Is Investment in Africa Too Low or Too High Macro and Micro Evidence 1

Is Investment in Africa Too Low or Too High?

Macro and Micro Evidence1

Abstract:Many analysts decry the lack of sufficient investment in Africa, implying that investment in Africa is “too low.” We find no evidence that private and public capital are productive in Africa, either in the cross-country data or in micro data from Tanzania. In this restricted sense, investment in Africa is too high rather than too low.

Shantayanan Devarajan*

William R. Easterly*

Howard Pack**

*World Bank

** University of Pennsylvania

1 This paper does not necessarily reflect the views of the World Bank or its member countries. We thank Patrick Asea, Benno Ndulu and seminar participants at the World Bank and AERC Biannual Research Workshop for helpful comments.

I. Introduction

Anyone concerned about Sub-Saharan Africa’s dismal growth performance over the past three decades cannot help noticing that investment, too, was significantly lower in Africa during this period. From 1960-94, Africa invested 9.6 percent of GDP (measured at international prices), while the ratio for other developing countries was 15.6 percent (Hoeffler [1999]). Inasmuch as Levine and Renelt [1992] identified investment as one of the few robust variables in cross-country growth regressions, it is tempting to conclude that Africa’s low investment share contributed to its disappointing growth performance—that is, investment in Africa was “too low” (Barro and Lee [1993], Collier and Gunning [1997]).

There are of course several difficulties with this conclusion, as some of these authors have pointed out. First, since private investment at least is endogenous, it is not clear how to increase it in order to stimulate growth. Consequently, several researchers have looked for more fundamental (and presumably more exogenous) factors in explaining Africa’s growth. The current list of candidates includes proximity to the tropics, ethnic fractionalization and weak social capital (Sachs and Warner [1997], Easterly and Levine [1997], Collier and Gunning [1997]). In an interesting recent paper, Hoeffler [199] shows that, when the endogeneity of investment and unobserved country-specific effects are allowed for, the so-called “Africa dummy”—the unexplained component of African growth—disappears.

Second, while Africa’s total investment rate was below that of other developing countries, public investment rates were about the same in the two sets of countries (about 7 percent of GDP). Any statement about whether African investment is too high or too

low would therefore have to say something about the composition of that investment—and whether more public investment would have benefited the continent.

Third, the cross-country regressions on which most of the analysis on growth and investment is based assume that total factor productivity (TFP) growth is uniform across all countries (Pack [1994]). Yet it is differences in TFP growth that indicate whether investment has been too high or too low in one country or another. Furthermore, in some African countries, TFP growth has been negative, which is difficult to reconcile with regression models that assume it is the same for all countries.

The purpose of this paper is to investigate the productivity of investment in Africa—to answer the question posed in the title—using a variety of methods. In section II, we use cross-country regressions to explore whether public and private investment had a positive and significant effect on growth in Africa. Recognizing that private investment is endogenous, we use the method of instrumental variables (with the level of private investment at the beginning of the period as the instrument). Our basic conclusion is that public investment is not correlated with growth in Africa. Private investment is also not correlated with growth, unless Botswana is included in the sample. A simple scatter plot of the data shows why: Botswana is the only country in Africa to have high private investment rates and high growth.

As we noted earlier, however, these cross-country regressions assume that TFP growth is uniform across all countries. Although difficult to swallow in general, this assumption may be more appropriate in examining manufacturing investment only. For the TFP associated with manufacturing stems from internationally-available blueprints and technology, which are the same for all countries. Hence in section III, we focus on

the productivity of manufacturing investment, and use a case study of Tanzania to explore the different ways investment was or was not productive. We show how a combination of factors, including public policies, insulation from market forces, weak technological capacity all combined to render manufacturing capital in Tanzania unproductive. If Tanzania is representative of other African countries, this analysis could explain what is behind the cross-country regressions reported in section II.

Our paper is by no means the first to examine the productivity of investment in Africa--nor will it be the last. Evidence from a global sample indicates that private investment is consistently associated with long-run growth (Levine and Renelt [1992], DeLong and Summers [1991]). Just how important investment is in the growth process is less clear. Young [1995] famously found that capital accumulation played a huge role in the East Asian growth miracles, with a minor role for TFP growth. Nelson and Pack [1999] dispute these findings, showing that the roles of TFP growth and capital accumulation cannot be disentangled in a general production function without specifying the form of technical progress. Klenow and Rodriguez-Clare [1997] also dispute Young’s finding by showing that the cross-country variation in TFP growth rates accounts for 92 percent of the cross-country variation in per capita growth. Easterly and Levine 2000 similarly find that many stylized facts about growth imply that most growth and income differences are explained by the “TFP residual” not by factor accumulation.

The impact of public investment is even less clear-cut. Easterly and Rebelo [1994] find a positive relationship between public infrastructure investment and growth (although not an effect of total public investment on growth), whereas Devarajan et al.

[1997] show that the share of public spending devoted to capital expenditure has a negative association with long-run growth.

Several authors have asked whether a similar pattern emerges when the sample is restricted to African countries. Khan and Kumar [1997] find that private investment is more productive than public investment, both in the global sample as well as when restricted to African countries (i.e., when they use regional slope dummies). Calamitsis et al. [1999] also find that private investment is significant in an African growth regression, while public investment is not robustly significant. These results confirm earlier results by Khan and Rheinhart [1990]. By contrast, Hadjimichael et al. [1995] show that public investment has a higher coefficient in a cross-country growth regression of African countries. Furthermore, they find that the coefficient on private investment is not statistically significant when macroeconomic policy variables are included in the regression. They interpret this result as implying that the only way investment affects growth in Africa is directly through capital accumulation, and not through increased productivity growth. Similarly, in a case study of Kenya, Oshikoya [1992] shows that the only period in which investment had a significant impact on growth was 1980-89, which was the period of financial liberalization. It is interesting to note that almost all of the African samples contain Botswana, and none of them reports the results of excluding Botswana from the sample.

Another set of papers look at the determinants of investment in Africa. Most of these, too, emphasize the role of macroeconomic policies in driving African investment. Oshikoya [1992], [1994] points out that credit availability and low inflation are the major determinants of investment in Africa. Elbadawi et al. [1998] examine the role of

instability in lowering Africa's investment rate. In a study of the SADC countries, Mlambo and Elhiraika [1997] show that, while favorable macroeconomic policies have a positive effect on private investment, public investment does not--implying that there may be some crowding-out in these countries.

II. Cross-country analysis of returns to public and private investment in Africa This section examines the cross-country evidence on the returns to public and private investment in Africa.2 It does this by first examining simple correlations between public investment and growth, and private investment and growth in Africa. Then a full regression of growth 1970-97 on the averages of public and private investment to GDP, initial income, and population growth will be performed. Next, some individual countries will be analyzed, by way of illustration. Finally, the response of investment to aid will be analyzed country by country, as indirect evidence as to whether aid meant higher investment – which it should have if economies were liquidity-constrained and returns to investment were reasonable.

A. Cross-section results on growth and investment

First, a word about the data. Total investment is easily obtainable from the national accounts. However, the split between public and private investment is more problematic. If we define public investment as the sum of investment by general government and by state enterprises, then we lack a standardized international database for such data. The Government Finance Statistics of the IMF has data only on general government (and even then often omitting local governments), and not on state enterprises. We will return to the GFS in a subsequent section; in this section we use an imperfect but comprehensive measure of public investment including state enterprises.

These data come from an amalgamation of 2 diverse sources: (1) the IFC series on public and private investment through 1997; (2) the series on public investment in Easterly [1999]. The latter in turn was an amalgamation of data in Bruno and Easterly [1998] and Easterly and Rebelo [1993]. All of these sources use World Bank and IMF reports, and for a few countries, the United Nations National Accounts. Our data thus have rather complicated bloodlines; they are more like a mutt rather than a pedigreed dog. We use the data subject to some reservations about their comparability across countries, but these data are the best we have for aggregate data on public investment. After constructing a public investment/GDP series, we subtract it from national accounts’ total

investment/GDP to get private investment/GDP.

Figure 1 provides a first look at public investment/GDP and growth in Africa. The picture is not encouraging for the idea that public investment has a high payoff for growth. Most of the data is concentrated in a ball with no discernible association between growth and public investment. Then there are the outliers: Botswana and Equatorial Guinea had exceptional growth but middling public investment; Zambia, Comoros, Mozambique and Sao Tome had high public investment but mediocre growth. The only country with high public investment and exceptional growth is Lesotho.

Figure 2 shows the corresponding picture for private investment/GDP and GDP growth. The figure seems to show somewhat more of an association between private investment and growth, although there are outliers like Congo and Gabon. The datapoint of Botswana looks like it will be influential in calculating the statistical association between private investment and growth; we will now confirm this suspicion.

2 This section draws on Dollar and Easterly [1998].

The table below shows a cross-section regression for 1970-97 for 29 African countries. Private investment has a significant positive and strong effect on growth, even after controlling for its endogeneity. In contrast, public investment has no discernible effect on growth.

Dependent Variable: GROWTH Per Capita

Method: Two-Stage Least Squares

Included observations: 29

Excluded observations: 17 after adjusting endpoints

Instrument list: C PRVINV70 PUBINV POPGROW RGDPCH70

Variable Coefficient Std. Error t-Statistic Prob.

CONSTANT TERM 0.000692 0.020264 0.034135 0.9731

0.375311 0.113537 3.305626 0.0030

PRIVATE

INVESTMENT/GDP

-0.025896 0.125628-0.206132 0.8384

PUBLIC

INVESTMENT/GDP

-0.943977 0.655257-1.440622 0.1626

POPULATION

GROWTH

-9.62E-06 5.15E-06-1.867287 0.0741

INITIAL INCOME

1970

R-squared 0.503848 Mean dependent var 0.004151

Adjusted R-squared 0.421156 S.D. dependent var 0.020571

S.E. of regression 0.015651 Sum squared resid 0.005879

F-statistic 5.558181

Prob(F-statistic) 0.002593

Unfortunately, the result on the favorable impact of private investment on growth depends heavily on Botswana. Here is the regression omitting Botswana:

Dependent Variable: GROWTH Per Capita

Method: Two-Stage Least Squares

Included observations: 28

Instrument list: C PRVINV70 PUBINV POPGROW RGDPCH70

Variable Coefficient Std. Error t-Statistic Prob.

C 0.013025 0.015691 0.830119 0.4150

0.160243 0.099032 1.618103 0.1193

PRIVATE

INVESTMENT/GDP

0.071218 0.096820 0.735571 0.4694

PUBLIC

INVESTMENT/GDP

POPULATION

-1.186179 0.500166-2.371571 0.0265

GROWTH

-2.71E-06 4.21E-06-0.644616 0.5256

INITIAL INCOME

1970

R-squared 0.552047 Mean dependent var 0.001753

Adjusted R-squared 0.474142 S.D. dependent var 0.016308

S.E. of regression 0.011826 Sum squared resid 0.003216

F-statistic 4.241627

Prob(F-statistic) 0.010230

The coefficient on private investment is only a third as large and not even significant at the 10 percent level. The variable that most explains relative growth performance now is population growth.

Does the lack of payoff in investment reflect low human capital in Africa? We tried adding the Barro-Lee years of schooling to the above regression, both as an independent term and as an interaction term with private investment. Schooling was insignificant, confirming results by Pritchett [1996] that the educational expansion in Africa has so far not yielded a high payoff. If the underlying relationship between growth and investment is a non-linear one, then it is not surprising that a linear regression yields no significant coefficients. Furthermore, if public and private capital were complements in the aggregate production function, the relationship between growth and investment

would be nonlinear. However, Devarajan, Swaroop and Zou [1997], among others, have estimated similar non-linear relationships and found public investment to be “too high.”

B. Growth accounting

Although the linear investment-growth model is popular in both cross-country regressions and individual country forecasting, it does not have good theoretical foundations. The Harrod-Domar model on which the linear growth model was based is no longer widely accepted because of its unappealing premises of surplus labor and zero substitutability between capital and labor. Some new growth models suggest linearity of growth to a broad concept of capital investment that includes physical capital, human capital, and technological knowledge; these models would not predict a linear relationship between growth and physical capital investment alone.3 A Solow production function approach would relate growth of output per worker to growth of capital per worker. We consider this approach here.

Figure 3a shows the African observations of capital growth per worker and output growth per worker of Nehru and Dhareshwar [1993]. There is no statistically significant association between capital growth per worker and output growth per worker. The coefficient on capital growth per worker, which is conceptually the share of capital in output, is .21 and is significant only at the 15 percent level. The figure shows such notable outliers as Nigeria and Sudan, which had capital growth per worker of over 4 percent per annum, but had zero or negative growth of output per worker. Outliers in the other direction include Kenya and Mauritius, which had capital growth per worker of

3 One exception is the original Romer [1987] model of endogenous growth, which suggested externalities to physical capital investment such that there was a linear relationship between output and physical capital. This model does not have many adherents today, and Romer [1994] himself disavowed it in favor of a

zero (i.e. the capital stock growing at same rate as labor force), but had labor productivity growth of 2 percent per annum.

The picture is even worse if we consider data for a more recent period 1977-94, using data from Bruno and Easterly [1998].4 Although 10 of the 19 countries with data had positive growth of capital per worker, only 3 had positive per capita output growth (Figure 3b). The correlation between output growth and capital growth is once again insignificant. The R-squared is only .10, indicating that capital growth per worker explains only 10 percent of the variation in growth of output per capita within Africa. C. Policies and Growth

Lest the reader think that the Africa sample is too small and too noisy to yield significant results on anything, we consider here a regression of per capita growth rates on policies. The following parsimonious specification works well for the Africa sample: Dependent Variable: GROWTH Per Capita

Method: Least Squares

Africa Sample only, 4 year averages, 1970-92

Included observations: 94

White Heteroskedasticity-Consistent Standard Errors & Covariance

Variable Coefficient Std. Error t-Statistic Prob.

C 0.012106 0.004455 2.717516 0.0079

Black Market Premium-0.004747 0.002381-1.993464 0.0492

Pub. Sec Balance/GDP 0.002702 0.000602 4.487297 0.0000

R-squared 0.178598 Mean dependent var-0.005259

Adjusted R-squared 0.160546 S.D. dependent var 0.032664

S.E. of regression 0.029928 Akaike info criterion-4.148670

Sum squared resid 0.081506 Schwarz criterion-4.067501

Log likelihood 197.9875 F-statistic 9.893117

Prob(F-statistic) 0.000130

model of endogenous technical change. See Easterly [1999] for a description of the downfall of the Harrod-Domar model.

4 They used updated data through 1993 for capital stocks from Nehru and Dhareshwar and World Bank data through 1994 for output per capita.

In a pooled regression of four-year average per capita growth rates 1970-92 for African countries, the black market premium and the public sector balance/GDP are both significant with the expected sign. (The investment share is still insignificant when added to this regression.) The black market premium and the public sector balance have been at the center of the policy debate in Africa. The poor incentives created by foreign exchange market distortions and high budget deficits could help explain why investment has not been productive in Africa. These adverse policies may have more fundamental determinants, like the ethnic polarization discussed by Easterly and Levine (1997).

D. Country examples

Regressions like those done above suppose a linear relationship between investment and growth. Another way of showing the weakness of such a relationship in Africa is by examining the variation within countries over time. Did countries that appeared to have a linear relationship of investment with growth maintain that relationship over time?

Figure 4 shows the example of Kenya. We choose the coefficient on investment so that it fits the initial period, and then we extrapolate this relationship for the rest of the period. We see that the investment-growth relationship that held in the 70s did not extrapolate well into the 1980s and 1990s. Per capita income should have kept growing at a rapid clip after 1980; instead it stagnated.

An analogous country exercise for growth accounting would be to assume a “normal” productivity growth of say, 1 percent per annum, and add it to .4 (capital share) * capital growth per worker to predict output growth per worker. Figure 5 shows the results of such an enterprise for Nigeria. Given its rapid capital growth per worker and a

normal TFP growth of 1 percent, Nigerian output worker should have more than doubled over 1960-88. Instead it hardly increased at all. Capital growth was not productive in Nigeria over this period.

D. Indirect evidence from aid and investment

Another way to assess whether returns to capital were high or not is to calculate the response of investment to foreign aid. Under prevailing assumptions in the foreign aid business, capital in poor countries has good returns but investment remains too low because of liquidity constraints and low domestic saving. The answer is thought to be foreign aid, which relieves the liquidity constraint and supplements domestic saving. Does aid pass into investment in practice in Africa? The table below gives the answer from regressing investment/GDP on overseas development assistance/GDP country by country for the period 1960-95.

Results of regressing Gross Domestic Investment/GDP on ODA/GDP

country by country in Africa, 1965-95

Coefficient of Investment on ODA Number of

countries

Percent of Sample

Total34100% Positive, significant, and >=100% Positive and significant824% Positive1750% Negative1750% Negative and significant1235%

No country in Africa had a one for one pass-through of aid into investment, as would have been expected from the liquidity constraint idea. Eight out of 34 African countries had a significant and positive relationship between aid and investment; more (12) had a negative and significant relationship. There is no evidence from the aid-investment relationship of high returns to investment frustrated by lack of liquidity.5 To give another country example, Figure 6 shows how high investment would have been in Madagascar if aid had passed into investment one for one since 1960. Investment would have reached 18 percent of GDP; instead actual investment to GDP hovered around 2 percent.

We have documented here two failures of conventional analysis: the failure of the linear growth-investment relationship and the failure of the one for one aid-investment relationship. What if we combine these two models to create a counterfactual for a given country? Easterly 1999 does such a calculation for Zambia. If all aid had gone into investment and investment had yielded an average payoff for growth (ICOR of 3.5), then Zambia’s per capita income by 1995 would have reached $20,320; instead it declined to around $600. The counterfactual of an income 34 times higher than actual shows how badly the linear investment-growth and aid-investment models failed in Africa.

E. Composition of public investment

The finding that public investment is unproductive in Africa, which seems to be robust to various specifications and data sets, could be troubling to those who decried the cutbacks in government investment brought on by adjustment programs. Had these

5 This finding is in line with that of Boone [1994, 1996], who finds a zero coefficient across countries between aid (suitably instrumented) and investment.

cutbacks been avoided, and public investment increased, our results show that Africa's growth would not have been any higher. A possible response would be that it is the composition, and not the level, of public investment that is important. Had African governments invested in health, education and infrastructure, for instance, the effects on per capita GDP growth would have been favorable. To test this hypothesis, we need to use data from the IMF's Government Finance Statistics, which is the only internationally-comparable database on the components of public expenditure. The total public investment figure would not be consistent with that used in the previous regressions in this section. Nevertheless, the data from the GFS give qualitatively the same result for a regression of per capita GDP growth on private and public investment. When public expenditure more generally is broken down into its components, none of the individual expenditure items has a statistically significant association with growth. Furthermore, the coefficient on private investment is generally not statistically significant when controlling for these different components of public expenditure. In other words, given the levels of public spending in health, education, and infrastructure, additional private investment would not have benefited African growth. Finally, in assessing the determinants of private investment in Africa, we find that public investment has a negative coefficient--strengthening the possibility that there was more crowding out than crowding in.

F. Implications

The direct and indirect evidence of overall poor returns to investment in Africa in the cross-country data contradict the notion that investment was too low in Africa. Higher investment would not have had a high payoff. The much-denigrated capital flight out of Africa may well have been a rational response to low returns at home. Collier et al

[1999] find 39% of African private wealth is held abroad. Indeed Africans are probably better off having made external investments than they would have been if they had invested solely at home!

III. Evidence from Tanzanian manufacturing on the productivity of capital The tenuous relationship between investment and growth can be illustrated with evidence from the evolution of Tanzania’s manufacturing sector. Focusing on the manufacturing sector of one country provides useful insights. Manufacturing technology is closer to being universally available than in other sectors: equipment and the knowledge to utilize it are purchasable on the world market unlike that in many of the non-traded sectors. Thus, differences in national production functions which may affect cross country results are less severe in manufacturing. It is likely that both output and inputs are measured more accurately than in other sectors, at least in formal manufacturing. Sectoral shifts that may affect aggregate productivity are less than those resulting from movements from subsistence agriculture to the modern sector. Finally, unlike other sectors such as agriculture and construction, the sector is relatively immune to natural forces such as drought or excessive rain that continue for several years and affect output.

Prins and Szirmai [1998] in collaboration with Tanzanian statistical agencies have recalculated the Tanzanian national accounts figures. Although the revised absolute numbers for value added differ from the official ones, both the levels and the intertemporal profile are similar. Value added and value added per worker, VA/N, in manufacturing rose from Independence 1964 to 1975, then began a sustained decline, VA/N, falling 38% between 1975 and 1990.

A. Sources of the Decline in Labor Productivity

VA/N in Tanzania fell between 1975 and 1990 for the entire manufacturing sector and its component branches (Table 1). There are several potential sources of the decline that are depicted in Figure 7.

1. A decrease in the capital-labor ratio along the 1975 production function - the move from A to B. This move could result from several causes: (a) a decline in the wage-rental ratio, w/P, leading firms to reduce their capital- labor ratios, implying a decline in VA/N unless TFP increased; (b) the hiring of unnecessary labor, particularly in public enterprises acting as employers of last resort; (c) a reduction in the flow of capital services (from the diminished capital stock) as capacity utilization declines due either to fall in demand or to the unavailability of complementary inputs, the latter due to foreign exchange constraints in the aggregate economy that forces firms to decrease production even where there is a potential for profitable sales. Ndulu 1986 also considers the possibility that output growth has not matched capacity growth due to a decline in utilization rates.

2. A decline in TFP, a movement from A, the position in 1975, to C or D in 1990, implying technological forgetting or an increase in the weight of low productivity sectors or firms, particularly public enterprises.

B. Changes in Capital per Worker and Incentives to alter the capital-labor ratio

Tanzania experienced a significant decline in the wage rental ratio, w/PK during the last quarter century. The user cost of capital rose as the cost of imported equipment increased due to devaluations and local building costs went up as well. For most firms and industries, the optimal capital-labor ratio should have fallen, as depicted in Figure 8,

causing a decrease in labor productivity unless this was offset by a rise in TFP. The decline in VA/N shown in Table 1 is the expected outcome of factor price movements. Surprisingly, Tanzanian data imply that the capital-labor ratio for the entire sector grew, considerably in some periods, despite the decline in the wage-rental ratio. Such movements could be due to a shift in the composition of output towards sectors with greater capital-labor ratios but sector specific capital-labor ratios are not available to allow a test of this.

Table 2 shows the nominal wage in Tanzanian manufacturing along with the major components of the user cost of capital, the price indices for non-residential structure and equipment. The expression for the user cost of capital, ignoring any capital gains, is

PK = CK [(i-p*) + d)] (1)

where PK is the user cost of capital, CK is the price of new capital goods, i the nominal rate of interest, p* the growth rate of the general price index, and d the depreciation rate. A major component of PK is the cost of capital goods which rose very rapidly. The appropriate value of (i-p*) is difficult to determine empirically. Although p* is available, the correct value of the nominal interest rate that firms could earn is not clear. We assume that firms have the alternative of lending in the grey market at a fixed premium above the rate of inflation and therefore this remains constant. Unless the “true”value declined very rapidly, w/PK would still have declined.

For three of the five year sub-periods, the wage-rental ratio was unambiguously decreasing, the price deflator for both investment components increasing more rapidly than wages. Only in 1980 to 1985 would the movement in w/PK depend on the particular

function used to aggregate the investment components. This indicates that optimal capital/labor ratios should have been declining which would imply a decrease in VA/N unless there was an offsetting growth in TFP. Yet as we will show in the next section, available data indicate that the capital-labor ratio was increasing through most of the period for the entire sector.

Van Engelen [1996, p. 55] presents the annual investment/VA ratio in Tanzanian manufacturing for the period 1966 to 1994. We have calculated averages for consecutive five year periods, shown in Table 3. The values in several periods are quite startling, e.g., in 1986-90 investment exceeded value added originating in manufacturing and in 1977-1979 the ratio was close to unity. The I/VA rates can be converted into gross capital stock growth rates by noting that K* = (I/VA)/(K/VA) = i/θ where θ is the marginal capital-output ratio. Subtracting the depreciation rate, d, yields the growth rate of net capital stock, Kn* = K* - d. This exercise is carried out in Table 3 using two values for θ and d.6 Even making the assumptions least favorable to finding a substantial value of K, θ= 6 and d = .05, the growth rate of the capital stock was positive over the last 20 years (column 7). For θ = 3 and d = .05, the capital stock growth rate would have exceeded 17 percent over the last two decades (column 4), much greater than that of the growth of the labor force shown in column 3. For the period 1976 to 1990, Tanzanian manufacturing’s capital-labor ratio grew substantially for all sets of assumptions yet the constant price

6 We are not using the measured values of θ which are themselves endogenous and reflect inefficiency in the use of capital. Rather, the values used, 3 and 6, reflect the boundaries of experience in relatively efficient economies over time. Insofar as θ is greater and the actual growth of the capital stock is lower than that recorded, the low growth of K* is not due to the lack of investment but to inefficiency. Note that if cost minimizing behavior prevailed, the optimal output capital ratio, (VA/K)* = [(α/1-α)(w/P K)]α-1 using the Cobb-Douglas. With w/P K declining, θ = K/Q as well as K/L should have declined and the value of K* for a given investment rate should have increased.

value added per worker declined by about 40 percent!7 To take one period when value added per worker was decreasing, 1976-90, any set of assumptions about θ and d still yields a considerable increase in the capital-labor ratio. This suggests that capital-shallowing is not a plausible explanation of the observed decline in labor productivity in Tanzania. Indeed, in two periods of falling VA/N, 1976-80 and 1981-85, the lowest implied growth rates of the capital-labor ratio are .034 and .112. Perhaps just as surprising is the continuing growth in the absolute size of the labor force over the years despite stagnation or decline in constant price value added. Both phenomena together imply that firms were not minimizing costs, a result not surprising in an environment in which large numbers of government interventions assured that inefficient firms survived.

Using the least favorable assumptions, θ = 6 and d = .05, the average growth rate of k was about 8 percent per annum between 1976 and 1990. With α = .4, this implies that v should have increased by 3.2 percent per year rather than decline by that amount. Using the relation v* = A* + αk*, the value of A* over the period is – 6.4. Tanzania thus provides an interesting case in which to look for the sources of declining labor productivity quite apart from low investment. The absence of competitive pressures in product markets and policies to encourage firms to maintain employment for political purposes can perhaps explain low levels of both VA/N and TFP. But the continuing decline of the latter over a very long period of time remains a major puzzle.

C. Explanations of the Decline in Productivity

A number of hypotheses about the factors that could explain the combination of a rapidly growing capital-labor ratio and declining labor productivity have been

7 See Table 3.

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恰恰相反，非常刺激。 https://www.sodocs.net/doc/188230935.html, But onthecontrary, lazy. 却恰恰相反，懒洋洋的。 https://www.sodocs.net/doc/188230935.html, Onthecontrary, I hate it! 恰恰相反，我不喜欢！ https://www.sodocs.net/doc/188230935.html, Onthecontrary, the club gathers every month. 相反，俱乐部每个月都聚会。 https://www.sodocs.net/doc/188230935.html, Onthecontrary, I'm going to work harder. 我反而将更努力工作。 https://www.sodocs.net/doc/188230935.html, Onthecontrary, his demeanor is easy and nonchalant. 相反，他的举止轻松而无动于衷。 https://www.sodocs.net/doc/188230935.html, Too much nutrition onthecontrary can not be absorbed through skin. 太过营养了反而皮肤吸收不了. https://www.sodocs.net/doc/188230935.html, Onthecontrary, I would wish for it no other way. 正相反，我正希望这样 Provided by jukuu Onthecontrary most likely pathological. 反之很有可能是病理性的。 https://www.sodocs.net/doc/188230935.html, Onthecontrary, it will appear clumsy. 反之，就会显得粗笨。 https://www.sodocs.net/doc/188230935.html,

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一般过去式 时间状语：yesterday just now (刚刚) the day before three days ag0 a week ago in 1880 last month last year 1. I was in the classroom yesterday. I was not in the classroom yesterday. Were you in the classroom yesterday. 2. They went to see the film the day before. Did they go to see the film the day before. They did go to see the film the day before. 3. The man beat his wife yesterday. The man didn’t beat his wife yesterday. 4. I was a high student three years ago. 5. She became a teacher in 2009. 6. They began to study english a week ago 7. My mother brought a book from Canada last year. 8.My parents build a house to me four years ago . 9.He was husband ago. She was a cooker last mouth. My father was in the Xinjiang half a year ago. 10.My grandfather was a famer six years ago. 11.He burned in 1991

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高中英语~词性~句子成分~语法构成 第一章节：英语句子中的词性 1.名词：n. 名词是指事物的名称，在句子中主要作主语.宾语.表语.同位语。 2.形容词;adj. 形容词是指对名词进行修饰~限定~描述~的成份，主要作定语.表语.。形容词在汉语中是（的）.其标志是: ous. Al .ful .ive。. 3.动词：vt. 动词是指主语发出的一个动作，一般用来作谓语。 4.副词：adv. 副词是指表示动作发生的地点. 时间. 条件. 方式. 原因. 目的. 结果.伴随让步. 一般用来修饰动词. 形容词。副词在汉语中是（地）.其标志是：ly。 5.代词：pron. 代词是指用来代替名词的词，名词所能担任的作用，代词也同样.代词主要用来作主语. 宾语. 表语. 同位语。 6.介词：prep.介词是指表示动词和名次关系的词，例如：in on at of about with for to。其特征：

介词后的动词要用—ing形式。介词加代词时，代词要用宾格。例如：give up her（him）这种形式是正确的，而give up she（he）这种形式是错误的。 7.冠词：冠词是指修饰名词，表名词泛指或特指。冠词有a an the 。 8.叹词：叹词表示一种语气。例如：OH. Ya 等 9.连词：连词是指连接两个并列的成分，这两个并列的成分可以是两个词也可以是两个句子。例如：and but or so 。 10.数词：数词是指表示数量关系词，一般分为基数词和序数词 第二章节：英语句子成分 主语：动作的发出者，一般放在动词前或句首。由名词. 代词. 数词. 不定时. 动名词. 或从句充当。 谓语：指主语发出来的动作，只能由动词充当，一般紧跟在主语后面。 宾语：指动作的承受着，一般由代词. 名词. 数词. 不定时. 动名词. 或从句充当. 介词后面的成分也叫介词宾语。 定语：只对名词起限定修饰的成分，一般由形容

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M A: Has the case been closed yet? B: No, the magistrate still needs to decide the outcome. magistrate n.地方行政官，地方法官，治安官 A: I am unable to read the small print in the book. B: It seems you need to magnify it. magnify vt.１．放大，扩大；２．夸大，夸张 A: That was a terrible storm. B: Indeed, but it is too early to determine the magnitude of the damage. magnitude n.１．重要性，重大；２．巨大，广大 A: A young fair maiden like you shouldn’t be single. B: That is because I am a young fair independent maiden. maiden n.少女，年轻姑娘，未婚女子 a.首次的，初次的 A: You look majestic sitting on that high chair. B: Yes, I am pretending to be the king! majestic a.雄伟的，壮丽的，庄严的，高贵的 A: Please cook me dinner now. B: Yes, your majesty, I’m at your service. majesty n.１．［Ｍ－］陛下（对帝王，王后的尊称）；２．雄伟，壮丽，庄严 A: Doctor, I traveled to Africa and I think I caught malaria. B: Did you take any medicine as a precaution? malaria n.疟疾 A: I hate you! B: Why are you so full of malice? malice n.恶意，怨恨 A: I’m afraid that the test results have come back and your lump is malignant. B: That means it’s serious, doesn’t it, doctor? malignant a.１．恶性的，致命的；２．恶意的，恶毒的 A: I’m going shopping in the mall this afternoon, want to join me? B: No, thanks, I have plans already. mall n.（由许多商店组成的）购物中心 A: That child looks very unhealthy. B: Yes, he does not have enough to eat. He is suffering from malnutrition.

base on的例句

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英语造句大全

英语造句大全English sentence 在句子中，更好的记忆单词！ 1、(1)、able adj. 能 句子：We are able to live under the sea in the future. (2)、ability n. 能力 句子：Most school care for children of different abilities. (3)、enable v. 使。。。能句子：This pass enables me to travel half-price on trains. 2、(1)、accurate adj. 精确的句子：We must have the accurate calculation. (2)、accurately adv. 精确地 句子：His calculation is accurately. 3、(1)、act v. 扮演 句子：He act the interesting character. （2）、actor n. 演员 句子：He was a famous actor. (3)、actress n. 女演员 句子：She was a famous actress. (4)、active adj. 积极的 句子：He is an active boy. 4、add v. 加 句子：He adds a little sugar in the milk. 5、advantage n. 优势 句子：His advantage is fight. 6、age 年龄n. 句子：His age is 15. 7、amusing 娱人的adj. 句子：This story is amusing. 8、angry 生气的adj. 句子：He is angry. 9、America 美国n.

(完整版)主谓造句

主语+谓语 1. 理解主谓结构 1) The students arrived. The students arrived at the park. 2) They are listening. They are listening to the music. 3) The disaster happened. 2．体会状语的位置 1) Tom always works hard. 2) Sometimes I go to the park at weekends.. 3) The girl cries very often. 4) We seldom come here. The disaster happened to the poor family. 3. 多个状语的排列次序 1) He works. 2) He works hard. 3) He always works hard. 4) He always works hard in the company. 5) He always works hard in the company recently. 6) He always works hard in the company recently because he wants to get promoted. 4. 写作常用不及物动词 1. ache My head aches. I’m aching all over. 2. agree agree with sb. about sth. agree to do sth. 3. apologize to sb. for sth. 4. appear (at the meeting, on the screen) 5. arrive at / in 6. belong to 7. chat with sb. about sth. 8. come (to …) 9. cry 10. dance 11. depend on /upon 12. die 13. fall 14. go to … 15. graduate from 16. … happen 17. laugh 18. listen to... 19. live 20. rise 21. sit 22. smile 23. swim 24. stay (at home / in a hotel) 25. work 26. wait for 汉译英： 1.昨天我去了电影院。 2.我能用英语跟外国人自由交谈。 3.晚上7点我们到达了机场。 4.暑假就要到了。 5.现在很多老人独自居住。 6.老师同意了。 7.刚才发生了一场车祸。 8.课上我们应该认真听讲。9. 我们的态度很重要。 10. 能否成功取决于你的态度。 11. 能取得多大进步取决于你付出多少努力。 12. 这个木桶能盛多少水取决于最短的一块板子的长度。

初中英语造句

【it's time to和it's time for】 ——————这其实是一个句型,只不过后面要跟不同的东西. ——————It's time to跟的是不定式（to do）.也就是说,要跟一个动词,意思是“到做某事的时候了”.如： It's time to go home. It's time to tell him the truth. ——————It's time for 跟的是名词.也就是说,不能跟动词.如： It's time for lunch.(没必要说It's time to have lunch) It's time for class.(没必要说It's time to begin the class.) They can't wait to see you Please ask liming to study tonight. Please ask liming not to play computer games tonight. Don’t make/let me to smoke I can hear/see you dance at the stage You had better go to bed early. You had better not watch tv It’s better to go to bed early It’s best to run in the morning I am enjoy running with music. With 表伴随听音乐 I already finish studying You should keep working. You should keep on studying English Keep calm and carry on 保持冷静继续前行二战开始前英国皇家政府制造的海报名字 I have to go on studying I feel like I am flying I have to stop playing computer games and stop to go home now I forget/remember to finish my homework. I forget/remember cleaning the classroom We keep/percent/stop him from eating more chips I prefer orange to apple I prefer to walk rather than run I used to sing when I was young What’s wrong with you There have nothing to do with you I am so busy studying You are too young to na?ve I am so tired that I have to go to bed early

The Kite Runner-美句摘抄及造句

《The Kite Runner》追风筝的人--------------------------------美句摘抄 1.I can still see Hassan up on that tree, sunlight flickering through the leaves on his almost perfectly round face, a face like a Chinese doll chiseled from hardwood: his flat, broad nose and slanting, narrow eyes like bamboo leaves, eyes that looked, depending on the light, gold, green even sapphire 翻译：我依然能记得哈桑坐在树上的样子，阳光穿过叶子，照着他那浑圆的脸庞。他的脸很像木头刻成的中国娃娃，鼻子大而扁平，双眼眯斜如同竹叶，在不同光线下会显现出金色、绿色，甚至是宝石蓝。 E.g.: A shadow of disquiet flickering over his face. 2.Never told that the mirror, like shooting walnuts at the neighbor's dog, was always my idea. 翻译：从来不提镜子、用胡桃射狗其实都是我的鬼主意。E.g.:His secret died with him, for he never told anyone. 3.We would sit across from each other on a pair of high

翻译加造句

一、翻译 1. The idea of consciously seeking out a special title was new to me., but not without appeal. 让我自己挑选自己最喜欢的书籍这个有意思的想法真的对我具有吸引力。 2.I was plunged into the aching tragedy of the Holocaust, the extraordinary clash of good, represented by the one decent man, and evil. 我陷入到大屠杀悲剧的痛苦之中，一个体面的人所代表的善与恶的猛烈冲击之中。 3.I was astonished by the the great power a novel could contain. I lacked the vocabulary to translate my feelings into words. 我被这部小说所包含的巨大能量感到震惊。我无法用语言来表达我的感情（心情）。 4，make sth. long to short长话短说 5.I learned that summer that reading was not the innocent(简单的) pastime(消遣) I have assumed it to be., not a breezy, instantly forgettable escape in the hammock(吊床)，( though I’ ve enjoyed many of those too ). I discovered that a book, if it arrives at the right moment, in the proper season, will change the course of all that follows. 那年夏天，我懂得了读书不是我认为的简单的娱乐消遣，也不只是躺在吊床上，一阵风吹过就忘记的消遣。我发现如果在适宜的时间、合适的季节读一本书的话，他将能改变一个人以后的人生道路。 二、词组造句 1. on purpose 特意，故意 This is especially true here, and it was ~. (这一点在这里尤其准确，并且他是故意的) 2.think up 虚构，编造，想出 She has thought up a good idea. 她想出了一个好的主意。 His story was thought up. 他的故事是编出来的。 3. in the meantime 与此同时 助记：in advance 事前in the meantime 与此同时in place 适当地... In the meantime, what can you do? 在这期间您能做什么呢？ In the meantime, we may not know how it works, but we know that it works. 在此期间，我们不知道它是如何工作的，但我们知道，它的确在发挥作用。 4.as though 好像，仿佛 It sounds as though you enjoyed Great wall. 这听起来好像你喜欢长城。 5. plunge into 使陷入 He plunged the room into darkness by switching off the light. 他把灯一关，房

改写句子练习2标准答案

The effective sentences:(improve the sentences!) 1.She hopes to spend this holiday either in Shanghai or in Suzhou. 2.Showing/to show sincerity and to keep/keeping promises are the basic requirements of a real friend. 3.I want to know the space of this house and when it was built. I want to know how big this house is and when it was built. I want to know the space of this house and the building time of the house. 4.In the past ten years,Mr.Smith has been a waiter,a tour guide,and taught English. In the past ten years,Mr.Smith has been a waiter,a tour guide,and an English teacher. 5.They are sweeping the floor wearing masks. They are sweeping the floor by wearing masks. wearing masks,They are sweeping the floor. 6.the drivers are told to drive carefully on the radio. the drivers are told on the radio to drive carefully 7.I almost spent two hours on this exercises. I spent almost two hours on this exercises. 8.Checking carefully,a serious mistake was found in the design. Checking carefully,I found a serious mistake in the design.

用以下短语造句

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英语造句

English sentence 1、(1)、able adj. 能 句子：We are able to live under the sea in the future. (2)、ability n. 能力 句子：Most school care for children of different abilities. (3)、enable v. 使。。。能 句子：This pass enables me to travel half-price on trains. 2、(1)、accurate adj. 精确的 句子：We must have the accurate calculation. (2)、accurately adv. 精确地 句子：His calculation is accurately. 3、(1)、act v. 扮演 句子：He act the interesting character.（2）、actor n. 演员 句子：He was a famous actor. (3)、actress n. 女演员 句子：She was a famous actress. (4)、active adj. 积极的 句子：He is an active boy. 4、add v. 加 句子：He adds a little sugar in the milk. 5、advantage n. 优势 句子：His advantage is fight. 6、age 年龄n. 句子：His age is 15. 7、amusing 娱人的adj. 句子：This story is amusing. 8、angry 生气的adj. 句子：He is angry. 9、America 美国n. 句子：He is in America. 10、appear 出现v. He appears in this place. 11. artist 艺术家n. He is an artist. 12. attract 吸引 He attracts the dog. 13. Australia 澳大利亚 He is in Australia. 14.base 基地 She is in the base now. 15.basket 篮子 His basket is nice. 16.beautiful 美丽的 She is very beautiful. 17.begin 开始 He begins writing. 18.black 黑色的 He is black. 19.bright 明亮的 His eyes are bright. 20.good 好的 He is good at basketball. 21.British 英国人 He is British. 22.building 建造物 The building is highest in this city 23.busy 忙的 He is busy now. 24.calculate 计算 He calculates this test well. 25.Canada 加拿大 He borns in Canada. 26.care 照顾 He cared she yesterday. 27.certain 无疑的 They are certain to succeed. 28.change 改变 He changes the system. 29.chemical 化学药品