Africa: Why Economists Get it Wrong By Morten Jerven

Abstract

Economic models and theories are widely used to set policies, inform the public and analyze current events. Thus, the bold claim that economists ‘get it wrong’ in Africa immediately sparks interest. In Africa: Why Economists Get It Wrong , Morten Jerven uses evidence from historians, econometricians and his own field work to show that much of the information, theories and common wisdom about African development is inaccurate and that misconceptions can lead to bad economic development policies. The common belief about African development is that over the past 50 years, the continent has had steadily poor economic growth and has fallen behind other regions of the world. Researchers cite facts like the average annual African gross domestic product (GDP) per capita growth rate in the period 1960–2000 was about 0.5% while the rest of the world had an average annual growth rate of 2%. These numbers appear uncontroversial but they hide an important underlying trend. Even though the average growth rate of African countries has been about 0.5%, African countries have experienced both economic growth and decline over the past 60 years. In fact, until 1975 the global and African GDP growth rates were very similar. Therefore, Jerven asserts that economists who use the average growth rate in models reach false conclusions about the African economy because they do not account for the variation in growth rates.