Despite the dominant role it plays in the Beninese economy, the cotton sector has not succeeded in accelerating the country’s economic growth. Yields have been volatile, and production practically stagnated from the mid-1990s to 2016. This poor performance mainly relates to the sector’s unstable management, which has oscillated between public and private monopolies. In its turn, this unstable management relates to several institutional factors including changes in ideology of the donors supporting the sector and the country’s political leader, elite bargaining, and clientelist contracts motivated by rent-seeking. These factors gave way to institutional instability, with the government abruptly overturning policies and planned actions by the previous government or re-assigning the mandates of management organisations in the cotton sector, which caused uncertainty in the sector and increased the cost of agriculture services in the sector.

We review evidence on the institutional weaknesses underlying economic development problems in Benin, analysing various sources of information including cross-country databases and an original opinion survey among decision makers in Benin. Three pressing institutional issues are found. First, the most serious impediment is corruption, which is seen as responsible for several key dysfunctions in almost all sectors: the political and electoral systems (vote buying), the relationship between business and the public administration (rigged procurement) or the judiciary system, land rights, or complicity between politicians and the media. Second, weak public management deteriorates the quality and the delivery of public services. It is most characterised by opacity of government policy-making to the public, ineffective regulation of the power sector, and a complex tax administration grossly inefficient in tax collection. Third, the level of informality is much higher in Benin than in the average sub-Saharan African country. This generates several economic costs including tax revenue loss, job precariousness, unfair competition for formal firms, and lack of control over the economy.

In Benin, top businesspeople not only capture the economy but also the executive, and possibly legislative power. This book develops a comprehensive analysis aimed at identifying and reducing the institutional constraints that impede Benins rapid, sustainable, and inclusive development. The research reveals a chain of causality between four main categories of institutional weaknesses in Benin, namely corruption, inefficiencies in governance, opacity in public decision-making, and excessive informality in the Beninese economy. These institutional weaknesses are traced back to proximate and ultimate causes. The immediate causes include political instability, elite capture of key state functions, weakness of the state, and the possibility of easy but illegal rents. In turn, these causes are linked to deep-rooted underlying factors such as the nature of the political game, essentially neo-patrimonialism with multiple economic and/or political Big Men, but also geographical or ethnic factors. We elaborate on policy reforms aiming at overcoming or circumventing these institutional problems.