Exchange Rate and Industrial Policies as a Means of Technological Learning in Africa: Which Institutional Framework to Embrace? Developmental State, Heterogeneous Coalition, or Neoliberal Coalition

This paper empirically evaluates the technological learning trajectory models of Porcile et al. (2023) across African countries categorized into three institutional regimes: developmental (Ethiopia, Mauritius, Rwanda), conflicting claims (Ghana, Kenya, Namibia, Tunisia), and neoliberal (Seychelles, South Africa). Using panel ARDL modeling, the study investigates the impact of real effective exchange rate (REER) depreciation on technological learning-by-doing, proxied by the growth rate of export income elasticity (GIEX). The results show no significant learning effects in the developmental regime due to immediate equilibrium adjustment and insignificant coefficients of REER depreciation. The conflicting claims regime demonstrates the same results, driven by low-complexity export baskets. Conversely, the neoliberal regime achieves a relatively persistent short-lived technological learning. However, its long-run REER growth coefficient is negative, confirming that over-reliance on price competitiveness retards long-run growth per Thirlwall's law. Ultimately, state failure hinders heavy intervention regimes in Africa, whereas moving toward the neoliberal framework yields better short-run learning outcomes.