The International Monetary Fund (IMF) predicts that this year the per capita income for Botswana will be US$10,400. A decade ago, this number was US$6,156, an impressive achievement--especially for a country that a new book about Botswana says has the odds against it, both by being an African country, and also by having a small population.
The book is titled, Why Botswana Prospered and is published by McGill-Queen's University Press. It was available in bookstores starting on July 30, 2005.
The short answer to the question posed by the book's title is that sound government policies are responsible for Botswana's economic achievements, among which, as the book points out, are a three decade long record of increasing prosperity. This equals and in many cases exceeds the record of many of the glamor stories of Asian favorites.
The book goes on to say there there is no single policy or direction that led to Botswana's success. Rather, it was a confluence of individuals making rational choices offered by an interactive system of tradition, leadership and institutions.
Among the reasons that Botswana has succeeded where other countries have failed is that is has a built-in combination of policies that act as shock absorbers for the inevitable downturns that afflict developing nations.
The book points out that skillful macroeconomic management by itself is not enough. Botswana's macros were well managed. There were no prolonged recessions or debilitating inflation for the three decade period.
Add to the macroeconomic stability government investment in education and infrastructure, plus government and private consumption and an important emphasis on domestic fixed capital formation, then the recipe for stability begins to come together.
While stability is important, the book demonstrates that stability does by no means preclude variability. Botswana's economy has endured shocks because the individual shocks were managed to stay below catastrophic levels. The complexity of Botswana's system itself has been a major insurance policy for survival.