Afreximbank Research recently published a paper written by Dani Rodrik (Ford Foundation Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government; Co-Director of the Economics for Inclusive Prosperity Network; President-Elect of the International Economic Association), discussing whether African leaders should deploy the needed adjustments in policy and institutions in the post-COVID-19 era.
The author indicated that, “Three trends will shape the world economy in the post-COVID-19 era. First, we will see a rebalancing of the relationship between markets and the state, with a much stronger role for governments and public regulation. Second, there will be a parallel rebalancing away from hyper-globalisation and towards greater national sovereignty and autonomy. Third, we will be transitioning into an era with lower economic growth potential, in which political leaders and their publics will need to scale down their growth ambitions.”
The pandemic has highlighted the inadequacy of our existing market arrangements in the face of challenges that demand collective action, as well as the importance of state capacity to respond to crises. It is leading nations to prioritise resilience and dependability in production over cost savings and efficiency through global outsourcing. The economic costs of lockdowns, the associated supply shocks and the reduction in global trade have been felt particularly acutely in low-income countries, such as those in Africa, where living conditions were already precarious to begin with.
All three trends have been in place for some time. And while they could be viewed as posing significant dangers to human prosperity, they may instead be harbingers for a more sustainable, more inclusive global economy. The question is whether African leaders will be able to deploy the needed adjustments in policy and institutions.
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Download this paper here to learn more about Dr. Rodrik’s insights>