@article {192226, title = {Cape Verde and Mozambique as Development Successes in West and Southern Africa}, journal = {NBER}, year = {2009}, abstract = {This paper applies an interpretation of how globalization and governance (G\&G) interact with convergencegiven Cape Verde and Mozambique{\textquoteright}s particular geographical and historical contexts. We hold thatdevelopment success under globalization entails, necessarily but not exclusively, positive market perceptionsregarding 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 assuccess notwithstanding the inexistence of a universally applicable development model. In practicalterms, we first identify macro-level policy and institutional combinations underpinning successfultrade 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 combinationsapply to both countries using an empirical analysis. We find that trade openness drives convergenceand export diversification in Western Africa (which is becoming more diversified) while convergenceis instead driven by economic and political freedoms in Southern Africa (which is becoming morespecialized). Our empirical analysis is complemented by a case-study narrative of Cape Verde andMozambique{\textquoteright}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 economicand political freedom; pursing macroeconomic stability and financial reputation; ensuring policy continuity(especially in the industrial and trade sectors) and focusing on human development (especially educationand poverty reduction). Moreover, both countries reveal convergence compared to their sub-regionalpeers 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 interactionbetween trade and financial globalization, on the one hand, and good governance and democracy, onthe other, may help explain the observed diversity of the Portuguese-speaking African community,which includes three other countries (Angola, Guinea-Bissau and S{\~a}o Tom{\'e} e Pr{\'\i}ncipe).}, url = {http://www.nber.org/papers/w16552.pdf}, author = {Jorge Braga de Macedo and Luis Brites Pereira} }