This book describes the reforms needed to move small middle-income countries in sub-Saharan Africa to advanced-economy status. The result of intense discussions with public officials in the countries covered, the book blends rigorous theory, econometrics, and practitioners' insights to come up with practical recommendations for policymakers. It spans topics from macroeconomic vulnerability and reserve adequacy to labor market institutions and financial inclusion. The book is a must-read for researchers interested in the economic issues facing developing countries in sub-Saharan Africa.
Mr. Lamin Y Leigh, Mr. Ali M. Mansoor, Friska Parulian, and Mr. Andrew W Jonelis
sophistication of their financial systems, including the increasing use of technology to improve financial system efficiency.
SMICgovernments have also generally addressed their development challenges effectively, including by narrowing the infrastructure gap and facilitating access to education and health. In general, SMICs score well on the human development index (HDI), including the levels of education and absolute poverty.
However, SMICs exhibit a significant degree of heterogeneity across various dimensions. This heterogeneity is most evident in the
driven by public sector wage policies, which distort labor market outcomes ( Leigh and Flores 2013 ) and impede a business-friendly climate. Macroeconomic policies may also need to be adapted to support global competitiveness. In many SMICs, government hiring practices and wage awards for public servants have typically inflated wage expectations and placed a premium on graduates with degrees that fail to provide the skills in demand in the private sector. They also sometimes lead to high reservation wages and extended job search periods. Too often, this situation