1. Cape Verde and Mozambique as Development Successes in Sub-Saharan Africa Jorge Braga de Macedo & Luís Brites Pereira NBER Conference on African Development Successes Cambridge, Massachusetts, December 11-12, 2009

7. Mutual Knowledge among Community of Portuguese-speaking Countries (CPLP) Ten years after creating CPLP in Lisbon, the 2006 summit approved in Bissau a declaration on MDGs emphasizing mutual knowledge : could standards of appropriateness regarding institutional reform be more responsive to historical affinities than to geography ?

8. EU, PALOP, CPLP cooperation The five Portuguese-speaking African countries (CPV, MOZ, Angola, Guinea-Bissau, Sao Tome e Principe) formed a group known as PALOP in 1979. PALOP held ten summits until 1992, when the first Regional Indicative Programme with the EU was signed . A Memorandum of Understanding with the European Commission was signed on the eve of the 2007 Europe-Africa summit in Lisbon, extended to CPLP .

9. Why Cape Verde & Mozambique? Geography - Cape Verde is a small island state with little natural resources and a difficult climate. History - Mozambique fought a protracted civil war following its independence from Portugal in the mid 1970s. Widespread recognition that both countries are actively seeking to overcome adverse developmental conditions due to:

10. Relative sizes in 2003 (Maddison database)

11. Cape Verde and ECOWAS - YCAP 1990GK$

12. Mozambique and SADC – YCAP 1990 GK$

14. 2. Number equivalent 5 digit Herfindahl Index (% p.a.)

15. PALOP vs SSA – YCAP 1990 GK K$

18. Conditional mean EMP

19. Conditional mean EMP

20. Conditional EMP Volatility

21. Conditional EMP Volatility

22. 3. World Bank Governance Indicators (1996-2007)

25. 7. International Trade (=5, best / worst )

26. 8. Infrastructure (=5, best / worst )

27. 9. Finance, Competition, Education ( best / worst )

28. 10. Institutions - stability, corruption, rule of law ( best / worst )

29. 11. Quality of regulation ( best / worst )

32. Globalization, Freedoms and Convergence: a summary of three way interactions Source: Macedo, Oliveira-Martins, Pereira (2007a)

36. ECOWAS: Relation between Income Gap & Number Equivalent

37. ECOWAS country means: Income Gap & Number Equivalent

38. SADC: Relation between Income Gap & Number Equivalent

39. SADC country means: Income Gap & Number Equivalent

40. ECOWAS, Cape Verde: Income Gap & Government Deficit – Country Means

41. ECOWAS Income Gap & Government Deficit – Time Means

42. SADC, Mozambique: Income Gap & Government Deficit – Country Means

43. SADC: Income Gap & Government Deficit – Time Means

44. ECOWAS, Cape Verde: Freedoms

45. SADC, Mozambique: Freedoms

46. ECOWAS: GDP per capita and Real Effective Exchange Rate (% p.a.)

47. SADC : GDP per capita and Real Effective Exchange Rate (% p.a.)

50. ECOWAS vs SADC – High Regime ECOWAS SADC ygap ↓ -> neq5 ↑ neq5 ↑ -> ygap ↓ ygap ↓ -> neq5 ↑ neq5 ↑ -> ygap ↓ open ↑ -> ygap ↓ govdef ↑ -> neq5 ↓ open ↑ -> neq5 ↓ govdef ↑ -> neq5 ↑ prcl ↑ -> neq5 ↑ ef ↑ -> neq5 ↑ prcl ↑ -> ygap ↓ ef ↑ -> ygap ↓ prcl ↑ -> neq5 ↓ ef ↑ -> neq5 ↓ legaleng -> ygap ↓

51. ECOWAS vs SADC – Full Sample ECOWAS SADC ygap ↓ -> neq5 ↑ neq5↑ -> ygap ↑ ygap ↓ -> neq5 ↑ neq5 ↑ -> ygap ↓ inflation ↑ -> ygap ↓ govdef ↑ -> ygap ↓ govdef ↑ -> neq5 ↓ open ↑ -> neq5 ↓ prcl ↑ -> ygap ↓ ef ↑ -> ygap ↓ ef ↑ -> neq5 ↑ prcl ↑ -> ygap ↓ ef ↑ -> ygap ↑ prcl ↑ -> neq5 ↓ ef ↑ -> neq5 ↑ cpv -> ygap ↓ sen -> ygap ↓ cpv -> neq5 ↑ sen -> neq5 ↓ legaleng -> ygap ↓ mus -> ygap ↓ moz -> ygap ↓ moz -> neq5 ↓ legaleng -> neq5 ↓

52. ECOWAS – Summary of Results LOW FULL HIGH ygap ↓ -> neq5 ↑ ygap ↓ -> neq5 ↑ neq5↑ -> ygap ↑ ygap ↓ -> neq5 ↑ neq5 ↑ -> ygap ↓ inflation ↑ -> ygap ↓ inflation ↑ -> neq5 ↑ govdef ↑ -> neq5 ↑ Less macroeconomic stability? inflation ↑ -> ygap ↓ open ↑ -> ygap ↓ govdef ↑ -> neq5 ↓ open ↑ -> neq5 ↓ demage ↑ -> ygap ↓ ef ↑ -> neq5 ↑ dictrans ↑ -> neq5 ↓ prcl ↑ -> ygap ↓ ef ↑ -> ygap ↓ demage ↑ -> ygap ↓ demtot ↑ -> ygap ↑ ef ↑ -> neq5 ↑ demage ↑ -> neq5 ↓ prcl ↑ -> neq5 ↑ ef ↑ -> neq5 ↑ cpv -> ygap ↓ sen -> ygap ↓ legaleng -> ygap ↓ cpv -> neq5 ↑ sen -> neq5 ↓ legaleng -> ygap ↓

53. ECOWAS 3SLS Results

54. ECOWAS 3SLS Results contd

55. SADC – Summary of Results SADC LOW FULL HIGH ygap ↑ -> neq5 ↑ neq5↑ -> ygap ↑ ygap ↓ -> neq5 ↑ neq5 ↑ -> ygap ↓ ygap ↓ -> neq5 ↑ neq5 ↑ -> ygap ↓ inflation ↑ -> ygap ↑ open ↑ -> ygap ↑ inflation ↑ -> neq5 ↓ open ↑ -> neq5 ↓ govdef ↑ -> ygap ↓ govdef ↑ -> neq5 ↓ open ↑ -> neq5 ↓ govdef ↑ -> neq5 ↑ prcl ↑ -> ygap ↓ ef ↑ -> ygap ↓ demage ↑ -> ygap ↑ demtot ↑ -> ygap ↑ prcl ↑ -> neq5 ↑ ef ↑ -> neq5 ↑ demage ↑ -> neq5 ↓ demtot ↑ -> neq5 ↓ ef ↑ -> neq5 ↑ dictrans ↑ -> neq5 ↓ prcl ↑ -> ygap ↓ ef ↑ -> ygap ↑ demtot ↑ -> ygap ↑ prcl ↑ -> neq5 ↓ ef ↑ -> neq5 ↑ demage ↑ -> neq5 ↓ constage ↑ -> neq5 ↑ prcl ↑ -> ygap ↓ ef ↑ -> ygap ↓ prcl ↑ -> neq5 ↓ ef ↑ -> neq5 ↓ mus -> ygap ↓ moz -> ygap ↓ moz -> neq5 ↓ legaleng -> neq5 ↓

56. SADC 3SLS Results

57. SADC 3SLS Results contd

58. ECOWAS, Cape Verde: Income Gap & Gvt. Deficit – Regimes, Country Means

59. ECOWAS, Cape Verde: Income Gap & Inflation – Regimes, Country Means

60. ECOWAS: Income Gap & Openness – Regimes, Country Means

61. ECOWAS Economic vs Political Freedom across Regimes

62. SADC Economic vs Political Freedom across regimes

63. Freedoms: 2SLS Results ECOWAS SADC ygap neq5 ygap neq5 Between Effects EF PRCL EF Fixed Effects EF EF PRCL EF EF

64. Cape Verde, Mozambique Results Full sample: t-statistics in parentheses *** p<0.01, ** p<0.05, * p<0.1 ygap neq5 Cape Verde -0.299*** (-3.267) 0.438** (2.346) Senegal -0.370*** (-6.040) 0.504** (4.982) Mauritius -0.833*** (-5.429) Mozambique -0.728*** (-4.403) -1.313*** (-4.507)

65. Cape Verde vs ECOWAS: Income Gap

66. Cape Verde vs ECOWAS: NEQ

67. Cape Verde - Income Gap & NEQ

68. Mozambique vs SADC: Income Gap

69. Mozambique vs SADC: NEQ

70. Mozambique: Income Gap & NEQ

73. Thank you for your attention.