Raising Growth and Investment in Sub-Saharan Africa: What Can Be Done?
Ablo, E. Y., and Ritva Reinikka, 1998, “Do Budgets Really Matter? Evidence from Public Spending on Education and Health in Uganda,” World Bank Policy Research Working Paper No. 1926.
Barro, Robert J. and Jong-Wha Lee, 1994, “Losers and Winners in Economic Growth,” in Proceedings of the World Bank Annual Conference on Development Economics, 1993, ed. By Michael Bruno and Boris Pleskovic, pp. 267–97.
Beddies, Christian, 1999, “Investment, Capital Accumulation, and Growth.: Some Evidence from The Gambia 1964-1998.” IMF Working Paper 99/117 (August).
Bloom, David E., and Jeffrey D. Sachs, 1998, “Geography, Demography, and Economic Growth in Africa,” Brookings Papers on Economic Activity: 2, Brookings Institution.
Collins, Susan M. and Barry P. Bosworth, 1996, “Economic Growth in East Asia: Accumulation versus Assimilation,” Brookings Papers on Economic Activity: 2, Brookings Institution, pp. 135–203.
Collier, Paul, 1999, “Comment on the Paper by Bloom and Sachs,” Brookings Papers on Economic Activity: 2, Brookings Institution, Vol. 37 (March).
Collier, Paul and Jan Willem Gunning, 1999a, “Explaining African Economic Performance,” Journal of Economic Literature, Vol. 37 (March), pp. 64–111.
Collier, Paul and Jan Willem Gunning, 1999b, “Why Has Africa Grown Slowly?”, Journal of Economic Perspectives, Vol. 13, Number 3 (Summer).
Collier, Paul, Anke Hoeffler and Catherine Patillo (1999), “Flight Capital as Portfolio Choice,” IMF Working Paper 99/171 (December).
Devarajan, Shantayanan, William Easterly and Howard Pack, 1999, “Is Investment in Africa Too High or Too Low? Macro and Micro Evidence,” World Bank, (November).
Easterly, William, and Ross Levine, 1997, “Africa’s Growth Tragedy: Policies and Ethnic Divisions,” Quarterly Journal of Economics, Vol. 112 (November), pp. 1203–50.
Easterly, William, and Ross Levine, 1998, “Troubles with the Neighbors: Africa’s Problem, Africa’s Opportunity,” Journal of African Economies, Vol. 7 (March), pp. 120–42
Fischer, Stanley, Ernesto Hernández-Catá, and Mohsin S. Khan, 1998, “Africa: Is This the Turning Point?” IMF Paper on Policy Analysis and Assessment 98/6 (May).
Ghura, Daneshwar, 1997, “Private Investment and Endogenous Growth: Evidence from Cameroon,” IMF Working Paper 97/165 (December).
Ghura, Daneshwar and Thomas J. Grennes, 1993, “The Real Exchange Rate and Macroeconomic Performance in Sub-Saharan Africa,” Journal of Economics, Vol. 42 (October).
Ghura, Daneshwar, Thomas J. Grennes and Michael T. Hadjimichael, 1996, “Growth in Sub-Saharan Africa,” Staff Papers, International Monetary Fund, Vol. 43 (September).
Ghura, Daneshwar, Thomas J. Grennes and Michael T. Hadjimichael, 1999, “Investment and Growth in Africa: Revisiting the Evidence,” IMF, unpublished (December).
Gupta, Sanjeev, Keiko Honjo, and Marijn Verhoeven (1997), “The Efficiency of Government Expenditure: Experiences from Africa”, IMF Working Paper 97/153 (November).
Hadjimichael, Michael, Dhaneshwar Ghura, Martin Mühleisen, R. Nord, and E. Murat Ucer. 1995, Sub-Saharan Africa: Growth, Savings and Investment, 1986-93, IMF Occasional Paper No. 118 (Washington: International Monetary Fund).
Jonsson, Gunnar and Arvind Subramanian, 1999, “Dynamic Gains from Trade: Evidence from South Africa.” IMF Working Paper (forthcoming).
Leite, Carlos, and Jens Weidmann, 1999, “Does Mother Nature Corrupt? Natural Resources, Corruption and Economic Growth,” IMF Working Paper 99/85 (July).
Rodrik, Dani, 1998, “Trade Policy and Economic Performance in Sub-Saharan Africa,” NBER Working Paper 6562, National Bureau of Economic Research, Cambridge, MA (May).
Roemer, Michael and Mary Kay Gugerty, 1997, “Does Economic Growth Reduce Poverty?” Technical Paper, Harvard Institute for International Development (March).
Schiff, Maurice and Alberto Valdés, 1995, “The Plundering of Agriculture in Developing Countries,” Finance & Development, Vol. 32 (March), pp. 44–70.
The oil exporting countries were severely affected by the plunge in world oil prices in 1998 but recovered in 1999 as prices rebounded. The oil importing countries were hit particularly hard in 1999, as oil prices surged and other commodity prices fell.
Ghura (1999) shows that, contrary to the assertions of Devarajan, Easterly and Pack (1999), the empirical relation between growth and private investment in Africa is indeed robust with respect to changes in specification.
This is a historical trough associated with the East Asian crisis. In the previous four years private investment in the newly industrialized Asian economies averaged about 25 percent.
It is noteworthy that the contribution to growth of both capital per worker and total factor productivity in the period 1973-1994 was found to be significantly lower in Africa than in South Asia.
In addition to the expectation of bad outcomes associated with poor macroeconomic policies, there is the problem of policy instability. Collier and Patillo (2000) show that, in the 1970s and 1980s, the volatility of real exchange rate changes and of the ratio of taxes to GDP in SSA was the highest among major country groups, implying a particularly high volatility in after-tax rates of return on capital.
Leite and Weidmann (1999) provide empirical evidence of the adverse effects of corruption on growth and of the connection between trade restrictions and corruption.