Working Paper: CEPR ID: DP10005
Authors: Dani Rodrik
Abstract: Africa?s recent growth performance has raised expectations of a bright economic future for the continent after decades of decline. Yet there is a genuine question about whether Africa?s growth can be sustained, and if so, at what level. The balance of the evidence suggests caution on the prospects for high growth. While the region?s fundamentals have improved, the payoffs to macroeconomic stability and improved governance are mainly to foster resilience and lay the groundwork for growth, rather than to generate productivity growth on their own. The traditional engines behind rapid growth, structural change and industrialization, seem to be operating at less than full power. If African countries do achieve growth rates substantially higher, they will have to do so pursuing a growth model that is different from earlier miracles based on industrialization. This might be agriculture-led or services-led growth, but it will look quite different than what we have seen before.
Keywords: Africa; Economic Growth
JEL Codes: O11; O55
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Improved governance (G38) | Economic growth (O00) |
| High global commodity prices (F69) | Recent growth performance in Africa (O55) |
| Low interest rates (E43) | Recent growth performance in Africa (O55) |
| Macroeconomic stability (E60) | Resilience (Q54) |
| Structural change and industrialization (L16) | Sustained growth (O44) |
| Current trends in structural change and industrialization (O14) | Moderate growth (O49) |