Africa: Why Economists Get It Wrong

172 Pages·2015·2.5 MB·English

by  Jerven, Morten

African Arguments
African Arguments is a series of short books about Africa today.
Aimed at the growing number of students and general readers
who want to know more about the African continent, these books
highlight many of the longer-term strategic as well as immediate
political issues. They will get to the heart of why Africa is the way
it is and how it is changing. The books are scholarly but engaged,
substantive as well as topical.
Series editors
richard dowden, Royal African Society
alex de waal, W0rld Peace Foundation, Fletcher School, Tufts
University
alcinda honwana, Open University
Editorial board
emmanuel akyeampong, Harvard University
tim allen, London School of Economics and Political Science
akwe amosu, Open Society Institute
breyten breytenbach, Gorée Institute
peter da costa, journalist and development specialist
william gumede, journalist and author
abdul mohammed, InterAfrica Group
robert molteno, editor and publisher
Titles already published
Alex de Waal, AIDS and Power: Why There is No Political Crisis – Yet
Tim Allen, Trial Justice: The International Criminal Court and the Lord’s
Resistance Army
Raymond W. Copson, The United States in Africa
Chris Alden, China in Africa
Tom Porteous, Britain in Africa
Julie Flint and Alex de Waal, Darfur: A New History of a Long War
Jonathan Glennie, The Trouble with Aid: Why Less Could Mean More for
Africa
Peter Uvin, Life after Violence: A People’s Story of Burundi
Bronwen Manby, Struggles for Citizenship in Africa
Camilla Toulmin, Climate Change in Africa
Orla Ryan, Chocolate Nations: Living and Dying for Cocoa in West Africa
Theodore Trefon, Congo Masquerade: The Political Culture of Aid Inef-
ficiency and Reform Failure
Léonce Ndikumana and James Boyce, Africa’s Odious Debts: How Foreign
Loans and Capital Flight Bled a Continent
Mary Harper, Getting Somalia Wrong? Faith, War and Hope in a Shattered
State
Neil Carrier and Gernot Klantschnig, Africa and the War on Drugs
Alcinda Honwana, Youth and Revolution in Tunisia
Marc Epprecht, Sexuality and Social Justice in Africa: Rethinking Homo-
sexuality and Forging Resistance
Lorenzo Cotula, The Great African Land Grab? Agricultural Investments
and the Global Food System
Michael Deibert, The Democratic Republic of Congo: Between Hope and
Despair
Adam Branch and Zachariah Mampilly, Africa Uprising: Popular Protest
and Political Change
Celeste Hicks, Africa’s New Oil: Power, Pipelines and Future Fortunes
Forthcoming
Keith Breckenridge, Mining, Power and Politics in South Africa: Rethinking
the African Resource Curse
Mick Moore, Odd-Helge Fjeldstad and Wilson Prichard, Taxing Africa
Kris Berwouts, War and Failed Peace in Eastern Congo
Theodore Trefon, Congo’s Environmental Paradox
Published by Zed Books and the IAI with the support of the
following organizations:
International African Institute The International African Institute’s
principal aim is to promote scholarly understanding of Africa, notably its
changing societies, cultures and languages. Founded in 1926 and based
in London, it supports a range of seminars and publications including
the journal Africa.
www.internationalafricaninstitute.org
Royal African Society Now more than a hundred years old, the Royal
African Society today is Britain’s leading organization pro moting Africa’s
cause. Through its journal, African Affairs, and by organ izing meetings,
discussions and other activities, the society strengthens links between
Africa and Britain and encourages understanding of Africa and its rela-
tions with the rest of the world.
www.royalafricansociety.org
The World Peace Foundation, founded in 1910, is located at the
Fletcher School, Tufts University. The Foundation’s mission is to promote
innovative research and teaching, believing that these are critical to the
challenges of making peace around the world, and should go hand in
hand with advocacy and practical engagement with the toughest issues.
Its central theme is ‘reinventing peace’ for the twenty-first century.
www.worldpeacefoundation.org
About the author
Morten Jerven teaches at the School for
International Studies at Simon Fraser
University in Vancouver, Canada. He is the
author of Poor Numbers: How We Are Misled
by African Development Statistics and What
to Do About It, and has published widely on
African economic development, especially
on patterns of economic growth and eco-
nomic development statistics.
morten Jerven
AFRICA
Why economists get
it wrong
Zed Books
london
in association with
International African Institute
Royal African Society
World Peace Foundation
Africa: Why economists get it wrong was first published in association with
the International African Institute, the Royal African Society and the
World Peace Foundation in 2015 by Zed Books Ltd, Unit 2.8, The Foundry,
17 Oval Way, London se11 5rr, uk
www.zedbooks.co.uk
www.internationalafricaninstitute.org
www.royalafricansociety.org
www.worldpeacefoundation.org
Copyright © Morten Jerven 2015
The right of Morten Jerven to be identified as the author of this work
has been asserted by him in accord ance with the Copy right, Designs and
Patents Act, 1988.
Set in OurType Arnhem and Futura Bold by Ewan Smith, London
Index: <[email protected]>
Cover designed by www.roguefour.co.uk
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system or transmitted in any form or by any means,
electronic, mechanical, photocopying or otherwise, without the prior
permission of Zed Books Ltd.
A catalogue record for this book is available from the British Library
isbn 978-1-78360-133-2 hb
isbn 978-1-78360-132-5 pb
isbn 978-1-78360-134-9 pdf
isbn 978-1-78360-135-6 epub
isbn 978-1-78360-136-3 mobi
Contents
Tables and figures | viii
Acknowledgments | ix
Introduction . . . . . . . . . . . . . . . . . . . .1
1 Misunderstanding economic growth in Africa . . . . 12
2 Trapped in history?. . . . . . . . . . . . . . . . 45
3 African growth recurring . . . . . . . . . . . . . 74
4 Africa’s statistical tragedy?. . . . . . . . . . . . .103
Conclusion . . . . . . . . . . . . . . . . . . .124
Notes | 133
Bibliography | 140
Index | 155
Tables and figures
Tables
1.1 Total GDP indices by region, 1960–75 . . . . . . . . . . . . . 29
1.2 Total GDP indices by region, 1975–90 . . . . . . . . . . . . . 29
1.3 Evidence used in the empirical growth literature for ‘lack of
social capital’ . . . . . . . . . . . . . . . . . . . . . . . 41
2.1 African and world GDP per capita, 1–1950 CE . . . . . . . . . 47
2.2 Relative income ranking in Africa from lowest to highest
according to three data sources for the year 2000. . . . . . . . 50
2.3 Low-, middle- and high-income African economies for the
year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . 52
2.4 Reliability band of GDP estimates for African countries. . . . . 54
3.1 Growth in GDP over time for three countries with different
growth rates. . . . . . . . . . . . . . . . . . . . . . . . 79
3.2 Growth in national income and per capita domestic product in
Benin, 1800–1950 . . . . . . . . . . . . . . . . . . . . . . 81
3.3 Contributions to GDP in the Gold Coast, 1891, 1901 and 1911 . . . 84
4.1 Base years of national accounts and planned revision years in sub-
Saharan Africa. . . . . . . . . . . . . . . . . . . . . . . 108
4.2 The impact of GDP re-basing in African countries at current
prices. . . . . . . . . . . . . . . . . . . . . . . . . . . 110
4.3 Data on poverty in sub-Saharan Africa . . . . . . . . . . . . 116
Figures
1.1 GDP in 1960 and GDP per capita growth, 1960–90. . . . . . . . 22
1.2 Average annual GDP growth in sub-Saharan Africa and in the rest
of the world, 1960–2000 . . . . . . . . . . . . . . . . . . . 26
1.3 Average annual growth in GDP per capita in sub-Saharan Africa
and in the rest of the world, 1960–2000 . . . . . . . . . . . . 27
1.4 Index of annual growth in GDP per capita in sub-Saharan Africa
and in the rest of the world, 1960–2000 . . . . . . . . . . . . 28
1.5 Financial aid as a percentage of GNI for sub-Saharan Africa,
1960–2000 . . . . . . . . . . . . . . . . . . . . . . . . . 33
1.6 Financial aid as a percentage of GNI for Korea, Kenya and
Botswana, 1960–99 . . . . . . . . . . . . . . . . . . . . . 34
1.7 Black market premiums for Kenya, Korea, Senegal, Tanzania
and Zambia, 1960–93 . . . . . . . . . . . . . . . . . . . . 38
3.1 Number of growing, failing and preserving economies in Africa,
1955–2006 . . . . . . . . . . . . . . . . . . . . . . . . . 87
3.2 Trade as a percentage of GDP in sub-Saharan Africa, 1960–2010 . 90
Acknowledgments
I have been researching patterns of economic growth in sub-
Saharan Africa since I was an MSc student and later a PhD
student in economic history at the London School of Economics
and Political Science (LSE). During that decade I have received
more advice and feedback than I can recount here. I am grate-
ful to the editors at Zed Books and the International African
Institute, Ken Barlow and Stephanie Kitchen and the rest of the
editorial board, for believing in this book project, and to staff at
the Royal African Society and African Arguments for their willing
assistance in planning this book.
This is a distilled version of the work I have published on
growth in African economies during the past five years. Longer
and more technical versions of parts of the arguments I put
forward here have been tested and tried in research and review
articles published by the Journal of African Economies, Journal of
Development Studies, Journal of International Development, African
Affairs, Economic History Review and Economic History of Develop-
ment Regions. I am grateful to the editors of these journals and, of
course, to the anonymous reviewers for comments on my manu-
script. Finally, and in particular with regards to Chapter 4, I am
grateful for the support from scholars and officials I have worked
with in Africa and the rest of the world on my quest for transpar-
ency surrounding the procedures that generate data on African
growth, poverty and development.
Finally, I am most indebted to my loved ones. This book is
dedicated to my little ones William and Robin, and my remark-
able wife Taraneh.