To what extent is the growth performance of a country directly related to the Kaldor's Growth Laws? A study of Africa

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ACKNOWLEDGEMENT

No words can express my appreciation and gratitude to my research advisor _______ through the course of this research, Professor _____has taught me numerous values that extend well beyond the realm of _________ (Your Subject Name). His emphasis on dedication to work and his valuable and practical insights of life are some of the major highlights of my education at The University _________.

ABSTRACT

This dissertation had an aim to analyze and test the applicability of Kaldor's Laws in Africa. Kaldor had presented three laws for economic growth and development and had related the economic development of a country with the manufacturing sector of that country. Africa is a very large continent in terms of both land mass and population, which makes it of great importance to the world. The many countries part of the continent are all somehow dependent upon or contributing to the world's GDP. Despite recent political reforms, the government of South Africa is faced with several economic challenges. The government has attempted to stabilize its increasing debt and reverse the double digit-inflation inherited from the apartheid regime. The researcher had taken data of forty-five African countries from the African development bank and had applied different statistical test to get empirical results. The results of this dissertation had shown that all of the laws of Kaldor are applicable in Africa. Therefore, it can be said that Africa can boot its economic growth through manufacturing sector.

Table of Contents

AcknowledgementII

AbstractIII

CHAPTER 1 INTRODUCTION1

History of Africa1

Purpose of the study3

Statement of Problem3

Research Aims and Objectives3

Research question4

Hypothesis4

CHAPTER 2 THE AFRICAN ECONOMY5

Democracy and Development8

Summary10

CHAPTER 3 MANUFACTURING11

The role of manufacturing in economic growth11

Manufacturing in Africa12

Economic growth in colonial era12

Economic growth in post-colonial era14

Comparison between pre an d post colonial growth era15

Economic growth in Africa in the twentieth century18

Manufacturing' role in boosting economy20

Challenges in economic growth in Africa24

Summary28

CHAPTER 4 KALDOR'S GROWTH LAWS29

Kaldor's first law29

The relationship between manufacturing and growth29

Kaldor's second law30

Kaldor's third law31

Summary31

CHAPTER 5 LITERATURE REVIEW32

Review of empirical work on growth in Africa32

Review of growth laws36

An overview and critique Solow's growth model38

Major assumptions of the Solow Model47

Implications of the Solow Model48

Implications of Kaldor Model48

Comparison between Solow Swan Growth Model and Kaldor Model49

Review of Kaldor's growth laws50

Summary51

CHAPTER 6 METHODOLOGY52

Range and type of data52

Method used and why52

Regression52

Measures of Association53

Least squares estimation54

Method used to collect data and analysis54

Summary56

CHAPTER 7 TESTING THE KALDOR LAWS57

Test of the first law of growth of Kaldor in African setting57

Test of the second law of growth of Kaldor (Verdoorn law) in African setting62

Test of the third law of Kaldor in Africa65

Summary67

CHAPTER 8 FINDING68

Manufacturing and GDP growth68

Agriculture and GDP growth69

Services and GDP growth70

Industry and GDP growth71

Productivity and GDP growth72

Service productivity and GDP growth73

Labour and GDP growth74

Overall manufacturing growth rate75

African countries GDP growth rate76

Summary77

CHAPTER 9 HYPOTHESIS78

Kaldor's first law: The relationship between manufacturing and growth78

Kaldor's second law: Output in labour and manufacturing sector output78

Kaldor's third law: Employment79

Summary79

CHAPTER 10 CONCLUSION80

Conclusion and recommendations80

Implications of the research82

Prospects of future research82

References84

Appendix93

CHAPTER 1 INTRODUCTION

History of Africa

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