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Finally, we might note that the political stresses produced by poverty have tended to be perverse. What is needed is a stronger impetus toward unity, but poverty is a fertile breeding ground for xenophobia and division. During 2008, there were riots in Johannesburg against immigration from Zimbabwe, as well as de facto ethnic partition in Kenya. The vision of African unity pioneered by Kwame Nkrumah and Julius Nyerere is in need of serious revival.
Notes The authors thank Mauro Caselli, Lisa Chauvet, Anke Hoeffler, Hyesung Kim, and Jean-Louis Warnholz for statistical analyses. This work was supported by the BP-funded Oxford Centre for the Analysis of Resource Rich Economies (OxCarre) and by the Centre for the Study of African Economies (CSAE). This research benefited from funding by the UK Department for International Development (DFID) as part of the iiG, a research programme to study how to improve institutions for pro-poor growth in Africa and South-Asia. The views expressed are not necessarily those of DFID. 1. “Dutch disease” takes its name from the supposed effects of North Sea natural gas discoveries on the Netherlands economy. 2. See Collier (2009) for a detailed account of this sequence. 3. These output loss costs are likely to be underestimates because they omit longer-term effects. Collier and Goderis (2008a) find that unless governance is good, dependence on commodity exports has adverse effects on long-term growth. The mismanagement of volatility may be one of the routes by which poor governance has these adverse long-term effects. 4. Benedikt Goderis undertook the substantial work involved in these recalculations.
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