Abstract
This paper examines the factors that drive labour productivity convergence between agriculture and manufacturing activities in Cameroon over 1969-2005. It is supposed that whenever one sector grows in terms of labour productivity it will also bring benefit to other industries. For instance, agriculture plays a significant role in reducing poverty. The bulk of the poor are engaged in agriculture and so an increase in agricultural productivity has a significant potential for reducing such poverty. Our findings indicate that while government spending on education, health, and road infrastructures promotes convergence, agricultural spending reinforces inequality in sectoral labour productivity by disproportionately increasing non-agricultural sector productivity. Furthermore, increases in manufacturing and service productivity levels both have a positive impact on agricultural productivity in the long-run, with manufacturing equally contributing in the short-run.
Highlights
Productivity growth appears to have become one of the surest routes to growth and poverty reduction
We present our findings in terms of the role played by Cameroon public expenditure or fiscal policy in productivity convergence between agriculture and the manufacturing sectors respectively as well as the interrelationships between these economic sectors including the service sector
We found that health spending has a significant coefficient; while education spending is insignificant, which implies that public spending in the social sectors has little effect on convergence of labour productivity.it would appear that government education expenditure is inefficient or poorly targeted
Summary
Productivity growth appears to have become one of the surest routes to growth and poverty reduction. There are indications that productivity growth is important for poverty reduction and even appears stronger than the link between growth and poverty reduction (CSLS, 2003) (Note 2) This issue is important especially for African countries that have higher levels of poverty and inequality (World Bank, 1995) and in the light of the first United Nations Millennium Development Goal envisaging the reduction of developing world poverty by half over 1990-2015. In sub-Saharan Africa, labour productivity is low especially in agriculture compared to manufacturing. To this end, developing an understanding of the relationship between productivity growth in ISSN 1911-2017 E-ISSN 1911-2025 www.ccsenet.org/ass. Convergence may take a long time to occur especially in a low-income, agriculture-based economy such as Cameroon, expected to be in the midst of the transformation process, far from full commercialisation of all labour markets. The discussion of results follows with a summary of findings and policy implication
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