I may be quite wrong, but I don't think that Ayittey is talking about about a traditional economy and an informal economy. I think he's talking about a traditional sector and an informal economy. That's plain as mud, I know, but Ayittey's critique is African governance.

Part of his solution is to build upon traditional institutions, among them the marketplace. But as Ayittey, points out, traditional African notions of markets are not premised on property as an individual, but as a clan. So in most African countries there are laws more or less built upon Western ideas of individual liberty and property, but the traditional systems also must be accommodated. There are various ways of doing this across African countries, and even within countries.

Another part of his solution is to encourage investment in the informal economy. Now what the informal sectors are, I think are as fuzzy as Ayittey's short hand of the traditional sector. One of the conversations I want to put out relevant to this discussion is from Benin Mwangi Africa in Business. I definitely recommend the blog, but I'm a bit miffed that my comment wasn't posted to the discussion, I'm linking to.

Mwangi is an American, in banking. LOL I'm a blogger in my basement. But I think there's some ideological blind spots that happen around the provocative discussions prompted by Ayittey. It's one thing to buy into his construction that African problems are for Africans to solve, and another to try to bend everything to fall into Ayittey's world view. He is a scholar at the American Enterprise Institute, but the distinction Ayittey makes about traditional sector ideas of ownership get glossed over, and probably doesn't fit as neatly with AEI's agenda as neatly as people think.

Anyway, my unpublished post to the thread at Benin Mwangi's site was prompted by a post about Chinese Entrepreneurs in Africa at Dani Rodrik's blog. I found the comments to the post there, and actually the post itself smelling of a privileged perspective and carelessness. It's very hard to talk about "Africa" really because of so many ingrained stereotypes. My basic point of the comment was that the Chinese entrepreneurs gathered capital within the informal economy of China and invested in informal sectors in African countries--the example was Malawi.

As the business grow they have to interact with the modern economy in any case. Once they're big enough they really are part of the modern economy.

One of Ayittey's big fans is Emeka Okafur and at his blog Timbuktu Chronicles many businesses along this continuum are highlighted.

Ayittey's talk prompted a bunch of discussion. Here are some blog posts that give a flavor of some of the discussions in blogs.

Ethan Zuckerman is one of the essential ones. Ethan I think mentions Eric Hersman, aka Hash. Hersman blogs as White African. His parents were Bible translators so he grew up in Sudan and Kenya. Something I love about Hash is he is able to argue in the African way--not sure how to describe what I mean. Hash is always nice, but give as well as he takes. Something else about Hash is he's a Geek and is able to translate Geek to Cheetah.`Grandiose Parlor`_ makes the argument that Africa can't discount the Hippos, something that other bloggers in Africa did as well.

People are inspired by Ayittey, but "God is in the details" as they say. I've read "Africa in Chaos" and would recommend it. I ought to read "Africa Unchained." While I think his ideas are important, if for now other reason than they spark so much productive discussion, It's very hard to make sense of "Africa" instead of the diverse situations of particular places in Africa.

There's a good interview with Ayittey by Bill Moyers online.