Monday, May 12, 2014

Urbanization Will Help Africa to Adapt to Climate Change

Some excellent economists have argued that climate change will raise the risk of more Civil Wars in Africa.  Their core story is that rural people without formal title to land will wander across informal borders and engage in Mad Max style fights over zero sum game natural resources such as water and food.  I have argued that increased urbanization will defuse this time bomb.  These fights do not take place in cities where people are working in the formal sector.  Since these authors have not modeled rural to urban migration, they are unable to address this point.

With this in mind, here is a new NBER Working paper.  Note that without mentioning urbanization, this is clearly the mechanism underlying the sectoral trends that the authors point to.  Manufacturing and services take place in cities.  These sectors face less direct risk from climate and once the income is earned, richer households have many more adaptation strategies for how to protect themselves against emerging risks.

What is driving the 'African Growth Miracle'?

Margaret S. McMillanKenneth Harttgen

NBER Working Paper No. 20077
Issued in May 2014
NBER Program(s):   ITI 
We show that much of Africa’s recent growth and poverty reduction can be traced to a substantive decline in the share of the labor force engaged in agriculture. This decline has been accompanied by a systematic increase in the productivity of the labor force, as it has moved from low productivity agriculture to higher productivity manufacturing and services. These declines have been more rapid in countries where the initial share of the labor force engaged in agriculture is the highest and where commodity price increases have been accompanied by improvements in the quality of governance.