Africa's growth trap: a political-economy model of taxation, R&D and investment
Why do so many African governments consistently impose high tax rates and make little investment in productive public goods when alternative policies could yield greater tax revenues and higher national income? We posit and test an intertemporal political economy model in which the government sets tax and R&D levels while investors respond with production. Equilibrium policy and growth rates depend on initial cost structure. We find that in many (but not all) African countries, low tax/high investment regimes would be time-inconsistent. For progrowth policies to become sustainable, commitment mechanisms or new production techniques would be needed.
|Date of creation:||2000|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44-(0)1865 271084
Fax: +44-(0)1865 281447
Web page: http://www.csae.ox.ac.uk/Email:
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dani Rodrik, 1998. "Trade Policy and Economic Performance in Sub-Saharan Africa," NBER Working Papers 6562, National Bureau of Economic Research, Inc.
- Richard J. Gilbert & David M. Newbery, 1994. "The Dynamic Efficiency of Regulatory Constitutions," RAND Journal of Economics, The RAND Corporation, vol. 25(4), pages 538-554, Winter.
- Robert J. Barro, 1989.
"Economic Growth in a Cross Section of Countries,"
NBER Working Papers
3120, National Bureau of Economic Research, Inc.
- David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
- 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,.
- Deaton, Angus & Miller, Ron, 1996. "International Commodity Prices, Macroeconomic Performance and Politics in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 5(3), pages 99-191, October.
- Robert E. Hall & Charles I. Jones, 1999.
"Why Do Some Countries Produce So Much More Output per Worker than Others?,"
NBER Working Papers
6564, National Bureau of Economic Research, Inc.
- Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
- Masters, William A. & Bedingar, Touba & Oehmke, James F., 1998.
"The impact of agricultural research in Africa: aggregate and case study evidence,"
Blackwell, vol. 19(1-2), pages 81-86, September.
- Masters, William A. & Bedingar, Touba & Oehmke, James F., 1998. "The impact of agricultural research in Africa: aggregate and case study evidence," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 19(1-2), September.
- Besley, Timothy, 1997.
"Monopsony and Time-Consistency: Sustainable Pricing Policies for Perennial Crops,"
Review of Development Economics,
Wiley Blackwell, vol. 1(1), pages 57-70, February.
- Besley, T., 1992. "Monopsony and Time-Consistency : Sustainable Pricing Policies for Perennial Grops," Papers 159, Princeton, Woodrow Wilson School - Development Studies.
- Sachs, J-D & Warner, A-M, 1996.
"Sources of Slow Growth in African Economies,"
545, Harvard - Institute for International Development.
- Fulginiti, Lilyan E. & Perrin, Richard K., 1997.
"LDC agriculture: Nonparametric Malmquist productivity indexes,"
Journal of Development Economics,
Elsevier, vol. 53(2), pages 373-390, August.
- Lilyan E. Fulginiti & Richard K. Perrin, 2005. "LDC Agriculture: Non-parametric Malmquist productivity indexes," Development and Comp Systems 0502025, EconWPA.
- Easterly, William & Levine, Ross, 1997.
"Africa's Growth Tragedy: Policies and Ethnic Divisions,"
The Quarterly Journal of Economics,
MIT Press, vol. 112(4), pages 1203-50, November.
- Easterly, W & Levine, R, 1996. "Africa's Growth Tragedy : Policies and Ethnic Divisions," Papers 536, Harvard - Institute for International Development.
- Hertel, Thomas W & Masters, William A & Elbehri, Aziz, 1998. "The Uruguay Round and Africa: A Global, General Equilibrium Analysis," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 7(2), pages 208-36, July.
- Margaret McMillan, 2001. "Why Kill The Golden Goose? A Political-Economy Model Of Export Taxation," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 170-184, February.
- Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, vol. 86(5), pages 1216-38, December.
- Angela Lusigi & Colin Thirtle, 1997. "Total Factor Productivity And The Effects Of R&D In African Agriculture," Journal of International Development, John Wiley & Sons, Ltd., vol. 9(4), pages 529-538.
- Easterly, William & Levine, Ross, 1998. "Troubles with the Neighbours: Africa's Problem, Africa's Opportunity," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 7(1), pages 120-42, March.
When requesting a correction, please mention this item's handle: RePEc:csa:wpaper:2000-14. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Richard Payne)
If references are entirely missing, you can add them using this form.