An interesting conclusion from a new paper that examines inequality in developing countries :
We find that property rights significantly increase the level of income inequality in the vast majority of developing countries, especially in low-democracy political environments. Suggesting that institutions in these economies tend to serve the interests of a minority. The inequality-increasing effect may be counterbalanced only in systems which are able to develop sufficiently inclusive political institutions. As the democratisation process unfolds, this effect should be reduced, albeit to a limited extent, implying that more political equality modifies the functioning of institutions so to ease economic inequality. The role of democracy seems to be an ‘indirect’ one and is channelled only through the property rights system. In fact, we find no evidence that democracy affects inequality by moderating the effect of financial development, education and asset inequality. Our results seem to support the view that, in the last decades, institutional arrangements in most developing countries have worked according to the interests of dominant groups, thereby not granting opportunities to lower classes.This is essentially the story of Zambia since 1991 thanks to the IMF / World Bank led reforms and their preoccupation with "private property". Economic liberalisation in the absence genuine transfer of power to the people through fundamental democratic reforms has proved Zambia's undoing. Successive governments have continued to concentrate power in the hands of the few and provided key state resources to domestic and foreign friends. The latter are particularly crucial as key financiers of elections.
Instead of a true level playing field that Zambians prayed for in 1991, what they got was a new system founded on a false liberalism that, to borrow from Van de Walle, "allowed corrupt elites to mobilize political support via clientelism and introduced patrimonial logic in the state bureaucracy, leading to the destruction of the capacity of the state and creating an environment of unpredictability…".
The point is not that life was rosy prior to 1991, but that Zambia moved from one extreme of poor governance founded on socialism to another founded on false liberalism. What the country need was economic and political reforms going hand in hand. It is not that economic liberalism was wrong, but that political liberalisation was missing. In the absence of such liberalisation, Zambia should have opted for a much slower pace of economic liberalism. The two must go hand in hand.