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Explaining African Growth Performance: A Production-Frontier Approach

Oleg Badunenko, University of Cologne, Daniel J. Henderson, State University of New York and Romain Houssa, University of Namur

This paper employs a production frontier approach to examine the performance of African economies from 1970-2007. We find that physical and human capital accumulation are the main factors that drive productivity growth at the country level. Diminishing marginal returns partially explains why the region has failed to generate sustained growth. Moreover, efficiency losses have constrained growth in Africa. Examining the outcomes of successful countries suggests that good governance, institutional quality and good policies are key factors to improve economic development in Africa. These factors are even more required in Sub-Saharan Africa given the natural constraints of geography in the region.