Invariably, these important mutations in the global economy are partly facilitated by the ability of emerging market economies to adopt and apply new technologies, a process which requires significant investments in scientific and technological infrastructures to fully benefit from the diffusion of technology underlying the new globalization landscape. This is all the more important because the diversification of sources of growth in the most successful emerging markets economies was enhanced by lateral shifts of their underlying production functions. And with the rapid reduction in the technological gap, the production function of these economies is converging towards global technology frontiers.

Conversely, the static model of time-invariant sources of growth underpinning production processes in scores of countries in Sub-Saharan Africa widened the region’s technology and productivity gap and undermined prospects for economic diversification. The growth volatility and abysmal contribution of Sub-Saharan Africa to global growth during the period of exceptional boom in international trade is partly the consequence of poor scientific and technological infrastructure and rapid depreciation of gross capital formation in a context of declining investment rates in the region [Akyuz and Gore (2001), Bayraktar and Fofack (2007)].

Presumably, there are other related costs associated with the underlying policy of time-invariant drivers of growth adopted by the majority of countries in Sub-Saharan Africa. Key among them is the continued marginalization of the region in the new globalization landscape of deepening integration of world economies. This marginalization is surely another important stylized fact characteristic of the new globalization landscape. The persistence of the debt-poverty trap in a region that continues to be saddled with debt and is slated to miss the first Millennium Development Goals of halving poverty by 2015 is probably another additional consequence [Easterly (2002, 2009), Sun (2004), Berg and Qureshi (2005)].<sup>19</sup> However, historical trends suggest that the transition from primary commodities and raw materials exports as drivers of growth to industrial output-based growth requires adoption of new development models, which emphasize value addition and economic diversification. Looking forward, a greater integration of Sub-Saharan African countries into the new globalization landscape may require structural and institutional transformation in support of economic diversification. The next sections explore the determinants of globalization which have contributed to the emergence of the new globalization landscape, and outline their implications for the choice of development models by Sub-Saharan African countries.

# **III. Analytical Framework**

Economic theory teaches us that countries involved in international trade are linked through the balance of payments, which summarizes economic and financial transactions between residents and nonresidents in a given cycle. Since globalization is defined as an unprecedented surge in global trade, the emergence of a new globalization landscape should be reflected in the balance

> 19 The accumulation of external liabilities might have been exacerbated by excess capital flight, especially when externally borrowed funds provide the resources and motivations for capital flight—debt-fueled capital flight hypothesis [Ndikumana and Boyce (2008)]. At the same time, a massive outflow of funds entertained over a long period creates a financing gap often bridged through external financing, a scenario generally known as capital flight-driven external borrowing. In spite of access to debt relief under the Enhanced HIPC Initiative, debt sustainability indicators have been deteriorating rather rapidly in a number of post-Completion Point countries [World Bank (2007)].

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