Economic Development in Africa 2007

Reclaiming Policy Space - Domestic Resource Mobilization and Developmental States

image of Economic Development in Africa 2007

The 2007 Report examines domestic resource mobilization for growth and poverty reduction in African countries. It analyses how African countries can increase domestic resources and channel them into productive investments. The Report also examines how African countries can reclaim development “policy space”, and give true meaning to, “ownership” of development strategies that respond to their own priorities within the framework of a “developmental State”.

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Towards a “Developmental State”

Despite the ritual implementation of SAPs over the past quarter century, many African countries have yet to experience sustained and robust growth rates high enough to ensure the attainment of the MDGs by the target date. The collapse in both savings and investment continued unabated, until recently. A breakdown in physical infrastructure, combined with a weakening of state capacity to carry out basic public management functions through SAP-induced retrenchment and de-industrialization, increased the size of the informal economy. The continuing lack of diversification of many sub-Saharan African economies also meant that the region’s vulnerability to adverse external factors such as commodity price fluctuations did not diminish, and in several cases has rather increased, within the context of trade liberalization.


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