More Sand Than Oil

Author:Nelson Sobrinho - Vimal Thakoor
Position:NELSON SOBRINHO and VIMAL THAKOOR are economists in the IMF's African Department. This article is based on IMF Working Paper 19/1,which the authors produced jointly with Amine Hammadi,Marshall Mills,and Ricardo Velloso.
Pages:35-37
SUMMARY

Sub-Saharan Africa stands to gain more from reducing corruption than any other region

 
FREE EXCERPT
A
new wave of leaders in sub-Saha ran
Africa has expressed renewed com-
mitment to ghting corruption. is
trend reects a recognition that go od
governance is key to fostering grow th and economic
development. e link between growt h and gov-
ernance is especia lly strong on this resource-rich
continent, where people stand to gain more eco-
nomically from reduci ng corruption than any where
else in the world.
Our research shows th at the governance dividend
for countries in sub-Sah aran Africa is t wo to three
times larger th an for the average country in the rest
of the world—even in regions perceived to have
equally weak governa nce. Bringing sub-Sa haran
Africa’s governance to the world average could
increase GDP per capita by an estim ated 1 to 2
percentage points a year.
Low corruption and good governance a re not the
sole drivers of growth, of course. Some countries
perceived as having wea k governance have expe-
rienced episodes of strong growth d riven by other
factors—for exa mple, natural resource wealth. In
other cases, countrie s with good governance have
not necessarily enjoyed strong growt h. But we
nd that corruption tends to undermine economic
growth, behaving more like sand than oil in the
economic engine.
MORE SAND
THAN OIL
Sub-Saharan Africa stands to gain more from reducing corruption
than any other region
Nelson Sobrinho and Vimal Thakoor
September 2019 | FINANCE & DEVELOPMENT 35
ART: ISTOC K/ FIL O; STARC EVIC

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