Coulibaly, KalamogoEzemenari, KeneDuffy, Neal2012-05-292012-05-292008-03https://hdl.handle.net/10986/6572Trade, financial, and exchange rate reforms are shown to have exerted a positive impact on the growth of total factor productivity in Rwanda during the period 1995-2003. Based on a constant returns-to-scale Cobb-Douglas production function, this paper regresses total factor productivity on indices of trade, financial, and exchange rate reforms. The analysis determines that trade reforms and financial reforms each contributed positively to improvements in total factor productivity. The data also suggest that the allocation of official development assistance to human capital made a significant contribution to productivity. In contrast, the appreciation of the real exchange rate of the late 1980's hindered productivity or the growth of TFP. Taken together, the findings for Rwanda presented in this paper show that the strong growth of the past decade has not just been due to a "bounce back" effect following the genocide. The results support the notion that policies favorable to trade development, a deepening of the financial sector, and formation of human capital have been effective for increasing aggregate productivity of the economy and stimulating growth in Rwanda. For sustained growth, the Rwandan authorities should continue to build on these policies, while also taking care to maintain an appropriate exchange rate.CC BY 3.0 IGOABSOLUTE VALUEACCOUNTINGACCOUNTING FRAMEWORKADVANCED TECHNOLOGYAGRICULTURAL SECTORAMOUNT OF CAPITALANNUAL GROWTHAUCTIONSBANK POLICYBANKING SYSTEMBROAD MONEYBUSINESS CONFIDENCECAPITAL FLOWCAPITAL FLOWSCAPITAL INVESTMENTCAPITAL SHARECAPITAL STOCKCENTRAL BANKCIVIL WARCIVIL WARSCOMMERCIAL BANKSCOMMODITIESCOMMUNICATIONS TECHNOLOGIESCOMPETITIVENESSCONSTANT RETURNS TO SCALECONTRIBUTIONS OF CAPITALCONTROL VARIABLECOOPERATIVE BANKSCOST OF CAPITALCURRENCY EXCHANGECURRENCY REGIMECURRENT ACCOUNTDEMAND FOR CAPITALDEMAND FOR MONEYDEPENDENT VARIABLEDEPRECIATIONDEPRECIATION RATEDEVELOPING COUNTRIESDEVELOPING ECONOMIESDEVELOPMENT ASSISTANCEDEVELOPMENT ECONOMICSDEVELOPMENT POLICIESDEVELOPMENT STRATEGYDIMINISHING RETURNSDISBURSEMENTDISEQUILIBRIUMDISTORTIONSDIVERSIFICATIONDOMESTIC PRICEDUMMY VARIABLEDYNAMIC ECONOMYECONOMETRICSECONOMIC CONDITIONSECONOMIC DEVELOPMENTECONOMIC EFFICIENCYECONOMIC GROWTHECONOMIC HISTORYECONOMIC PERFORMANCEECONOMIC REFORMECONOMIC REFORMSECONOMIC RESEARCHECONOMIC RESOURCESECONOMIC STABILITYECONOMIC STRUCTUREECONOMIC SYSTEMECONOMIC TIME SERIESEDUCATIONAL ATTAINMENTELASTICITYERROR CORRECTION MODELERROR CORRECTION TERMERROR TERMEXCESS PROFITSEXCHANGE RATEEXCHANGE RATE REFORMSEXCHANGE RATE SYSTEMEXCHANGE RATESEXCHANGE TRANSACTIONSEXCHANGE-RATEEXCLUSIONEXPENDITURESEXPLANATORY VARIABLESEXPORT EARNINGSEXPORTERSEXPORTSEXTERNAL COMPETITIVENESSEXTERNAL SHOCKSFINANCIAL ASSISTANCEFINANCIAL DEVELOPMENTFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIATIONFINANCIAL MARKETFINANCIAL REFORMFINANCIAL REFORMSFINANCIAL REGIMESFINANCIAL SECTORFINANCIAL SYSTEMFIXED CAPITALFIXED EXCHANGE RATEFLEXIBLE EXCHANGE RATEFLEXIBLE EXCHANGE RATESFOREIGN CAPITALFOREIGN COMPETITIONFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE ACCOUNTSFOREIGN EXCHANGE RESERVESFOREIGN EXCHANGE TRANSACTIONSFOREIGN INVESTMENTFOREIGN MARKETSFOREIGN RESERVESFREE TRADEGDPGDP PER CAPITAGENERAL EQUILIBRIUMGENERAL EQUILIBRIUM ANALYSISGLOBALIZATIONGOVERNMENT POLICIESGROSS CAPITAL FORMATIONGROSS DOMESTIC PRODUCTGROSS FIXED CAPITAL FORMATIONGROWTH RATEGROWTH RATESHUMAN CAPITALHUMAN RESOURCESIMPORTIMPORT LIBERALIZATIONIMPORTSINCREASING RETURNSINCREASING RETURNS TO SCALEINDUSTRIALIZATIONINEFFICIENCYINFANT INDUSTRY ARGUMENTINFLATIONINSTITUTIONAL REFORMSINTEREST RATESINTERNATIONAL BANKINTERNATIONAL COMPETITIONINTERNATIONAL ECONOMICSINTERNATIONAL TRADEINVENTORIESKNOWLEDGE ECONOMYLABOR FORCELEGAL SYSTEMLOCAL CURRENCYLOCAL MARKETSLONG-RUN EQUILIBRIUMM2MACROECONOMIC POLICIESMACROECONOMIC STABILIZATIONMANUFACTURING INDUSTRIESMARKET ECONOMYMAXIMUM LIKELIHOOD ESTIMATIONMONETARY FUNDMONOPOLYNEW CURRENCYOPEN ECONOMYOUTPUTOUTPUT RATIOPHYSICAL CAPITALPOLITICAL INSTABILITYPOVERTY REDUCTIONPRIVATE SECTOR CREDITPRIVATE SECTOR CREDITSPRIVATIZATIONPRODUCTION COSTSPRODUCTION FUNCTIONPRODUCTION FUNCTIONSPRODUCTIVITYPRODUCTIVITY GROWTHPROPERTY RIGHTSRATE OF DEPRECIATIONRATE OF GROWTHRE-EXPORTSREAL COSTREAL EFFECTIVE EXCHANGE RATEREAL EXCHANGE RATEREAL GDPREAL INTERESTREAL INTEREST RATEREAL INTEREST RATESREJECTIONREMITTANCERETURNRETURNS TO SCALESHARE COEFFICIENTSHARE OF CAPITALSOCIAL CAPITALSTABLE GROWTHTARIFF BARRIERSTARIFF REDUCTIONTAX RATESTECHNOLOGICAL CHANGETOTAL FACTOR PRODUCTIVITYTRADABLE GOODSTRADE BARRIERSTRADE LIBERALIZATIONTRADE OPENNESSTRADE POLICIESTRADE POLICYTRADE REFORMSTRADE STRATEGYTRADE TAXUNCERTAINTYUNDERDEVELOPED COUNTRIESWITHDRAWALWORLD TRADEWORLD TRADE ORGANIZATIONWTOWorld Bank10.1596/1813-9450-4552