow (on the shore of the Arctic Ocean) they won't see the sun for weeks. The New York Times just ran a story on Alaska's dark days, highlighting "seasonal affective disorder" - the dark induced depression that many feel at this time: In Alaska, Darkness and Depression Descend (Associated Press, December 18):
Winter is a drag to some extent for one out of five Americans, studies suggest. A smaller fraction - mostly women and young adults - suffer from Seasonal Affective Disorder, a type of depression stemming from decreased daylight.
Nearly 10 percent of Alaskans suffer from the disorder to some degree, according to a 1992 study published in the American Journal of Psychiatry.
Symptoms include lethargy, a heightened desire for sleep, cravings for carbohydrates, feelings of melancholy, fuzzy thinking and loss of libido or sociability, said Suzanne Womack Strisik, an assistant psychology professor at the University of Alaska Anchorage.
Severe cases can be debilitating, even prompting thoughts of suicide. Experts say, however, suicide rates actually peak with increasing spring light.
"You don't have enough energy to make a plan before then," Ms. Strisik said. "It's too much trouble. Once the light starts coming back, there's more energy, but reasoning is still off. "
So, naturally one's thoughts turn to warmer, sunnier, more cheerful places. Like tropical Mauritius:
Mauritius, an island nation, is located in the Indian Ocean. This Air Mauritius route map shows where:
There have been a number of impressive growth episodes in Africa: Growing in Africa ...
Mauritius has been the scene of one of the best:
Arvind Subramanian looks at the Mauritian experience in Mauritius: A Case Study (Finance & Development, December 2001) ("S" below). This was followed up by a more elaborate analysis ("Who Can Explain the Mauritian Miracle" by Subramanian and Devesh Roy ("S&R"), one of the papers Dani Rodrik collected in In Search of Prosperity ).
Early observers weren't optimistic about the Mauritian future. V.S. Naipaul thought:
And they (the political parties in Mauritius) seem to recognize that, at the end of the day, they will be left with what they started with: an agricultural colony, created by empire in an empty island and always meant to be part of something larger, now given a thing called independence and set adrift, an abandoned imperial barracoon, incapable of economic or cultural autonomy. (S)
Nobel prize winning economist James Meade thought that:
Heavy population pressure must inevitably reduce real income per head below that it might otherwise be. That surely is bad enough in a community that is full of political conflict. But if in addition, in the absence of other remedies, it must lead either to unemployment (exacerbating the scramble for jobs between Indians and Creoles) or to even greater inequalities (stocking up still more the envy felt by the Indian and Creole underdog for the Franco-Mauritian top dog), the outlook for peaceful development is poor. (S&R)
Nevertheless, Mauritian per capita income "increased three and a half times over a 40-year period, while that of the average African increased by 32 percent." (S&R)
Even in retrospect (from 2003), Mauritian starting conditions looked unpropitious. Although it had some advantages - some human capital strengths, for example - the cons outweighed the pros:
On the one hand, a number of factors—especially the initial level of income, geography, and commodity dependence—have exerted a drag on long-term growth. For example, Mauritius is disadvantaged by being at least 25-30 percent more distant from world markets than the average African country.... Formal analysis shows that on balance... the disadvantages outweigh the advantages: initial conditions have slowed growth by about 1 percentage point a year relative to the average African country and by nearly 2 percentage points relative to the fast-growing developing economies of East Asia. (S)
But, Mauritius grew, fast, and over many years.
Subramanian and Roy indicate that Mauritian growth was driven by growth in exports. Imports, exports, and the ratio of imports and exports to GNP (the "openness ratio") grew rapidly. In the late 90s the openness ratio was over 100, compared to a ratio of 45 for Africa. "Particularly strong was the growth in manufacturing exports, originating predominantly from the export processing zone." Rents from sugar and textile imports formed a large proportion of GNP. These rents facilitated investment. Productivity, especially in textiles, also grew rapidly as Mauritians adopted new ways of doing things - perhaps in part because the open economy was also open to ideas.
Oddly, Mauritius had a relatively protectionist trade policy, even for an African country. Average tariffs were high. Taxes (tariffs) on imports should have made investments in "import-competing" industries look relatively more attractive to Mauritians. This wouldn't have been good for export led growth. Tariffs on imported inputs could also have increased the costs of exporting - already high because Mauritius was remote - and have held exports down.
Mauritius offset the burdens on its exporters with tariff-free access for productive inputs, with tax incentive subsidies, and relaxed labor market regulations, in the export sector. All of these were supplied through the institutional structure of an Export Processing Zone (EPZ). However, Subramanian and Roy don't think these measures alone were enough to "offset completely the antiexport bias of the restrictive import regime."
Something else was needed.
Mauritius has been one of the big beneficiaries from preferential access to developed country sugar and textile markets. A developed country that imposes high tariffs on imports, increases the price for the imported goods within its boundaries. If it grants a small producer like Mauritius an exemption from part or all of that tariff, the small country has a competitive leg up on other foreign competition in the developed country market. Subramanian and Roy argue that preferential access actually "contributed more to offsetting the antiexport bias of the import regime than domestic export subsidization policies."
Other African countries have used EPZ arrangements, and others have been given preferential access to developed country markets. But often the benefits generated by these policies have accrued to a few, been dissipated through corruption, and haven't spark-plugged growth.
What was different about Mauritius?
Good institutions explain a lot:
To some considerable extent, strong domestic institutions have contributed substantially to Mauritian success and are a good candidate for underlying explanations of the Mauritian miracle. Compared with many developing countries, Mauritius has since independence been a democracy and developed strong participatory institutions. (S&R)
But that still doesn't take us all the way (S&R):
The econometric results, however, suggest that even after accounting for the role of institutions there is a sizable unexplained component to Mauritian growth. Cross-country growth models, by definition, cannot capture country-specific idiosyncratic effects. In Mauritius there were many. But one particularly important one, ironically, appears to be the very diversity and ethnic fragmentation that Meade lamented as a curse.
Diversity had three important benefits:
First, Mauritian ethnic communities facilitated the introduction of foreign investment and technology, and provided an entree to overseas markets.
Second, in independent Mauritius, economic power - particularly in the key sugar sector - resided in the small French community, while political power resided in the larger Indian community. Compromise between the two left industry free to produce without looting by the political elites.
Third, the need to conciliate the various ethnic groups led to the development of participatory political institutions, which "have ensured free and fair elections, the rule of law, a vibrant and independent press, and respect for property rights, all of which have made Mauritius an attractive investment location."
What about replicability?
One clear message is that attempting to replicate the Mauritian experiment might be hazardous for other countries, in part because the trading environment is now less favorable. preferential margins for African countries will slowly but inevitably decline as global liberalization proceeds apace. Perhaps, more importantly, it may be difficult for other countries to replicate the key elements of the Mauritian globalization strategy - heavy intervention, extensive subsidization, and targeting, including through the creation of EPZs - because the preconditions for ensuring that an interventionist strategy succeeds notably, high-quality domestic institutions and political processes, may not be in place. (S&R)
(Don't feel too bad about the short days in Alaska right now, it'll be made up to us in six months.)