African Finance and Lack of Development

38 Pages Posted: 25 May 2005

Date Written: May 20, 2005


Sub-Saharan Africa has made the least progress over the past three decades, and - except for South Africa - it is now one of the world's poorest regions. Even a country relatively untouched by war that had been widely hailed as "reformed" by the early 1990s, Tanzania, has turned in a disappointing growth performance that is hard to explain. Foreign assistance programs that try to bypass the national and local authorities in the recipient countries do not encourage institutional development and strengthen public-service ethos. In much of Sub-Saharan Africa, incentive compatibility of good governance for building the country together still has to be instilled before cumulative progress may be possible.

Keywords: Sub-Saharan Africa, growth accounting, economic development, financial development, debt forgiveness

JEL Classification: O11, O16, O19, O23, F34

Suggested Citation

von Furstenberg, George M., African Finance and Lack of Development (May 20, 2005). Available at SSRN: or

George M. Von Furstenberg (Contact Author)

Indiana University ( email )

Department of Economics
Wylie Hall, Indiana University
Bloomington, IN 47405-6620
United States
812-856-1382 (Phone)
812-855-3736 (Fax)


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