Toward an understanding of economic growth in Africa: A reinterpretation of the Lewis model
We develop a model economy that has many of the features of Lewis (1954) but that also includes an in-between sector as described by Lewis (1979). Our model underscores the importance of the following determinants of structural change: (i) productivity growth in the agricultural sector; (ii) product...
| Autores principales: | , |
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| Formato: | Journal Article |
| Lenguaje: | Inglés |
| Publicado: |
Elsevier
2018
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/145987 |
| _version_ | 1855536061209378816 |
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| author | Diao, Xinshen McMillan, Margaret S. |
| author_browse | Diao, Xinshen McMillan, Margaret S. |
| author_facet | Diao, Xinshen McMillan, Margaret S. |
| author_sort | Diao, Xinshen |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | We develop a model economy that has many of the features of Lewis (1954) but that also includes an in-between sector as described by Lewis (1979). Our model underscores the importance of the following determinants of structural change: (i) productivity growth in the agricultural sector; (ii) productivity growth in the nonagricultural sector and; (iii) the terms of trade. Public investment enhances productivity growth in all sectors but when it is financed by foreign inflows, it also causes a real exchange rate appreciation leading to a contraction in the open modern sector. These results provide a partial explanation for recent patterns of growth in Rwanda and elsewhere in Africa where the nontradables or what we call the in-between sector has expanded more rapidly than the tradable sector. Our results also highlight the dilemma faced by poor countries in dire need of public investment with a very limited tax base. |
| format | Journal Article |
| id | CGSpace145987 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2018 |
| publishDateRange | 2018 |
| publishDateSort | 2018 |
| publisher | Elsevier |
| publisherStr | Elsevier |
| record_format | dspace |
| spelling | CGSpace1459872025-02-24T06:46:44Z Toward an understanding of economic growth in Africa: A reinterpretation of the Lewis model Diao, Xinshen McMillan, Margaret S. structural adjustment models public investment economic growth economic development economic systems economic sectors productivity econometric models economic growth rate economic dualism exchange rate finance foreign investment We develop a model economy that has many of the features of Lewis (1954) but that also includes an in-between sector as described by Lewis (1979). Our model underscores the importance of the following determinants of structural change: (i) productivity growth in the agricultural sector; (ii) productivity growth in the nonagricultural sector and; (iii) the terms of trade. Public investment enhances productivity growth in all sectors but when it is financed by foreign inflows, it also causes a real exchange rate appreciation leading to a contraction in the open modern sector. These results provide a partial explanation for recent patterns of growth in Rwanda and elsewhere in Africa where the nontradables or what we call the in-between sector has expanded more rapidly than the tradable sector. Our results also highlight the dilemma faced by poor countries in dire need of public investment with a very limited tax base. 2018-06-07 2024-06-21T09:05:29Z 2024-06-21T09:05:29Z Journal Article https://hdl.handle.net/10568/145987 en http://www.nber.org/papers/w21018 https://doi.org/10.1016/j.worlddev.2016.08.014 https://doi.org/10.1016/j.worlddev.2017.07.004 https://doi.org/10.1016/j.worlddev.2018.05.027 Open Access Elsevier Diao, Xinshen and McMillan, Margaret S. 2018. Toward an understanding of economic growth in Africa: A reinterpretation of the Lewis model. World Development 109 (September 2018): 511-522. Special Section: Agricultural Growth and Poverty Reduction. https://doi.org/10.1016/j.worlddev.2016.12.008 |
| spellingShingle | structural adjustment models public investment economic growth economic development economic systems economic sectors productivity econometric models economic growth rate economic dualism exchange rate finance foreign investment Diao, Xinshen McMillan, Margaret S. Toward an understanding of economic growth in Africa: A reinterpretation of the Lewis model |
| title | Toward an understanding of economic growth in Africa: A reinterpretation of the Lewis model |
| title_full | Toward an understanding of economic growth in Africa: A reinterpretation of the Lewis model |
| title_fullStr | Toward an understanding of economic growth in Africa: A reinterpretation of the Lewis model |
| title_full_unstemmed | Toward an understanding of economic growth in Africa: A reinterpretation of the Lewis model |
| title_short | Toward an understanding of economic growth in Africa: A reinterpretation of the Lewis model |
| title_sort | toward an understanding of economic growth in africa a reinterpretation of the lewis model |
| topic | structural adjustment models public investment economic growth economic development economic systems economic sectors productivity econometric models economic growth rate economic dualism exchange rate finance foreign investment |
| url | https://hdl.handle.net/10568/145987 |
| work_keys_str_mv | AT diaoxinshen towardanunderstandingofeconomicgrowthinafricaareinterpretationofthelewismodel AT mcmillanmargarets towardanunderstandingofeconomicgrowthinafricaareinterpretationofthelewismodel |