(1) "Since 1980, aggregate per capita GDP in sub-Saharan Africa has declined at almost 1percent per annum. The decline has been widespread: 32 countries are poorer now than in 1980. Today, subSaharan Africa is the lowest-income region in the world...It is clear that Africa has suffered a chronic failure of economic growth. The problem for analysis is to determine the causes" (Collier and Gunning 1999: 'Why has Africa grown slowly?'). "Over the last decade, the South African government has pursued a set of cautious fiscal and monetary policies that have kept inflation and public debt at low levels. In spite of these strong fundamentals, the economy has displayed lacklustre growth rates...As of 2006, GDP per capita has yet to reach its 1981 level. In spite of what could arguably be described as a better fundamental and cyclical basis for accelerated growth, the country's performance over the past decade has been on par with the rest of sub-Saharan Africa, and considerably below the average growth rate of 3.7 percent in South Asia, and 6.2 percent in East Asia" (Dube, Hausmann and Rodrik 2007: 'South Africa: identifying the binding constraint on shared growth').

(a) Explain the possible reasons why sub-Saharan Africa grew slowly from 1980-1999.

(b) Also explain what factors may have constrained economic growth more specifically in South Africa since 1994.

Prescribed reading Snowdon and Vane 2005: Chapter 11, 579 - 659.

Additional Resources: Collier and Gunning 1999: 3 - 22.

Dube, Hausmann and Rodrik 2007: 1 - 42.