Development as Diffusion: Manufacturing Productivity and Sub-Saharan Africa's Missing Middle

24 Pages Posted: 22 Jun 2014

See all articles by Alan Gelb

Alan Gelb

Center for Global Development

Christian Meyer

European University Institute - Economics Department (ECO)

Vijaya Ramachandran

Center for Global Development

Date Written: February 26, 2014

Abstract

We consider economic development of Sub-Saharan Africa from the perspective of slow convergence of productivity, both across sectors and across firms within sectors. Why have “productivity enclaves”, islands of high productivity in a sea of smaller low-productivity firms, not diffused more rapidly? We summarize and analyze three sets of factors: First, the poor business climate, which constrains the allocation of production factors between sectors and firms. Second, the complex political economy of business-government relations in Africa’s small economies. Third, the distribution of firm capabilities. The roots of these factors lie in Africa’s geography and its distinctive history, including the legacy of its colonial period on state formation and market structure.

Keywords: Productivity, Manufacturing, Dualism, Firms, Africa

JEL Classification: D24, L25, O11, O14

Suggested Citation

Gelb, Alan and Meyer, Christian and Ramachandran, Vijaya, Development as Diffusion: Manufacturing Productivity and Sub-Saharan Africa's Missing Middle (February 26, 2014). Center for Global Development Working Paper No. 357. Available at SSRN: https://ssrn.com/abstract=2457235 or http://dx.doi.org/10.2139/ssrn.2457235

Alan Gelb (Contact Author)

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

Christian Meyer

European University Institute - Economics Department (ECO)

Villa La Fonte
Via delle Fontanelle 18
San Domenico di Fiesole, FI 50014
Italy

HOME PAGE: http://www.eui.eu/eco

Vijaya Ramachandran

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

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