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Avoiding the fragility trap in Africa

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  • Andrimihaja, Noro Aina
  • Cinyabuguma, Matthias
  • Devarajan, Shantayanan

Abstract

Not only do Africa's fragile states grow more slowly than non-fragile states, but they seem to be caught in a"fragility trap". For instance, the probability that a fragile state in 2001 was still fragile in 2009 was 0.95. This paper presents an economic model where three features -- political instability and violence, insecure property rights and unenforceable contracts, and corruption -- conspire to create a slow-growth-poor-governance equilibrium trap into which these fragile states can fall. The analysis shows that, by addressing the three problems, fragile countries can emerge from the fragility trap and enjoy a level of sustained economic growth. But addressing these issues requires resources, which are scarce because external aid is often tailored to the country's performance and cut back when there is instability, insecurity, and corruption. The implication is that, even if aid is seemingly unproductive in these weak-governance environments, it could be hugely beneficial if it is invested in such a way that it helps these countries tackle the root causes of instability, insecurity, and corruption. Empirical estimations corroborate the postulated relationships of the model, supporting the notion that it is possible for African fragile countries to avoid the fragility trap.

Suggested Citation

  • Andrimihaja, Noro Aina & Cinyabuguma, Matthias & Devarajan, Shantayanan, 2011. "Avoiding the fragility trap in Africa," Policy Research Working Paper Series 5884, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5884
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    References listed on IDEAS

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    1. Oded Galor & Omer Moav, 2004. "From Physical to Human Capital Accumulation: Inequality and the Process of Development," Review of Economic Studies, Oxford University Press, vol. 71(4), pages 1001-1026.
    2. Campos, Nauro F. & Nugent, Jeffrey B., 2002. "Who is afraid of political instability?," Journal of Development Economics, Elsevier, vol. 67(1), pages 157-172, February.
    3. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 717-737.
    4. 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, Oxford University Press, vol. 114(1), pages 83-116.
    5. Tim Lankester, 2007. "Tim Lankester on Paul Collier, The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 8(3), pages 195-199, July.
    6. Edgar L. Feige, 2003. "Underground Activity And Institutional Change: Productive, Protective And Predatory Behavior In Transition Economies," Development and Comp Systems 0305001, EconWPA.
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    Cited by:

    1. Mireille Razafindrakoto & François Roubaud & Jean-Michel Wachsberger, 2013. "Institutions, gouvernance et croissance de long terme à Madagascar : l'enigme et le paradoxe," Working Papers DT/2013/13, DIAL (Développement, Institutions et Mondialisation).
    2. Mireille Razafindrakoto & François Roubaud & Jean-Michel Wachsberger, 2017. "Institutions, gouvernance et croissance de long terme à Madagascar : l'énigme et le paradoxe," Working Papers hal-01653670, HAL.
    3. repec:dau:papers:123456789/12014 is not listed on IDEAS
    4. Katz-Lavigne, Sarah G., 2017. "The renegotiation window: Resource contract renegotiations in the mining industry in Africa from 2000 to 2013," Resources Policy, Elsevier, vol. 51(C), pages 22-30.

    More about this item

    Keywords

    Economic Theory&Research; Debt Markets; Emerging Markets; Inequality; Achieving Shared Growth;

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