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This paper uses an instrumental variables approach to estimate the relationship between trade openness and economic growth in Sub-Saharan Africa. Instrumental variables estimates show that economic growth has a significant negative contemporaneous effect on trade openness, while trade openness has a significant positive effect on economic growth. A 1 percentage point increase in the ratio of trade over GDP is associated with a short-run increase in growth of approximately 0.5% in a given year; the cumulative long-run effect on the level of GDP per capita is larger, reaching about 2%. [ABSTRACT FROM AUTHOR]

There has been a recent surge in research on long-term African development. For this research agenda to be fruitful and its theories tested, it is crucial to have consistent estimates of economic change. However, there is a lack of reliable time series data for the colonial period in Sub-Saharan Africa. This article contributes new time series data for the Gold Coast and Ghana between 1890 and 2010 and in particular a new GDP time series for Ghana for the years 1891–1957. The series implies a sustained period of economic expansion from the late nineteenth century. This suggests a revision of some prevalent truths about the history of economic growth in Sub-Saharan Africa, and points the way forward for expanding the database to cover the colonial period for other African economies. [ABSTRACT FROM AUTHOR]