At the heart of the Growth Project is a set of 26 detailed country studies conducted by African research teams. Rather than viewing each country’s experience in isolation, these case studies use global econometric benchmarks to discipline the search for key developments and puzzles at the country level. Particular attention is devoted to identifying turning points in the governance environment for growth, including conventional policy initiatives (like public investment drives or trade policy reforms) as well as institutional changes that alter the nature or scope of public sector involvement in economic activity and that feature importantly in the global evidence on growth. In the latter category, transitions affecting the security of property rights, the scope for private trade in agriculture and the prevalence of armed conflict all emerge repeatedly in the case study evidence.

The identification of turning points divides each country’s experience into a sequence of episodes during which the governance environment took on a distinctive character. Detailed research then focuses, first, on explaining investment and growth outcomes within each episode – a task that takes place at the sectoral and microeconomic levels, where economic agents respond to the structural constraints they face and the incentives generated by the governance environment – and second, on interpreting the political economy forces underlying transitions in the governance environment.

The country studies of the Growth Project therefore bring a wealth of evidence to bear on two of the most urgent questions confronting African policy makers. First, what constitutes a pro-growth policy environment, given a country’s economic structure and initial conditions? Second, what are the key political economy constraints to achieving such an environment? These questions are explicitly addressed in the Growth Project synthesis volume, now under preparation for Cambridge University Press (to be published along with the country studies in the multi-volume Cambridge Economic Survey of Africa). As a framework for analysis, the synthesis volume adopts a two-dimensional taxonomy of the country episodes by growth opportunities and policy choices.

On the opportunity dimension, global evidence points to economic isolation and resource-dependence as critically important structural determinants of the set of feasible and effective growth strategies over the 1960–2000 period. Particularly after the mid 1970s, development success stories were concentrated among the coastal and resource-poor countries, mainly in Asia, that adopted outward-oriented growth strategies focused on manufactured exports. This was not an available strategy for landlocked and resource-rich countries, which grew more slowly on a global basis (although outcomes for resource-rich countries were highly variable). Nearly a third of Africa’s long-term growth shortfall relative to other developing regions can be accounted for simply by controlling for these geographically-based opportunities, because a far greater proportion of African countries is landlocked or resource-rich (or both) than in any other region of the world.

Throughout coastal Africa, inward-oriented trade policies came under intense external pressure starting in the mid 1980s, and by the mid 1990s the tight regulatory syndromes of the early post-independence period had been substantially reformed in much of the continent. Where these market-based reforms have been maintained for a decade or more, as in Ghana, Tanzania and Senegal, cumulative gains in export diversification have been substantial and domestic exporting lobbies have emerged to provide continuing political support. The Asian model suggests that growth strategies in coastal Africa should continue to focus on building low-cost export platforms in areas of manufacturing, services, or agro-processing. Public infrastructure investments should be evaluated as a package, with a view to bringing African non-labour costs for selected exports down to world levels and promoting both foreign and domestic private investment. Given the complementarities and threshold effects in public investment, this is likely to require a big push, which in turn means donor financing on a large scale relative to the size of the existing non-traditional export sector.

Two fundamental barriers to the success of such an export-promoting strategy must be confronted squarely. One is the agglomeration benefits already enjoyed by Asian exporters as a result of their 20-year head start, coupled with the erosion of existing poor-country export preferences in industrial-country markets. Mauritius broke into foreign textile markets via a 12-year allocation under the Multi-Fibre Agreement, a preference that has now been eliminated. African exporters need temporary protection in industrial country markets via enhancements of Europe’s Everything but Arms initiative and the American African Growth and Opportunity Act (AGOA). These concede the principle of temporary protection but undermine it via tight rules of origin and, in the case of AGOA, short time limits. If Africa is to become a destination of choice for investment serving third-country markets, these initiatives will have to be expanded in scope, through more generous rules of origin and a time window closer to a decade than to the current three years under AGOA. Second, recipient governments must manage foreign aid with a view to its direct and indirect impacts on export diversification. The record suggests that high levels of foreign aid, like large resource rents, have not been conducive to export diversification except where governments have embraced export diversification as a high-priority goal of economic policy. The critical point here is that while many forms of aid produce political benefits for both donors and recipients, transfers that diversify the export base in growth-promoting directions are likely to provoke opposition from import-competing interests in the donor countries. It is therefore up to recipient governments to ensure that aid supports the diversification of exports rather than primarily replacing exports or compounding existing patterns. On the political end this requires supporting and broadening the non-traditional export lobbies whose interests are so closely aligned with the national interest in structural transformation and growth.

Choices matter profoundly for resource-rich countries, given the wide variance of growth outcomes associated with resource abundance. The overriding requirement for success is the orderly spending of resource rents on public goods. The principles of effective management of resource rents are well known: Botswana avoided the natural resource curse by maintaining transparency and accountability in the use of public resources, setting a high efficiency bar for the spending of windfall gains, and adjusting rapidly to adverse shocks.

Elsewhere in Africa, resource-rich countries were prone to macroeconomic instability, making rapid and irreversible spending commitments during high-price episodes and then falling into large fiscal deficits when international prices fell. Since wage and salary spending is particularly hard to reverse, fiscal austerity was often concentrated in the public investment budget, with substantial costs to economic growth. The fundamental challenge for resource-rich Africa, looking ahead, is to develop institutions capable of protecting the interests of future generations, enhancing accountability in the use of rents and ensuring high-quality assessment of public spending projects.

The central argument for electoral competition is the lever it provides over the performance of public officials. In this respect, the (re-)introduction of democratic elections in Africa during the 1990s bodes well for subsequent economic management. It is not clear, however, that electoral competition provides a reliable mechanism for representing the interests of future generations. Global evidence suggests that electoral competition tends to reduce growth in resource-rich countries, unless it is combined with institutional checks and balances that enhance accountability. The widening of civil liberties during the 1990s contributed substantially in this respect, by enhancing the scope for public debate and censure. The Extractive Industries Transparency Initiative is beginning to perform a similar function, by providing African societies with information on the disposition of rents.

The property rights to resource rents have been a focus of regionally-based distributional conflict in many African countries. By contrast with Botswana, for example, Nigeria’s resource endowment has been a focus of costly rent-seeking, political corruption and macroeconomic volatility. Ethno-regional polarization may be one source of these differences. In Nigeria, deep regional political cleavages pre-dated the discovery of oil resources and gave rise to a nation-building problem that was largely absent in smaller and more homogeneous Botswana.

The problem of ethno-regional polarization is far more general, and is not restricted to resource-rich countries; similar cleavages were present at the end of the colonial period in much of West Africa as well as in other parts of the continent including the Great Lakes region and Sudan. The country evidence suggests that pre-existing patterns of polarization complicated economic management by encouraging sharp ethno-regional biases in national policy. The development of credible political bargains that can gradually defuse the most costly forms of ethno-regional politics remains a central growth challenge in much of Africa, including newly resource-rich countries like Chad and Sudan. Meanwhile, regionally and internationally based action to contain armed conflict is a sine-qua-non of growth for the continent. Civil wars cost in excess of 2 percentage points of growth per year for the home country and create major growth spillovers for neighbours.

Landlocked countries are the final opportunity category in the Growth Project. Their growth challenge is distinctively difficult. On the one hand, they face disproportionate costs of development, given the paucity of existing transport networks and (although not in all cases) the hostility of the natural environment. On the other hand, they are to a significant degree at the mercy of their neighbours, on whom they rely for regional markets and for transport access to international markets. Coastal neighbours are particularly important; along with transport services and markets for goods and services, they are potential providers of highly remunerative factor markets for migrant labour. The economic stagnation of African coastal economies after the mid 1970s created a massive missed opportunity for their landlocked neighbours.

Given the relatively low cost of regional trade, closer economic integration with regional partners is a high priority for landlocked countries. These countries have a particular interest in the maintenance of low external barriers by regional partners, since regional agreements may otherwise operate to raise the cost of imports through inefficient import substitution by coastal neighbours. The export of labour services may play an important role in national growth strategy, implying that interventions that enhance the skills of potential migrants and encourage remittances from short- and long-term migrants should receive a high priority. As in the coastal economies, scaled-up aid levels will be needed to support public investment in transport and agriculture. The most important contribution recipient governments can make to this effort is to improve the efficiency and integrity of public expenditure management.

Finally, although landlockedness greatly increases the costs of traditional trade with industrial-country markets, countries that are landlocked need not also be air-locked and e-locked. High quality airport services can open possibilities for niche exports that exploit Africa’s location, including horticultural exports to Europe. Service exports can leverage the language skills of English- and to some degree French-speaking populations; along with post-primary education, the priority area here is effective governance of telecommunications services. Technological developments have transformed the appropriate domain of government activity in this area from one of direct provision to one of appropriate regulation and the enhancement of competition.

The interaction of opportunities with choices will continue to define Africa’s growth performance in the decades ahead. For most of the 1975–1995 period, growth strategy per se was displaced by crisis management and structural adjustment. With governments and external stakeholders now taking a longer view, successful growth strategies will be those that bring global evidence and the evidence from Africa’s own experience to bear in the particular and changing circumstances of individual countries. The Growth Project research provides an indispensable resource in this effort.

Stephen A. O’Connell is a Professor of Economics at Swarthmore College, USA, and a Research Associate of the Centre for the Study of African Economies, University of Oxford. He is co-coordinator, with Benno Ndulu, of the Growth Project.