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Growth Diagnostic of Cape Verdean Economy

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  • Brito, Joao

Abstract

The main of this article is to analyse the evolution of Cape Verdean economy and find a binding constraint to economic growth, using the technique “growth diagnostic” proposed by Hausmann et al. (2005). The real GDP per capita in Cape Verde increased from US$ 806 in 1970 to US$ 2.830 in 2011, with average annual growth rate of 3.3%. The service sector was the main share in GDP production side. Cape Verdean economy presents great dependence of external capital and, despite the considerable growth, the unemployment rate remains high and public debt is high but sustainable. We found some factors that constitute constraints to economic growth, as weak financial intermediation, poor infrastructure, high costs in the inter-island connections and strong deviation between the human capital needs and areas of formation of secondary and tertiary education. Thus, government policies should be aimed at overcoming these barriers.

Suggested Citation

  • Brito, Joao, 2013. "Growth Diagnostic of Cape Verdean Economy," MPRA Paper 59480, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:59480
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    References listed on IDEAS

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    1. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    2. Ricardo Hausmann & Bailey Klinger & Rodrigo Wagner, 2008. "Doing Growth Diagnostics in Practice: A 'Mindbook'," Growth Lab Working Papers 19, Harvard's Growth Lab.
    3. World Bank & International Finance Corporation, 2006. "Doing Business 2007 : How to Reform," World Bank Publications - Books, The World Bank Group, number 7245.
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    Cited by:

    1. Khairul Akmaliah Adham & Hasmiah Kasimin & Nurul Atasha Jamaludin & Siti Khadijah Mohd Ghanie & Nor Azzatunnisak Mohd Khatib & Mohd Fuaad Said, 2016. "Developing a Cybernetics Approach to Analysing Inclusive Growth Constraints," Systemic Practice and Action Research, Springer, vol. 29(3), pages 215-234, June.
    2. José Carlos Teixeira & Carlos Vieira & Paulo Ferreira, 2021. "The Effects of Government Bonds on Liquidity Risk and Bank Profitability in Cape Verde," IJFS, MDPI, vol. 9(1), pages 1-23, January.
    3. Silves J.C. Moreira & Pedro Cosme Vieira & Aurora A.C. Teixeira, 2014. "Estimating the human capital stock for Cape Verde, 1950-2012," FEP Working Papers 547, Universidade do Porto, Faculdade de Economia do Porto.
    4. Leandro do Rosario Viana Duarte & Yin Kedong & Li Xuemei, 2017. "The Relationship between FDI, Economic Growth and Financial Development in Cabo Verde," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(5), pages 132-142, May.

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    More about this item

    Keywords

    Economic growth; Country analysis; Growth diagnostic; Countries competitiveness; Cape Verde;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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