Luc Christiaensen, Joachim De Weerdt, Bert Ingelaere, Ravi Kanbur, 21 April 2021

Despite potentially greater income gains in big cities, migrants from rural areas in developing countries often move to small towns. This column uses survey data from Tanzania to show that distance drives destination in migration decisions, particularly for the poor and for those with no education. This finding explains the seeming paradox of greater migration to small towns than to big cities, and provides a strong argument for a more balanced orientation of development investment between the two. 

Ana Fernandes, Alejandro Forero, Hibret Maemir, Aaditya Mattoo, 14 April 2021

Under the African Growth and Opportunity Act in 2001, the US allowed duty-free entry of apparel products from eligible African countries. However, the end of the Multi-Fiber Arrangement in 2005 re-exposed African countries to significant international competition from Asia. This column finds that countries in Southern Africa and firms in Kenya that boomed during the period of high initial trade preferences went bust when the Multi-Fiber Arrangement expired. Subsequent growth was driven by new countries, notably Ethiopia, and by new firms in Kenya. These results are consistent with the complementary role of domestic reforms rather than the ‘infant industry’ benefits of trade preferences alone.

Noam Angrist, Simeon Djankov, Pinelopi Goldberg, Harry Patrinos, 09 April 2021

Human capital is a critical component of economic development. But the links between growth and human capital – when measured by years of schooling – are weak. This column introduces a better measurement, using a database that directly measures learning and represents 98% of the global population. The authors find that the link between economic development and human capital is strong when measured in this way. They also show that global progress in learning has been limited over the past two decades, even as enrolment in primary and secondary education has increased.

Xinshen Diao, Mia Ellis, Margaret McMillan, Dani Rodrik, 01 March 2021

Before Covid-19 struck, many economies in sub-Saharan Africa were expanding rapidly – faster than at any time since independence. Yet African growth accelerations were anomalous when viewed from the perspective of comparative development patterns; structural changes were accompanied by declining within-sector productivity growth in modern sectors. This column explores this anomaly in the context of African manufacturing using newly created firm-level panel data for Tanzania and Ethiopia. In both countries, there is a sharp dichotomy between larger firms that exhibit superior productivity performance but do not expand employment much, and small firms that absorb employment but do not experience any productivity growth. These patterns appear to be related to technological advances in global manufacturing which are making it more capital intensive.

Rabah Arezki, Simeon Djankov, Ugo Panizza, 23 February 2021

While most African countries have been largely spared so far from the direct health effect of the Covid-19 pandemic, the continent’s economy has been significantly hurt by the economic consequences. This is particularly concerning given Africa’s high prevalence of extreme poverty.  A new eBook from CEPR Press focuses on business and household responses to the Covid-19 crisis in Africa, as well as access to international finance, patterns in international borrowing, and country-specific experiences during the pandemic. 

Yohan Iddawela, Neil Lee, Andrés Rodríguez-Pose, 21 February 2021

Differences in the quality of local and regional governments and their implications for development have attracted considerable attention, especially in Europe and Asia. In Africa, the recent drive towards decentralisation has, however, neglected how variations in the quality of sub-national governments affect development prospects. This column addresses this gap in knowledge by measuring variations in subnational government quality in 22 African countries, and connecting these variations to differences in levels of development across the continent. The quality of sub-national governments is an important driver of economic development in African regions.

Philip Roessler, Yannick Pengl, Robert Marty, Kyle Sorlie Titlow, Nicolas van de Walle, 06 December 2020

The colonial history of Africa still casts a shadow on development in the continent. This column uses a new geospatial dataset to study the long-term effects of colonial cash crop extraction in Africa. It finds that cash crop production had a positive long-run effect on local development in terms of urbanisation, road infrastructure, night-time luminosity, and household wealth. However, this came at the expense of investments in surrounding areas, which appear worse off today than predicted by precolonial factors. The legacy of the colonial economy in Africa was a negative feedback loop of weak institutions and spatial inequities.  

Roberto Bonfatti, Steven Poelhekke, 03 December 2020

Africa’s interior-to-coast roads are well placed to export natural resources, but not to support regional trade. Are they the optimal response to geography and comparative advantage, or the result of suboptimal political distortions? This column investigates the political determinants of road paving in West Africa in 1965–2014. Autocracies focused more than democracies on connecting metal and mineral deposits to ports, resulting in more interior-to-coast networks. This deposit-to-port bias was only present for deposits located on the elite’s ethnic homeland, suggesting that Africa’s interior-to-coast roads were the result of ethnic favouritism by autocracies.

Steven Poelhekke, 27 November 2020

Africa's roads were originally built so that colonial powers could extract its natural wealth. What has happened since then? Steven Poelhekke of the University of Auckland examines the maps with Tim Phillips.

Thilo Albers, Morten Jerven, Marvin Suesse, 22 November 2020

Why do large differences in tax revenues between states exist and persist? This column introduces a comprehensive new dataset of tax and revenue collection for all African polities from 1900 to 2015 to answer this central question. The results confirm the importance of democratic institutions and political stability, while de-emphasising the role of resource revenues. Overall, states in Africa have been able to build institutions for the collection of ‘hard’ taxes when the preconditions were favourable, especially when access to external finance was limited. These insights add important nuance to established theories of state-building in developing countries.

Valeria Rueda, 09 October 2020

Some ethnic groups are active in African politics, and some are not. Valeria Rueda tells Tim Phillips the fascinating story of how two socioeconomic revolutions more than a century ago shaped post-colonial political power.

Ewout Frankema, Marlous van Waijenburg, 02 May 2020

Despite a clear positive relationship between education and income at the micro-level, raising educational attainment rates in the developing world have so far failed to lead to substantial and sustained economic growth. This column collects data on skill premia for 50 African and Asian countries for 1870-2010 and presents evidence of a dramatic fall in skill premia from initially very high levels for both Asia and Africa over the course of the 20th century. This convergence of skill premia to Western levels is shown to be negatively related to the relative supply of educated workers in those economies.

Jeremie Gross, Catherine Guirkinger, Jean-Philippe Platteau, 16 April 2020

For many regions around the world, geographic isolation is the primary cause of seasonal fluctuations in the price and availability of foodgrain. To activate the local food market, dampen such fluctuations, and improve people’s nutritional status, Burkina Faso’s Food Security Granaries programme set up village-level cooperatives and put them in charge of buying grain from outside sources and selling it locally. This column assesses the effects of the intervention and finds that market activation considerably reduced nutritional stress, especially among young children. The nutritional improvement is driven by a change in the timing of food purchase and hence, of consumption.

Swati Dhingra, Silvana Tenreyro, 14 April 2020

Nearly 80% of the world’s poorest inhabitants live in rural areas and labour in agriculture. Because they lack the productive assets or infrastructure needed to market their produce, strategies intended to encourage agribusinesses-led development of such markets rank high on many policy agendas. Still, systematic studies of the efficacy of these policies remain scarce. This column examines the impact that promoting agribusiness-participation in crop markets has made in Kenya, and concludes that such policies are no panacea for low agricultural incomes.

Joseph Stiglitz, 27 November 2019

Joe Stiglitz offers his thoughts on economic growth in Africa, inequality in China, and the other key economic questions of our time.

Axel Dreher, Andreas Fuchs, Roland Hodler, Bradley Parks, Paul Raschky, Michael Tierney, 07 October 2019

Chinese development projects have the potential to improve the lives of millions of people, but political capture of its development finance by politicians may undermine its effectiveness. This column examines local development outcomes across 47 African countries and the effects of financial support from China between 2001 and 2012. The results not only show that Chinese aid registers positive effects on economic development at the district-level and province-level, but also that political bias in the subnational distribution of Chinese aid does not substantially undermine local development outcomes.

Rabah Arezki, 19 August 2019

Algeria’s recent victory in the Africa Cup of Nations has united a country whose development model has frustrated its young and educated workforce. This column offers four lessons for economic development from the national football team’s success: on the role of competition and market forces, mobilising talent, the role of managers, and the importance of referees (i.e. regulation). 

Finn Tarp, 22 November 2018

Finn Tarp, Director of UNU-WIDER, discusses what the last decade of research at the institute can tell us about economic transformation.

Stephen Cecchetti, Kim Schoenholtz, 26 June 2018

Over the past six years, more than 1.2 billion adults have gained at least basic financial access through a financial institution or their mobile phone. This column discusses the benefits of financial inclusion, key trends regarding access since 2011, and the means for achieving the World Bank’s goal of universal financial access. It also argues that if the nations of Africa develop institutions to support strong, stable and balanced growth—including the necessary financial apparatus—they can become the primary drivers of global expansion in the remainder of the 21st century.

Pages

CEPR Policy Research