Botswana has experienced a spectacular economic performance since gaining independence in 1966. While the foundation of its growth lies in the country’s mineral wealth, the present paper argues that public expenditure has been the main conduit to channel mining revenues back into the economy. This, together with a strong capacity of the Botswana government to formulate and implement coherent national policies through various National Development Plans, has been the main factor behind its good growth performance. However, in terms of employment creation the picture is more nuanced: While formal sector employment grew almost in line with GDP until 1991, employment growth de-linked from output growth in the early 1990s and fell behind population growth. As the paper details, this de-linking between growth and employment coincided with a number of policy reforms that where intended to deregulate the Botswana economy. The analysis of macro-economic policies is complemented by a discussion of Botswana’s labour market policies, especially with respect to wage-setting, industrial relations and skills development, and their mutual coherence.

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