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Regional convergence and catching up process in Africa: A tale of three clubs

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  • Aomar Ibourk
  • Zakaria Elouaourti

Abstract

The aims of this article were twofold. First, to tackle the issue of convergence from an analytical point of view by presenting the mathematical developments of the main economic growth models, which emphasized that the convergence of African economies is conditional to the investment level in the early stages of physical capital accumulation. As the latter increases, the convergence of African economies is determined by other factors (investment in research and development (R&D) and human capital, etc.). Second, to verify the empirical validity of these models by confronting them with data from 33 African economies stratified by development level over the period 2004–2019. Empirical results using both spatial and nonspatial panel estimation methodology and the ‘beta‐convergence’ approach pointed to three ‘convergence clubs,’ as well as a conditional convergence for all these clubs. However, the determinants of convergence among African economies differ by development level. In low‐income economies, convergence is conditional to financial development and inflation level. For lower‐middle‐income economies, institutional quality and inflation level contribute to the convergence of this club. The convergence of upper‐middle‐income economies is conditioned by public spending and human capital. In terms of policy implications, countries should develop measures that strengthen institutional reforms to improve the functioning of financial systems, democratic accountability, control of corruption, business climate, economic growth, strengthening the legal environment, and improving competition by reducing public expenditures. This paper is original insofar as it advances the field from the current state of knowledge in several ways. First, to stand out from the existing literature, we conducted a comparative analysis of the institutional quality levels across 33 African countries by developing an institutional quality index through the use of a principal component analysis (PCA) method. Second, we tested the empirical validity of the convergence hypothesis beneath economic growth theories and in the African context; moreover, it has verified the possible existence of ‘convergence clubs,’ then, it brought to light the main determinants of the convergence of these clubs. El objetivo de este artículo es doble. En primer lugar, abordar la cuestión de la convergencia desde un punto de vista analítico, presentando los desarrollos matemáticos de los principales modelos de crecimiento económico que subrayan que la convergencia de las economías africanas está condicionada al nivel de inversión en las primeras fases de acumulación de capital físico. A medida que aumenta esta última, la convergencia de las economías africanas viene determinada por otros factores (inversión en investigación y desarrollo (I+D) y capital humano, etc.). En segundo lugar, verificar la validez empírica de estos modelos cotejándolos con datos de 33 economías africanas estratificadas por nivel de desarrollo durante el periodo 2004–2019. Los resultados empíricos obtenidos mediante la metodología de estimación mediante paneles espaciales y no espaciales y el enfoque de ‘convergencia beta’ apuntaron hacia tres ‘clubes de convergencia’, así como a una convergencia condicional para todos estos clubes. Sin embargo, los factores determinantes de la convergencia entre las economías africanas fueron diferentes según el nivel de desarrollo. En las economías de renta baja, la convergencia está condicionada al desarrollo financiero y al nivel de inflación. En el caso de las economías de renta media‐baja, la calidad institucional y el nivel de inflación contribuyen a la convergencia de este club. La convergencia de las economías de renta media‐alta está condicionada por el gasto público y el capital humano. En cuanto a las implicaciones políticas, los países deberían desarrollar medidas que refuercen las reformas institucionales para mejorar el funcionamiento de los sistemas financieros, la rendición de cuentas democrática, el control de la corrupción, el clima empresarial, el crecimiento económico, el fortalecimiento del entorno jurídico y la mejora de la competencia mediante la reducción del gasto público. Este artículo es original en la medida en que avanza en el campo del estado actual del conocimiento de varias maneras. En primer lugar, para distinguirse de la bibliografía existente, se realizó un análisis comparativo de los niveles de calidad institucional en 33 países africanos mediante la elaboración de un índice de calidad institucional mediante el uso del método de análisis de componentes principales (ACP). En segundo lugar, se puso a prueba la validez empírica de la hipótesis de convergencia bajo las teorías del crecimiento económico y para el contexto africano; además, se verificó la posible existencia de los ‘clubes de convergencia’ y, a continuación, se esclarecieron los principales determinantes de la convergencia de estos clubes. 本稿の目的は二つある。一つは、アフリカ経済の収束は、物理的な資本蓄積の初期段階における投資水準に左右されることを強調した主要な経済成長モデルの数学的展開を提示することにより、分析的観点から収斂の問題に取り組む。後者が増加すると、アフリカ経済の収束は他の要因(研究開発への投資、人的資本等)によって決定される。もう一つは、2004~2019年の開発レベルで層別化したアフリカの33カ国の経済のデータとこれらのモデルと対峙させて、その実証的妥当性を検証する。空間的および非空間的パネル推定方法と「ベータ収束」アプローチの両方を使用した実証的な結果から、三つの「収束クラブ」と、これらすべてのクラブに対する条件付き収束が示された。しかし、アフリカ経済の収束の決定要因は開発レベルによって異なる。低所得地域では、経済収束は金融の発展とインフレ水準が条件となる。低中所得地域では、制度の質とインフレ水準がこのクラブの収束に寄与する。高中所得地域の経済収束は、公共支出と人的資本によって決定される。政策的インプリケーションに関しては、各国は、金融システムの機能を改善するための制度改革、民主的説明責任、腐敗の制御、ビジネス環境、経済成長、法的環境の強化、公共支出の削減による競争の改善を強化する措置を策定すべきである。本稿は、以下の点でこの研究分野を現状から発展させるということに関して独自性がある。まず、既存研究と一線を画すために、主成分分析法を用いて制度の質の指標を作成し、アフリカの33カ国の制度の質レベルの比較分析を行った。第二に、経済成長理論の下で、またアフリカの文脈において、収束仮説の実証的妥当性を検証した。さらに、「収束クラブ」 の存在の可能性を検証し、これらのクラブの収束の主な決定要因を明らかにした。

Suggested Citation

  • Aomar Ibourk & Zakaria Elouaourti, 2023. "Regional convergence and catching up process in Africa: A tale of three clubs," Regional Science Policy & Practice, Wiley Blackwell, vol. 15(6), pages 1339-1372, August.
  • Handle: RePEc:bla:rgscpp:v:15:y:2023:i:6:p:1339-1372
    DOI: 10.1111/rsp3.12646
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    References listed on IDEAS

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