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  5. Africa in the Global Economy: Rethinking Policy Paradigms
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Africa in the Global Economy: Rethinking Policy Paradigms

Paper Session

Monday, Jan. 5, 2026 10:15 AM - 12:15 PM (EST)

Philadelphia Marriott Downtown, Room 304
Hosted By: Association for Evolutionary Economics
  • Chair: Geoffrey Schneider, Bucknell University

African Regional Economic Arrangements: Challenging Orthodoxy

Howard Stein
,
University of Michigan

Abstract

Neoclassical economics sees regional economic arrangements in three broad categories. First there are free trade areas where tariffs are removed between members, but countries have the autonomy in setting their tariffs with non-member countries. Second there are custom unions where common tariff policies are applied to trade with all non-members of the grouping. A third type is common markets where with free movement of factors of production, goods and services among all members states in the arrangement. The modern neoclassical analysis was first generated in 1950 by early Chicago School Economist Jacob Viner (customs union theory). The approach and the literature that it generated often used ridiculous assumptions of perfect competition and constant returns to argue that trade arrangement for a small country was a second- best solution to unilateral trade liberalization. Trade diversion (reduction of imports from countries that are not members of a regional group) generally leads to imports from a supplier that is not the lowest cost source and hence reduces welfare in this neoclassical economic world. Drawing on the example of the East African Community, the paper will illustrate how a focus on trade and consumption have problematically delimited its economic impact. Regional arrangements are best seen as institutional constructs that can transcend the limitations of an individual country’s ability to mobilize finance and other resources to generate new manufacturing capacities. At the heart of any successful arrangement is an industrial policy that avoids uneven development by ensuring the equitable distribution of productive capacities.

Sub-Saharan Africa and the Promises and Perils of the U.S. Retreat from Neoliberalism under Trump

Geoffrey Schneider
,
Bucknell University

Abstract

The neoliberal era has been a disaster for most of sub-Saharan Africa (SSA), consigning countries to the production of primary products while fostering devasting levels of debt and capital flight. During the neoliberal era, Africa’s share of global trade fell from 6% in 1980 to 3% in 2019. While Trump’s dismantling of U.S.A.I.D. and his tariffs will have clear, negative consequences for many parts of SSA, the withdrawal of U.S. international dominance may provide opportunities for rethinking development policies in a way that fosters inclusive growth and is more likely to result in structural transformation. This paper will review the evolution of development policy imposed on SSA via conditional lending from the neoliberal, structural adjustment era through the more recent Poverty Reduction Strategy Papers (PSRPs) and their supposed embrace of the Millennium Development Goals. Given the ongoing failures of neoliberal policies in SSA, the paper then explores potential opportunities to stimulate trade within Africa and to develop broader south-south trade linkages, possibly via the BRICS group. The reduction of the dominance of the west and the forging of new trade linkages may offer SSA the opportunity for structural transformation that has been denied it for more than four decades by the rigid straightjacket of neoliberal policies, especially when combined with economic policies designed to capture capital flows and foster industrial development.

China and Africa's Critical Minerals: Geopolitics, Debt, and the Challenge of a Just Transition

Alicia Giron
,
National Autonomous University of Mexico

Abstract

This article examines the complex causal relationship between China’s growing demand for critical minerals and the rise of external debt across African countries. This dynamic is driven by the continent’s integration into the global economic cycle as a supplier of strategic goods essential to both the energy transition and the digital economy. Within this framework, the study analyzes how the thirst for critical minerals impacts the evolution of external indebtedness, specifically highlighting the structural weakness of economies where exports rely overwhelmingly—nearly 80 percent—on commodities. The study hypothesizes that strategies of external borrowing, alongside Chinese investment in energy infrastructure designed to secure mineral access, intensify the economic dependence of African nations. Ultimately, this cycle of indebtedness and extractive dependence undermines governments’ capacity to finance social welfare. This calls into question the feasibility of a Just Transition (JT) on the continent, raising doubts regarding whether the shift toward clean energy will genuinely benefit local populations or instead deepen the structural asymmetries of the New World Economic Order (NWEO).

The Unfinished Business of Decolonizing African Economies: An Institutionalist Perspective

Fadhel Kaboub
,
Denison University

Abstract

This paper builds on the original institutionalist tradition and its subsequent development by Post-Keynesian-Institutionalists in recent decades to argue that the process of decolonization of African countries was never allowed to be completed and that it is our generation's responsibility to do the necessary work to complete the unfinished business of structural economic decolonization. This structural economic transformation cannot be undertaken without careful analysis of existing power structures (domestic, regional and global), constraints on productive capacity, inflation and external debt constraints, as well as other institutional constraints. The paper uses the concepts of "institutions" in the Veblenian sense of the term, as in habits of thought and routines of behavior that permeate education, law, policy and business culture. Finally, the paper proposes a policy framework for structural decolonization that incorporates the theory of institutional adjustment.

Generational Inequality in Africa and Its Local and Global Consequences

Mwangi wa Githinji
,
University of Massachusetts-Amherst

Abstract

Despite in some cases having decent growth rates the failure of African economies to structurally transform and create sufficient decent employment has led to a crises of youth unemployment and underemployment. This paper will examine empirically how the opportunities and well-being of young people in African economies have changed over time especially with respect to the generations that came before them and how these changes have led to discontent with the present set of economic policies and in some case a dissatisfaction with electoral regimes. The lack of opportunities for the youth has arguably led to the rise of youth movements demanding political change such as those that a decade ago led to the Arab Spring beginning in Tunisia and more recently the anti-Government uprisings centered on demonstrations against government economic policy that begun in Kenya last year and to some extent spread to other countries in the region. Further an examination will be made of whether the inequality between the youth and the older generations is becoming a permanent feature of the distributional regimes in these economies, and explore the consequences of these inequalities both locally and globally.
JEL Classifications
  • B5 - Current Heterodox Approaches
  • O5 - Economywide Country Studies