africa

Yale Center for the Study of Globalization
limiting the dummy to the identified GR only. Where these robustness checks made
differences in the results, the differences are discussed.
29.5.2 Data
The availability of complementary datasets allowed us to calculate GRs for the
period since 1950, but we ran regressions only on the sample since 1970. Owing
to the need to calculate growth rates to t+3 and with the sample ending at 2010, the
range for analysis was 1970–2007. The dependent variable GR is a dummy with the
value 1 if a growth reversal occurred in the year when the average per capita GDP
growth rate in the preceding five years was a certain threshold percentage greater
than that in the succeeding three years. (As explained above, in cases where the
five-year average GDP growth was lower than 5 percent, the threshold percentage
was set at 2 percent, and in cases where the five-year average GDP growth was
higher than 5 percent, the threshold percentage was 3 percent.)
Income data used to calculate the dependent variable, income levels, and the standard
deviation all come from the Penn World Tables (Heston, Summers, and Aten,
2012). The democracy score, Polity2, comes from the Polity IV database 1 , which is
a general measure of regime type, lying between –10 for the most autocratic and 10
for the most democratic regimes. The inflation rate is used as a proxy for the degree
of economic stability and by implication the quality of macroeconomic management.
To capture the effects of human skill levels in preventing growth reversals, we
include data on a country’s educational level, proxied by the population’s average
total years of primary, secondary, and tertiary education. We also use openness
to trade, calculated as the value of a country’s total trade as a percentage of GDP,
obtained from the Penn World Tables. We include two dummy variables, indicating if
the country is a major exporter of oil and/or natural resources or a non-fuel primary
commodity exporter, as a measure of economic diversification to determine whether
a more diversified structure is better at insulating an economy from growth reversals.
We also use the more traditional measures of diversification: manufacturing value
added as a percentage of GDP, and the share of primary products in total exports.
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