Income Convergence in African Countries: Evidence from a Stationary Test With Multiple Structural Breaks

Omid Ranjbar (), Chien-Chiang Lee (), Tsangyao Chang and Mei-Ping Chen ()

South African Journal of Economics, 2014, vol. 82, issue 3, 371-391

Abstract: This paper examines the catching-up (stochastic convergence in real per capita income) hypothesis for 52 African countries with respect to the USA. over the 1969-2011 period, using a highly flexible stationarity test. The empirical results show (i) that all African countries experienced at least one break, switching between catching-up and divergence paths during the sample period; (ii) that structural breaks tend to coincide with political instability, trade liberalisation policies and terms of trade shocks; (iii) that among the 52 African countries studied, only five lie on the catching-up path, while the remaining 47 diverge from the USA. Our results show that the economic performance of African countries fall far behind those of the USA and that the economic growth tragedy of Africa continues.

Date: 2014
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