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Thirty years in Africa.s development: From structural adjustment to structural transformation?

Tony Addison ()

No 119, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: The regional development policy in Brazil materializes mainly in the regional development funds for the north-east (FNE), the north (FNO), and the centre-west (FCO), in which more than EUR36 billion was invested between 2004 and 2010. This paper examines the economic effect of these regional development funds using for the first time a unique and recent data provided by Brazil.s government. The study uses spatial panel models and different spatial scales of municipalities and micro-regions to analyse the effect of development funds on regional GDP per capita growth during 2004-10. The results suggest that development funds have positive impact on GDP per capita growth mainly at municipality level. Furthermore, the results indicate that different modalities of FCO, FNO, and FNE affect regional growth differently. Africa has come a long way since the economic turmoil of the 1980s, the decade of .structural adjustment.. Growth has been strong, yet poverty remains high. Underlying the shortage of good livelihoods and high social inequality is the lack of diversification in Africa.s contrast to Asia.s success stories. Structural adjustment did not change the basic structure of economies. Many countries became mired in war in the 1980s and 1990s. This also brought about structural change, often of the worst kind. Today, structural transformation remains on the policy table, but many of the constraints, notably infrastructure and enterprise finance, have yet to be resolved. Agricultural productivity remains low. And without new manufacturing and service clusters, Africa is yet to follow East Asia in integrating with the global economy in ways that add value and good jobs. Instead, integration continues via Africa.s traditional primary exports, making the region vulnerable to commodity price shocks. Today.s policy agenda is subtle, and one in which the challenges have no easy answers.

Keywords: Africa; economic transformation; poverty; inequality; aid (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gro
Date: 2015
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