The Political Economy of Aid-Dependency: The Market Economy versus Mafia Economy

Governments which operate on the basis of rule of law are good-governance governments. Such governments protect human rights and promote freedoms. On the other hand, non-reforming non-good-governance governments impose themselves and their Hobson's choices on society by force of arms. They are run by warlordism, or rule of warlords. In the absence of the true opposition party in parliament and government, warlords cannot establish or protect human rights. As a result, the fundamental problem of economics (FPE) which is resource scarcity and competition over scarce resources cannot be solved. The economy thriving under warlordism is called mafia economy, which is the antithesis of the market or rule of law-based economy. Many African and third world governments run or manage mafia economies. Taking the case of a non-good governance government and its mafia economy, this book attempts to show how a peaceful transition can be made from warlordism to rule of law; and from a mafia economy to market economy.