Exchange Rate and Industrial Policies as a Means of Technological Learning in Africa: Which Institutional Framework to Embrace? Developmental State, Heterogeneous Coalition, or Neoliberal Coalition

Samson Gebrerufael (), Renee Eyden () and Rangan Gupta ()
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Samson Gebrerufael: Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa
Renee Eyden: Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa
Rangan Gupta: Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa

No 202625, Working Papers from University of Pretoria, Department of Economics

Abstract: This paper empirically evaluates the technological learning trajectory models of Porcile et al. (2023) across African countries categorized into three institutional regimes: developmental (Ethiopia, Mauritius, Rwanda), conflicting claims (Ghana, Kenya, Namibia, Tunisia), and neoliberal (Seychelles, South Africa). Using panel ARDL modeling, the study investigates the impact of real effective exchange rate (REER) depreciation on technological learning-by-doing, proxied by the growth rate of export income elasticity (GIEX). The results show no significant learning effects in the developmental regime due to immediate equilibrium adjustment and insignificant coefficients of REER depreciation. The conflicting claims regime demonstrates the same results, driven by low-complexity export baskets. Conversely, the neoliberal regime achieves a relatively persistent short-lived technological learning. However, its long-run REER growth coefficient is negative, confirming that over-reliance on price competitiveness retards long-run growth per Thirlwall's law. Ultimately, state failure hinders heavy intervention regimes in Africa, whereas moving toward the neoliberal framework yields better short-run learning outcomes.

Keywords: technological learning-by-doing; REER depreciation; income elasticity of exports; developmental regimes; state failure (search for similar items in EconPapers)
JEL-codes: F13 F14 F41 O11 O30 O33 O43 O47 P48 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2026-09
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