Social Attributes And Economic Instability In Africa

Abstract

How do the social characteristics of African economies affect their relative economic stability? This paper offers a new nominal definition of economic instability in terms of average standard deviations from the exponential growth path suggested by neoclassical growth theory under ideal conditions. We used the portion of the population that subsists on agriculture as an indication of how diverse and adaptable any particular economy is. Literacy rates may serve as a proxy for the quality and adaptability of the labor force in the various countries. Other variables used are urban population as a percentage of total population, life expectancy, infant mortality rates and the corruption perception index. These variables were all statistically significant in explaining economic instability with the exception of corruption perception index and infant mortality rates that were statistically insignificant.