The Political Economy of Rwanda’s Rise Pritish Behuria Cambridge Univ. Press (2026)
Can Rwanda innovate its way to prosperity? Few African countries have drawn as much admiration and controversy as Rwanda has. Three decades since the 1994 genocide against the Tutsi ethnic group, Rwanda is widely viewed as a rare success story of African development.
It has built a reputation for administrative competence, public-health achievements and ambitious state planning. The country has become a laboratory for development initiatives and a fixture in policy case studies. Its capital city, Kigali, hosts global health summits, economic meetings and international technology forums.
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As one official tells economist Pritish Behuria early in his new book, The Political Economy of Rwanda’s Rise, “if you have an idea for a development policy, the place to see if it has legs, is Rwanda”. But has the nation achieved development, or merely growth?
Blending politics, economics and science, and drawing on a decade of research and more than 580 interviews, Behuria describes Rwanda’s bold attempt to transform its economy after the genocide. The Rwandan Patriotic Front (RPF) — Rwanda’s ruling political party — led by President Paul Kagame, envisioned that the landlocked and densely populated nation could become a regional hub for finance, tourism, logistics and knowledge-intensive services.
Although it has made impressive gains in health, technology and governance, economic growth has yet to translate into an industrial economy, according to Behuria.
Capacity challenges
The book focuses on what economists call structural transformation: the process in which a country’s economy transitions from relying on low-productivity activities, such as conventional farming, to higher-value sectors built on technological learning and industrial capability, such as manufacturing and the generation and spreading of technical knowledge. Behuria examines Rwanda’s transformation through the question: why does structural transformation remain so elusive in Africa?
Rwanda has undoubtedly improved in many measures of human welfare and has made notable advances in health and social indicators — achievements that have helped to cement its reputation as a model of effective governance. But Behuria asks whether such progress has generated the technological capabilities required to catch up with countries that have greater economic growth. His answer, to a large extent, is no.
In 2023, IRCAD Africa launched the first training centre on the African continent for minimally invasive surgical techniques.Credit: J. Countess/Getty
This answer deserves attention beyond Rwanda and studies of African development. Scientists, innovation scholars and development practitioners will find that Behuria’s book provides a compelling explanation of why technological progress and economic transformation might not necessarily go hand in hand.
Behuria proposes that development depends ultimately on whether domestic firms acquire knowledge-based assets — the skills, technologies and organizational capacities that enable them to compete internationally. Too often, science-policy discussions treat innovation as a matter of research funding, university rankings or start-up ecosystems. But Behuria reminds us that countries do not become knowledge economies simply by declaring themselves so.
Political factors
He notes a paradox: Rwanda has built an “interventionist” state, but not an industrial economy. Manufacturing remains below historical peaks, and many of the country’s most celebrated initiatives rely heavily on foreign capital, external expertise or state-affiliated enterprises, rather than technologically capable domestic firms.
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For example, after 1994, the RPF worked initially with closely allied business people to help rebuild and diversify Rwanda’s economy. But by the mid-2000s, the government had become less confident in domestic investors and was relying increasingly on foreign investors and government-owned or party-affiliated companies to drive major projects.
Take the hotel sector: Rwanda’s first five-star hotel was originally backed by RPF investments, with business people linked to the party investing in other hotels around the country. Some local elites and military officials also entered the sector. However, several of these ventures failed financially. As a result, ownership of most major hotels has gradually moved into foreign hands, often supported by tax incentives and other government benefits.
Behuria argues that Rwanda’s ruling elite faces a dilemma, with domestic capitalists viewed not only as economic actors but also as potential political rivals. Consequently, the government often prefers strategies that minimize reliance on independent, domestic business groups. Services, tourism and foreign investment became politically attractive precisely because they don’t depend on local capital.
The drone delivery company Zipline sends medical supplies to rural communities in Rwanda.Credit: Luke Dray/Getty
Behuria points out how concerns about political control shape economic decisions in agriculture, mining, finance and manufacturing. The Rwandan state frequently succeeds at coordinating investment and attracting international partners. What proves more difficult is nurturing a class of domestic firms that are capable of sustained technological upgrading.
The consequence, he argues, is a pattern of growth that generates impressive outcomes but falls short on key structural changes. “Learning from that failure and encouraging the acquisition of technological capabilities among local firms during that process is a crucial reason why some East Asian countries achieved structural transformation,” he writes.
