Growth in fragile states in Africa: Conflict and post‐conflict capital accumulation

Abstract

This article analyses the pattern of capital accumulation in Africa and its interaction with political fragility. Political fragility, defined as armed conflict or civil war, retards or reverses gains with respect to capital accumulation, slowing long-term economic growth. Many countries experience negative rates of capital accumulation, particularly during periods of acute political instability. In postwar periods, countries generally continue to experience capital destruction, lending support to the "war ruin hypothesis." This has implications for long-term economic growth in view of the strong association between capital accumulation and economic performance. The main policy implication of the analysis is that African countries and their international partners should pay more attention to capital accumulation, including capital reconstruction after periods of political instability, to lay the foundations for sustainable economic growth.

A comparative analysis of Indian and Chinese FDI into Africa: The role of governance and alliances

“…At the last meeting of the Commonwealth Heads of Government Meeting (CHOGM) 2020, which focused on strengthening democracy and rule of law, India reaffirmed its political commitment to the alliance, and at the same time doubled its contribution for the Commonwealth Technical Cooperation Fund with the aim of promoting egalitarianism, and enhancing trade and investment in knowledge intensive industries among member countries (The Economic Times, 2020). India's approach to balance an economic and political engagement with Africa seems very strategic and it can be especially important for 32 small states in Africa that are economically weak and politically fragile (Nkurunziza, 2019).…”

Foreign financial flows, human capital and economic growth in African developing countries

“…Variables preconditioning for the steady‐state of an economy involve physical capital stock and population growth rate. In reality, the rate of growth in African countries is relatively low over time, while these countries face negative rates of capital accumulation (Nkurunziza, 2019) and low return on capital investment (Othman & Jenkins, 2020). Also, population growth is found to reduce economic growth in African countries in the long‐run (Ukpolo, 2002).…”

Fragility and development in Africa: An introduction

“…The contributions by Nkurunziza (), Dunne and Tian () and Hoeffler () all examine the impacts of armed conflict. As discussed above not all fragile states experience armed conflict and some countries with armed conflict are not classified as fragile states.…”

“…As discussed above not all fragile states experience armed conflict and some countries with armed conflict are not classified as fragile states. Nkurunziza () focuses on capital accumulation. Unsurprisingly, war destroys capital but interestingly many post‐conflict episodes are also characterized by continuing capital destruction, making an economic turnaround and the realisation of a peace dividend difficult.…”

“…Fragile states generate regional spillovers, for example on trade (see Chacha and Edwards ) and exacerbate the cost of conflict (see Dunne and Tian ). Further aspects of conflict, namely post‐conflict stabilization (Hoeffler ) and reduced capital accumulation (Nkurunziza ) are also examined.…”