How instability lowers African growth

This paper aims to assess the role of instabilities on Africa'slow rates of growth during the seventies and eighties, usingcross-section econometric estimates, on a sample of Africanand non-African countries and two pooled decades. Africa exhibitshigher 'primary' instabilities (climatic, terms of trade andpolitical instabilities), i.e., instabilities which are structuralrather than the result of policy. These 'primary' instabilitiesinfluence African growth more through a lower growth residualthan through a lower average rate of investment. They do soby their impact on economic policy, which is evidenced by theirinfluence on two 'intermediate' instabilities, the instabilitiesof the rate of investment and of the real exchange rate, whichsignificantly lower the rate of growth.