Bogetic, ZeljkoNoer, JohnEspina, Carlos2012-06-112012-06-112007-11https://hdl.handle.net/10986/7655Real GDP per capita and capital stock in Cote d'Ivoire grew strongly from 1960 to 1979, but have declined ever since, for twenty-five years. As a result, the country has traveled a full circle from economic success to failure in little more than a generation. What are the long-term factors behind this dismal growth story? Are the Ivorian development problems mostly of recent origin? Or there are more fundamental, economic factors that explain its long term performance? Four principal conclusions are as follows: First, Cote d'Ivoire's long-term growth performance is not fully explained by temporary factors (e.g., CFA overvaluation or recent conflict). Longer term factors such as capital accumulation, productivity, and terms of trade are key to understanding the country's performance as is the policy of specialization in a single commodity--cocoa. Second, the long-term decline in per capita output started well before the currency overvaluation, and at a time of political stability, and is related to a major, secular deterioration in terms of trade that started after 1976. Third, total factor productivity estimates indicate that TFP per capita also grew until it hit a plateau in 1976-78, and then shrank thereafter, despite gains in human capital accumulation. Fourth, Cote d'Ivoire has pursued a policy of specialization in cocoa beans but this bet on a single commodity has ultimately failed. The strategy that brought prosperity during the 1970s resulted in a growth failure when cocoa prices began declining since 1976.CC BY 3.0 IGOACCOUNTINGAGRICULTUREARREARSAVERAGE ANNUAL GROWTHAVERAGE GROWTHBASE YEARBENCHMARKBENCHMARKSCALCULATIONSCAPITAL ACCUMULATIONCAPITAL COSTCAPITAL FORMATIONCAPITAL GOODSCAPITAL GROWTHCAPITAL INVESTMENTCAPITAL INVESTMENTSCAPITAL STOCKCAPITAL STOCK GROWTHCAPITAL STOCKSCAPITAL TIMESCENTRAL BANKCIVIL WARCOMMODITIESCOMMODITYCOMMODITY EXCHANGESCOMMODITY EXPORTSCOMMODITY PRICECOMMODITY PRICESCOMPETITIVENESSCONSTANT RETURNSCONSTANT RETURNS TO SCALECONSUMERCONSUMER PRICE INDEXCONTRIBUTIONCONTRIBUTIONSCURRENCYCURRENT ACCOUNTCURRENT ACCOUNT BALANCEDEMOGRAPHICDEPRECIATIONDEVALUATIONDEVELOPING COUNTRIESDEVELOPMENT CENTERDEVELOPMENT POLICYDIVERSIFICATIONDIVERSIFICATION STRATEGYECONOMIC ACTIVITYECONOMIC DEVELOPMENTSECONOMIC GROWTHECONOMIC HISTORYECONOMIC MANAGEMENTECONOMIC PRODUCTIVITYECONOMIC SUCCESSECONOMIC TRENDSEDUCATIONAL ATTAINMENTELASTICITYENROLLMENTEXCHANGE RATEEXCHANGE RATESEXPECTED VALUEEXPECTED VALUESEXPORTSFACTOR ACCUMULATIONFACTORS OF PRODUCTIONFARMERSFUNCTIONAL FORMFUNCTIONAL FORMSFUTURESGDP PER CAPITAGENDERGENDER EQUALITYGENERAL POPULATIONGINI COEFFICIENTGLOBAL MARKETGNPGROSS DOMESTIC PRODUCTGROWTH PERFORMANCEGROWTH RATEGROWTH RATE OF OUTPUTGROWTH RATESHOUSEHOLDSHUMAN CAPITALINCOME DISTRIBUTIONINCOMESINFLATIONINITIAL CAPITALINSTITUTIONAL INFRASTRUCTUREINTERNATIONAL BANKINTERNATIONAL PRICESINVENTORYINVESTMENT EXPENSESLABOR FORCELABOR FORCE GROWTHLABOR FORCE PARTICIPATIONLAND USELARGE COMPANIESLIFE EXPECTANCYLITERACYLOCAL CURRENCYMACROECONOMIC PERFORMANCEMARGINAL PRODUCTMARKET PERFORMANCEMARKET SHAREMARKETINGMODEL OF GROWTHNATIONAL INCOMEOVERVALUATIONPER CAPITA INCOMEPHYSICAL CAPITALPOLITICAL STABILITYPOVERTY RATEPOVERTY RATESPRICE DECLINESPRICE ELASTICITYPRICE LEVELPRICE LEVELSPRIMARY EDUCATIONPRODUCTION FUNCTIONPRODUCTION INCREASESPRODUCTION INPUTSPRODUCTIVITYPROSPERITYPUBLIC EXPENDITUREPUBLIC EXPENDITURESRAPID POPULATION GROWTHRATE OF GROWTHRATE OF RETURNRATES OF GROWTHRE-INVESTMENTREAL EXCHANGE RATESREAL GDPREAL GROWTH RATESRECEIPTSREFUGEESREGIONAL TRADEREGRESSION ANALYSISSHARE OF OUTPUTSHARE OF WORLD OUTPUTSOCIAL CONSEQUENCESSUB-SAHARAN AFRICASUNK COSTSTECHNOLOGICAL PROGRESSTFPTOTAL FACTOR PRODUCTIVITYTOTAL FACTOR PRODUCTIVITY ANALYSISTOTAL OUTPUTUNEMPLOYMENTUNIONURBAN AREASURBAN POPULATIONURBANIZATIONVALUE ADDEDVALUE OF OUTPUTVOLATILITYWAGEWORK FORCEWORLD ECONOMYWORLD MARKETWORLD MARKETSWorld Bank10.1596/1813-9450-4414