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Sources Of Slow Growth In African Economies


  • Sachs, Jeffery
  • Warner, Andrew


The following note offers some calculations of the sources of slow growth in African economies. The underlying cross-country growth equation makes per capita growth a function of six country-specific characteristics, grouped around policy variables and structural variables, as follows: • Policy variables: (1) openness to trade (2) market efficiency (3) national saving rates • Structural variables: (4) initial income (5) physical access to port facilities (6) natural resource abundance Africa's poor economic performance reflects a combination of policy and structural variables, of which the policy variables are the most important. Virtually every African economy was closed to international trade during the 1970s and 1980s. National saving rates have also been very low, partly because of low government saving. Most African countries have displayed a relatively low degree of market efficiency because of extensive goverment intervention, the absence of the rule of law, widespread wage/price controls, low protection of private property, and so forth. With regard to economic structure, Africa is more land-locked, and has less access to the sea via navigable rivers, than almost any other area in the world (only rivaled by Central Asia). Many of the economies are also extremely abundant in natural resources. In earlier work, we have found that resource-abundant economies experienced slower growth than resource poor economies. However, these two structural features (landlockedness and resource-abundance) have played only a modest role in Africa's slow growth.

Suggested Citation

  • Sachs, Jeffery & Warner, Andrew, 1996. "Sources Of Slow Growth In African Economies," Harvard Institute for International Development (HIID) Papers 294367, Harvard University, Kennedy School of Government.
  • Handle: RePEc:ags:hariid:294367
    DOI: 10.22004/ag.econ.294367

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    Institutional and Behavioral Economics;

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity


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