LSE’s Mollie Gerver says that Morten Jerven’s latest book Africa:Why Economists Get it Wrong is a “helpful reminder that policymakers should learn from economic trends, and not the trends of economists.”
A recent White House Press release states that “good governance” is the underpinning of economic growth in Africa. Elections should be transparent. Corruption should be tackled. Education should be improved. It is assumed that, because African countries did not have these policies in the 1980s, and seemed to have slower growth in the 20th century, that these policies caused slower growth. Morten Jerven, in an engaging book, questions this and other assumptions.
He begins by stating a fact: Africa did not suffer from slow growth in the 20th century. Rather, it suffered from recurring growth, including in the 1950s, 60s and 70s, and again from the mid-90s. Economists should focus on why Africa has grown, not why it has not. And when considering what caused slow growth in the 1980s, it is not enough to look at what correlated with low GDP. Though corruption and staggering democracy are correlated with slow growth, these policies tend to come after slow growth, not before. This suggests “poor governance” is caused by recessions, and is not the cause of them. To know what caused the recession of the 1980s, we need to see what preceded it, such as the oil price shocks of 1979-1981.
Development economists, he argues, often ignore such historical events, and ignore changes across time and between countries. Books like Paul Collier’s Bottom Billion focus on average growth from the entire 20th century, rather than differences between decades. This does not just misrepresent Africa. It leads to poor inferences about what causes what.
When economists finally began looking at history in the late 1990s, they continued ignoring growth, searching instead for the variable that could explain Africa’s chronic failures. Scholars argued that poor education, aid dependency, the slave trade or colonialisms caused the slow growth in the 20th century, when in fact these phenomena were also correlated with high growth at various periods.
In the 2010s there was a change. Economists and development agencies began claiming that “seven out of the ten fastest growing economies are in Africa.” It soon became clear that these forecasts were based only on very recent growth, overvaluing GDP and undervaluing inflation. And while there was growth, it was mostly limited to small, resource-rich economies, with GDPs that fluctuate with global commodity prices. Economists were once again ignoring recurring growth across time, perceiving Africa as historically slow, and suddenly improving by leaps and bounds within a decade. The “Africa rising” meme was born.
Jerven is not the first to focus on recurring growth in Africa throughout the 20th century and beyond. The political scientist Robert Bates, in 1981 and 2008, used rational choice theory to explain why African economies grew dramatically after independence and then quickly declined. In 1999 the anthropologist James Ferguson described Zambia’s economic rise and fall. But Jerven goes beyond asking what it would be rational for actors to do, and beyond individual cases, providing a broader set of data across countries. And importantly, Jerven constantly questions the accuracy of this data, which often does not include information on the informal economy, or even the formal economy. Even when accurate information is added to datasets, he argues, it is often added suddenly, making it appear as if the country has suddenly grown more than it has.
The book is a helpful reminder that policymakers should learn from economic trends, and not the trends of economists. It moves beyond the usual clichés of “Africa is not a country,” showing why understanding differences between countries, and across time, can help explain why growth has changed. And in understanding why growth has changed, we can better formulate policies based on the needs of economies, and not the problems of economists.
If there is anything missing in the book, it is details from individual countries, and the differences between them. In this sense, the book should be viewed as complimenting more country-specific literature, providing a helpful overview for economists, social scientists, policymakers, and anyone interested in development. The book will also interest those concerned with how information is gathered, used, and applied to policy. By carefully picking apart datasets, Jerven successfully shows why policies have gone wrong, reframing the debate on governance and growth.
Africa: Why Economists get it Wrong by Morten Jerven Published by Zed Books
Mollie Gerver is a research student in the LSE Department of Government. Follow her on Twitter @MollieGerver.
The views expressed in this post are those of the authors and in no way reflect those of the Africa at LSE blog or the London School of Economics and Political Science.