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Cape Verde and Mozambique as Development Successes in West and Southern Africa

In: African Successes: Sustainable Growth

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  • Jorge Braga de Macedo
  • Luís Brites Pereira

Abstract

This paper applies an interpretation of how globalization and governance (G&G) interact with convergence given Cape Verde and Mozambique’s particular geographical and historical contexts. We hold that development success under globalization entails, necessarily but not exclusively, positive market perceptions regarding the orientation and predictability of policies as well as the accompanying institutional arrangements. As such, a positive G&G interaction with respect to a comparator group can usefully be defined as success notwithstanding the inexistence of a universally applicable development model. In practical terms, we first identify macro-level policy and institutional combinations underpinning successful trade diversification (an indicator of globalization) and income convergence (an indicator of governance) in the sub-regions of West and Southern Africa. We then assess to what extent these combinations apply to both countries using an empirical analysis. We find that trade openness drives convergence and export diversification in Western Africa (which is becoming more diversified) while convergence is instead driven by economic and political freedoms in Southern Africa (which is becoming more specialized). Our empirical analysis is complemented by a case-study narrative of Cape Verde and Mozambique’s long-term development, which allows us to also identify the following common drivers: moving towards a market economy; opening up to regional and global trade; increasing economic and political freedom; pursing macroeconomic stability and financial reputation; ensuring policy continuity (especially in the industrial and trade sectors) and focusing on human development (especially education and poverty reduction). Moreover, both countries reveal convergence compared to their sub-regional peers when looking at average GDP per capita and indicators of financial reputation and good governance. While these findings are insufficient to conclude that convergence wi

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This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 13440.

Handle: RePEc:nbr:nberch:13440

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  1. Hausmann, Ricardo & Hwang, Jason & Rodrik, Dani, 2005. "What You Export Matters," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp05-063, Harvard University, John F. Kennedy School of Government.
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  3. Bonaglia, Federico & Braga de Macedo, Jorge & Bussolo, Maurizio, 2001. "How Globalization Improves Governance," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2992, C.E.P.R. Discussion Papers.
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  8. Barry Eichengreen & David Leblang, 2006. "Democracy and globalisation," BIS Working Papers 219, Bank for International Settlements.
  9. Jorge Braga de Macedo & Luis Pereira & Afonso Reis, 2009. "Comparing Exchange Market Pressure across Five African Countries," Open Economies Review, Springer, Springer, vol. 20(5), pages 645-682, November.
  10. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, Princeton University Press, edition 1, volume 1, number 8973.
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  12. Reinhart, Carmen & Rogoff, Kenneth, 2009. "This Time It’s Different: Eight Centuries of Financial Folly-Preface," MPRA Paper 17451, University Library of Munich, Germany.
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  14. Aleksandra PARTEKA, 2007. "Employment and Export Specialization Patterns versus GDP Per Capita Performance - Unifying Approach," Working Papers, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali 302, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
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  20. Angel-Urdinola, Diego & Wodon, Quentin, 2007. "Assessing Absolute and Relative Poverty Trends with Limited Data in Cape Verde," MPRA Paper 11111, University Library of Munich, Germany.
  21. Macedo, Jorge Braga de & Pereira, Luis Brites, 2006. "The Credibility of Cabo Verde’s Currency Peg," FEUNL Working Paper Series wp494, Universidade Nova de Lisboa, Faculdade de Economia.
  22. John M. Luiz, 2009. "Institutions and economic performance: Implications for African development," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(1), pages 58-75.
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  24. Macedo, Jorge Braga de, 2010. "Global crisis and national policy responses: together alone?," FEUNL Working Paper Series wp546, Universidade Nova de Lisboa, Faculdade de Economia.
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Cited by:
  1. Frankel, Jeffrey A., 2010. "Mauritius: African Success Story," Scholarly Articles 4450110, Harvard Kennedy School of Government.
  2. Jorge Braga de Macedo, 2012. "Cape Verde’s foreign policy: an economic perspective," FEUNL Working Paper Series wp572, Universidade Nova de Lisboa, Faculdade de Economia.

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