Regional perspectives - Africa Flashcards
what has Africas growth been like over the 20th and 21st century
- poor growth performance compared to other developing countries
- in 19th century was on par with india and china
- but fell behind after negative growth in 80s and stagnant growth 80s-2000s
what did the solow model predict would happen with African growth
- was it true
prediction
- unconditional convergence and faster growth of African countries
- has not happened since 1950s
what is the reason why Africa has not seen sustained economic growth
- or unconditional convergence
- if country has sustainable structural transformation –> sustained economic growth
- but africa seen drop in share of agriculture as % of GDP
- and drop in manufacturing
- deindustrialising early = before they have achieved positive income effects from industrialisation
how has africas past affected growth directly
but how can policy address this
historically:
- effected capital accumulation (HC, K)
- ethnolinguistic fractionalisation
- resource curse
- geography
- other countries have addressed similar issues - so is it policy failure?
in what 2 ways did colonial pas activities have an effect on post colonial africa
- set up unreliable tax base
- set up indirect rule
what did EU colonies do when setting up administration = budgets
- set up reliance on indirect taxes
- at time SSA had strong trade performance in resource-rich coastal economies
- set up budgetary structure that relies on taxes on imports/exports/consumption
why is having most of budget structure relying on indirect taxes bad
- less reliable
- exposed to fluctuation on the price of commodities
- low fiscal capacity
how has poor budgetary set up of Africa affected growth today
- as a result today SSA has lowest fiscal capacity worldwide
- SSA has small government budget - because relying on trade (set up by past)
- lower capacity of government to make changes
what was colonials effect on indirect rule
- they gave power to local chiefs
why is chiefdom bad for growth
- chiefs have no accountability, rent seeking, extractive
- seirra leone = 58% of tax revenue paid to chiefs - little on education
- more competition of chiefs = more accountability = less rent seeking = better economic outcomes LR
what kind of extractive markets were set up by colonisers
distorting markets = allowed whites to extract largest possible pay off
kenya = policies to help white agricultural farmers
- cartelisation = to keep prices high
- Africans cant support themselves
did the extractive markets persist
yes leading to persisting inequality and social conflict
Nunn (2008)
- slave trade
do countries that exported more slave have worse economic outcomes today
- ran regression of GDP per capita with number of slaves traded
- there is a relationship
- more slaves exported = lower GDP per capita today
what are the reasons behind why slaves traded ages ago affects economic outcomes today
mistrust
- people living in areas where slave trade was high = more mistrusting
- not trusting in economic transactions
- LR damages to social fabric
Michalopoulos (2013)
what did they do/test
precolonial legacies
is there an effect on precolonial political centralisation on long term development
- variable of interest = pre colonial jurisdictional hierarchy - distinguish between centralised states and tribes
- outcome = light density
- Regression discontinuity design at the border
