Ending Africa's Poverty Trap

Sachs, Jeffrey D.; McArthur, John W.; Schmidt-Traub, Guido; Kruk, Margaret E; Bahadur, Chandrika; Faye, Michael; McCord, Gordon C.

doi:10.1353/eca.2004.0018

Cited by 493 publications

(357 citation statements)

References 133 publications

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“…An influential argument coming from Jeffrey Sachs and his associates (Sachs, et al 2004) argues that the specific characteristics of Africa in terms of low population density, vast areas, poor infrastructure and the prevalence of difficult diseases makes many of the conventional governance arguments irrelevant. What Africa requires, according to this argument is a "big push" in terms of massive investment in infrastructure and disease control before attention to governance can deliver any results.…”

Section: Good Governance and The Liberal Economic Analysis Of Africamentioning

confidence: 99%

Governance and Growth Challenges for Africa

Khan¹

2011

Good Growth and Governance in AfricaRethinking Development Strategies

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The World Bank recognized the role of concerted state strategies in driving growth in a number of successful East Asian countries (World Bank 1993). However, this qualified recognition was attended with the observation that the appropriate state capacities for productive interventions were missing in most other developing countries. In these countries, attempts to replicate East Asian strategies would not only fail, but would make things worse due to static efficiency losses and rent-seeking costs. At one level, the World Bank's argument against growth-promoting strategies of the East Asian type in most developing countries is absolutely accurate. The appropriate governance capabilities are clearly absent in many of the poorest countries that are most in need of growth strategies. Moreover, an attempt to acquire state capabilities on a scale that would enable these countries to attempt the types of interventionist programmes seen in East Asian countries in the 1960s and 1970s is probably beyond the feasible capacity of reform in these developing countries.However, while we recognize the obvious truth in the World Bank's analysis of the problem, their policy conclusion does not necessarily follow. The conclusion was that because the substantial growth-promoting governance capabilities of the East Asian economies did not exist in most other developing countries (and indeed could not be feasibly replicated) their optimal strategy was to abandon all growth-promoting strategies and resort to the alternative of seeking to promote market efficiency through market-enhancing governance. This does not follow because a market-enhancing governance strategy is equally over-ambitious in the demands it makes on state capabilities and focusing on this may not deliver any significant returns. To attempt to make markets in general work so efficiently that market failures are no longer a problem may be just as overambitious as the attempt to correct vast swathes of market failures through extensive interventions. In addition, there are structural reasons which set a ceiling to the development of market-enhancing governance capabilities in developing countries. Focusing purely on market-enhancing governance is therefore likely to yield disappointing results.To take account of the limited reform capabilities in real contexts, a targeted approach to developing governance capabilities makes sense. The experience of successful developers suggests that growth-promoting governance was important, but many of the political and institutional initial conditions enjoyed by the successful countries of East Asia were indeed very different from those in Africa. Any simplistic attempt to learn the lessons of East Asia is therefore likely to be misleading because the scale of these growth-enhancing governance capabilities cannot be replicated in most contemporary developing countries. Attempts to do so are likely to result in significant government failures and the abandonment of these strategies. A more relevant approach for Africa is to learn fr...

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Section: Good Governance and The Liberal Economic Analysis Of Africamentioning

confidence: 99%

Governance and Growth Challenges for Africa

Khan¹

2011

Good Growth and Governance in AfricaRethinking Development Strategies

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“…For instance, this would be the case if the marginal product of capital were extremely low at too small levels of infrastructure or human capital (see Sachs, McArthur, Schmidt-Traub, Kruk, Bahadur, Faye, and McCord 2004). Alternatively, this could be the case if regions lagging behind were isolated from other developed regions (see Murphy, Shleifer, and Vishny 1989, for arguments along those lines).…”

Section: Introductionmentioning

confidence: 99%

Too much of a good thing? On the growth effects of the EU's regional policy

Becker

Egger

Ehrlich

2012

European Economic Review

213

174

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The European Union (EU) provides grants to disadvantaged regions of member states from two pools, the Structural Funds and the Cohesion Fund. The main goal of the associated transfers is to facilitate convergence of poor regions (in terms of per-capita income) to the EU average. We use data at the NUTS3 level from the last two EU budgetary periods (1994-99 and 2000-06) and generalized propensity score estimation to analyze to which extent the goal of fostering growth in the target regions was achieved with the funds provided and whether or not more transfers generated stronger growth effects. We find that, overall, EU transfers enable faster growth in the recipient regions as intended, but we estimate that in 36% of the recipient regions the transfer intensity exceeds the aggregate efficiency maximizing level and in 18% of the regions a reduction of transfers would not even reduce their growth. We conclude that some reallocation of the funds across target regions would lead to higher aggregate growth in the EU and could generate even faster convergence than the current scheme does.

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“…The economics literature suggests that the most important causes of this sluggishness are due to various combinations of policy failures-or policy 'syndromes' 3 (e.g., Ndulu et al 2007aNdulu et al , 2007b, institutional weaknesses (e.g., Birdsall 2007;Sachs et al 2004), adverse history (e.g., Acemoglu et al 2001Acemoglu et al , 2002Nunn 2008), political instability and civil conflict (Easterly and Levin 1997;Collier and Hoeffler, 2004;2005), and geographical constraints (e.g., Gallup et al 1999;Naudé 2004Naudé , 2009. A large number of studies have also been concerned with sub-Saharan Africa's trade orientation and performance, and the impact of globalization on Africa-including consideration of foreign direct investment and regional integration (e.g., Carrère 2004;Foster 2006;Fosu 1990;Naudé and Krugell 2007).…”

Section: Determinants Of Successmentioning

confidence: 99%

Development Progress in Sub-Saharan Africa: Lessons from Botswana, Ghana, Mauritius, and South Africa

Naudé¹

2013

Achieving Development Success

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Botswana, Ghana, Mauritius and South Africa are sub-Saharan African countries that stand out for their development progress. Each of these countries has succeeded against the odds, against expectations. This paper synthesizes the common ingredients of these countries' success, and derives lessons. It concludes that smallness, landlockedness, tropical location, distance from world markets, racism, colonialism and other challenges can be overcome through appropriate institutions, governance and good economic policies. Terms of use: Documents in

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Ending Africa's Poverty Trap

Cited by 493 publications

References 133 publications

Governance and Growth Challenges for Africa

Governance and Growth Challenges for Africa

Too much of a good thing? On the growth effects of the EU's regional policy

Development Progress in Sub-Saharan Africa: Lessons from Botswana, Ghana, Mauritius, and South Africa

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