Government Impartiality and Sustained Growth in Sub-Saharan Africa

Abstract

Many studies suggest that one of the main reasons for Africa’s dismal growth performance over most of the 20th century is its degree of ethnic fragmentation. Yet, there is still insufficient knowledge about whether ethnic diversity necessarily entails large economic costs, or whether the implications of diversity depend, inter alia, on the government’s approach toward the ethnic question. We note that economic growth tends to increase average incomes, but it also affects the income distribution. Then, if growth is accompanied by growing economic inequality, the perception of the impartiality of the government toward different ethnic groups is likely to be important for whether growth can be sustained, or whether sparks of growth will evaporate because of rising political divisions and internal conflicts. In this paper, we study whether the degree of ethnic impartiality in the government’s policies is related to the emergence of sustained growth in sub-Saharan Africa, irrespective of the actual content of the policies. We measure perceptions about the impartiality of the government with survey data from the Afrobarometer covering 20 countries starting in the late 1990 s. Our main definition of sustained growth is when there is a GDP per capita growth rate of at least 2% for at least five consecutive years. Our empirical results suggest that countries whose governments are perceived as impartial are more likely to experience sustained growth. We conclude that in order to ensure economic development, it is not only important to choose the ‘‘right” policies, but also to implement these policies in a fair manner.