# **4.2 Case Studies: Seeking Commonalities across Three Exceptional Miracle Episodes**

Considering the overall growth and its time and sectoral dimensions, we selected three countries in the region—Botswana, Ethiopia, and Mauritius—for a deep dive into the drivers of their miracle episodes. These three countries have experienced high and sustained growth for decades that goes beyond the “Africa Rising” period with varied sectoral contributions ( **Figure 18** ). Do the three countries share anything in common behind the seemingly different sectoral drivers? In this sub-section, we look into these individual cases and seek commonalities across these successful stories to understand what might have explained how a sustained growth episode started. A similar approach was adopted in The Growth Report led by Michael Spence in which 13 growth miracles were studied and five commonalities were identified (Commission on Growth and Development 2008).<sup>16</sup> At first glance, Botswana, Mauritius, and Ethiopia appear vastly different. Yet they have all achieved sustained growth for a prolonged period that is on par with the world’s best performers. Botswana embarked on a sustained growth path since as early as the 1960s during its transition into independence from colonial rule. Raising cattle had been the backbone of the country’s economic activities for which climate, soil, and vegetation are particularly well suited (World Bank 1971). Mauritius, a small island nation in the Indian Ocean, experienced a growth outburst in the early 1980s, over a decade after the country became independent in 1968. Already a middle-income country, Mauritius had relied upon sugar production that was most resilient to cyclone damages endured by the island. Ethiopia, Africa’s oldest independent country, started its impressive growth episode more recently in the 2000s. Largely an agrarian economy with agriculture accounting for over 80% of employment, Ethiopia was one of the poorest countries in the continent at the onset of its miracle expansion. These diverse initial geographical, political, and economic conditions have not constrained the sustained economic expansion for decades afterwards.

Moreover, these countries faced similar challenges at the outset, which should resonate with many countries in the region that are still struggling with low and volatile growth. Before their economies took off, all three countries faced physical and financial constraints. Being either landlocked or island countries, the three nations faced substantial barriers or costs to connect with external markets. Their economies largely relied upon a few, if not a single, primary industries, be it cattle raising, sugar production, or rainfed agriculture. With protracted deficits, government had to rely on foreign aid or external financing. Undaunted by the challenges, these three countries have successfully transformed their economies to a new level. Nowadays, Botswana has grown from the world’s poorest country in the 1960s to an upper-middle-income economy aspiring to become a high-income one. Mauritius has teetered on the threshold between upper-middleincome and high-income economies in recent years. At its current trajectory, Ethiopia is rapidly approaching the middle-income status as its income per capita at constant price has grown over threefold in the past two decades.

The economic transformation of these countries did not happen overnight, but as a result of solid foundations built and effective economic policies implemented. By seeking common factors among the three countries at the onset of their economic takeoff, we hope to offer some insights on what most likely worked to kick off a miracle growth episode. Our case studies are synthesized from various World Bank reports and academic papers for Botswana (World Bank 1971, 1978; Acemoglu, Johnson & Robinson 2003; Hillbom, 2008; Poteete, 2009; Lewin, 2011), Mauritius (World Bank 1982, 1983, 1985; Subramanian, 2009; Sobhee, 2009; Frankel, 2016; Zafar, 2011), and Ethiopia (World Bank 2002, 2007;

> 16 The 13 economic miracles identified in the Growth Report are Botswana, Brazil, China, Hong Kong, China, Indonesia, Japan, the Republic of Korea, Malaysia, Malta, Oman, Singapore, Taiwan, China, and Thailand. These economies have grown an average annual rate of 7 percent or more for 25 years or longer.