Technology Trap and Poverty Trap in Sub-Saharan Africa

Since the industrial revolution, advances in science and technology have continuously accounted for most of the growth and wealth accumulation in leading industrialized economies. In recent years, the contribution of technological progress to growth and welfare improvement has increased even further, especially with the globalization process which has been characterized by exponential growth in exports of manufactured goods. This paper establishes the existence of a technology trap in Sub-Saharan Africa. It shows that the widening income and welfare gap between Sub-Saharan Africa and the rest of world is largely accounted for by the technology trap responsible for the poverty trap. This result is supported by empirical evidence which suggests that if countries in Sub-Saharan Africa were using the same level of technology enjoyed by industrialized countries income levels in Sub-Saharan Africa would be significantly higher. The result is robust, even after controlling for institutional, macroeconomic instability and volatility factors. Consistent with standard one-sector neoclassical growth models, this suggests that uniform convergence to a worldwide technology frontier may lead to income convergence in the spherical space. Overcoming the technology trap in Sub-Saharan Africa may therefore be essential to achieving the Millennium Development Goals and evolving toward global convergence in the process of economic development.

Bibliographic Details

Main Author:	Fofack, Hippolyte
Language:	English
Published:	World Bank, Washington, DC 2008-03
Subjects:	ABSOLUTE TERMS, AGGREGATE LEVEL, AGGREGATE OUTPUT, AGRICULTURAL OUTPUT, AGRICULTURAL PRODUCTION, AGRICULTURAL SECTOR, AGRICULTURE, ATTRIBUTES, AVERAGE GROWTH, AVERAGE GROWTH RATE, AVERAGE INCOME, BALANCE OF PAYMENTS, BASIC, BEST PRACTICE, BUSINESS CLIMATE, BUSINESS CYCLES, BUSINESS ENVIRONMENT, CAPABILITIES, CAPITAL ACCUMULATION, CAPITAL DEVELOPMENT, CAPITAL MARKETS, CHOICE OF TECHNOLOGY, COMMERCE, COMMODITIES, COMMUNICATION TECHNOLOGY, COMPARATIVE ADVANTAGE, COMPONENTS, CONSUMER PRICE INDEX, CONSUMPTION GROWTH, CONVERGENCE HYPOTHESIS, COVARIANCE MATRIX, DATA AVAILABILITY, DATA COMPRESSION, DATA REDUCTION, DATA SETS, DEPENDENT VARIABLE, DEVELOPED COUNTRIES, DEVELOPED WORLD, DEVELOPING COUNTRIES, DEVELOPING WORLD, DEVELOPMENT ECONOMICS, DEVELOPMENT GOALS, DEVELOPMENT INDICATORS, DEVELOPMENT PROCESSES, DEVELOPMENT STRATEGY, DIMINISHING RETURNS, DIVERSIFICATION, DOMESTIC CREDIT, ECONOMETRICS, ECONOMIC ACTIVITY, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC HISTORY, ECONOMIC INEFFICIENCY, ECONOMIC LITERATURE, ECONOMIC OVERHEATING, ECONOMIC PERFORMANCE, ECONOMIC RESEARCH, ECONOMIES OF SCALE, ELASTICITY, ELASTICITY OF SUBSTITUTION, EMPIRICAL EVIDENCE, EMPIRICAL RESULTS, EMPIRICAL STUDIES, ENGINEERING, ENGINEERS, EQUILIBRIUM, EQUIPMENT, EXCESS SUPPLY, EXOGENOUS VARIABLES, EXPLANATORY VARIABLES, EXPORTS, EXTERNALITIES, FINANCIAL DEPTH, FINANCIAL INSTITUTIONS, FIXED COSTS, FIXED EFFECTS, GDP, GDP PER CAPITA, GEOGRAPHIC POVERTY TRAPS, GLOBAL ECONOMY, GLOBAL LEVEL, GLOBALIZATION, GROWTH ELASTICITY, GROWTH MODEL, GROWTH MODELS, GROWTH POTENTIALS, GROWTH PROSPECTS, GROWTH RATE, GROWTH RATES, GROWTH THEORY, HIGH TECHNOLOGY, HUMAN CAPITAL, HUMAN DEVELOPMENT, HUMAN RESOURCE, HUMAN RESOURCE DEVELOPMENT, INCOME, INCOME ELASTICITY, INCOME GROWTH, INCOME INEQUALITY, INCOME LEVELS, INCREASING RETURNS, INCREASING RETURNS TO SCALE, INDEPENDENT VARIABLES, INDUSTRIAL DEVELOPMENT, INDUSTRIAL REVOLUTION, INDUSTRIALIZATION, INDUSTRIALIZED COUNTRIES, INFLATION RATE, INNOVATION, INNOVATIONS, INSTITUTION, INSTITUTIONAL FRAMEWORK, INTERNATIONAL TRADE, INVENTIONS, INVESTMENT FUNCTIONS, KNOWLEDGE ECONOMY, KNOWLEDGE SOCIETIES, LABOR FORCE, LEARNING, LIVING STANDARDS, LONG RUN, LONG-RUN GROWTH, LOSS OF INFORMATION, LOW-INCOME COUNTRIES, M2, MACROECONOMIC INSTABILITY, MANUFACTURING, MARGINAL EFFECT, MARKET ECONOMIES, MEAN VALUE, MEDICINE, MICRO DATA, MICRO MODEL, MONETARY ECONOMICS, NEOCLASSICAL MODELS, NEW TECHNOLOGIES, 0 HYPOTHESIS, OIL EXPORTERS, OUTPUT GAP, OUTPUT GROWTH, PARTIAL EQUILIBRIUM ANALYSIS, PER CAPITA INCOME, POLICY IMPLICATIONS, POLICY LEVEL, POLICY RESEARCH, POLITICAL ECONOMY, POOR COUNTRIES, POVERTY GAP, POVERTY RATE, POVERTY RATES, POVERTY REDUCTION, POVERTY TRAPS, PRIMARY PRODUCTS, PRO-POOR, PRO-POOR GROWTH, PRODUCTION FUNCTION, PRODUCTION FUNCTIONS, PRODUCTION PROCESSES, PRODUCTIVITY, PRODUCTIVITY GROWTH, PUBLIC POLICY, PUBLIC SPENDING, PUBLISHING, PURCHASING POWER, PURCHASING POWER PARITY, R&D, REAL GDP, REAL INTEREST RATES, RESULT, RICH COUNTRIES, SATELLITE, SAVING RATE, SCALE EFFECT, SCIENTISTS, SEMICONDUCTORS, SIGNIFICANT REDUCTION, SIMULATION, SKEWED DISTRIBUTION, SKILLED LABOR, SUB-SAHARAN AFRICA, TECHNOLOGICAL ADVANCES, TECHNOLOGICAL INFRASTRUCTURE, TECHNOLOGICAL INNOVATIONS, TECHNOLOGICAL PROGRESS, TECHNOLOGY FRONTIER, TECHNOLOGY TRANSFERS, TOTAL FACTOR PRODUCTIVITY, TRADE OPENNESS, TRADE SHOCKS, UNEMPLOYMENT, UNEMPLOYMENT RATES, USERS, WEALTH, WEALTH CREATION, WEB, WORLD INCOME DISTRIBUTION,
Online Access:	http://documents.worldbank.org/curated/en/2008/03/9296609/technology-trap-poverty-trap-sub-saharan-africa https://hdl.handle.net/10986/6491
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