Growing a knowledge-based economy: evidence from public expenditure on education in Africa

Abstract

This paper is developed with the broad objective of articulating the relevance of knowledge and innovation to promote growth to achieve Africa’s economic potential, and for sustaining that economic growth on the longer-term. The paper starts with a review of the concept of a knowledge-based economy and discusses it from various perspectives. It then presents an overview of recent work on its diverging meanings and importance in the development of African economies. It also highlights the theoretical perspectives of public educational investment and economic growth, and uses this as a basis to conduct an empirical analysis of the effects of public investments in education in relation to economic growth and human capital development, using panel data on 52 African countries. This is followed by conclusions and recommendations for future investments in knowledge in African, with emphasis on the role of international development institutions in particular African Development Bank.