Cape Verde and Mozambique as Development Successes in West and Southern Africa


This paper applies an interpretation of how globalization and governance (G&G) interact with convergence
given Cape Verde and Mozambique’s particular geographical and historical contexts. We hold that
development success under globalization entails, necessarily but not exclusively, positive market perceptions
regarding the orientation and predictability of policies as well as the accompanying institutional arrangements.
As such, a positive G&G interaction with respect to a comparator group can usefully be defined as
success notwithstanding the inexistence of a universally applicable development model. In practical
terms, we first identify macro-level policy and institutional combinations underpinning successful
trade diversification (an indicator of globalization) and income convergence (an indicator of governance)
in the sub-regions of West and Southern Africa. We then assess to what extent these combinations
apply to both countries using an empirical analysis. We find that trade openness drives convergence
and export diversification in Western Africa (which is becoming more diversified) while convergence
is instead driven by economic and political freedoms in Southern Africa (which is becoming more
specialized). Our empirical analysis is complemented by a case-study narrative of Cape Verde and
Mozambique’s long-term development, which allows us to also identify the following common drivers:
moving towards a market economy; opening up to regional and global trade; increasing economic
and political freedom; pursing macroeconomic stability and financial reputation; ensuring policy continuity
(especially in the industrial and trade sectors) and focusing on human development (especially education
and poverty reduction). Moreover, both countries reveal convergence compared to their sub-regional
peers when looking at average GDP per capita and indicators of financial reputation and good governance.
While these findings are insufficient to conclude that convergence will be sustained, the positive interaction
between trade and financial globalization, on the one hand, and good governance and democracy, on
the other, may help explain the observed diversity of the Portuguese-speaking African community,
which includes three other countries (Angola, Guinea-Bissau and São Tomé e Príncipe).

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Last updated on 08/21/2014