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In newly collected data on 46 economies over 1990-2011, we show that financial development since 1990was mostly due to growth in credit to real estate and other asset markets, which has a negative growth coefficient. We also distinguish between growth effects of stocks and flows of credit. We find positive growth effects for credit flows to nonfinancial business but not for mortgage and other asset market credit flows. By accounting for the composition of credit stocks and for the effect of credit flows, we explain the insignificant or negative growth effects of financial development in recent times. What was true in the 1960s, 1970s and 1980s when the field of empirical credit-growth studies blossomed, is no longer true in the 1990s and 2000s. New bank lending is not primarily to nonfinancial business and financial development may no longer be good for growth. These trends predate the 2008 crisis. They prompt a rethink of the role of banks in the process of economic growth.

Contrary to conventional economic theories, the relationship between income growth and agricultural employment is extremely diverse, even among regions starting from similar levels of development, such as Asia and Africa. Due to its labor-intensive Green Revolution and strong farm-nonfarm linkages, Asia's development path is mostly characterized by fast growth with relatively slow agricultural exits. In contrast to Asia, urban biased policies, low rural population density, and high rates of population growth have led a number of African countries down a path of slow economic growth with surprisingly rapid agricultural exits. Despite this divergence both continents now face daunting employment problems. Asia appears to be increasingly vulnerable to rising inequality, slower job creation, and shrinking farm sizes, suggesting that Asian governments need to refocus on integrating smallholders and lagging regions into increasingly commercialized rural and urban economies. Africa, in contrast, has yet to achieve its own Green Revolution, which would still be a highly effective tool for job creation and poverty reduction. However, the diversity of its endowments and its tighter budget constraints mean that agricultural development strategies in Africa need to be highly context specific, financially sustainable, and more evidence-based. JEL codes: O13, O15, O18 Long-run economic growth has been accompanied by a significant exodus of workers out of the agricultural sector. This observation was regarded as a robust stylized fact by early development economists and was incorporated into a wide array of development theory (Lewis 1954; Hirschman 1958; Kuznets 1973; Chenery 1979). Subsequent research has added important nuances to this observation-for example many agricultural workers move into the local nonfarm economy rather than to urban areas (Anderson and Leiserson 1980)-but the basic conclusion that development entails "agricultural exits" has rarely been The World Bank Research Observer

Long-term growth in developing countries has been explained in four frameworks: 'extractive colonial institutions' (Acemoglu et al., 2001), 'colonial legal origin' (La Porta et al., 2004), 'geography' (Gallup et al., 1998) and 'colonial human capital' (Glaeser et al., 2004). In this paper we test the 'colonial human capital' explanation for sub-Saharan Africa, controlling for legal origin and geography. Utilising data on colonial era education, we find that instrumented human capital explains long-term growth better, and shows greater stability over time, than instrumented measures for extractive institutions. We suggest that the impact of the disease environment on African long-term growth runs through a human capital channel rather than an extractive-institutions channel. The effect of education is robust to including variables capturing legal origin and geography, which have additional explanatory power.