Abstract Four 2005-2006

GLOBAL

DEVELOPMENT STUDIES

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Volume Four Winter 2005-Spring 2006 Numbers 1-2.

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DOES GLOBALIZATION AFFECT ECONOMIC GROWTH IN AFRICA?

John C. Anyanwu*

Chief Research Economist and Acting Division Manager

Research Division, Development Research Department

African Development Bank

Tunis - Tunisia

Email: J.ANYANWU@AFDB.ORG

Published online: February 10, 2017

ABSTRACT

Globalization - the complex process of economic, political, social, and cultural integration which takes place as capital, trade, goods, persons, ideas, images, values, environmental toxins and even micro-organisms move across state boundaries – presents both opportunities and challenges to African countries. Using panel data containing an index of globalization covering its three main dimensions: economic integration, social integration, and political integration, both also disaggregated for 33 African countries in 1970-2000, this article analyzes the effects of globalization on economic growth in Africa. The results show that the overall index of globalization has no effect on African economic growth. Among the three dimensions, it is social integration that is positively and significantly related with growth. However, further disaggregation shows that a component of economic integration - actual economic flows (trade, foreign direct investment, and portfolio investment, as a percentage of GDP) promote economic growth in Africa. Also, a component of social integration – personal contacts – is positively and significantly related to African economic growth. Political integration has no effect on growth. The article then identifies the main obstacles to the integration of African countries into the world economy and suggests some policy implications.

*The views expressed in this article are those of the author and they do not represent the views of the African Development Bank Group.