Africa’s economy has grown steadily since the middle of the 90’s. But what is the future of the black continent? Will it finally enter a period of sustainable growth? Interestingly, exploration of European history can help us to address this intriguing question. Professor of economic history Stephen Broadberry and his colleague Leigh Gardner are not too optimistic.
“Growth reversals continue to pose a serious threat to African prosperity, and measures of structural change and institutional quality should be given more weight in assessing the extent to which individual countries have moved closer to achieving sustained economic growth,” researchers working at the London School of Economics claim.
After the Industrial Revolution era of relatively stable growth began in Western countries. However, little was known about preindustrial economic trends until recently. In fact, it was usually assumed that economies were at almost permanent stagnation. However, this assumption was falsified by the new studies on historical national accounting. They revealed that the real picture is much more complex than was thought.
“These data confirm anecdotal arguments that pre-industrial economies were not stagnant but rather experienced periods of growth followed by reversals which erased gains in living standards,” the scientists say. They argue that two main processes enabled the transition to long term stability. Firstly, a major role was played by the diversification of economic system. Agricultural sector was successfully supplemented by growing industrial and service sectors. Secondly, these changes went hand in hand with institutional reforms.
Broadberry and Gardner argue that recent history of Africa resembles the situation of preindustrial Europe. Economic boom of the sixties was replaced by long lasting decline. Situation has improved recently. But how long will it continue? “The pattern of economic growth experienced by African countries during the post-war period, characterized by growth accelerations followed by reversals, can persist over the very long run – in the European case, for half a millennium,” the economists write.
Unfortunately, conditions, which enabled successful transition to stability in Europe are absent in Africa. Consequently, danger of growth-reversal remains high and future prospects seem dim. “Measures of structural change and institutional quality should be given more weight in assessing the extent to which individual countries have moved closer to achieving sustained economic growth,” the British scholars emphasize.
Article: Broadberry S. and Gardner L., 2014, African economic growth in a European mirror: a historical perspective, The Economic History working papers, 202, The London School of Economics and Political Science, London, UK. Source link.