them to buy political support and sustain his undemocratic
regime.
Neither Ghana’s disappointing performance after
independence nor the countless other cases of apparent
economic mismanagement can simply be blamed on
ignorance. After all, if ignorance were the problem, well-
meaning leaders would quickly learn what types of policies
increased their citizens’ incomes and welfare, and would
gravitate toward those policies.
Consider the divergent paths of the United States and
Mexico. Blaming this disparity on the ignorance of the
leaders of the two nations is, at best, highly implausible. It
wasn’t differences in knowledge or intentions between John
Smith and Cortés that laid the seeds of divergence during
the colonial period, and it wasn’t differences in knowledge
between later U.S. presidents, such as Teddy Roosevelt or
Woodrow Wilson, and Porfirio Díaz that made Mexico
choose economic institutions that enriched elites at the
expense of the rest of society at the end of the nineteenth
and beginning of the twentieth centuries while Roosevelt
and Wilson did the opposite. Rather, it was the differences
in the institutional constraints the countries’ presidents and
elites were facing. Similarly, leaders of African nations that
have languished over the last half century under insecure
property rights and economic institutions, impoverishing
much of their populations, did not allow this to happen
because they thought it was good economics; they did so
because they could get away with it and enrich themselves
at the expense of the rest, or because they thought it was
good politics, a way of keeping themselves in power by
buying the support of crucial groups or elites.
The experience of Ghana’s prime minister in 1971, Kofi
Busia, illustrates how misleading the ignorance hypothesis
can be. Busia faced a dangerous economic crisis. After
coming to power in 1969, he, like Nkrumah before him,
pursued unsustainable expansionary economic policies
and maintained various price controls through marketing
boards and an overvalued exchange rate. Though Busia
had been an opponent of Nkrumah, and led a democratic
government, he faced many of the same political
constraints. As with Nkrumah, his economic policies were
adopted not because he was “ignorant” and believed that