Politics and Productivity Growth in Africa

by Steven Block

Average growth in GDP per capita in Africa increased from -0.4 percent per year during the 1990s to just 1.6 percent per year during the 2000s. Nearly all of this reversal was the result of accelerated agricultural productivity growth, which had been negative during the 1990s and was just barely positive during the 2000s. The fragility of this recovery remains an open question, but assessing the extent of this fragility should begin with an understanding of what drove the economic recovery to begin with. In his article, Dr. de Waal describes “Africa’s rent-based recovery,” yet it is too simple to attribute Africa’s recovery exclusively to commodity booms. Africa’s recent economic growth has resulted from both economic and political reform.

In recent research, Robert Bates and I have found that throughout much of Africa over this time period, governments that gained power as a result of military coups or were installed by a party that could not legally be opposed have given way to governments that rule because they have received a majority of the votes in a competitive election. In addition, governments now less frequently intervene in markets and economic incentives, and as a result they appear to elicit the more efficient use of land, labor, and capital in Africa’s economies. Bates and I argue that these changes in the nature of Africa’s polities produced changes in government policies, resulting in accelerated productivity growth. While our analysis leaves much of the growth of Africa’s economies unexplained, the relationship between the reform of institutions and the revival of growth emerges as one of our most robust findings.

How comprehensive and enduring does Africa’s growth appear? The answer depends in part on demographics. While some point to the “demographic dividend” that Africa might accrue as a result of an earlier decline in mortality rates, recent reportshighlight the persistence of high birth rates and therefore the persistence of high dependency ratios. Our results confirm the negative impact of such ratios on increases in per capita incomes. They also suggest (subject to the effect of possible measurement error) a positive impact of petroleum exports on Africa’s growth rate, but with the slowing growth of emerging markets and the increase in the domestic production of energy in North America, the impact of such exports is likely to decline. Of additional concern, we also find a significant relationship, via agriculture, between rainfall and growth in Africa’s economies. That rainfall remains a significant determinant of economic growth reminds us of the continuing importance of the agricultural sector and that while Africa’s economies may be growing, their structure has yet to be transformed.

The core result of my research with Bates, however, is that a significant part of Africa’s economic recovery during the 2000s is explained by the rapid expansion of competitive electoral systems during the 1990s, increasing government accountability and incentivizing leaders to choose policies that benefit majorities over narrow elites. This is good news. However, recent political trends in Africa provide added cause for concern. For several years, Freedom House has decried the decline in the quality of political and civil rights on the continent. According to Freedom House in 2012, a higher percentage of states in Africa moved to lower levels of political and civil liberties and a lower percentage ascended to higher levels, compared to the world as a whole. Worth mentioning too is the data compiled by Daniel Posner and Daniel Young on term limits in Africa: when competitive elections were introduced during the period of political reform, term limits were adopted in thirty-three African states. As of 2014, the limits had not been reached in nine of these states; but in eleven of the remaining twenty-four states (forty-six percent), the chief executive and his supporters sought to abolish them; and in eight (thirty-three percent) they succeeded in doing so.

Powerful forces are at play in Africa that seek to reverse the political reforms of the 1980s and 1990s. If Bates and I are correct in our explanation for Africa’s recovery, then this political reversal could be economically costly.

About the Author

Steven A. Block is a Professor of International Economics at The Fletcher School. He previously has served as a consultant to the World Bank and USAID on numerous technical assistance missions in sub-Saharan Africa and South Asia, and also as senior analyst at Abt Associates, Inc. His research focuses on food and agricultural policy, productivity, household nutrition, and the political economy of both macroeconomic and agricultural policy.

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