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Globalization, Growth, and Africa's Pervasive Development Disorder

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Globalization, Growth, and Africa's Pervasive Development Disorder Globalization, Growth, and Africa’s Pervasive Development Disorder by Jean-Louis ZOËL Cambridge, May 2003 Fellow, Weatherhead Center for International Affairs (2002-2003) Harvard University No view expressed by the author in this paper, written exclusively during his fellowship at Harvard University and therefore out of any active official duty, should be ascribed in any degree, directly or indirectly, to the French Government or any French governmental or public sector entity. Any error is the responsibility of the author. CONTENTS FOREWORD ...............................................................................................................................5 1 – INTRODUCTION .................................................................................................................6 2 – ARE GLOBALIZATION AND DEVELOPMENT CONGRUENT? ..............................9 2-1 DEFINING AND MEASURING DEVELOPMENT.......................................................................10 Income, Not So Simple.........................................................................................................10 From Income To Freedom...................................................................................................11 Back to Per Capita Income..................................................................................................12 The Human Development Index...........................................................................................13 Income Per Capita for General Comparisons.....................................................................14 2-2 IS DEVELOPMENT GOING GLOBAL?....................................................................................14 A Millennial Overview.........................................................................................................14 The Two Last Centuries.......................................................................................................16 Many Faltering Economies..................................................................................................17 Could a Majority Be Converging After All?.......................................................................18 2-3 ECONOMIC GLOBALIZATION: NOT SO NEW , NOT THAT FAR.............................................19 The First Globalization Century Prior to the Great War....................................................20 New Momentum Of Globalization After World War II........................................................21 2-4 DOES TRADE LIBERALIZATION MAKE A COUNTRY GROW? ...............................................23 A Relatively Good Case in Comparative Statics .................................................................24 Dynamic Indeterminacy.......................................................................................................25 Inconclusive Empirical Research ........................................................................................26 Paradoxes in Economic History ..........................................................................................27 Open Agnosticism and Eclecticism......................................................................................29 What Happens when Liberalization Doesn’t Work?...........................................................31 2-5 GLOBALIZATION, DEVELOPMENT AND GLOBAL GOVERNANCE..........................................32 The Grand Bargain..............................................................................................................32 Concerns about Asymmetric Results ...................................................................................33 Managed Institutional Diversity..........................................................................................35 Integration Trilemma and Global Governance...................................................................37 3 – WHAT DO WE KNOW ABOUT GROWTH?.................................................................40 3-1 THE NEOCLASSICAL LEADS................................................................................................41 The Inadequacy of the Initial Solow Model.........................................................................41 The Augmented Solow Model’s Shortcomings ....................................................................42 Growth Accounting’s Conventional Wisdom.......................................................................44 3-2 NEW LEADS ON GROWTH IN ECONOMIC THEORY................................................................45 Endogenous Neo-Schumpeterian Growth............................................................................46 New Appropriation, Market, and Coordination failures.....................................................47 New Approaches Within or Towards Institutions................................................................49 3-3 THE DEBATES SPURRED BY THE CROSS-COUNTRY REGRESSIONS ON GROWTH .................52 The Main Geography Thesis................................................................................................53 The Alleged Resource Curse................................................................................................55 The Policies Thesis ..............................................................................................................56 The Institutions Thesis .........................................................................................................57 3-4 DARKNESS AND FREEDOM IN THE BLACK BOXES OF SOCIAL CAPABILITY .........................61 Pristine Complexity but Broad Precepts.............................................................................61 Social Capital and The Principles of Institutions................................................................66 4 – IS THERE AN AFRICAN CURSE? ..................................................................................72 4-1 AFRICA’S DISMAL PERFORMANCE.......................................................................................74 Economic Backwardness .....................................................................................................74 Human Underdevelopment..................................................................................................77 4-2 LEGACY OF HISTORY: TRAUMATIC BUT NOT IMMISERATING ............................................80 The Infamous Slave Trade...................................................................................................80 Colonization and Identities..................................................................................................81 Colonization and Economic Development...........................................................................83 4-3 NO AFRICAN DUMMY BUT HANDICAPS ..............................................................................86 Total Factor Productivity and Demography .......................................................................86 Small Arbitrary States..........................................................................................................89 Climate and Poor Soils........................................................................................................90 Tropical Health Handicaps .................................................................................................92 Landlockedness....................................................................................................................92 Natural Resources and the African Exception: Botswana ..................................................93 Terms of Trade Losses.........................................................................................................94 4-4 DYSFUNCTIONAL ECONOMIC AND POLITICAL GOVERNANCE .............................................94 A Tiny Elite for an Hegemonic State...................................................................................95 The Neopatrimonial State: Corruption, Predation and Underprovision ............................97 Variations in Space and Time around the Central Tendency............................................100 The Third Wave and the Neap Tide of Liberalizations......................................................101 4-5 NO SOCIO-PSYCHOLOGICAL DUMMY...............................................................................104 The Rent-Seekers of Extraversion......................................................................................105 Individualism, Communalism or Both ?............................................................................107 The Escapism Syndrome....................................................................................................109 Magical Africa ...................................................................................................................110 Temporality and Chiefs......................................................................................................111 No African Determinism ....................................................................................................112 Wounds to Heal..................................................................................................................115 5 - CONCLUDING REMARKS.............................................................................................118 REFERENCES ........................................................................................................................125
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