African Arguments

Top Menu

  • About Us
  • Write for us
  • Contact us
  • Advertise
  • Newsletter
  • RSS feed
  • Donate

Main Menu

  • Home
  • Country
    • Central
      • Cameroon
      • Central African Republic
      • Chad
      • Congo-Brazzaville
      • Congo-Kinshasa
      • Equatorial Guinea
      • Gabon
    • East
      • Burundi
      • Comoros
      • Dijbouti
      • Eritrea
      • Ethiopia
      • Kenya
      • Rwanda
      • Seychelles
      • Somalia
      • South Sudan
      • Sudan
      • Tanzania
      • Uganda
      • Red Sea
    • North
      • Algeria
      • Egypt
      • Libya
      • Morocco
      • Tunisia
      • Western Sahara
    • Southern
      • Angola
      • Botswana
      • Lesotho
      • Madagascar
      • Malawi
      • Mauritius
      • Mozambique
      • Namibia
      • South Africa
      • Swaziland
      • Zambia
      • Zimbabwe
    • West
      • Benin
      • Burkina Faso
      • Cape Verde
      • Côte d’Ivoire
      • The Gambia
      • Ghana
      • Guinea
      • Guinea Bissau
      • Liberia
      • Mali
      • Mauritania
      • Niger
      • Nigeria
      • São Tomé and Príncipe
      • Senegal
      • Sierra Leone
      • Togo
  • Politics
    • Elections Map
  • Economy
  • Society
  • Culture
  • #EndSARS
  • Specials
    • Covid-19
    • Travelling While African
    • From the wit-hole countries…
    • Living in Translation
    • Red Sea
    • Beautiful Game
  • Debating Ideas
  • About Us
  • Write for us
  • Contact us
  • Advertise
  • Newsletter
  • RSS feed
  • Donate

logo

African Arguments

  • Home
  • Country
    • Central
      • Cameroon
      • Central African Republic
      • Chad
      • Congo-Brazzaville
      • Congo-Kinshasa
      • Equatorial Guinea
      • Gabon
    • East
      • Burundi
      • Comoros
      • Dijbouti
      • Eritrea
      • Ethiopia
      • Kenya
      • Rwanda
      • Seychelles
      • Somalia
      • South Sudan
      • Sudan
      • Tanzania
      • Uganda
      • Red Sea
    • North
      • Algeria
      • Egypt
      • Libya
      • Morocco
      • Tunisia
      • Western Sahara
    • Southern
      • Angola
      • Botswana
      • Lesotho
      • Madagascar
      • Malawi
      • Mauritius
      • Mozambique
      • Namibia
      • South Africa
      • Swaziland
      • Zambia
      • Zimbabwe
    • West
      • Benin
      • Burkina Faso
      • Cape Verde
      • Côte d’Ivoire
      • The Gambia
      • Ghana
      • Guinea
      • Guinea Bissau
      • Liberia
      • Mali
      • Mauritania
      • Niger
      • Nigeria
      • São Tomé and Príncipe
      • Senegal
      • Sierra Leone
      • Togo
  • Politics
    • Elections Map
  • Economy
  • Society
  • Culture
  • #EndSARS
  • Specials
    • Covid-19
    • Travelling While African
    • From the wit-hole countries…
    • Living in Translation
    • Red Sea
    • Beautiful Game
  • Debating Ideas
Politics

Africa: why we need to study economies, not economics

By Morten Jerven
October 22, 2015
4392
5
Share:

Economists now recognise history and politics matter in understanding African economies. But that should be our starting point, not our conclusion.

Overlooking Cape Town, South Africa, from the Rhodes Memorial. Photograph by jbdodane.

Overlooking Cape Town, South Africa, from the Rhodes Memorial. Photograph by
jbdodane.

In the 1990s and 2000s, economists looking at Africa were typically preoccupied with the continent’s apparent “chronic failure of growth”. The economic literature took it as a given that there was a Bottom Billion and strove to explain why countries were stuck in growth traps. Never mind that the narrative of Africa’s chronic failure only holds true if you ignore the 1950s, 1960s, 1970s and then the 1990s and 2000s.

However, for those economists attempting to tease out a clean causal effect for the lack of growth, it soon became clear causality runs both ways – for example, budget deficits can cause a lack of growth, but lack of growth can also cause budget deficits. Furthermore, the number of potential explanatory variables discovered mushroomed. A survey found that up to 2005, 145 variables had found to be significantly correlated with growth.

What I call the “˜second generation’ of economic growth literature thus took a different tack. It skipped explaining growth in this way and instead put its energies into finding the one root cause that had trapped African economies through history. While previously economists had looked for correlations between slow growth and ongoing growth-inhibiting factors, now they searched for an overarching historical variable that could account for both. The problem of reverse causality was side-stepped, and the search for the answer moved to libraries, archives and yearbooks.

This second generation of literature has now generated a list of variables to rival the first. For instance, low economic growth today has been found to be correlated with colonisation, slave exports, distance to the equator, the plough, high malaria prevalence and many others things. Economists understand that history matters.

However, beyond the correlation between a historical dataset and GDP per capita in the present day, everything else – i.e. the actual history – is still missing. Branko Milanovic has called this particular combination of simplistic history and advanced statistical models “Wikipedia with regressions”. I have come to think this is an insult to Wikipedia.

One of the big findings of this new historical approach is that economists will tell you institutions matter. This much is true. But again, without looking at history and the reality of how institutions and economies really interact, a lot is misunderstood. In what Lant Pritchett calls the “why aren’t you more like Denmark” policy implication, economists in this school of thought look simplistically at the history and suppose that good institutions led to Denmark’s wealth while bad institutions led to, say, Chad’s relative poverty.

But the truth, as economic historians will know, is that institutions evolve in complex ways and that economic history is full of examples of growth coinciding with imperfect institutions – take for example the Gold Coast becoming a leading producer of cocoa in the early 19th century or China’s growth since the 1970s. Good institutions can be a result of economic development, not just their cause.

One may celebrate the fact that economists are more fully recognising that institutions and history matter. But this realisation could end up leading us down the wrong path if we don’t have a meaningful definition of what it means for an institution to be “˜good’. One thing we know for sure is that economic development requires different kinds of institutions at different moments and in different places. And if this is true, then measuring institutions according to a single normative global scale from 1 to 10 doesn’t make sense.

If the current trend in economic literature on Africa is correct in saying that history and institutions matter, the types of regressions researchers are relying on should be abandoned in favour of deep contextual studies of these histories and institutions. Instead of studying economics, we need to be studying economies.

At the moment, the literature has found a relationship between lack of development and having the “˜wrong history’ or “˜bad institutions’. But we need to turn this around and study how African economies work, rather than focusing solely on explaining why they don’t. History and politics matter. But that should be our starting point, not our conclusion.

Morten Jerven is the author of Africa: Why Economists Get it Wrong.

Previous Article

Ethiopia: new cabinet, new plan, new direction?

Next Article

African Political Thought, Part 4: The Degeneration ...

Morten Jerven

5 comments

  1. Catherine Boone 24 October, 2015 at 14:32

    Morten, This is 100% correct. Thanks again, Catherine

  2. Ike okontaa 28 October, 2015 at 16:45

    Economists study their own reflections in the mirror and claim they are studying Africa.

  3. Ike okonta 28 October, 2015 at 16:52

    Economics is the study of human beaviour in relation to the satisfaction of his more urgent wants with the limited resources at his disposal.

  4. Phathutshedzo 2 November, 2015 at 07:03

    As a student of economics, I find this to be very true and insightful…we are trained to apply economic principles instead of contextualization of African economies and what makes them tick.

  5. Donald Kasongi 2 November, 2015 at 15:40

    This is an important reminder to be taken up seriously instead of being driven by prejudices and pessimism.Thanks for the great piece ..

Leave a reply Cancel reply

  • MozambiquePolitics

    Mozambique: Nyusi grapples with Guebuza’s toxic legacy one year on

  • Politics

    Heterosexual Africa? – notes from the struggle for sexual rights

  • Politics

    International Criminal Court in Africa: “alea jacta est”

The Africa Insiders Newsletter

Get the free edition of our exclusive look at this week’s most important developments on the continent.

Please wait...

Thank you for signing up!

  • 76272
    Followers

Interactive Elections Map

Keep up to date with all the African elections.

Most read

  • africa elections 2021

    Africa Elections 2021: All the upcoming votes

  • Africa coronavirus covid A woman in Mali wearing a mask. Credit: Photo: World Bank / Ousmane Traore.

    Africans don’t just live to die. A response to the New York Times.

  • eritrea Adigrat Street in Tigray, Ethiopia. Credit: Rod Waddington.

    Eritrea in the Tigray war: What we know and why it might backfire

  • In Aksum, Tigrayan region of Ethiopia. Credit: Rod Waddington.

    As a Tigrayan, my bond with Ethiopia feels beyond repair

  • west President Yoweri Museveni meeting with then IMF Managing Director Christine Lagarde in 2017. Credit: IMF Staff Photograph/Stephen Jaffe.

    Museveni and the West. Relationship status: It’s complicated

Brought to you by


Creative Commons

Creative Commons Licence
Articles on African Arguments are licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
  • Cookies
  • Privacy Policy
  • Terms & Conditions
  • en English
    am Amharicar Arabicny Chichewazh-CN Chinese (Simplified)en Englishfr Frenchde Germanha Hausait Italianpt Portuguesest Sesothosn Shonaes Spanishsw Swahilixh Xhosayo Yorubazu Zulu
© Copyright African Arguments 2020
en English
am Amharicar Arabicny Chichewazh-CN Chinese (Simplified)en Englishfr Frenchde Germanha Hausait Italianpt Portuguesest Sesothosn Shonaes Spanishsw Swahilixh Xhosayo Yorubazu Zulu