Journal of
Development and Agricultural Economics

  • Abbreviation: J. Dev. Agric. Econ.
  • Language: English
  • ISSN: 2006-9774
  • DOI: 10.5897/JDAE
  • Start Year: 2009
  • Published Articles: 496

Full Length Research Paper

Determinants of productivity in Africa: The role of economic freedom

Cephas Naanwaab
  • Cephas Naanwaab
  • L.C. Cooper Jr. International Trade Center, North Carolina A&T State University, 1601 East Market Street, Greensboro, NC 27411, USA.
  • Google Scholar
Osei-Agyeman Yeboah
  • Osei-Agyeman Yeboah
  • L.C. Cooper Jr. International Trade Center, North Carolina A&T State University, 1601 East Market Street, Greensboro, NC 27411, USA.
  • Google Scholar


  •  Accepted: 27 July 2013
  •  Published: 31 October 2013

Abstract

 

This paper examines the determinants of multifactor productivity in a cross-country study of 33 African countries. Among others, we specifically focus on the role of economic freedom, and its sub-components, as defined by the Heritage Foundation/Wall Street Journal Economic Freedom Index (EFI). The empirical results show that the economic freedom index (and most of its components) has a positive and statistically significant impact on the productivity of African nations. The components of economic freedom that are critically important to enhancing productivity of African countries are: Business freedom, investment freedom, financial freedom, property rights freedom and freedom from corruption. We also investigate ‘bivariate granger-causality’ between economic freedom and total productivity. The results show that economic freedom granger-causes total factor productivity in most of these countries, but the other way around is not true.

 

Key words: Africa, economic freedom, granger-causality, productivity.