Testing Kaldor’s Growth Laws across the Countries of Africa

Abstract

One of the many contributory factors to Africa’s relative economic backwardness and low per capita income is that the industrialization process has hardly started and even appears to be bypassing the continent altogether. There is even evidence in some African countries of deindustrialization before they have ever reached Rostow’s growth stages of ‘take-off and ‘maturity’. Africa has the lowest share of industrial output in total output compared to other continents; it has the highest share of the labour force still employed in agriculture, and the highest share of export earnings derived from primary products. To what extent is the growth performance of African economies related to these structural characteristics? More precisely is there any discernible evidence that GDP growth and overall labour productivity growth of African countries is positively related to how fast their industrial sector is growing?

First published in African Development Review, December 2003 (with Heather Wells).