of globalization are our preferred estimates. Our preferred equation implies that overall the
steady state rate of growth of output per worker in these low income African countries is
negative at -2.6%. However, globalization, in contrast to the strong arguments put by the
pessimists, has moderated somewhat these negative TFP effects. But the degree of
globalization has to increase significantly to about 50 at least to offset the negative effects of
TFP. To increase per worker incomes in the steady state to 1.5%, GLO needs to be increased
to about 75.5. GLO for all the countries is much lower than this value.
In Table 3 the average values of GLO (GLO) for all the countries for the periods of
1970-1999 and 2000-2005 are shown in columns 1 and 2 respectively. The percentage
change in GLO between the 2 average values in columns 1 and 2 is in column 3 and gives an
indication of how rapidly these countries have been globalizing in the recent years. In
column 4 the average growth rate of output per worker is shown.
In Burundi and Rwanda GLO is the lowest and below 20. Countries with GLO higher
than 30 are Cote d'Ivoire, Ghana, Kenya, Malawi, Nigeria, Senegal, Togo and Zambia. In
the other 11 countries GLO is between 20 and 30. Burundi and Rwanda are still the least
globalized countries in the new millennium with an average of GLO below 30 and Sierra
Leone is another country with a GLO below 30. On the other hand in Ghana, Nigeria and
Zambia, GLO in the new millennium is sufficiently high to offset the negative trend effect of
TFP.
In Congo, Niger and Togo globalization process seems to be progressing at a slow
rate. Since in the majority of these African countries the negative TFP effects are not
completely offset, much of their growth seems to be determined by factor accumulation and
therefore transient in nature. When an OLS regression is estimated between the average
growth rate of output (DLYL) on the average growth rate of capital per worker (DLKL) and
the average value of GLO, the coefficient of GLO was insignificant but the coefficient of
DLKL is 0.158 and significant with a p-value of 0.066. These observations are also valid for
Ghana, Nigeria and Zambia although globalization is high and may have contributed only a
small increase to their long run growth rates.
11