## The Prospects for Sustained Growth in Africa: Benchmarking the Constraints

_IMF Working Papers, March 1, 2007_

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## Bibliographic details
- Authors: Arvind Subramanian, Jonathan David Ostry, Simon Johnson
- Published: March 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451866162.001

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### Summary of core findings
- A dozen countries had weak institutions in 1960 and yet sustained high rates of growth subsequently; these countries are used to create benchmarks to evaluate potential constraints on sustained growth for sub-Saharan Africa.
- 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.
- The extent of ill-health, internal conflict, and societal fractionalization do stand out as problems in contemporary Africa.
- A key question is the extent to which 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 raises two specific concerns for a development strategy based on expanding exports of manufactures:
  - Micro-level institutions that affect the costs of exporting.
  - The level of the real exchange rate—especially the need to avoid overvaluation.

### Policy implications and issues for strategy
- Reassess conventional priorities: policies focused solely on improving broad institutions, macro stability, trade openness, education, and inequality may not address the most binding constraints today.
- Health and conflict mitigation: prioritize interventions to reduce ill-health and internal conflict and to manage societal fractionalization, given their prominence as contemporary problems.
- Export-led manufacturing strategy:
  - Address micro-level institutional barriers that raise the costs of exporting (regulation, customs, logistics, firm-level frictions).
  - Manage real exchange rate policy carefully to avoid overvaluation that would undermine manufactured exports.

### Key statistics and publication identifiers
- Pages: 57
- Publication date: March 1, 2007
- Volume: 2007
- Issue: 052
- Series: Working Paper No. 2007/052
- DOI: https://doi.org/10.5089/9781451866162.001
- Stock No: WPIEA2007052
- ISBN: 9781451866162
- ISSN: 1018-5941

*Authored by Arvind Subramanian, Jonathan David Ostry, Simon Johnson.*

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