Scandinavian Working Papers in Economics

Discussion Papers of Business and Economics,
University of Southern Denmark, Department of Business and Economics

No 8/2013: Is Africa's recent growth sustainable?

Thomas Barnebeck Andersen () and Peter Sandholt Jensen ()
Additional contact information
Thomas Barnebeck Andersen: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Peter Sandholt Jensen: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark

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

JEL-codes: O11; O43; O47

26 pages, April 15, 2013

Full text files

dpbe8_2013.pdf PDF-file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to Lene Holbæk ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-04-30 13:40:56.