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The Prospects for Sustained Growth in Africa

Author/Editor: Arvind Subramanian | Jonathan David Ostry | Simon Johnson
Authorized for Distribution: March 1, 2007
Electronic Access: Free Full Text (PDF file size is 453KB)
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

Summary: A dozen countries had weak institutions in 1960 and yet sustained high rates of growth subsequently. We use data on their characteristics early in the growth process to create benchmarks with which to evaluate potential constraints on sustained growth for sub-Saharan Africa. This analysis suggests that what are usually regarded as first-order problems-broad institutions, macroeconomic stability, trade openness, education, and inequality-may not now be binding constraints in Africa, although the extent of ill-health, internal conflict, and societal fractionalization do stand out as problems in contemporary Africa. A key question is to what extent Africa can rely on manufactured exports as a mode of "escape from underdevelopment," a strategy successfully deployed by almost all the benchmark countries. The benchmarking comparison specifically raises two key concerns as far as a development strategy based on expanding exports of manufactures is concerned: micro-level institutions that affect the costs of exporting, and the level of the real exchange rate-especially the need to avoid overvaluation.
 
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Series: Working Paper No. 07/52
Subject(s): Economic growth
Author's keyword(s): Sustained growth | Africa | constraints | benchmark
 
English  
    Published:   March 1, 2007        
    ISBN/ISSN:   9781451866162/1018-5941   Format:   Paper
    Stock No:   WPIEA2007052   Pages:   57
    Price:   US$18.00
       
     
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