Structural transformation and economic development in the best performing sub-Saharan African states
DOI:
https://doi.org/10.24136/eq.v12i4.29Keywords:
economic development, sub-Saharan Africa, technology development, new structural economicsAbstract
Research background: Economic development in sub-Saharan Africa is of paramount importance, yet it escapes most of the attempts to understand it better in the economic dis-course, and it remains a sensitive issue in politics, contradicting stakeholders at national and international levels. The region still lags behind others in terms of technological advancement and economic development. It has grown significantly in the precedent decade, but the extent of growth has not sufficiently translated to its development. Determining strategies for sub-Saharan Africa is a scientific challenge, which requires more attention. In the globalized, interconnected reality, solving problems of the South is in the best interest of the North.
Purpose of the article: The aim of this research is to analyze structural changes as factors of economic development in the best performing sub-Saharan African countries on the grounds of new structural economics in order to provide policy implications. Methods: Namibia, Botswana, South Africa and Gabon were selected as best performing economies in the region. Based on the literature review and the analysis of descriptive statis-tics, profiles of sample countries were set. This in turn allowed to determine the potential explanatory variables for OLS model of economic development. In the model, factors relating to labour productivity, technology and structural change were included. The data was sourced from WDI (World Development Indicators) database, Gretl software was used for computations.
Findings & Value added: This paper contributes to the literature by attempting to explain structural changes in the process of economic development in the sub-Saharan region on the sample of best performing states. The paradigm of new structural economics provided theo-retical grounds for empirical analysis. Based on the results, policy implications were proposed with respect to technology promotion, natural resources management, and quality of institutions. The research was limited by data availability and reliability.
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References
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Bates, R. H., Block, S. A., Fayad, G., & Hoeffler, A. (2012). The new institutional-ism and Africa. Journal of African Economies, 22(4). doi: 10.1093/jae/ejs031.
Bates, R. H., & Block, S. A. (2013). Revising African agriculture: institutional change and productivity growth. Journal of Politics, 75(2).
Bates, R. (2015). When things fell apart: state failure in late-century Africa. Cam-bridge: Cambridge University Press. doi:10.1017/CBO9781316423974.
Berglof, E. (2015). New structural economics meets European transition. Journal of Economic Policy Reform, 18(2). doi: 10.1080/17487870.2015.1013543.
Bhorat, H., Kanbur, R., & Stanwix, B. (2014). Estimating the impact of minimum wages on employment, wages, and non-wage benefits: The case of agriculture in South Africa. American Journal of Agricultural Economics, 96(5). doi: 10.1093/ajae/aau049.
Birdsall, N., Rodrik, D., & Subramanian, A. (2005). How to help poor countries. Foreign Affairs, 84(4). doi: 10.2307/20034426.
Bruno, R. L., Douarin, E., Korosteleva, J., & Radosevic, S. (2015). Technology choices and growth: testing new structural economics in transition economies. Journal of Economic Policy Reform, 18(2). doi: 10.1080/17487870.2015 .1013541.
Buera, F. J., & Kaboski J. (2008). Scale and the origins of structural change. Work-ing Paper Series, Federal Reserve Bank of Chicago, WP-08-06. doi: 10.1016/j.jet.2010.11.007.
Calderón, C. (2009). Infrastructure and growth in Africa. Policy Research Working Paper Series, World Bank, 4914.
Chauvet, L., & Collier, P. (2009). Elections and economic policy in developing countries. Economic Policy, 59(509). doi: 10.1111/j.1468-0327.2009.00228.x.
Chauvet, L., Collier, P., & Hoeffler, A. (2010). Paradise lost: the costs of state failure in the Pacific. Journal of Development Studies, 46(5). doi: 10.1080/00220381003623871.
Devarajan, S., & Kanbur, R. (2007). A framework for scaling up poverty reduc-tion, with illustrations from South Asia. In D. Narayan & E. Glinskaya (Eds.). Ending poverty in South Asia: ideas that work. Washington, DC: World Bank.
Devarajan, S., & Kanbur, R. (2013) The evolution of development strategy as balancing market and government failure. Working Paper, Charles H. Dyson School of Applied Economics and Management, Cornell University, 09.
Devarajan, S., David, R., Dollar, D. R., & Holmgren, T. (2001). Aid and reform in Africa. World Bank. Working Paper 22118. doi: 10.1596/0-8213-4669-5.
Easterly, W., & Pfutze, T. (2008). Where does the money go? Best and worst prac-tices in foreign aid. Journal of Economic Perspectives, 22(2). doi: 10.1257/jep.22.2.29.
FFP (2017). Fragile States Index. Retrieved from http://fsi.fundforpeace.org/rankings-2016 (07.01.2017).
Fine, B., & Van Waeyenberge, E. (2013). A paradigm shift that never was: Justin Lin's new structural economics. Competition and Change, 17(4).
Fukuyama, F. (1992). The end of history and the last man. New York: Perennial.
GCI (2016). Global competitiveness index 2015-2016. World Economic Forum. Retrieved form http://reports.weforum.org/global-competitiveness-report-2015-2016/results-overview/ (04.01.2017).
Gollin, D., & Rogerson, R. (2010). Agriculture, roads and economic development in Uganda. Working Paper. Retrieved form https://a4f8c630-a-62cb3a1a-s-sites.googlegroups.com/site/douglasgollin/doug-gollin/research/papers-1/Gollin _and_Rogerson_-_Agriculture_Roads_and_Economic_Development _in_Uga nda (04.01.2017).
Gollin, D., Parente, S., & Rogerson, R. (2002). The Role of agriculture in devel-opment. American Economic Review, 92(2). doi: 10.1257/00028280232 0189177.
Harman, S., & Williams, D. (2014). International development in transition. Inter-national Affairs, 90(4). doi: 1468-2346.12148.
Herrendorf, R., Rogerson, R., & Valentinyi, A. (2013) Growth and structural transformation. Prepared for the Handbook of Economic Growth. Retrived from http://www.imf.org/external/np/seminars/eng/2013/SPR/pdf/rrog2.pdf (02.15.2017).
Hirschmann, A.(1984). Dissenter's confession: the 'Strategy of economic develop-ment' revisited". In G.M. Meier & D. Seers (Eds.). Pioneers in development. New York: Oxford University Press.
ILO (1976). Employment, growth and basic needs: a one world problem. Geneva.
ISIC (1990). International standard industrial classification of all economic activities. Revision 3. United Nations, 1990, Series M, No. 4, Rev. 3.
Kallioras, D., & Petrakos, G. (2010). Industrial growth, economic integration and structural change: Evidence from the EU New Member-States Regions. Annals of Regional Science, 45(3). doi: 10.1007/s00168-009-0296-5.
Kekic, L. (2007) The Economist Intelligence Unit?s index of democracy. Retrieved from http://www.economist.com/media/pdf/DEMOCRACY_INDEX_2007_ v3.pdf (07.01.2017).
Kose, M. A., & Prasad, E. S. (2012). Capital accounts: liberalize or not. Finance & development. International Monetary Fund, Retrieved from: http://www.imf.org/external/pubs/ft/fandd/basics/capital.htm (28.12.2016).
Kuznets, S. (1972). Problems in comparing recent growth rates for developed and less developed countries. Economic Development & Cultural Change, 20(2).
Kuznets, S. (1977). Two centuries of economic growth: reflections on U.S. experi-ence. American Economic Review, 67(1).
Lin, J. Y. (2012). New structural economics a framework for rethinking develop-ment and policy. Washington: The World Bank.
Lin, J. Y. (2015). The Washington Consensus revisited: a new structural economics perspective. Journal of Economic Policy Reform, 18(2).
Lin, J. Y., & Treichel, V. (2012). Learning from China's rise to escape the middle-income trap: a new structural economics approach to Latin America. World Bank. Dou: 10.1596/1813-9450-6165.
Lin, J. Y., Sun, X., & Jiang, Y. (2013). Endowment, industrial structure, and ap-propriate financial structure: A new structural economics perspective. Journal of Economic Policy Reform, 16(2). doi: 10.1080/17487870.2013.799035
Milczarek, A. (2014). Africa as a new potential of the global economy. Journal of International Studies, 7(2). doi: 10.14254/2071-8330.2014/7-2/13.
Prebisch, R. (1950). The economic development of Latin America and its principal problems. New York: United Nations.
Przeworski, A., Alvarez, M. E., Cheibub, J. A., & Limongi, F. (2000). Democracy and development: political institutions and wellbeing in the World, 1950?90, Cambridge: Cambridge University Press. doi: 10.1017/CBO9780511804946.
Rodrik, D. (2011). New structural economics: comments. World Bank Research Observer, 26(2).
Sato, H. (2013). New structural economics: a framework for rethinking develop-ment and policy by Justin Yifu Lin, Washington, DC: World Bank, 2012. De-veloping Economies, 51. doi:10.1111/deve.12022.
Sejkora, J., & Buryan, Š. (2015). Growth facilitation in new structural economics: the case of Senegal. Proceedings of The Multidisciplinary Academic Confer-ence, 8(1).
Shuaibu, M., & Oladayo, P. (2016). Determinants of human capital development in Africa: a panel data analysis. Oeconomia Copernicana, 7(4). doi: 10.12775/OeC.2016.030
Stiglitz, J. (2011). New structural economics: comments. World Bank Research Observer, 26(2).
Stokke, H. E. (2004). Technology adoption and multiple growth paths: an inter-temporal general equilibrium analysis of the catch-up process in Thailand. Re-view of World Economics/Weltwirtschaftliches Archiv, 140(1).
Vučković, V. (2014). New structural economics: a framework for rethinking de-velopment. Development and Policy, 16(1). doi:10.15179/ces.16.1.6.
Williamson, J. (2000). What should the world bank think about the washington consensus? World Bank Research Observer, 15(2). doi: 10.1093/wbro/15.2. 251.
Williamson, J. (2004). The strange history of the Washington Consensus. Journal of Post Keynesian Economics, 27(2).
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Published
2017-12-31
How to Cite
Świerczyńska, K. (2017). Structural transformation and economic development in the best performing sub-Saharan African states. Equilibrium. Quarterly Journal of Economics and Economic Policy, 12(4), 547–571. https://doi.org/10.24136/eq.v12i4.29
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Section
Economic growth
