What Drives Structural Transformation in Sub‐Saharan Africa?

Abstract

This paper provides an empirical assessment of the driving forces behind structural transformation in sub-Saharan Africa, and to further access the role of structural reforms in accounting for cross-country differences in transformation. Evidence from this paper reveals that country specific fundamentals, institutions and policy reforms as well as governance and fiscal reforms are the key drivers of transformation in the region. A set of policy strategies is proposed to engender sustained transformation and development in the region. Ã Justice Tei Mensah (corresponding author), 157This paper seeks answers to three policy relevant questions: (1) What are the key drivers of transformation in SSA? (2) What role has the myriad of structural reforms implemented in the region played in spurring the process of transformation across economies in SSA? (3) What is the way forward for policy aimed at economic transformation?The paper makes important contributions to the literature on structural transformation in the sub-Saharan African region. First, to the best of our knowledge, this is the first study that provides empirical estimates on the determinants of structural transformation in SSA, with particular reference to the 21 countries included in the African Transformation Report which has become the blueprint of transformation in the region. Second, as part of our search for the drivers of structural transformation in SSA, we examine the impact of policy reformsthat were specifically directed at restructuring the economies of SSA to promote sustainable economic growthon economic transformation. The rate of success of different reform programs in transforming the economies of SSA is an important factor in the design of future reform policies.The literature on structural transformation is relatively scanty but growing. Studies in this area mainly have their theoretical underpinnings on the works of Kuznets (1955) which describe structural transformation as often associated with the canonical shift in the economic structure as a country transitions from developing to a developed economy. Also, the new growth theories spearheaded by Schumpeter (1934), Solow (1957), Grossman and Helpman (1991), Romer (1990), Aghion and Howitt (2009) offers good exposition on the drivers of transformation and growth. These studies unequivocally assert physical and human capital (see Romer, 1990), and technological change and innovations (Schumpeter, 1934) as key drivers of transition from developing to a developed economy (i.e. economic growth). For instance, Christiaensen et al. (2006) and Diao et al. (2007) assert that technology, rapid accumulation of human and physical capital, and the roles of market, institutions, and governments are key drivers of transformation. Thus, policies aimed at enhancing the spread of adoption and use of technology and quality education of indigenes offers a potent approach towards transformation. From the empirical perspective, studies such as Bah (2011), Timmer et al. (2012), Duarte and Restuccia (2010), McM...

Manufacturing Value Added Development in North Africa: Analysis of Key Drivers

“…But the proportion of land that is for agricultural is positively and significantly associated with a higher MVA in the sub-region, like arable land as in Mensah (2016) but unlike in Dabla-Norris et al (2013). Domestic investment rate has negative and statistical significant effect on MVA in North Africa.…”

“…Also, they find that mining output share, arable land, and age dependency (young and old) are negatively and significantly correlated with manufacturing value added in those countries. In the same vein, Mensah (2016) find that the level of income, arable land, population, and age dependency (young) are positively and significantly associated with manufacturing added development in Sub-Saharan Africa. With respect to agro-manufacturing, Anyanwu and Kponnou (2016) find an inverted U-shaped relationship with real per capita GDP.…”

Accelerating Agro‐Manufacturing to Feed Africa

“…(), and Mensah et al . () the relationship that we want to estimate can be written as: where FBTMVA it is the measure of food, beverages and tobacco MVA as percentage of total MVA in country i at time t ; α 0 is the constant term; β 1 is the elasticity of FBT MVA with respect to real per capita GDP (international PPP) in 2005, rgdppc ; β 2 is the FBT MVA elasticity with respect to quadratic real per capita GDP; X is the control variables, including government consumption expenditure (as a percentage of GDP), household consumption expenditure (as a percentage of GDP), trade openness, FDI inflows (as a percentage of GDP), domestic credit to the private sector (as a percentage of GDP), natural resource rents as percentage of GDP (oil, mining, natural gas, coal, and forest), and arable land (as a percentage of total land area). Other control variables are total population (in log), age dependency (old), age dependency (young), information and communications technology (ICT) accessibility (proxied by mobile phone subscriptions (percent)), secondary school enrolment (education), social globalization index, political globalization index, and institutionalized democracy (polity2).…”

Pengaruh Kepemimpinan Transformasional, Keadilan Organisasional Dan Kepuasan Kerja Terhadap Komitmen Organisasional Karyawan

“…Begitu juga penelitian di organisasional pemerintahan Pakistan yang dilakukan oleh Karim dan Rehman (2012) menunjukkan keadilan organisasional berpengaruh secara positif dan signifikan terhadap komitmen organisasional. Hasil yang sama ditemukan oleh Crow et al (2012) dan Mensah et al (2016) menyatakan bahwa keadilan organisasional memiliki pengaruh positif terhadap komitmen organisasional. Penelitian yang dilakukan Lashari et al (2016) di University of Sargodha juga menemukan keadilan organisasional berpengaruh positif dan signifikan terhadap komitmen organisasional pegawai.…”