Rich and poor: How political governance crises have affected the relationship between diamond exports and economic growth in the Central African Republic

Abstract

This article examines the role played by political governance crises in the relationship between diamond exports and economic growth in the Central African Republic over the period 1978 to 2010. We used changes in constitution and government and politico-military crises (including tensions, violence, and politically motivated protests) as proxies for a political governance crisis. The Autoregressive Distributed Lag Model and Bound Test for cointegration are employed to establish short-run and long-term relationships. The results show different impacts of the proxy of political governance crises in the relationship between diamond exports and economic growth. We argue that, in a bid to ensure that diamonds fuel economic growth, improving governance of the mining sector and the political governance environment must become a core priority of the country's development strategy.