Document Type

Article

Publication Date

1-2009

Abstract

Explanations for Africa's poor long-run growth performance have varied over time. The theories examined include geography (Jeffrey D. Sachs and Andrew Warner 1997); institutions (William Easterly and Ross Levine 1997; Daron Acemoglu, Simon Johnson, and James Robinson 2001, 2002; Nathan Nunn 2007, 2008); health (David Bloom and Sachs 1998; Gregory N. Price 2003); and economic dependency (William Darity 1982). More recently, economists have attempted to explain what The Economist has called Africa's new "period of unparalleled economic success" (The Economist 2008a, 33). Average annual real GDP growth was 1.8 percent between 1980 and 1989 and increased to 4.4 percent between 2000 and 2005. Per head, real growth in Africa fell by 1.1 percent between 1980 and 1989 and increased 2.1 percent between 2000 and 2005 (World Bank 2007a). This recent reversal of fortune may stem from the broad economic reforms that many African countries instituted during the 1990s, especially macroeconomic stabilization and financial-market liberalization. But it may also be due to the recent boom in international prices of oil, copper, and other primary commodities that constitute a significant fraction of Africa's exports (International Monetary Fund (IMF) 2006). With newly available data extending through 2005, we investigate whether international commodity price increases (our "metals" hypothesis) or policy reforms (our "management" hypothesis) have driven Africa's recent performance. In doing so, we supplement existing accounts of Africa's recent success (see Benno J. Ndulu and Stephen A. O'Connell 2007; John Page and Jorge S. Arbache 2008, for example). Our results, based on cross-country growth regressions, suggest that both "metals" and "man agement" have contributed to Africa's recent reversal of economic fortune.

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