The Asymmetric Relationship between Subsaharan Africa and the Rest of the World: A Theoretical Analysis of the Role of Imports Compression

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Periodical article

Title:	The Asymmetric Relationship between Subsaharan Africa and the Rest of the World: A Theoretical Analysis of the Role of Imports Compression
Author:	Rattsø, Jørn
Year:	1992
Periodical:	Eastern Africa Economic Review
Volume:	8
Issue:	1
Pages:	1-11
Language:	English
Geographic term:	Subsaharan Africa
Subjects:	international economic relations economic development Economics and Trade
Abstract:	The international conditions for economic development in sub-Saharan Africa are discussed in a model of the relationship between the region and the rest of the world. The North-South model of L. Taylor (1981) is modified to take into account important characteristics of the region: imported intermediates and import compression policy. The rationing of foreign capital to Africa produces an asymmetry in international relations, and the foreign exchange constraint generates a trade-off between growth and capacity utilization. Policies to stimulate growth in sub-Saharan Africa must attack the continent's import dependency, and expansionary demand policy in the region will have a contractional effect as long as the foreign exchange constraint is binding. Bibliogr., sum.