## Sustaining and Accelerating Pro-Poor Growth in Africa

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**Canonical URL:** [Sustaining and Accelerating Pro-Poor Growth in Africa](https://www.imf.org/-/media/websites/imf/imported-publications/external/pubs/nft/2006/africa/eng/_growth.pdf)

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### Objectives and overall approach
- The paper addresses two overarching questions: Are improvements in growth in sub-Saharan Africa since the mid-1990s sustainable? What types of growth strategies contribute most to reducing poverty?
- The analysis proceeds in four stages:
  - Explore factors contributing to the post-1995 improvement in growth, including the roles of external conditions, policy improvements, investment, productivity growth, and institutions.
  - Analyze correlates of growth accelerations to identify factors associated with substantial and sustained jumps in growth rates, including whether triggering factors can be identified and whether the incidence and timing of accelerations can be predicted.
  - Examine the consistency of sub-Saharan Africa data with theoretical predictions linking fiscal policy, financial development, and institutions to growth (for example, nonlinear relationships between fiscal deficits and growth; effects of fiscal consolidations that reduce reliance on domestic financing; links between infrastructure and growth; and the role of macroeconomic stability for financial development).
  - Review evidence on what types of growth processes are most effective at raising incomes of the poor, focusing on the roles of the rate of growth, the response of poverty to that growth, and changes in inequality.

### Key analytic themes and framing
- The paper emphasizes correlation-based analysis, noting that many explanatory factors are themselves strongly influenced by output growth, making causality difficult to establish.
- It situates the recent growth improvement in the context of the Millennium Development Goals (MDGs) and observes that the recent improvement, while encouraging, is insufficiently strong to put sub-Saharan Africa on a path to make substantial reductions in poverty as set out in the MDGs.
- The literature context: the authors note an evolution from monocausal explanations for Africa’s stagnation to recognition of diverse performance driven by a complex set of factors. The consensus is that Africa does not grow differently from other regions, but is particularly disadvantaged on key growth determinants.
- Robust-variable findings cited in the paper identify poor health indicators, ethnic diversity, expensive investment goods, low levels of education, excessive government expenditure, and lack of openness as contributors to sub-Saharan Africa’s growth shortfall relative to the rest of the world.

### Growth improvement since the mid-1990s: questions posed
- To what extent is the growth recovery driven by favorable external conditions?
- Have improved policies played an important role?
- Has the improved growth performance been accompanied by improvements in investment, productivity growth, and basic institutions, suggesting a more durable foundation?
- How do these factors explain differences in performance across subgroups in the region?
- Which countries can be identified as the strongest performers?
- The analysis considers country subgroup characteristics such as membership in the CFA franc zone, involvement in conflict, and whether a country has an IMF-supported program.

### Growth accelerations: analytic focus
- Identification of accelerations and their bivariate correlates (the paper includes an explicit empirical treatment across episodes).
- Examination of what is different about acceleration episodes versus nonepisodes, including timing and associated macroeconomic and policy variables.
- Investigation of possible triggers for accelerations and the determinants that sustain accelerations.
- Empirical coverage includes the period 1980–2004 for acceleration probability analysis.

### Policies, institutions, and growth: areas examined
- Fiscal policy:
  - Is there evidence of a nonlinear relationship between fiscal deficits and growth in sub-Saharan Africa?
  - Do fiscal consolidations that reduce reliance on domestic financing, and changes in the composition of spending, increase growth?
- Financial development:
  - What are the broad trends in correlations between financial development indicators and growth in sub-Saharan Africa?
  - Is financial development more strongly correlated with growth in conditions of macroeconomic stability?
- Institutions:
  - What is the correlation between improvement in basic institutions and growth in sub-Saharan Africa?
  - Are improvements in political institutions and improvements in economic institutions strongly correlated over time?

### Pro-poor growth: focus and questions
- Growth is the long-run key to poverty reduction, but there is significant short-run variation across countries in the magnitude of growth’s effect on poverty.
- In the long run, growth is more likely to be sustainable if there is greater equity in opportunities for all segments of the population to participate in the benefits of growth.
- The paper focuses on macroeconomic issues and asks:
  - What is the role of the rate of growth, the response of poverty to that growth, and changes in inequality in explaining changes in poverty in sub-Saharan Africa?
  - What do country case studies tell us about macroeconomic policies and conditions conducive to pro-poor growth?

### Methodological and contextual notes
- The paper does not attempt a comprehensive literature review but references the shift in the literature toward multifactor explanations and newer methods that identify robust explanatory variables.
- The authors acknowledge the limits of causal inference given endogeneity between growth and many explanatory variables; much of the analysis therefore emphasizes correlations and robustness checks.
- The analysis recognizes heterogeneity across African countries in geography, resource endowments, external environment, inherited institutions, prevalence of disease, and other structural features that affect growth opportunities.

*Italic: Source — Sustaining and Accelerating Pro-Poor Growth in Africa (Catherine A. Pattillo, Sanjeev Gupta, and Kevin Carey), International Monetary Fund, chapter: Introduction.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-publications/external/pubs/nft/2006/africa/eng/_growth.pdf_