Sir W. Arthur Lewis and the Africans: Overlooked Economic Growth Lessons

Amavilah, Voxi Heinrich (2014): Sir W. Arthur Lewis and the Africans: Overlooked Economic Growth Lessons.

Abstract

This comment is not a typical outcome of a typical research activity, and it not written like one. For example, although I have a list of references, I do not provide a formal literature review. The list is simply an acknowledge of the work that might have influenced my thoughts on the topic at hand. It is also not a review or any other evaluation of Lewis’s work, of which there are many by more eminent and famous friends, colleagues, and students of his. Lewis’s impact on Development Economics is well-known and appreciated. Less known and openly appreciated is his economic theory of growth and technological change, but I am not going to stress that either. My maintained claim is that the Newly-Industrialized Asian economies (NIAEs) have read carefully and followed closely and well Lewis’s theory in devising their growth and change strategies and policies, with local adjustments, of course. Many African countries on the other hand appear to have followed Lewis halfheartedly and in a helter-skelter way. Consequently, the difference in the performance of the two regions is no longer a matter of contention. The objective of this comment is to restate what I believe are Lewis’s key lessons to developing countries, and to show that although Lewis led all developing countries to water, proverbially speaking, some African countries have so far chosen not to drink. I find that there is a deliberateness in the order of the development process as conceptualized in Lewis’s theory of economic growth and technological change. First, for a country to grow it has to acknowledge that scarcity is real and to learn to be efficient, to economize. Second, efficiency requires good economic institutions to sustain it. Third, institutions need to not only have knowledge, defined as technological knowledge plus social knowledge, but more importantly such knowledge must grow, spread, and be used. The fourth “proximate cause” of growth in this order of preference is physical capital. Following capital, in the fifth and sixth places, respectively, are population (labor) and other natural resources (land), and government. Lewis is new classical (not to be confused with neo-classical) in that his theory of growth and change takes population and natural resources as given for any developing country, and counts government as a throwback to classical economics to suggest that economies perform best when government’s role is well defined and constrained. By implication good government is a function of good institutions, learning and knowledge growth. I conclude from this evidence that some African countries have refused to acknowledge scarcity, paid lip-service to knowledge accumulation, growth, and diffusion, over-stressed their need for physical capital and the abundance of their natural resources, neglected their populations, and failed to assign government its proper role. The result, until recently, has been slow growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic growth and technological change, Lewis and the Africans, Lewis and growth and change of African countries, lessons for growth and change, deep causes of growth and change of developing countries
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa; P - Economic Systems > P5 - Comparative Economic Systems > P52 - Comparative Studies of Particular Economies

References

Acemoglu, D., Johnson, and Robinson (2001b) The colonial origins of comparative development: An empirical investigation, American Economic Review 91 (5), pp. 1369-1401.

Acemoglu, D, and Robinson, J 2012 Why Nations Fail: The Origins of Power, Prosperity and Poverty. New York: Crown Publishers/Randon House, Inc.

Acemoglu, D., S. Johnson, and JA Robinson (2001a) African success story: Botswana, MIT Department of Economics Working Paper No. 01-37. Available at SSRN: http://ssrn.com/abstract=290791.

Amavilah VH 2000 Meditating on “Slow Growth in Africa”: New evidence or just ol’ stuff? http://128.118.178.162/eps/dev/papers/0307/0307003.pdf.

Amavilah, VH 2005 Resource intra-actions and interactions: Implications for technological change and economic growth. http://129.3.20.41/eps/ge/papers/0508/0508004.pdf.

Amavilah, VH 2006 Institutional change and economic performance: An off-the-cuff comment on Professors Daron Acemoglu, Simon Johnson, and James Robinson’s Three Papers. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=911324.

Amavilah, VH 2009 Knowledge of African countries: Production and value of doctoral dissertations, Applied Economics 41(7-9): 977-989.

Amavilah, VH 2014 Human knowledge and a commonsensical measure of human capital: A proposal. [Forthcoming].

Amavilah, VH 2008 The inhibited (exhibited) spread of innovations. http://mpra.ub.uni-muenchen.de/8993/1/MPRA_paper_8993.pdf.

Amavilah, VH 2007 Innovations spread more like wildfires than like infections. http://mpra.ub.uni-muenchen.de/3958/1/MPRA_paper_3958.pdf.

America, R. 2013 Economic development with limited supplies of management: What to do about it – the case of Africa, Challenge 56(1): 61-71.

Anand, S. and Sen, A. 1994 Human Development Index: Methodology and Measurement, Occasional papers, 12, Human Development Report Office, New York.

Arrow, KJ 1969 Classificatory notes on the production and transmission of technological knowledge, American Economic Review 59(2): 29-35.

Barbier, EB 2001 Scarcity and Frontiers: How Economies Have Developed Through Natural Resource Exploration. Cambridge (UK): Cambridge University Press.

Bell Grosvenor, EM 1953 Safari through changing Africa. National Geographic Magazine CIV(2): 145-198.

Bhagwati, J 1958 Immiserizing Growth: A Geometrical Note, Review of Economic Studies 25 (June): 201-205

Boulding, KE, and Mukerjee, T (eds) 1972 Economic Imperialism. Ann Arbor: University of Michigan Press.

Chang, H-J 2002 Kicking Away the Ladder: Development Strategies in Historical Perspectives. New York: Anthem Press.

Choi, K 1983 Theories of Comparative Economic Growth. Ames” Iowa State University Press, Chapters 7 and 8.

Cooper, A 1982 U.S. Economic Power and Political Influence in Namibia, 1700-1982. Boulder (CO): Westview Press.

Easterlin, RA 1974 Does economic growth improve the human lot? Some empirical evidence: in Paul A. David and Melvin W. Reder (eds) Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz. New York: Academic press, Inc.

Easterly, W and Nyarko, Y 2008 Is the Brain Drain Good for Africa?. Brookings Global Economy and Development Working Paper No. 19. Available at SSRN: http://ssrn.com/abstract=1121853 or http://dx.doi.org/10.2139/ssrn.1121853 (March).

Economist Magazine 2005 Helping Africa to help itself. (July 2nd-8th).

Ehrlich, PR, and Ehrlich, AH 1990 The Population Explosion. New York: Simon and Schuster.

Fahm, LA 1964 International organization and African economic growth, in MJ Herskovits and M Harwitz (eds) Economic Transition in Africa. London: Routledge and Kegan Paul, Chapter 17

Helliwell, J, Layard, R and Sachs, J (eds) 2012 World Happiness Report 2013. European Economic Commission.

Herskovits, MJ and Hurwitz, M (eds) 1964 Economic Transition in Africa. London: Routledge and Kegan Paul.

Herskovits, MJ 1952[1940] Economic Anthropology: The Economic Life of primitive Peoples. New York: W.W. Norton and Company, Chapter 1.

Hirschman, AO 1982 “The rise and decline of development economics , in The Theory and Experience of Economic Development, Essays in Honor of Sir W. Arthur Lewis, CF Diaz-Alejandro, G Ranis, MR Rosensweig, M Gersovitz, eds. London: George Allen and Unwin, Ltd.

Kamarck, AM 1976 The Tropics and Economic Development: A Provocative Inquiry. Baltimore: The John Hopkins University Press.

Kamarck, AM 1977 The Economics of African Development. New York: Praeger Publishers (Second reprint).

Kenney, NT, and Vaughn, WD 1960 The winds of freedom stir a continent. National Geographic Magazine, 118(3): 303-361.

Kimble, GHT 1951 Focus on tropical Africa, Canadian Geographical Journal, XLII(July):2-15.

Knight, FH 1951[1933] The Economic Organization with an Article Notes on Utility and Cost. New York: Harper Torchbooks.

La Fay, H, and Scherschel, JJ 1962 Freddom’s progress South of the Sahara. National Geographic Magazine, 122(5): 603-639.

Layard, R 200? Happiness: Lessons from a New Science. New York: Penguin Books.

Lee, JW 1996 Government interventions and productivity, Journal of Economic Growth, 1(3): 391-414.

Lewis, WA 1979 The slowing down of the engine of growth. Nobel Prize Lecture. http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1979/lewis-lecture.html.

Lewis, WA 1977 The Evolution of the Internation Economic Order. Princeton: Princeton University Press.

Lewis, WA 1969 Aspects of Tropical Trade, 1883-1965. Stockholm: Almquist and Wicksell.

Lewis, WA 1965[1955] The Theory of Economic Growth. New York: Harper Torchbooks.

Lewis, WA 1954 Economic development with unlimited supplies of labor, Manchester School of Economic and Social Studies 22(2): 139-191.

Lewis, WA 1953 Report on Industrialization and the Gold Coast. Accra.

Liang, MY 2010 Confucianism and the East Asian Miracle, American Economic Journal: Macroeconomics, 2(3): 206-34.

Lucas Jr., R 1993 Making a Miracle, Econometrica 61(2) 251-272

Lugard, Lord FD 1922 The Dual Mandate inTropical Africa. Edinburgh.

Malthus, RT 1960 On Population, Edited and Introduced by G. Himmelfarb. New York: Modern Library/Random House, Inc.

Mansfield, E 1971 Technological change. New York: W.W. Norton & Company Inc.

Mbaku, JM Institutions and Development in Africa. Trenton (NJ): Africa World Press.

Meier, GM, Bauer, PT and Seers, D 1984 Pioneers in Development. Oxford: Oxford University Press.

Mintner, W 1986 King Solomon’s Mines Revisited: Western Interests and the Burdened History of Southern Africa. New York: Basic Books, Inc., Publishers.

Moore, WR 1950 Roaming Africa’s unfenced zoos. National Geograpic Magazine, XCVII(3): 353-380.

Moore, WR 1950 Britain tackles the East African bush. National Geographic Magazine, XCVII (3): 311-352

Moss, JM 2007 African Development: Making sense of the Issues and Actors. Boulder: Lynne Rienner Publishers.

National Geographic Magazine 2005 Africa: Whatever you though, think again. Special Issue.

Nunn, N 2008 The long-term effects of Africa’s slave trades, Quarterly Journal of Economics, 123(2): 703-745.

Pakenham, T 1991 The Scramble for Africa, 1876-1912. London: Abcus (1997 reprint).

Prebisch, R 1950 The Economic Development of Latin America and Its Principal Problems. New York: United Nations.

Ranis, G 2004 Arthur Lewis’ contribution to development thinking and policy. Center Discussion Paper No. 891. Economic Growth Center, Yale University.

Rodney, W 2011[1972] How Europe Undeveloped Africa. Black Classic Press.

Rogers, EM 2003 Diffusion of Innovations, 5th Edition. New York: Free Press.

Romer, PM 1994 The origins of endogenous growth, Journal of Economic Perspectives 8(1): 3-22.

Romer, Paul (1993) Idea gaps and object gaps in economic development, Journal of Monetary Economics, 32(3), pp. 543-573.

Ross, K 1962 South Africa close-up. National Geographic Magazine, 122(5) 641-682.

Schultz, TW 1979 Investing in population quality throughout low-income countries, In World population and Development: Challenges and Prospects. Philip M. Hauser (Editor). New York: Syracuse University Press, pp. 339-360

Schultz, TW 1981 Investing in People: The Economics of Population Quality. Berkeley: University of California press.

Sen, AK 1985 Commodities and Capabilities. Oxford: Elsevier Science Publishers.

Sen, AK 1999 Development As Freedom. Oxford: Oxford University Press.

Sen, AK 1966 Peasants and dualism with and without surplus labor, Journal of Political Economy 74(5): 425-450.

Sen, AK 1983 Development: Which way now?, Economic Journal, 93(?): 745-762.

Shinnie, M 1965 Ancient African Kingdoms. New York: St. Martin’s Press.

Singer, HW 1950 The distribution of gains between investing and borrowing countries. American Economic Review 40(2): 473-485.

Sowell, T 1996 Knowledge and Decisions. New York: Basic Books, Inc.

Stamp, LD 1953 Africa: A Study in Tropical Development. New York: John Wiley and Sons, Inc.

Thornton, J 1998 Africa and Africans in the Making of the Atlantic World, 1400-1800, 2nd Edition. New York: Cambridge University Press.

Tignor, RL 2006 W. Arthur Lewis and the Birth of Development Economics. Princeton: Princeton University Pressl

Turnbull, CM 1961 The Lonely African. New York: Touchstone Book/Simon and Schuster, Chapter 11.

UN, Department of Economic Affairs 1951 Economic Conditions in Africa: Supplement to World Economic Report, 1949-50. Nos. E/1910/Add.1/Rev.1, ST/ECA/9/Add.1. New York: UN.

Weber, M 1958(1930) The Protestant Ethic and the Spirit of Capitalism. New York: Charles Scribner’s Sons.

Weber, M 1960 Religions of the East (3 volumes). Glencoe (IL): Free Press.

Weber, M 1947 The Theory of Social and Economic Organization. London: Free Press of Glencoe/Collier-Macmillan Limited.

Wentzel, V 1961 Angola, unknown Africa. National Geographic Magazine 120(3): 347-383.

World Bank 1993 The East Asian Miracle: Economic Growth and Public Policy. Washington DC: World Bank.

Young, HP 2007 Innovation diffusions in heterogeneous populations. Discussion Paper Seris, No. 303. Department of Economics, University of Oxford. http://www.economics.ox.ac.uk/Research/wp/pdf/paper303.pdf

Young, HP 2004 Innovation diffusion and population heterogeneity, Preliminary Draft, Johns Hopkins University (October 20, 2006 Version). Available at: http://www.econ.princeton.edu/seminars/SEMINARS/Fall06Seminars/young.pdf

Young, .HP 2005 The spread of innovations by social learning, Working Paper (February 17, 2006 Version). Available at: http://www.econ.jhu.edu/People/Young/Spread28march.pdf