Discussion Papers of Business and Economics
Department of Business and Economics, University of Southern Denmark
Thomas Barnebeck Andersen
Is Africa's recent growth sustainable?
() and Peter Sandholt Jensen
Abstract: In this paper we argue that the answer is yes. Our
optimism rests on the finding that differences in the level of
institutional quality predict cross-country variation in African economic
growth during the period 1995-2011. This finding is quite robust. It holds
in OLS, LAD and 2SLS settings; it holds for different measures of
institutions and different measures of economic growth; and it holds for
the period before and the period after the global financial crisis. We also
show that changes in institutional quality predict cross-country variation
in African economic growth. Moreover, if we split our sample in two equally
sized groups, a high-growth and a lowgrowth group, then the high-growth
group has experienced a statistically significant increase in institutional
quality, whereas the low-growth group has not. Overall, this makes probable
that institutions has played an important part in Africa’s recent growth
acceleration. The continent has seen many false dawns, caused in large part
by ups in commodity prices, but a growth acceleration driven by
institutions is likely to signify a genuine African takeoff.
Keywords: Institutions; economic growth; Africa; (follow links to similar papers)
JEL-Codes: O11; O43; O47; (follow links to similar papers)
26 pages, April 15, 2013
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