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In Africa's least developed countries (LDCs), escape from poverty and convergence to living standards of more advanced economies depends critically on structural transformation and the emergence of productive entrepreneurship that would accelerate growth and job creation. So far, however, subsistence agriculture has been the main source of employment in these countries, while a dynamic private sector in industry or high value-added services has remained elusive. Utilizing the flow approach to labor markets, this paper complements the empirical literature and numerous surveys on small and medium enterprise (SME) constraints and develops a theoretical framework that examines the main obstacles to entrepreneurship in Africa's LDCs. The paper posits that given the persistent frictions in product and labor markets as well as skill shortages that characterize these economies, development of productive entrepreneurship cannot be left to markets alone. The policy analysis suggests that the state has an important role to play. Well-targeted government interventions including training of potential entrepreneurs and workers can help to establish more modern and highly productive SME clusters that Africa's LDCs need. [ABSTRACT FROM AUTHOR]

This paper investigates the possible effects of the US reform of the international settlement rate system on telecommunications investment in Africa. We estimate a telecommunications investment equation using a panel data of 51 African countries during the 1991–2003 period and find that settlement payments have significantly positive effects on telecommunications investment in African countries. A 10 percent increase in settlement payment, on average, increases the telecommunications investment expenditure to GDP ratio by 3.4 percent over a three-year period. Using previously calculated revenue loss from the US reform, our estimates suggest that African countries stand to lose between 4.4 to 11 percentage points of their telecommunications investment in the medium run and with it, possible decreases in income growth rate. However, we argue that African countries can counter the effects of this revenue loss by increasing the efficiency of telecommunications investment through appropriate market restructuring, including the promotion of competition and privatization. [ABSTRACT FROM AUTHOR]

This article examines the developer's dilemma—a seeming quandary emerging from the fact that developing countries simultaneously pursue two different developmental goals: (a) seeking economic development through structural transformation and (b) reducing income inequality. However, the proclivity of increasing income inequality while pursuing structural transformation is often referred to as the developer's dilemma. This study investigates for the presence of this dilemma in Africa using sample splitting and threshold estimation technique. While we find support for the existence of a developer's dilemma, suggesting that structural transformation induces income inequality, the income inequality‐widening effect is disproportionate. [ABSTRACT FROM AUTHOR]

Africa's economies have diverged from other developing regions: over the past three decades growth has been much slower. In this paper I relate this to the region's distinctive physical and political geography. These features not only make Africa different from other regions, they make some parts of Africa radically different from others. Understanding these differences is critical because they imply equally substantial differences in opportunities and hence in the strategies likely to be effective for growth. No pan-African growth strategy offers a realistic prospect of success, nor can Africa simply copy the strategies of successful regions that have fundamentally different physical or political geography. I propose three strategies each of which is likely to be appropriate for a part of the region. [ABSTRACT FROM AUTHOR]

Erosion of trade preferences currently being enjoyed by the least developed countries (LDCs) and some developing countries remains an important area in the ongoing trade negotiations. The different positions regarding the preference erosion question besides being informed by political economy considerations are also founded on empirical results of this particular question. But does the methodology used for the empirical analysis matter? In this article, the importance of preference erosion due to MFN liberalization on agriculture is analyzed. Drawing from the potential complementary strengths in triangulation, the article uses both partial and general equilibrium analyses. The article shows that the ranking of preference erosion as an issue of policy concern is influenced by the empirical methodology adopted. However, irrespective of the rank, the article concludes that preference erosion is an important issue not only in terms of welfare, but also as it has impacts on incomes for preference-receiving countries. [ABSTRACT FROM AUTHOR]

Africa has the largest number and proportion of fragile states in the world. Fragile states are characterized by slower economic growth, higher incidences of poverty, and persistent inequality. Thus, there is a circular relationship between fragility, inequality, and slow economic growth. This study examines the relationship between fragility, financial inequalities, and inclusive growth in African countries. We introduce a novel way of examining inclusive growth in African countries by developing a unified measure of inclusive growth that captures the two dimensions of inclusive growth: income growth and income distribution. This enables us to adequately assess not just increased opportunities arising from economic growth, but also see how those new opportunities are distributed across all segments of the population. We captured the fragile status of African countries by using an index of fragility. We measured financial inequalities using new data on financial inclusion. The data analysis suggested negative relationships between fragility and inclusive growth in African countries. In addition, the results suggest positive relationships between financial inclusion and inclusive growth. Thus, inclusive growth can be fostered through policies that reduce financial inequalities. Therefore, a less fragile environment is conducive to inclusive growth both directly and indirectly through financial inclusion. [ABSTRACT FROM AUTHOR]

Objective We propose and test a theory that media freedom determines the extent of economic voting in developing democracies. Methods Building on extant work that suggests economic voting takes place in developing democracies much like it does in established democracies (Lewis-Beck and Stegmaier, 2008), we test our theory using a new collection of aggregate data from elections in 22 developing democracies in Africa Results Media freedom rather than political freedom may be a bigger determinant of economic voting in developing democracies. Moreover, the threshold of political development needed for economic voting is lower than previously suggested by the literature. Conclusion Economic voting is alive and well in developing democracies-even those with relatively low levels of economic and political development. [ABSTRACT FROM AUTHOR]

The combination of poor institutions and erratic macroeconomic policy, as measured by the volatility of fiscal policy, is associated with slower growth. We show that macroeconomic policy is more erratic in countries that are rich in natural resources, especially minerals and fuels, and in those that receive large aid inflows. Poor institutions also play a role. Although Africa is a major receiver of aid and exporter of natural resources, this is not purely an African phenomenon. Output volatility is not associated with slower growth after controlling for institutions and the volatility of fiscal policy. [ABSTRACT FROM AUTHOR]

This article examines the relationship between information and communication technologies (ICTs) and regional integration as a pathway to socioeconomic development in Africa and South America. Both regions share a colonial legacy often characterized by stronger economic ties to the developed world than within the regions. In recent decades, regional organizations have been involved in efforts to strengthen the infrastructure for ICTs, as well as the enhancement of economic and political integration as strategies to achieve development. However, the literature continues to show distinct research agendas that unwittingly overlook the connections between these areas. This article proposes a theoretical framework combining research on integration, ICTs, and development. It provides a brief analysis of each region and its ICT initiatives, the potential impact on regional integration, and how this relates to development. We suggest possible applications of the framework to identify and research the processes of integration and expected outcomes of development. [ABSTRACT FROM AUTHOR]

This article discusses the meaning of 'ideology' and 'development' and the relationship betwen them. It examines external constraints on development, including dependence on the industrialized West and the crippling burden of debt servicing, and the issue of privatization, which is seen as cutting across the ideological boundaries separating capitalist and socialist states. It also reviews internal constraints on development, such as the shortage of essential skills and the adoption of policies favouring the urban areas, and argues that they are largely independent of ideological considerations. It maintains that the apparent strength of the movement towards de-ideologization in Africa may not prove permanent. [ABSTRACT FROM AUTHOR]

The article discusses the role of organized labor in economic development in Africa. The following interpretations are analyzed: the interpretation of the Inter-University Study of Labor Problems in Economic Development; the political unionism viewpoint; and the interpretation of those who believe that the role of labor is to contribute to rapid economic growth. The author points that the role of organized labor to regulate conflict has been weakened in the developing areas. Thus, labor's contribution to industrialization and economic development remains an elusive one.