The Role of Capital Accumulation, Adjustment and Structural Change for Economic Take-Off: Empirical Evidence from African Growth Episodes

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Abstract
In this article, we analyze extended periods of growth in Africa based on panel estimations from 27 African countries during the 1960-1996 period. Our main conclusion is that sustainable growth needs to be based on a balanced mix of capital accumulation, macroeconomic adjustment and structural change. In addition to more commonly used determinants of Total Factor Productivity, we construct a measure for the effect of labor reallocation as well as an index of economic diversification and estimate the impact of the latter on long term growth. Further we propose a framework for the analysis of extended growth periods, in view of assessing their sustainability.