African Growth: Why a ‘Big Push’?

Abstract

Over the past 40 years Africa has stagnated while other developing countries have grasped growth opportunities. This process of divergence has turned Africa into the poorest region. Africa needs a big push to escape from four development traps: the conflict trap, the corruption trap, the primary commodity trap and the fractionalized society trap. Since these low level equilibria have been sustained over some time a marginal effort is unlikely to be successful. However, the traps weaken the effectiveness of aid, making increased aid unlikely to be a successful instrument to push Africa's development. This paper suggests four non-traditional policy instruments donors can use in addition to increased aid: a security guarantee, templates of good governance, temporary trade preferences and the conditioning aid on processes of governance rather than on policies.