Explaining growth in African countries – what matters?

Abstract

In this work we analyze the role of the traditional determinants of economic growth, pointed by the literature, in African countries in the period between 1950 and 2012, using growth regressions. Due to the specificity and the single nature of each one of these countries, methods that take into account observed and unobserved heterogeneity are used. Results highlight the relevance of the growth rate of the capital stock to economic growth in African countries in the short-run, which is significant in all regressions. The growth rate of the government to GDP ratio is also important in all but one of the regressions in which appears, and its growth is harmful for the growth of GDP per capita in the short-run. On the other hand, variables related to the public debt do not present any relationship with economic growth. Human capital has a positive relationship with economic growth in regressions that do not include public debt. The growth rate of real GDP per capita also depends (negatively) on its past value, i.e., the lower the real GDP per capita the higher will be its growth rate.