Learning from patterns of long term economic change
The African post-colonial economic performance has been described as a chronic failure of economic growth and the problem for analysis, hence, has been to determine its causes. It is argued here that in the long run the growth experience of African economies is better approached as ’growth recurring’.
There have been sustained periods of GDP increases in Africa in pre-colonial, colonial and post-colonial period, which were associated with qualitative changes of how society was organized and led to significant increases in economic welfare.
The growth episodes were rooted in trade and the world economy, but the growth was only possible due to a reorganization of factors of production, a combination of investment and technological growth and had political economy consequences.
There is a crucial difference between asking (i) why there has been a chronic growth failure and (ii) why African economies grew and why they retrogressed. The study of growth as a recurring process is central to understanding the prospects for sustained growth in Sub-Saharan Africa.
The African post-colonial economic performance has been described as a chronic failure of economic growth and the problem for analysis, hence, has been to determine its causes.
The initial research on African economic growth performance focused on averaged gross domestic product (GDP) per capita growth in the post-colonial period. By making almost exclusive use of statistics that show average growth over time, the literature did not seek to explain periods of growth and stagnation, but focused on explaining slow growth on average. By extension, since most poor economies have displayed slow growth on average, explaining slow growth was conflated with explaining low income.
This stylized fact of permanent stagnation, which rings well with the popular view of the current income distribution of income and growth in the world, embodied in the phrase “the bottom billion”, has provided the impetus for an economic growth literature that investigates the historical causes of persistence of low income in African economies.
Thus it has been argued that the fundamental cause of Africa’s current relative poverty is the lack of pro-growth institutions, which originated either under the colonial system or during the period of slavery, or even as a result of African special geographical features or population characteristics. It is argued here that in the long run the growth experience of African economies is better approached as ’growth recurring’.
There have been sustained periods of GDP increases in Africa in pre-colonial, colonial and post-colonial period. Although most of these periods were not ’growth triumphant’ as in the case of European industrialisation or in late developers in other regions such as East-Asia, they were still important in that they were associated with qualitative changes of how society was organized and led to significant increases in some kind of economic welfare.
A few examples of growth experiences will briefly be reviewed here, before we return to reconsider the prospects for African growth.
African economies are often viewed as marginalised in the world economy historically, yet most of them have been involved in the world economy for centuries. For example, during the height of the slave trade the per capita export revenue in Dahomey was comparable to that of Great Britain. The profitable slave business facilitated the growth of some stronger states, and in some markets imports spurred exchange and growth in the domestic economy.
The closing of the Atlantic slave trade in the 19th century meant stagnation and loss of power for centralized states as this undermined the fiscal basis of Dahomey as well as other West African states. Though it did not always mean the end of slavery as a mode of production, the end of the slave trade opened up new economic opportunities. It paved the way for what has been called the period of “legitimate commerce” and what is also referred to as the “cash-crop revolution” in Sub-Saharan Africa.
The cocoa boom originated in the colony of the Gold Coast, and spread to other areas such as the Ivory Coast and Nigeria. Peasants responded favourably to the earning potential from an external market demand for this new cash crop, also by investing in cocoa trees.
Income estimates for the period between 1891 and 1911 indicate a period of rapid growth. If ’traditional consumption’ is not taken into account, the GDP per capita more than tripled over two decades, implying average annual growth of 6.5 per cent in the modern sector over the period. This growth was sustained into the 1940s.
Economic change in colonial and pre-colonial Africa is not fully documented, but these episodes of boom and bust have left lasting effects. Growth in the pre-colonial period, when based in slave trade, was absolutely unsustainable in the long term. Yet the rent from this growth was captured by elites, and in some cases facilitated the temporary underpinning of states and their fiscal capacity.
The end of the slave trade was forced externally, although some areas and states did attempt to disengage earlier than the 19th century. The growth of export crop production in the 19th century did entail large improvements in GDP per capita, which were enjoyed by the peasant population, sometimes directly.
Through marketing boards, instituted during colonial rule, the receipts from these exports were increasingly captured by the state. In the post-colonial period these earnings were channelled into very high rates of capital formation and state investment-led growth.
The global economic downturn in the 1970s hit Africa particularly hard. Between 1975 and 1995, a combination of depressed demand in external markets and elites turning to predatory rent-seeking ensured that growth did fail in the majority of African economies. It is also widely recognized that this economic downturn also led to a political disorder, state failure and increased the incidence of civil war.
After a prolonged period of Structural Adjustment, growth did return, particularly due to renewed demand and increased prices for primary product exports. On average African economies has been growing for more than a decade now. Eventually, this has changed the tone in scholarship, with publications such as “Africa at a Turning Point?” and “Africa’s Turn?”.
Still, it is striking that until this day the best noted books on African economies by economists still focusses on explaining why African economies are not growing. However, If it is accepted that growth revived in Africa in the early 1990s, then viewing a the decades of decline in the 1970s and 1980s as representative for African growth characteristics looks untenable, and the history of African economic growth needs to be reconsidered.
The task of social scientists is to come up with good research questions. This short piece argues that there is a crucial difference between approaching the conundrum of African growth by asking why there has been a chronic growth failure and that of asking why African economies grew and why they retrogressed. There have been periods of rapid economic change and accumulation, which in turn caused important qualitative changes in how the society and the economy were organized.
It seems to me that the study of growth as a recurring process is central to understanding the prospects for sustained growth in Sub-Saharan Africa. While we do know how these periods of growth are related to world economic patterns, research on how these patterns change economic power and structure in African economies are key, yet relatively understudied questions that demand answers.
The growth episodes here were rooted in trade and the world economy, but the growth was only possible due to a reorganization of factors of production, a combination of investment and technological growth and had political economy consequences.
Economic growth has been recurring in Africa. It is precisely because these periods of rapid economic change and accumulation caused important qualitative changes in how the society and the economy were organized, that they cannot be ignored, as they have tended to be in the search for a root cause of Africa’s chronic failure of growth.
All the underlying evidence and references for this article are available at
Jerven, M.: African Growth Recurring: An Economic History Perspective on African Growth Episodes, 1690-2010. Economic History of Developing Regions, 25:2, pp. 127-154, 2010, which may be ordered here.