How instability lowers African growth

This paper aims to Assess the role of instabilities on Africa's low rates o f growth during the seventies and eighties, using cross-section econometric estimates, on a sample of African and non-African countries and two pooled decades. Africa exhibits higher 'primary' instabilities (climatic, terms o f trade and political instabilities), i.e., instabilities which are structu ral rather than the result of policy. These 'primary' instabilities influen ce African growth more through a lower growth residual than through a lower average rate of investment. They do so by their impact on economic policy, which is evidenced by their influence on two 'intermediate' instabilities, the instabilities of the rate of investment and of the real exchange rate, which significantly lower the rate of growth.