Rent-Seeking and Economic Growth in Africa

Much of Africa has suffered from slow or even negative growth since independence. According to standard neo-classical theory of growth, this should not happen. This study examines the economic experience of 22 African countries, and the author argues that rent-seeking (payment made to a resource beyond what is necessary to get the resource to perform its function) and policies that encourage rent-seeking over productive use of resources have played a major role in hindering economic growth. The resulting rent-seeking model out-performs the neo-classical growth model in explaining resource use and economic growth in Africa.