Stuck in the Middle? Structural Change and Productivity Growth in Botswana

Brian McCaig, Margaret McMillan, Iñigo Verduzco-Gallo and Keith Jefferis

No 21029, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper decomposes Botswana’s growth from the late 1960s through 2010 into a within-sector and a between-sector (structural change) component. We find that during the 70s and 80s Botswana’s rapid economic growth was characterized by significant structural change with the share of the labor force employed in agriculture dropping from more than 80 percent to around 40 percent. Between 1990 and 2010 growth was also rapid, but structural change detracted from growth. We hypothesize that this is one of the reasons for persistent poverty and very high income inequality in Botswana today. This leaves us with the following puzzle: why is it that a country with such an impressive track record marked by good governance and prudent macroeconomic and fiscal policy is having so much trouble diversifying its economy?

JEL-codes: O5 O55 (search for similar items in EconPapers)
Date: 2015-03
New Economics Papers: this item is included in nep-afr and nep-gro
Note: DEV ITI
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Citations: View citations in EconPapers (4)

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