I can see how an extractive economy lowers the cost of labor. High labor costs and excess capital are the prerequisites for investing in labor saving technology.
It is not difficult for a bad government to copy existing technology that is more efficient. I believe the key difference between Africa and Asia is the green revolution of the 60s and 70s. The arguments are outlined here:
As China increased their yields they were able to move labor from subsistence farming into industrial production. Eventually the same revolution will happen in Africa. Inclusive economies are necessary for continued innovation. Applying several hundred years worth of productivity gains into a few decades may even given the illusion that fantastic economic growth is possible without inclusion. We will see if Africa becomes more inclusive as their productivity and growth begin to accelerate. I also feel personally attacked by the spot on long termist description.
I can see how an extractive economy lowers the cost of labor. High labor costs and excess capital are the prerequisites for investing in labor saving technology.
It is not difficult for a bad government to copy existing technology that is more efficient. I believe the key difference between Africa and Asia is the green revolution of the 60s and 70s. The arguments are outlined here:
https://opinionator.blogs.nytimes.com/2014/04/09/a-green-revolution-this-time-for-africa/
As China increased their yields they were able to move labor from subsistence farming into industrial production. Eventually the same revolution will happen in Africa. Inclusive economies are necessary for continued innovation. Applying several hundred years worth of productivity gains into a few decades may even given the illusion that fantastic economic growth is possible without inclusion. We will see if Africa becomes more inclusive as their productivity and growth begin to accelerate. I also feel personally attacked by the spot on long termist description.