Chris Blattman asked me to respond to his big picture piece on China, India, and Africa, which draws on TN Srinivasan’s lecture on China and India at a China development conference. I agree with all the explanations of the China, India, and Africa growth rates – except for the part about explaining growth rates. As I’ve previously argued on this blog, economists have no scientific evidence base for explaining or predicting year to year or even decade to decade variations in growth rates. Probably the best we can do is expect regression to the mean – the fastest growers will slow down, and the slowest growers will speed up.
Despite that obnoxious bit of scientific honesty, I still liked TN’s story of China and India, and Chris’ story of Africa. Maybe storytelling could be useful even without a firm evidence base. The success story of my steak fajitas with sweet corn salsa, despite my inability to follow a recipe or any other reproducible culinary procedure, might contain some useful inspirational lessons for you, even if not ones you could verify with a Randomized Trial.
TN’s story is plausible that China and India had a large CHANGE in per capita income in response to a large CHANGE towards better economic policies. This is also how I usually answer the ubiquitous China Question after every public talk (while still confessing that economists can’t rigorously explain or predict short-to-medium run growth rates).
Chris’ point is also plausible, that Africa’s long-term lag in state formation and technology (exacerbated by the slave trade and colonialism) played a role in its difficult development path. There are enough academic papers on this that I now have a whole section on it in my African Development class. The evidence on the long run is actually better than on short-run growth variations, because the Law of Large Numbers makes it easier to explain the very long run rather than the short run.
And then we can tell another CHANGE on CHANGE story (not rigorous), that Africa’s movement towards better macro and micro policy may be paying off with better growth in the new millennium. Along with tolerating a few inspirational stories, this also jibes with the longer run evidence in LEVELS that respectable economics goes with respectable development.
So perhaps the main takeaway, at a time of general gloom, and after the readers of this blog demanded more positive takeaways, is just that China, India, and (more modestly, new millennium, pre-crisis) Africa have been growth success stories. China and India have achieved an unprecedented mass escape from poverty. Africa has grown faster than ever before in its history. Even though Africa's growth is not as high as China and India, it may be even more impressive since Africa may finally be overcoming the long odds of a technological and state-buiding lag measured in centuries.
And storytelling (even though hard evidence may never be available) seems to confirm that these three successes had something to do with a movement towards good economics.