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Is Africa's economy at a turning point?

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  • Arbache, Jorge
  • Go, Delfin S.
  • Page, John

Abstract

In this paper, Arbache, Go, and Page examine the recent acceleration of growth in Africa. Unlike the past, the performance is now registered broadly across several types of countries-particularly the oil-exporting and resource-intensive countries and, in more recent years, the large- and middle-income economies, as well as coastal and low-income countries. The analysis confirms a trend break in the mid-1990s, identifying a growth acceleration that is due not only to favorable terms of trade and greater aid, but also to better policy. Indeed, the growth diagnostics show that more and more African countries have been able to avoid mistakes with better macropolicy, better governance, and fewer conflicts; as a result, the likelihood of growth decelerations has declined significantly. Nonetheless, the sustainability of that growth is fragile, because economic fundamentals, such as savings, investment, productivity, and export diversification, remain stagnant. The good news in the story is that African economies appear to have learned how to avoid the mistakes that led to the frequent growth collapses between 1975 and 1995. The bad news is that much less is known about the recipes for long-term success in development, such as developing the right institutions and the policies to raise savings and diversify exports, than about how to avoid economic bad times.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4519.

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Date of creation: 01 Feb 2008
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Handle: RePEc:wbk:wbrwps:4519

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Keywords: Economic Conditions and Volatility; Governance Indicators; Achieving Shared Growth; Economic Theory&Research; Emerging Markets;

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References

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  1. Paul Collier & Benedikt Goderis, 2007. "Commodity Prices, Growth, and the Natural Resource Curse: Reconciling a Conundrum," CSAE Working Paper Series 2007-15, Centre for the Study of African Economies, University of Oxford.
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  3. Harry Seldadyo & Emmanuel Pandu Nugroho & Jakob de Haan, 2007. "Governance and Growth Revisited," Kyklos, Wiley Blackwell, vol. 60(2), pages 279-290, 05.
  4. Subramanian, Uma & Matthijs, Matthias, 2007. "Can Sub-Saharan Africa leap into global network trade ?," Policy Research Working Paper Series 4112, The World Bank.
  5. World Bank, 2007. "Global Economic Prospects 2007 : Managing the Next Wave of Globalization," World Bank Publications, The World Bank, number 7157, January.
  6. Paul Collier & Jan Willem Gunning, 1997. "Explaining African economic performance," CSAE Working Paper Series 1997-02.2, Centre for the Study of African Economies, University of Oxford.
  7. Collier, Paul & Dehn, Jan, 2001. "Aid, shocks, and growth," Policy Research Working Paper Series 2688, The World Bank.
  8. Barry P. Bosworth & Susan M. Collins, 2003. "The Empirics of Growth: An Update," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 113-206.
  9. Shantayanan Devarajan & William R. Easterly & Howard Pack, 2002. "Low Investment is Not the Constraint on African Development," Working Papers 13, Center for Global Development.
  10. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-51, December.
  11. Essama-Nssah, B. & Go, Delfin S. & Kearney, Marna & Korman, Vijdan & Robinson, Sherman & Thierfelder, Karen, 2007. "Economy-wide and distributional impacts of an oil price shock on the south African economy," Policy Research Working Paper Series 4354, The World Bank.
  12. Deaton, A-S & Miller, R-I, 1995. "International Commodity Prices, Macroeconomic Performance, and Politics in Sub-Saharan Africa," Princeton Studies in International Economics 79, International Economics Section, Departement of Economics Princeton University,.
  13. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
  14. Hnatkovska, Viktoria & Loayza, Norman, 2004. "Volatility and growth," Policy Research Working Paper Series 3184, The World Bank.
  15. Ratha, Dilip & Mohapatra, Sanket & Plaza, Sonia, 2008. "Beyond aid : new sources and innovative mechanisms for financing development in Sub-Saharan Africa," Policy Research Working Paper Series 4609, The World Bank.
  16. Harry G. Broadman, 2007. "Africa's Silk Road : China and India's New Economic Frontier," World Bank Publications, The World Bank, number 7186, January.
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Citations

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Cited by:
  1. Amavilah, Voxi Heinrich, 2008. "Domestic resources, governance, global links, and the economic performance of Sub-Saharan Africa," MPRA Paper 11193, University Library of Munich, Germany.
  2. Devarajan, Shantayanan & Go, Delfin S. & Maliszewska, Maryla & Osorio-Rodarte, Israel & Timmer, Hans, 2013. "Stress-testing Africa's recent growth and poverty performance," Policy Research Working Paper Series 6517, The World Bank.
  3. World Bank, 2009. "Africa - Making Development Climate Resilient : A World Bank Strategy for Sub-Saharan Africa," World Bank Other Operational Studies 3211, The World Bank.
  4. Go, Delfin S. & Quijada, Jose Alejandro, 2011. "Assessing the odds of achieving the MDGs," Policy Research Working Paper Series 5825, The World Bank.
  5. Olessia Korbut & Gonzalo Salinas & Cheikh A. Gueye, 2011. "Growth in Africa Under Peace and Market Reforms," IMF Working Papers 11/40, International Monetary Fund.
  6. Arnelyn Abdon & Jesus Felipe, 2011. "The Product Space: What Does It Say About the Opportunities for Growth and Structural Transformation of Sub-Saharan Africa?," Economics Working Paper Archive wp_670, Levy Economics Institute, The.

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