The Prospects for Sustained Growth in Africa: Benchmarking the Constraints

By Arvind Subramanian, Jonathan David Ostry, Simon Johnson

March 1, 2007

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Arvind Subramanian, Jonathan David Ostry, and Simon Johnson. The Prospects for Sustained Growth in Africa: Benchmarking the Constraints, (USA: International Monetary Fund, 2007) accessed November 12, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

A dozen countries had weak institutions in 1960 and yet sustained high rates of growth subsequently. We use data on their characteristics early in the growth process to create benchmarks with which to evaluate potential constraints on sustained growth for sub-Saharan Africa. This analysis suggests that what are usually regarded as first-order problems-broad institutions, macroeconomic stability, trade openness, education, and inequality-may not now be binding constraints in Africa, although the extent of ill-health, internal conflict, and societal fractionalization do stand out as problems in contemporary Africa. A key question is to what extent Africa can rely on manufactured exports as a mode of "escape from underdevelopment," a strategy successfully deployed by almost all the benchmark countries. The benchmarking comparison specifically raises two key concerns as far as a development strategy based on expanding exports of manufactures is concerned: micro-level institutions that affect the costs of exporting, and the level of the real exchange rate-especially the need to avoid overvaluation.

Subject: Economic sectors, Expenditure, Exports, Foreign exchange, Health, International trade, Manufacturing, Public expenditure review, Real exchange rates

Keywords: Africa, African country, Asterisked country, Benchmark, Constraints, Developing world, East Asia, Economic risk, Exchange rate, Exports, GDP growth, Growth country, Growth episode, Growth spurt, Manufacturing, Price level, Public expenditure review, Real exchange rates, SSA country, Sub-Saharan Africa, Sustained growth, WP

Publication Details

Pages:

57
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/052
Stock No:

WPIEA2007052
ISBN:

9781451866162
ISSN:

1018-5941

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