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

In: African Successes, Volume IV: Sustainable Growth

Author

Listed:
  • 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 will b
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Suggested Citation

  • Jorge Braga de Macedo & Luís Brites Pereira, 2014. "Cape Verde and Mozambique as Development Successes in West and Southern Africa," NBER Chapters,in: African Successes, Volume IV: Sustainable Growth, pages 203-293 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:13440
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    Cited by:

    1. Jeffrey Frankel, 2014. "Mauritius: African Success Story," NBER Chapters,in: African Successes, Volume IV: Sustainable Growth, pages 295-342 National Bureau of Economic Research, Inc.
    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.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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