Where Is the African Growth Miracle?

Abstract

A remarkable view of African growth is Young (JPE, 2012)’s assertion of (Sub-Saharan) African growth miracle. He first predicts household’s mean education level by various indicators of its standard of living as revealed by DHS surveys from 1990 to 2006. He uses the predicted mean education level in Mincerian regressions to predict mean real wages/ consumption. He finds the resulting real wage growth rate is three or four times of what is shown by PWT 7.0. This paper de-constructs Young (2012) and finds it relies heavily on DHS surveys from richer non-Sub-Saharan countries. We also examine year-by-year dynamics of Sub-Saharan growth using PWT 9.1 data for all 45 Sub-Saharan countries for which it is available. Although many Sub-Saharan countries show falling back either right from the beginning or after initial catching-up, at least ten catch-up at the median rate of 2.6% for 20 years or more (i.e., grow faster than the US at a median excess rate of 2.6%) and merit the appellation of growth miracles. Four of them were major slave exporters, and four are at the equator. This suggests hypotheses that slave exports centuries ago or proximity to the equator undermine economic performance may not be so important; and we may get more revealing results by considering countries in one continent or geographic region only.

Keywords: DHS surveys; PWT; Long-term Income Dynamics; Catch-up 20 years or More; Country Growth Miracle; Slave Exports; Proximity to Equator

JEL Classification: O10; O47