Working Paper: NBER ID: w20188
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: No keywords provided
JEL Codes: O11; O40; O55
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| temporary external factors (F29) | Africa's growth prospects (O55) |
| weak institutions, poor geography, and inadequate structural change (O17) | barriers to sustained growth in Africa (O55) |
| traditional engines of growth not functioning at full capacity (O49) | Africa's growth prospects (O55) |
| adopting a different growth model (agriculture-led or services-led) (O14) | higher growth rates in Africa (O55) |
| improvements in policy and governance aimed at fostering resilience (O29) | significant productivity growth in Africa (O55) |
| structural transformation and challenges posed by premature deindustrialization (O14) | Africa's industrial sector underperforming (O55) |