The Political Economy of Zambia's Recovery: Structural Change without Transformation?

Abstract

During the last decade, the resurgence in economic growth in Africa south of the Sahara has generated an interest in the drivers and consequences of structural change and transformation. Using the case of Zambia, this paper examines whether structural change translates into reduced poverty and improved social welfare through an empirical and systematic analysis of the country’s growth trajectory during 1991-2010. We find that growth after 2002 was accompanied by positive structural change, but most new jobs were in the low-wage, insecure informal sector in urban areas. Due to the demands of an expanding middle class, construction and high-value services also generated additional jobs, but the share of employment growth from these sectors was small and skewed more toward higher-skilled Zambians. Consequently, for a majority of the population, large-scale social transformation did not follow from structural change. As a consequence, the government that oversaw Zambia’s economic recovery was thrown out of office in 2011 in favor of an opposition party that promised to rectify perceived inequalities created by the country’s resurgence. The case therefore holds economic, social, and political implications for many of the region’s other fast growing democracies.

Keywords: Zambia, Southern Africa, Africa South of Sahara, Africa, economic development, employment, poverty, social change, social welfare, social inequality, populism