Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/80311 
Year of Publication: 
2006
Series/Report no.: 
CREDIT Research Paper No. 06/08
Publisher: 
The University of Nottingham, Centre for Research in Economic Development and International Trade (CREDIT), Nottingham
Abstract: 
The principal aim of this paper is to identify, in the context of the relationship between openness and growth, factors that can account for the poor growth performance of subSaharan African (SSA) countries. Including inequality as a broad measure of policy distortions, attention focuses on policy and non-policy barriers to trade, indicators of openness and resource endowments. The empirical analysis uses cross-section and panel econometric techniques to investigate the links between growth, inequality and openness for a sample of 44 developing countries over 1970-95. There are four broad conclusions. First, within the sample, there is a low correlation between initial GDP and inequality. Second, inequality appears to have a robust negative effect on growth in the long run but not in the short run. Third, we find consistent evidence that openness is positively associated with growth, and some evidence that trade liberalisation tends to offset or dampen the negative effect of inequality on growth. Finally, Africa does appear to be different; the especially poor SSA growth performance can be explained by the combination of low levels of openness, high natural barriers to trade (especially high costs of transport to distant dynamic markets) and export dependence on primary commodities.
Subjects: 
Openness
Transport Costs
Trade and Growth
Sub-Saharan Africa
JEL: 
F14
O10
Document Type: 
Working Paper

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