Growth in fragile states in Africa: Conflict and post‐conflict capital accumulation

• Author: Janvier D. Nkurunziza
• DOI: http://doi.org/10.1111/rode.12552
• Published date: 01 August 2019
• Date: 01 August 2019

SPECIAL ISSUE ARTICLE

Growth in fragile states in Africa: Conflict and

post‐conflict capital accumulation

Janvier D. Nkurunziza

UNCTAD

Correspondence

Janvier D. Nkurunziza, UNCTAD, Palais

des Nations 8-14 Avenue de la paix

Ch-1211 Geneva, Switzerland.

Email: Janvier.nkurunziza@un.org

Funding information

African Economic Research Consortium

Abstract

This article analyses the pattern of capital accumulation

in Africa and its interaction with political fragility. Politi-

cal fragility, defined as armed conflict or civil war,

retards or reverses gains with respect to capital accumula-

tion, slowing long‐term economic growth. Many countries

experience negative rates of capital accumulation, particu-

larly during periods of acute political instability. In post‐

war periods, countries generally continue to experience

capital destruction, lending support to the “war ruin

hypothesis.”This has implications for long‐term eco-

nomic growth in view of the strong association between

capital accumulation and economic performance. The

main policy implication of the analysis is that African

countries and their international partners should pay more

attention to capital accumulation, including capital recon-

struction after periods of political instability, to lay the

foundations for sustainable economic growth.

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INTRODUCTION

The concept of fragility has four major dimensions: high political instability, poor economic per-

formance, low institutional quality, and weak governance (Gelbard et al., 2015). This paper focuses

directly on one dimension of fragility, political instability, and indirectly on economic performance.

This focus is motivated by the fact that many African countries have been plagued by political

instability since their independence in the early 1960s, and anemic economic growth.

When Elbadawi and Sambanis (2000) published “Why are there so many civil wars in Africa?”

covering the period between 1960 and 1999, nearly 20 African countries had experienced at least

one episode of civil war. Eighteen years after the publication of that paper, many wars have ended,

and new ones started. Nkurunziza (2010) notes that in the second half of 2007 Africa had active

civil wars in three countries, namely Chad, Sudan and Somalia. After 2007, new civil wars started

DOI: 10.1111/rode.12552

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© 2018 John Wiley & Sons Ltd wileyonlinelibrary.com/journal/rode Rev Dev Econ. 2019;23:1202–1219.

in countries such as the Central African Republic, Nigeria (Boko Haram), Libya, and South Sudan.

Therefore, while progress has been achieved in resolving some conflicts, others have emerged,

suggesting that fragility associated with political instability in Africa is a dynamic phenomenon

and needs to be regularly assessed.

Two concepts are generally used to measure the gravity of political instability. The first is

armed conflict, defined as “a contested incompatibility that concerns government and/or territory

where the use of armed force between two parties, of which at least one is the government of a

state, results in at least 25 battle‐related deaths”per year (UCDP/PRIO, 2015). The second con-

cept, “civil war,”refers to an armed conflict where the casualty numbers surpass 1,000 battle‐

related deaths per year. Hence, in any given year, while most countries in Africa are peaceful, a

few experience armed conflicts while others experience civil war. There is another group of coun-

tries that are in a post‐war state, as defined below. These different groups of countries display dif-

ferent socioeconomic patterns. A priori, countries in civil war or armed conflict are expected to

show the highest level of fragility.

This paper analyzes the pattern of physical capital accumulation in Africa, contrasting experi-

ences in three political states, peace, war, and post‐war, where the war state is a combination of

situations of armed conflict and civil war. Marshall and Cole (2014) consider capital accumulation

as an important determinant of development, which in turn represents one of the three elements of

the societal‐system triad determining the quality of societal systems.

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Therefore, this paper's focus

on capital accumulation is motivated by the premise that it is impossible to appreciate the dispari-

ties in African countries’long‐term economic performance without a good understanding of their

patterns of capital accumulation. Indeed, the analysis of the sources of growth in East Asia over

the last few decades has shown that high rates of investment and capital accumulation were key

factors explaining their successful growth experience (Bosworth & Collins, 2003).

Three major issues are addressed. First, the paper revisits the topic of armed conflict and civil

war in Africa covering the period from 1970 to 2014. Using transition analysis as in Nkurunziza

(2010), each country–year is classified in one of the political states discussed above. The computa-

tion of transition probabilities across states before and after the Cold War is based on this informa-

tion. Second, estimates of capital stock are computed for 51 of the 54 African countries for which

data are available. The pattern of capital accumulation across the three political states is then ana-

lyzed.

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Third, the paper examines the correlates of capital accumulation, including measures of

political states, and economic growth. The results could help to explain why some countries suc-

ceed in generating and sustaining high rates of economic growth after episodes of severe political

instability (e.g. Rwanda after 1994) while others are less successful (e.g. Burundi after 1993), as

discussed in some detail in Nkurunziza (2016a). The analysis also illustrates the extent to which

capital accumulation, understood as economic reconstruction in post‐war contexts, helps to create a

‘peace dividend’or economic opportunities that are needed to make peace‐building sustainable

(Willems & Leeuwen, 2015).

The main result from the analysis is that many countries fail to accumulate capital or even

destroy it, particularly during episodes of severe political fragility, with negative implications for

long‐term economic development given the strong correlation between capital accumulation and

the rate of economic growth. Therefore, African countries and their development partners should

combine efforts to speed up capital accumulation, the main channel through which they could

achieve high and sustainable rates of economic growth.

The article proceeds as follows. Section 2 presents the concepts used to analyze political states

and their transitions. Based on these definitions, empirical transition matrices are derived and

discussed. Section 3 looks at the interaction between political fragility and capital accumulation,

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