Explaining Slow Growth in Africa

Abstract

This paper critically reviews the empirical literature on growth, with a view to drawing some lessons for Africa. It illustrates the diversity of the results found by different authors, and calls for a more rigorous approach, paying attention to the identification of structural parameters and to simultaneity biases. It emphasizes the part played by openness and export orientation as the main policy variables affecting growth. Then, the choice of bad policies, which seems to be the main proximate cause of slow growth in Africa, is traced to the lack of social capital and deficient political institutions.Résumé: Cet article est une critique de la littérature empirique sur le développement dont le but est d'en tirer quelques leçons sur l'Afrique. L'article démontre la diversité des conclusions tirées par plusieurs auteurs et fait appel à une démarche plus rigoureuse, prenant en compte l'identification des paramètres structurels et des penchants simultanés qui existent. L'importance du marché et son orientation vers l'export sont soulignées comme étant les deux variables principales qui touchent directement la croissance. Les auteurs démontrent ensuite que le choix de mauvaises politiques, qui semble être la cause principale de la faible croissance africaine, est due en effet à un manque de capital social ainsi qu'aux institutions politiques défectueuses.

Civil war, climate change, and development: A scenario study for sub-Saharan Africa

“…Empirically he finds that after a 15-year war, the post-war growth rate is enhanced by 5.9 per cent per annum. Later papers find similar effects, and also study the spillover effects on neighboring countries and trading partners (Asteriou and Price 2001;Azam et al 2002;Bayer and Rupert 2004;Bozzoli et al 2010;Butkiewicz and Yanikkaya 2005a;Carmignani 2003;De Groot 2010;Fosu 2003;Gyimah-Brempong and Corley 2005;Kang and Meernik 2005;Koubi 2005;Murdoch and Sandler 2002). (Dell et al 2008;Fankhauser and Tol 2005) study the impact of climate change on economic growth.…”

Making Finance Work for Africa

“…While noting the role of exogenous factors ("opportunities") in holding back many African countries, the study points to a set of antigrowth policy ("choice") syndromes-control regimes, adverse redistribution, unsustainable spending booms, and state failure-that have accounted for the loss of between 1 and 2.5 percent per annum in median growth rates. According to the project's conclusions, avoiding these syndromes was virtually a necessary condition for rapid growth and virtually sufficient for avoiding the growth collapses that so often undermined sustained progress in Africa (Fosu and O'Connell 2006; see also Azam, Bates, and Biais 2005;Azam, Fosu, and Ndung'u 2002 Dercon, Ayalew, and Gautam (2005). 7.…”

Does Africa grow slower than Asia, Latin America and the Middle East? Evidence from a new data-based classification method

“…Knowing which countries get poorer, relative to other countries, also allows one to study the origins of these negative developments. Explanations for the African bgrowth tragedyQ that have been put forward in the literature are diverse, including geographic location, ethnic diversity, choice of institutions, political instability, bad public policy, insufficient infrastructure, limited openness to international trade, and the lack of social capital, see Easterly andLevine (1997, 2003), Sachs and Warner (1997), Bloom and Sachs (1998), Temple (1998), Collier and Gunning (1999a,b), Acemoglu et al (2001), Azam et al (2002), and Artadi and Sala-i-Martin (2003), among others. In the present paper, we will not investigate the sources of economic growth in detail, although our model is well-suited for this purpose, especially for exploring the issue of parameter heterogeneity, which means to say that the marginal impact of certain growth determinants might be different across (groups of) countries.…”