Real income per head in much of sub-Saharan Africa grew rapidly in the 1960s, but faltered following the first OPEC oil price shock in 1973-74, and then stagnated or fell from the late 1970s to the early 1990s. Africa also saw a broad wave of authoritarian rule sweep the continent in the 1960s and early 1970s. Since 1990, however, the African political landscape has experienced significant changes, many in the direction of greater pluralism and democracy. Moreover, where civil strife has been avoided, Africa has seen a broad tendency towards rapid growth for several years after 1995. This sequence of events suggests that political economy may offer useful perspectives on Africa's growth record over the last several decades. We begin with a summary of Africa's growth patterns and the evolution of African political regimes. We then examine models of authoritarian rule for insights into the conditions under which elites may sacrifice the general interest to extract rents and retain power, or in which leaders may find ways of making growth-enhancing policy politically acceptable. It would be premature to conclude that Africa's political reforms of the 1990s have helped to generate economic progress. However, we do believe that the increase in political pluralism, in combination with greater unity among African aid donors, bodes well for a continuation of Africa's growth recovery.
External aid donors have gradually shifted from a benign view of the African state to one that presumes a con¯ict of interest between the state and its own private sector. What are the implications of this diagnosis for the design of aid programs? We develop a model that locates slow growth in the overly narrow interests of a political elite. We study the impact of aid on policy choice and private investment and the role of conditionality in securing the gains from aid. The results capture key features of the current diagnosis while underscoring the need for more sophisticated treatments of domestic political institutions, institutional change, and donor motivations.
for their helpful comments and suggestions. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
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