Economic Growth, Entrepreneurship and the Business Environment in Africa

Research on causes of underdevelopment traps and economic growth can be traced back to the work of Young (1928), Rosenstein-Rodan (1943) and Nurkse (1953). The seminal work of Kormendi and Meguire (1985), Grier and Tullock (1998), Barro (1991), Abramovitz (1986) and Baumol (1986), revived the debate on causes of economic growth. Later work by Quah (1997), Salai-I-Martin (1987,2004) has sought to identify the factors driving economic growth across various regions around the world in a manner that would explain why various regions are growing at such di¤erent rates. A stark example is the vast di¤erences in growth rates between Africa and Asia. Asia, on one hand, was at the same level of development withmost African countries in the early sixties, but has since overtaken Africa in the pace of economic growth. Explanations and solutions for Africa’s poor growth are found in the research work by Collier (2004), Berthelemy and Varoudakis (1996), Berthelemy and Soderling (2001), and Sacks, et al (2004). The “big-push” initiative, which argues for …nancial transfers in developing countries especially, Africa has been pushed heavily by Sacks, et al (2004) and is also linked to the African Commission Report driven by the British government, and accompanied by proposals for debt forgiveness for poorer countries.