Productivity growth and economic reform : evidence from Rwanda
AbstractTrade, financial, and exchange rate reforms are shown to have exerted a positive impact on the growth of total factor productivity in Rwanda during the period 1995-2003. Based on a constant returns-to-scale Cobb-Douglas production function, this paper regresses total factor productivity on indices of trade, financial, and exchange rate reforms. The analysis determines that trade reforms and financial reforms each contributed positively to improvements in total factor productivity. The data also suggest that the allocation of official development assistance to human capital made a significant contribution to productivity. In contrast, the appreciation of the real exchange rate of the late 1980's hindered productivity or the growth of TFP. Taken together, the findings for Rwanda presented in this paper show that the strong growth of the past decade has not just been due to a"bounce back"effect following the genocide. The results support the notion that policies favorable to trade development, a deepening of the financial sector, and formation of human capital have been effective for increasing aggregate productivity of the economy and stimulating growth in Rwanda. For sustained growth, the Rwandan authorities should continue to build on these policies, while also taking care to maintain an appropriate exchange rate.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4552.
Date of creation: 01 Mar 2008
Date of revision:
Economic Theory&Research; Emerging Markets; Debt Markets; Currencies and Exchange Rates; Access to Finance;
This paper has been announced in the following NEP Reports:
- NEP-AFR-2008-03-25 (Africa)
- NEP-ALL-2008-03-25 (All new papers)
- NEP-DEV-2008-03-25 (Development)
- NEP-EFF-2008-03-25 (Efficiency & Productivity)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- World Bank, 2011. "Republic of Burundi - Country Economic Memorandum (CEM) : The Challenge of Achieving Stable and Shared Growth," World Bank Other Operational Studies 2769, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.