Africa: The Growth-Governance Puzzle in Africa
January 12, 2016
By Richard Joseph*
Why did sub-Saharan Africa experience such a prolonged economic downturn starting in the mid-1970s? And why has it experienced such a sustained economic upturn since the mid-1990s?
A consensus did emerge that the former trend was caused by bad governance, bad policies, declining investments, and unfavorable terms of trade. But what accounts for the positive growth rates over the past two decades, and why are they seen under such a diverse array of political systems? Finally, will African countries grow out of mass poverty, or will we see a new equilibrium of economic expansion without structural transformation – the latter understood as increased productivity, more and better-paid jobs, diversified exports, and vastly improved infrastructures? While we have become more aware of the growth-governance puzzle, resolving it remains elusive.
The disappointing growth performance of sub-Saharan Africa during the first three decades of independence was called a puzzle. In 2016, it is the sustained economic turnaround that remains puzzling. Although surveys of the statistical data often paint a glowing picture, certain questions persist. Since Africa was overly dependent on international aid flows and the export of mineral commodities for decades, why did that scenario begin shifting? Second, since the quality of growth remains deficient–in terms of its inclusiveness and ability to create jobs–are the progress reports misleading?
Steven Radelet is one of the undeterred optimists about economic progress in Africa and other less-developed areas. He continues to stress the critical contribution made by good governance, including democratization, to such progress. Africa today is seen through split screens: one depicts steady progress while another shows communities struggling to meet basic needs and coping with abysmal infrastructure.
The largest countries in the continent–the Democratic Republic of the Congo, Nigeria, and Sudan–remain in a time-warp of highly predatory and dysfunctional governance. Popular disenchantment, even in a country often praised for its democracy such as Ghana, is now aired in international forums. Meanwhile, authoritarian regimes in Ethiopia and Rwanda exceed their democratic counterparts in growth and socio-economic progress.
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