Growth In Africa

1038 Words 5 Pages
I will be discussing Collier and Gunning’s article, Why has Africa grown slowly? In the Journal of Economic Perspectives, and Mazrui, Ali article Democracide: Who killed democracy in Africa? In Collier and Gunning’s paper, Why has Africa grown slowly? I will explain how domestic-destiny and external-destiny are blamed as two of the four reasons for Africa’s poor economic performance. Also, explaining the difference between domestic-destiny and external-destiny and which one Collier states is easier to overcome? In their conclusion, Collier and Gunning state currently (in late 1990s) there is one key factor that is poor external policies that is pulling back Africa from growth. I will show how Collier comes to this factor and discuss what African …show more content…
A decade after, colonization in Africa was nearly abolished, and growth was increasing rapidly. African growth and its structure was consistent with the state of South Asia. In the 1970s African economies began to decline, many nations became authoritarian, and while African growth began to shrink, Asia improved. Collier explains slow growth in Africa with the argument of policy vs destiny factors, and domestic vs external factors. Controversy around external factors in Africa was the old story, the World Bank and the IMF identified exchange rates and trade policies as the main reasons of slow growth. Collier admits that exchange rates in African countries are over-valued, made up by tariffs and trade restrictions, however potential domestic causes of slow growth are also part of that. The domestic factors, and exogenous factors considers Africa's adverse climate which leads to things like poor health and constrained agriculture and the fact that high ethnic diversity may make it more difficult to develop an inter-connected economy. In contrast to the domestic-exogenous viewpoint, Collier and Gunning have emphasizes domestic-policy failings such as poor public service delivery and high …show more content…
Domestic-exogenous explanations focus on internal explanations which are not affected by policy. Collier identifies four domestic-exogenous factors which could lead to slow growth. Much of the continent is tropical, and Collier states that such regions of the world have high rates of diseases like malaria, as well as poor conditions for agriculture. Life expectancy has also been low, and fertility is high which, when combined with public health measures, led to a rapidly growing population. Africa has not yet experienced a demographic transition whereas fertility rates decline. Collier finds these factors are consequences of low income as well as causes. The second domestic-exogenous factor identified which may help explain slow growth is the climate conditions and poor-quality soil of much of the continent, with largely unpredictable rain cycles. Collier states that Africa is probably capable of having its own agricultural revolution. Given the high risks of agriculture in Africa, Collier states how households must use assets to smooth consumption over the long-run as opposed to invest, meaning they become trapped in a low-income and high-liquidity equilibrium. The third factor identified is Africa's very low population. The effect of this is high transportation costs, which have led to poor market integration and the

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