Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics University of California, Berkeley
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Econ
omic
s 17
2Is
sues
in A
frica
n E
cono
mic
Dev
elop
men
t
Pro
fess
or T
ed M
igue
lD
epar
tmen
t of E
cono
mic
sU
nive
rsity
of C
alifo
rnia
, Ber
kele
y
Econ
omic
s 17
2Is
sues
in A
frica
n E
cono
mic
Dev
elop
men
t
Lect
ure
24 –
Apr
il 19
, 200
7
Eco
nom
ics
172:
Lec
ture
24
3
Eco
nom
ics
172:
Lec
ture
24
4
Out
line:
(1)
Whi
ch w
ay fo
rwar
d on
fore
ign
aid?
(2)
New
topi
c: e
thni
c di
vers
ity a
nd e
cono
mic
dev
elop
men
t in
Afri
ca
Eco
nom
ics
172:
Lec
ture
24
5
•W
hat t
ypes
of d
evel
opm
ent p
roje
cts
are
likel
y to
be
mos
t suc
cess
ful?
•W
hat r
ole
shou
ld d
onor
s lik
e th
e W
orld
Ban
k an
d IM
F pl
ay in
fore
ign
aid?
•S
houl
d fo
reig
n ai
d bu
dget
s be
incr
ease
d / d
ecre
ased
?
•D
oes
fore
ign
aid
do m
ore
harm
than
goo
d?
Wra
ppin
g up
: wha
t sho
uld
aid
look
like
?
Eco
nom
ics
172:
Lec
ture
24
6
•W
hat t
ypes
of d
evel
opm
ent p
roje
cts
are
likel
y to
be
mos
t suc
cess
ful?
•W
hat r
ole
shou
ld d
onor
s lik
e th
e W
orld
Ban
k an
d IM
F pl
ay in
fore
ign
aid?
•S
houl
d fo
reig
n ai
d bu
dget
s be
incr
ease
d / d
ecre
ased
?
•D
oes
fore
ign
aid
do m
ore
harm
than
goo
d?
•Th
e m
ost s
ucce
ssfu
l dev
elop
ing
coun
tries
(e.g
., C
hina
, In
dia)
hav
e no
t rec
eive
d m
uch
fore
ign
aid
Wra
ppin
g up
: wha
t sho
uld
aid
look
like
?
Eco
nom
ics
172:
Lec
ture
24
7
Nex
t top
ic: e
thni
c di
vers
ity a
nd d
evel
opm
ent
Eco
nom
ics
172:
Lec
ture
24
8
•S
ub-S
ahar
an A
frica
is th
e w
orld
’s m
ost e
thno
-lin
guis
tical
ly d
iver
sity
con
tinen
t•
14 o
f the
wor
ld’s
15
mos
t div
erse
cou
ntrie
s ar
e in
A
frica
(the
one
exc
eptio
n is
Indi
a)
Nex
t top
ic: e
thni
c di
vers
ity a
nd d
evel
opm
ent
Eco
nom
ics
172:
Lec
ture
24
9
•S
ub-S
ahar
an A
frica
is th
e w
orld
’s m
ost e
thno
-lin
guis
tical
ly d
iver
sity
con
tinen
t•
14 o
f the
wor
ld’s
15
mos
t div
erse
cou
ntrie
s ar
e in
A
frica
(the
one
exc
eptio
n is
Indi
a)
•O
ne p
ract
ical
pol
icy
ques
tion
in s
uch
circ
umst
ance
s:
Whi
ch la
ngua
ge s
houl
d be
cho
sen
as th
e na
tiona
l la
ngua
ge o
f suc
h di
vers
e co
untri
es?
(Lai
tin19
92)
Nex
t top
ic: e
thni
c di
vers
ity a
nd d
evel
opm
ent
Eco
nom
ics
172:
Lec
ture
24
10
•S
ub-S
ahar
an A
frica
is th
e w
orld
’s m
ost e
thno
-lin
guis
tical
ly d
iver
sity
con
tinen
t•
14 o
f the
wor
ld’s
15
mos
t div
erse
cou
ntrie
s ar
e in
A
frica
(the
one
exc
eptio
n is
Indi
a)
•O
ne p
ract
ical
pol
icy
ques
tion
in s
uch
circ
umst
ance
s:
Whi
ch la
ngua
ge s
houl
d be
cho
sen
as th
e na
tiona
l la
ngua
ge o
f suc
h di
vers
e co
untri
es?
(Lai
tin19
92)
--Lo
cal l
angu
ages
of p
artic
ular
gro
ups
(“ve
rnac
ular
s”)
--Lo
cal l
ingu
a fra
ncas
(e.g
., S
wah
ili in
Eas
t Afri
ca)
--E
urop
ean
colo
nial
lang
uage
s (e
.g.,
Eng
lish,
Fre
nch)
Nex
t top
ic: e
thni
c di
vers
ity a
nd d
evel
opm
ent
Eco
nom
ics
172:
Lec
ture
24
11
Lang
uage
Reg
ion
(mai
n co
untri
es)
Sw
ahili
Eas
t Afri
ca (T
anza
nia,
Ken
ya)
Ling
ua fr
anca
sin
Afri
ca
Eco
nom
ics
172:
Lec
ture
24
12
Map
of A
frica
Sw
ahili
-spe
akin
gar
ea
Eco
nom
ics
172:
Lec
ture
24
13
Lang
uage
Reg
ion
(mai
n co
untri
es)
Sw
ahili
Eas
t Afri
ca (T
anza
nia,
Ken
ya)
Chi
chew
aS
outh
-eas
t Afri
ca (M
alaw
i)Li
ngal
aC
entra
l Afri
ca (C
ongo
)W
olof
Wes
t Afri
ca (S
eneg
al)
Hau
saW
est A
frica
/ S
ahel
(Nig
eria
, Nig
er)
Ling
ua fr
anca
sin
Afri
ca
Eco
nom
ics
172:
Lec
ture
24
14
•A
maj
or p
olic
y is
sue
in m
any
coun
tries
esp
ecia
lly in
th
e ea
rly-m
id 1
960s
imm
edia
tely
afte
r ind
epen
denc
e
Sho
uld
the
colo
nial
lang
uage
be
reta
ined
?
Eco
nom
ics
172:
Lec
ture
24
15
•A
maj
or p
olic
y is
sue
in m
any
coun
tries
esp
ecia
lly in
th
e ea
rly-m
id 1
960s
imm
edia
tely
afte
r ind
epen
denc
e
•P
ossi
ble
draw
back
s to
reta
inin
g th
e E
urop
ean
colo
nial
la
ngua
ge a
s th
e of
ficia
l lan
guag
e:
(1) S
choo
l lea
rnin
g m
ay s
uffe
r whe
n ch
ildre
n ar
e ta
ught
in a
lang
uage
that
they
do
not k
now
wel
l
Sho
uld
the
colo
nial
lang
uage
be
reta
ined
?
Eco
nom
ics
172:
Lec
ture
24
16
•A
maj
or p
olic
y is
sue
in m
any
coun
tries
esp
ecia
lly in
th
e ea
rly-m
id 1
960s
imm
edia
tely
afte
r ind
epen
denc
e
•P
ossi
ble
draw
back
s to
reta
inin
g th
e E
urop
ean
colo
nial
la
ngua
ge a
s th
e of
ficia
l lan
guag
e:
(1) S
choo
l lea
rnin
g m
ay s
uffe
r whe
n ch
ildre
n ar
e ta
ught
in a
lang
uage
that
they
do
not k
now
wel
l
(2) L
angu
age
is a
n im
porta
nt c
ompo
nent
of n
atio
nal
iden
tity.
Wha
t doe
s ad
optin
g a
Eur
opea
n la
ngua
ge
rath
er th
an a
n A
frica
n la
ngua
ge d
o to
nat
iona
l prid
e?
(3) O
ther
s?
Sho
uld
the
colo
nial
lang
uage
be
reta
ined
?
Eco
nom
ics
172:
Lec
ture
24
17
•B
enef
its to
reta
inin
g a
colo
nial
lang
uage
(e.
g.,
Eng
lish,
Fre
nch,
Por
tugu
ese)
as
offic
ial l
angu
age:
(1) I
ncre
ases
the
abili
ty to
com
mun
icat
e w
ith th
e re
st
of th
e w
orld
–bu
sine
ss, t
echn
olog
y, li
tera
ture
, etc
.
Sho
uld
the
colo
nial
lang
uage
be
reta
ined
?
Eco
nom
ics
172:
Lec
ture
24
18
•B
enef
its to
reta
inin
g a
colo
nial
lang
uage
(e.
g.,
Eng
lish,
Fre
nch,
Por
tugu
ese)
as
offic
ial l
angu
age:
(1) I
ncre
ases
the
abili
ty to
com
mun
icat
e w
ith th
e re
st
of th
e w
orld
–bu
sine
ss, t
echn
olog
y, li
tera
ture
, etc
.
(2) E
ase
of re
tain
ing
law
s, a
dmin
istra
tive
reco
rds,
te
xtbo
oks,
etc
. fro
m th
e co
loni
al p
erio
d
Sho
uld
the
colo
nial
lang
uage
be
reta
ined
?
Eco
nom
ics
172:
Lec
ture
24
19
•B
enef
its to
reta
inin
g a
colo
nial
lang
uage
(e.
g.,
Eng
lish,
Fre
nch,
Por
tugu
ese)
as
offic
ial l
angu
age:
(1) I
ncre
ases
the
abili
ty to
com
mun
icat
e w
ith th
e re
st
of th
e w
orld
–bu
sine
ss, t
echn
olog
y, li
tera
ture
, etc
.
(2) E
ase
of re
tain
ing
law
s, a
dmin
istra
tive
reco
rds,
te
xtbo
oks,
etc
. fro
m th
e co
loni
al p
erio
d
(3) E
urop
ean
lang
uage
s m
ay b
e th
e m
ost e
thni
cally
ne
utra
l cho
ice
in s
ome
setti
ngs
(e.g
., N
iger
ia)
(4) O
ther
s?
Sho
uld
the
colo
nial
lang
uage
be
reta
ined
?
Eco
nom
ics
172:
Lec
ture
24
20
•B
enef
its to
reta
inin
g a
colo
nial
lang
uage
(e.
g.,
Eng
lish,
Fre
nch,
Por
tugu
ese)
as
offic
ial l
angu
age:
(1) I
ncre
ases
the
abili
ty to
com
mun
icat
e w
ith th
e re
st
of th
e w
orld
–bu
sine
ss, t
echn
olog
y, li
tera
ture
, etc
.
(2) E
ase
of re
tain
ing
law
s, a
dmin
istra
tive
reco
rds,
te
xtbo
oks,
etc
. fro
m th
e co
loni
al p
erio
d
(3) E
urop
ean
lang
uage
s m
ay b
e th
e m
ost e
thni
cally
ne
utra
l cho
ice
in s
ome
setti
ngs
(e.g
., N
iger
ia)
(4) O
ther
s?S
ame
issu
es in
Indi
a (E
nglis
h vs
. Hin
di v
s. o
ther
s)
Sho
uld
the
colo
nial
lang
uage
be
reta
ined
?
Eco
nom
ics
172:
Lec
ture
24
21
•S
omal
ia is
a m
ediu
m-s
ized
eth
nica
lly h
omog
enou
s co
untry
in E
ast A
frica
, one
of t
he fe
w o
n th
e co
ntin
ent.
An
idea
l cas
e fo
r a s
ingl
e na
tiona
l lan
guag
e (S
omal
i)
Cho
osin
g an
offi
cial
lang
uage
in S
omal
ia
Eco
nom
ics
172:
Lec
ture
24
22
•S
omal
ia is
a m
ediu
m-s
ized
eth
nica
lly h
omog
enou
s co
untry
in E
ast A
frica
, one
of t
he fe
w o
n th
e co
ntin
ent.
An
idea
l cas
e fo
r a s
ingl
e na
tiona
l lan
guag
e (S
omal
i)
•Y
et th
e th
ree
“offi
cial
lang
uage
s” d
urin
g th
e po
st-
inde
pend
ence
per
iod
wer
e E
nglis
h, It
alia
n, A
rabi
c –
notS
omal
i! …
Huh
?
Cho
osin
g an
offi
cial
lang
uage
in S
omal
ia
Eco
nom
ics
172:
Lec
ture
24
23
•S
omal
ia is
a m
ediu
m-s
ized
eth
nica
lly h
omog
enou
s co
untry
in E
ast A
frica
, one
of t
he fe
w o
n th
e co
ntin
ent.
An
idea
l cas
e fo
r a s
ingl
e na
tiona
l lan
guag
e (S
omal
i)
•Y
et th
e th
ree
“offi
cial
lang
uage
s” d
urin
g th
e po
st-
inde
pend
ence
per
iod
wer
e E
nglis
h, It
alia
n, A
rabi
c –
notS
omal
i! …
Huh
?
•W
hy?
(Lai
tin19
92)
(1) T
here
was
a d
ispu
te o
ver t
he c
orre
ct S
omal
i scr
ipt
Cho
osin
g an
offi
cial
lang
uage
in S
omal
ia
Eco
nom
ics
172:
Lec
ture
24
24
•S
omal
ia is
a m
ediu
m-s
ized
eth
nica
lly h
omog
enou
s co
untry
in E
ast A
frica
, one
of t
he fe
w o
n th
e co
ntin
ent.
An
idea
l cas
e fo
r a s
ingl
e na
tiona
l lan
guag
e (S
omal
i)
•Y
et th
e th
ree
“offi
cial
lang
uage
s” d
urin
g th
e po
st-
inde
pend
ence
per
iod
wer
e E
nglis
h, It
alia
n, A
rabi
c –
notS
omal
i! …
Huh
?
•W
hy?
(Lai
tin19
92)
(1) T
here
was
a d
ispu
te o
ver t
he c
orre
ct S
omal
i scr
ipt
(2) E
lites
hav
e an
ince
ntiv
e to
rest
rict a
cces
s to
go
vern
men
t job
s an
d po
wer
(“re
nts”
) to
thos
e w
ho
spea
k th
e co
loni
al la
ngua
ge –
peop
le li
ke th
emse
lves
(3) O
ther
s?
Cho
osin
g an
offi
cial
lang
uage
in S
omal
ia
Eco
nom
ics
172:
Lec
ture
24
25
•Fo
cus
on e
thno
-ling
uist
ic fr
actio
naliz
atio
n (E
LF) a
s th
eir m
easu
re o
f div
ersi
ty. T
he d
ata
was
com
pile
d by
S
ovie
t ant
hrop
olog
ists
in th
e 19
60s.
Piis
pop
ulat
ion
prop
ortio
n of
eth
nic
grou
p i (
e.g.
, Luh
yas
in K
enya
):
Eas
terly
and
Lev
ine
(199
7) o
n et
hnic
div
ersi
ty
∑ =
−=
N iiP
ELF
1
21
Eco
nom
ics
172:
Lec
ture
24
26
•Fo
cus
on e
thno
-ling
uist
ic fr
actio
naliz
atio
n (E
LF) a
s th
eir m
easu
re o
f div
ersi
ty. T
he d
ata
was
com
pile
d by
S
ovie
t ant
hrop
olog
ists
in th
e 19
60s.
Piis
pop
ulat
ion
prop
ortio
n of
eth
nic
grou
p i (
e.g.
, Luh
yas
in K
enya
):
•E
xam
ple:
Thre
e gr
oups
eac
h w
ith p
opul
atio
n sh
are
of 1
/3. T
hen
ELF
= 1
–(1
/3)2
–(1
/3)2
–(1
/3)2
= 2/
3
Two
grou
ps w
ith p
opul
atio
n sh
ares
of 1
/3 a
nd 2
/3.
Then
ELF
= 1
–(2
/3)2
–(1
/3)2
= 4/
9
Eas
terly
and
Lev
ine
(199
7) o
n et
hnic
div
ersi
ty
∑ =
−=
N iiP
ELF
1
21
Eco
nom
ics
172:
Lec
ture
24
27
•Fo
cus
on e
thno
-ling
uist
ic fr
actio
naliz
atio
n (E
LF) a
s th
eir m
easu
re o
f div
ersi
ty. T
he d
ata
was
com
pile
d by
S
ovie
t ant
hrop
olog
ists
in th
e 19
60s.
Piis
pop
ulat
ion
prop
ortio
n of
eth
nic
grou
p i (
e.g.
, Luh
yas
in K
enya
):
•H
ighe
st E
LF C
ount
ries:
Tanz
ania
(0.9
3), U
gand
a (0
.90)
, Dem
ocra
tic R
epub
lic
of C
ongo
(0.8
9), C
amer
oon
(0.8
9), I
ndia
(0.8
9), S
outh
A
frica
(0.8
8), N
iger
ia (0
.87)
, Ivo
ry C
oast
(0.8
6), C
entra
l A
frica
n R
epub
lic (0
.83)
, Ken
ya (0
.83)
, etc
.
Eas
terly
and
Lev
ine
(199
7) o
n et
hnic
div
ersi
ty
∑ =
−=
N iiP
ELF
1
21
Eco
nom
ics
172:
Lec
ture
24
28
•E
aste
rly a
nd L
evin
e’s
mai
n fin
ding
is th
at e
cono
mic
gr
owth
is n
egat
ivel
y re
late
d to
eth
nic
dive
rsity
acr
oss
all c
ount
ries
in th
e w
orld
. Reg
ress
ion
equa
tion:
GR
OW
THi=
a +
b(E
LF) i
+ cX
i+ e
i
Eth
nic
dive
rsity
and
eco
nom
ic g
row
th
Eco
nom
ics
172:
Lec
ture
24
29
•E
aste
rly a
nd L
evin
e’s
mai
n fin
ding
is th
at e
cono
mic
gr
owth
is n
egat
ivel
y re
late
d to
eth
nic
dive
rsity
acr
oss
all c
ount
ries
in th
e w
orld
. Reg
ress
ion
equa
tion:
GR
OW
THi=
a +
b(E
LF) i
+ cX
i+ e
i
•Th
eir e
stim
ate
is b
= -0
.02
(t-st
atis
tic =
3.2
). W
hy?
Eth
nic
dive
rsity
and
eco
nom
ic g
row
th
Eco
nom
ics
172:
Lec
ture
24
30
•E
aste
rly a
nd L
evin
e’s
mai
n fin
ding
is th
at e
cono
mic
gr
owth
is n
egat
ivel
y re
late
d to
eth
nic
dive
rsity
acr
oss
all c
ount
ries
in th
e w
orld
. Reg
ress
ion
equa
tion:
GR
OW
THi=
a +
b(E
LF) i
+ cX
i+ e
i
•Th
eir e
stim
ate
is b
= -0
.02
(t-st
atis
tic =
3.2
). W
hy?
Out
com
es/c
hann
els
b (t-
stat
istic
)S
choo
ling
-0.9
91 (-
6.2)
Fina
ncia
l dep
th-0
.266
(-3.
7)E
xcha
nge
rate
dis
torti
on
0.25
2 (3
.4)
Bud
get s
urpl
us-0
.013
(-1.
4)Te
leph
one
lines
/per
son
-3.0
7 (-
7.2)
Eth
nic
dive
rsity
and
eco
nom
ic g
row
th
Eco
nom
ics
172:
Lec
ture
24
31
•Th
e et
hnic
ally
Ash
anti
(13%
of p
opul
atio
n) re
gion
of
cent
ral G
hana
is a
maj
or c
ocoa
pro
duce
r
Illus
trativ
e C
ase
Stu
dies
: Gha
na
Eco
nom
ics
172:
Lec
ture
24
32
•Th
e et
hnic
ally
Ash
anti
(13%
of p
opul
atio
n) re
gion
of
cent
ral G
hana
is a
maj
or c
ocoa
pro
duce
r•
The
larg
est e
thni
c co
mm
unity
in G
hana
, and
riva
ls o
f th
e A
shan
ti, is
the
colle
ctio
n of
Aka
n(3
0% o
f po
pula
tion)
eth
nic
grou
ps in
sou
ther
n G
hana
. The
firs
t pr
esid
ent,
Kw
ame
Nkr
umah
, was
Aka
n
Illus
trativ
e C
ase
Stu
dies
: Gha
na
Eco
nom
ics
172:
Lec
ture
24
33
•Th
e et
hnic
ally
Ash
anti
(13%
of p
opul
atio
n) re
gion
of
cent
ral G
hana
is a
maj
or c
ocoa
pro
duce
r•
The
larg
est e
thni
c co
mm
unity
in G
hana
, and
riva
ls o
f th
e A
shan
ti, is
the
colle
ctio
n of
Aka
n(3
0% o
f po
pula
tion)
eth
nic
grou
ps in
sou
ther
n G
hana
. The
firs
t pr
esid
ent,
Kw
ame
Nkr
umah
, was
Aka
n
•In
194
9 E
aste
rly a
nd L
evin
e (1
997)
repo
rt th
at th
e B
ritis
h co
loni
al g
over
nmen
t pai
d fa
rmer
s 89
% o
f the
w
orld
pric
e fo
r coc
oa –
not b
ad a
t all!
Illus
trativ
e C
ase
Stu
dies
: Gha
na
Eco
nom
ics
172:
Lec
ture
24
34
•Th
e et
hnic
ally
Ash
anti
(13%
of p
opul
atio
n) re
gion
of
cent
ral G
hana
is a
maj
or c
ocoa
pro
duce
r•
The
larg
est e
thni
c co
mm
unity
in G
hana
, and
riva
ls o
f th
e A
shan
ti, is
the
colle
ctio
n of
Aka
n(3
0% o
f po
pula
tion)
eth
nic
grou
ps in
sou
ther
n G
hana
. The
firs
t pr
esid
ent,
Kw
ame
Nkr
umah
, was
Aka
n
•In
194
9 E
aste
rly a
nd L
evin
e (1
997)
repo
rt th
at th
e B
ritis
h co
loni
al g
over
nmen
t pai
d fa
rmer
s 89
% o
f the
w
orld
pric
e fo
r coc
oa –
not b
ad a
t all!
•D
ue in
par
t to
infla
tion,
by
1983
Gha
na p
aid
only
6%
(!)
of th
e w
orld
pric
e to
coc
oa fa
rmer
s, a
nd e
thni
c di
visi
ons
may
be
part
of th
e ex
plan
atio
n w
hy if
ec
onom
ic p
ower
lead
s to
pol
itica
l inf
luen
ce
Illus
trativ
e C
ase
Stu
dies
: Gha
na
Eco
nom
ics
172:
Lec
ture
24
35
•Fo
r nex
t tim
e: c
ontin
ue re
adin
gs fr
om w
eek
14
Eco
nom
ics
172:
Lec
ture
24
36
Whi
tebo
ard
#1
Eco
nom
ics
172:
Lec
ture
24
37
Whi
tebo
ard
#2
Eco
nom
ics
172:
Lec
ture
24
38
Whi
tebo
ard
#3
Eco
nom
ics
172:
Lec
ture
24
39
Whi
tebo
ard
#4
Eco
nom
ics
172:
Lec
ture
24
40
Whi
tebo
ard
#5
Eco
nom
ics
172:
Lec
ture
24
41
Map
of A
frica
Eco
nom
ics
172:
Lec
ture
24
42
Map
of A
frica
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