Colonial Legacy and Economic Efficiency across Africa: A Metafrontier Approach

Abstract

AbstractThis paper attempts to estimate comparable efficiency scores for 40 African countries over the period 1975–2014, adopting the metafrontier framework which allows the decomposition of the overall technical efficiency into technology gap ratio and standard technical efficiency (Huang et al., ). We tested whether colonial legacy, proxied by country's first official language, based on stochastic frontiers were preferred to the pooled stochastic frontier. Consequently, we split countries into the three following groups: French‐speaking countries, English‐speaking countries, and other African countries. Efficiency measures results showed that there is, on average, more efficiency matters than technology gap issues. In addition, the extent of those challenges varies from one group of countries to another. It is found that the efficiency issue is more pronounced among English‐speaking countries, while the main challenge for French‐speaking countries is related to technology gap. Results also show that the appropriate trade, monetary, and financial sector‐oriented policies may help countries to close their technology gap.