Augustin Kwasi Fosu

Exports and economic growth: The African case

Abstract Previous studies have found that export growth favorably affects the rate of economic growth in less developed countries (LDCs). This paper examines the extent to which this hypothesis holds true for African countries as a subgroup, especially since export contents and transmission mechanisms may differ between African and other LDCs. GDP growth of 28 African LDCs is analyzed using a pooled cross-sectional cum time-series estimation of 1960–1970 and 1970–1980 average annual growth rates. Based upon the usual augmented production function specification that includes labor, capital formation, and exports, export growth is observed to exert a positive and significant impact on economic growth. While this export effect is somewhat smaller than that for non-African LDCs, the difference is not statistically significant.

Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa

Abstract This study explores the extent to which inequality affects the impact of income growth on the rates of poverty changes in sub-Saharan Africa (SSA) compared to non-SSA, based on an unbalanced panel of 86 countries over 1977–2004. For all three measures of poverty – headcount, gap, and squared gap – the impact of GDP growth on poverty reduction is a decreasing function of initial inequality. The impacts are similar in direction for SSA and non-SSA, so that within both regions there are considerable disparities in the responsiveness of poverty to income growth, depending on inequality. Nevertheless, the income–growth elasticity is substantially less for SSA, implying relatively small poverty-reduction response to growth.

Growth, Inequality and Poverty in Sub-Saharan Africa: Recent Progress in a Global Context

The present study employs recent World Bank data to shed light, in a global context, on the transformation of changes in income and inequality into poverty reduction for a large number of countries in sub-Saharan Africa (SSA). The study begins by discussing SSAs progress on poverty. Next, it presents data on how various African countries have fared in terms of the incidence of poverty relative to other countries, with special emphasis on the period since the mid-1990s, when SSA generally experienced a growth resurgence. The paper then decomposes performance on poverty into changes in income and inequality for a sample of SSA countries that have the requisite data. The paper finds that recent progress on poverty has been considerable, in contrast to the earlier, 1980–early 1990s, period. Compared with the progress in a global sample of countries, however, progress has been mixed: nonetheless, although African countries lag behind the Brazil, India, China and Russia group of countries as a whole, many of them have outperformed India. Furthermore, while income growth is found to be the main engine for poverty reduction in SSA in general, the role of inequality is crucial in certain countries. Viewed in a global context, moreover, the low levels of income have inhibited the effectiveness of income and inequality improvements in reducing poverty in many African countries.

POVERTY AND DEVELOPMENT

Neoclassical economics has traditionally posited that the process of development entails changes in incomes over time. Larger income levels achieved via positive economic growth, appropriately discounted for population growth, would constitute higher levels of development. As many have noted, however, the income measure fails to adequately reflect development in that per-capita income, in terms of its levels or changes to it, does not sufficiently correlate with measures of (human) development, such as life expectancy, child/infant mortality and literacy. The United Nations Development Programme’s (UNDP) human development index (HDI) constitutes an improved measure for development. HDI has been modified to be gender-sensitive with variants that reflect gender inequality. Various measures reflecting Sen’s “capability” concept, such as civil and political rights, have also been incorporated. Countries where the level of poverty is relatively large tend also to exhibit low values of human development, thus lowering the mean values of the development measures. Where inequalities of development indicators are very large, however, the average values may not sufficiently reflect the conditions of the poor, requiring the need to concentrate on poverty per se. The most recognized indicator of (income) poverty is the headcount ratio, which simply measures the proportion of the population considered to earn an income less than the standard required for basic needs (the other poverty measures are those for the depth and severity of poverty). This poverty line may vary from country to country and over time. However, to simplify comparability across countries and over time, the poverty line has been standardized as a daily income of US

Export composition and the impact of exports on economic growth of developing economies

1 at international standards. As an indicator of extreme poverty, this poverty rate is also the yardstick for Goal 1 of the Millennium Development Goals (MDGs). The above measures do not necessarily reflect deprivation in human development. Thus in 1997 the UNDP introduced the human poverty index (HPI) for developing countries. This measure is intended to reflect deprivations in the three indexes of human development: long and healthy life, knowledge and a decent standard of living. For more developed countries, HPI is further modified to reflect social exclusion. Despite the myriad criticisms levelled against such measures of development and poverty, these indicators provide us with reasonable pictures of how well various countries are performing beyond mere income growth. What the evidence shows is that countries that rank at the bottom of the HDI scale tend also to exhibit the largest HPI values. Hence, these measures are useful in that they at least signal specific countries that may require special attention. Both indices are needed, however, to gauge the nature of the development challenge. For example, a relatively low HDI value despite a high per-capita income suggests that growth is not being efficiently transformed into human development. Similarly, if both HDI and HPI are high, then the achievement in human development is not being sufficiently shared by those at the bottom, suggesting the need to address the human-development distribution picture. Ideally, HDI should be high and HPI low. What policies are considered pro-poor or pro-development? Employment generation is a particularly salient linchpin between economic growth on the one hand, and poverty reduction and development on the other. Policies that augment the demand for labour are therefore likely to produce desirable social-impact outcomes for developing economies.1 Thus, appropriate policies are generally those that increase employment in sectors with reasonable levels of productivity, as well as those that provide essential public goods. The nature of the sociopolitical environment is a particularly salient determinant of the effectiveness of transforming growth to development or poverty reduction. Higher levels of inequality, for instance, lower the effectiveness of growth in reducing poverty.2,3 Similarly, greater rates of political instability tend to retard the rate at which growth is transformed to human development.4 Health is critical. Impaired health exacerbates poverty and undermines development, whether directly or indirectly via lowering growth.5 Malaria, historically one of the deadliest diseases in the tropics, has been deleterious to development and has contributed considerably to poverty, especially in Africa,6 as has HIV/AIDS more recently.7 Both morbidity and mortality are important contributors to the above development and poverty woes emanating from diminished health.8 Health standards, as exemplified by Goal 6 of the MDGs for instance, are essential for attaining poverty eradication and development success. The Bulletin, in conjunction with over 230 other journals, is participating this month in a Global Theme Issue on Poverty and Human Development (see: http://councilscienceeditors.org/globalthemeissue.cfm) by publishing a number of papers on this topic. ■

Political instability and economic growth in developing economies: some specification empirics

Abstract Employing an augmented production-function framework, a number of studies have found that export growth exerts a positive impact on GDP growth in less developed countries (LDCs), even when capital and labor are controlled for. Using a similar framework but recognizing the possible heterogeneity of exports, the present paper finds, for the 1960–1980 period, that while the primary export sector exhibits little or no effect on GDP growth in LCDs, there is a differential positive impact by the manufacturing export sector.

Inequality and the growth–poverty nexus: specification empirics using African data

Abstract The paper empirically explores the specification of the relationship between political instability (PI) and economic growth, using data on different events of coups d’etat in sub-Saharan Africa. It finds that when a principal component of the various PI events is employed in an augmented production function, basic specification tests are met. However, specifying PI using the separate events, such as ‘successful’ coups, results in a potentially misspecified relationship, reduced model fit, and underestimation of the adverse PI effect.

Explaining Slow Growth in Africa

Applying analysis-of-covariance to 1990s African data, the study finds the impact of growth as a decreasing function of inequality and a poverty–growth elasticity range of 0.02–0.68 across the sample of countries.

Achieving development success : strategies and lessons from the developing world

This paper critically reviews the empirical literature on growth, with a view to drawing some lessons for Africa. It illustrates the diversity of the results found by different authors, and calls for a more rigorous approach, paying attention to the identification of structural parameters and to simultaneity biases. It emphasizes the part played by openness and export orientation as the main policy variables affecting growth. Then, the choice of bad policies, which seems to be the main proximate cause of slow growth in Africa, is traced to the lack of social capital and deficient political institutions. Cet article est une critique de la litterature empirique sur le developpement dont le but est d’en tirer quelques lecons sur l’Afrique. L’article demontre la diversite des conclusions tirees par plusieurs auteurs et fait appel a une demarche plus rigoureuse, prenant en compte l’identification des parametres structurels et des penchants simultanes qui existent. L’importance du marche et son orientation vers l’export sont soulignees comme etant les deux variables principales qui touchent directement la croissance. Les auteurs demontrent ensuite que le choix de mauvaises politiques, qui semble Atre la cause principale de la faible croissance africaine, est due en effet a un manque de capital social ainsi qu’aux institutions politiques defectueuses.

Occupational Mobility of Black Women, 1958–1981: The Impact of Post-1964 Antidiscrimination Measures

This paper provides a synthesis of successful strategies and implied lessons for development success, employing at least six themes on in-depth case studies of a large number of developing countries around the world. The coverage includes East Asia and the Pacific (South Korea, Malaysia, Thailand, and Vietnam), the Emerging Asian Giants (China and India), Sub-Saharan Africa (Botswana, Ghana, Mauritius, and South Africa), Latin America and the Caribbean (Brazil, Chile, Costa Rica, and the Dominican Republic), and the Middle East and North Africa (Bahrain, Oman, Tunisia, and the United Arab Emirates), along with the respective regional syntheses. Although countries´ experiences are not necessarily replicable, the recurrent themes across countries and regions provide the appropriate connectedness for fostering a truly global perspective on development strategies and lessons from the developing world.