Economic policy, economics performances and Nicolas Kaldor’s magic square in the Democratic Republic of Congo

Abstract

This article seeks to critically analyze the economic policies implemented and the expected results in the Democratic Republic of Congo over a period of 47 years, from 1970 to 2016. Thus, Nicolas Kaldor’s magic square made it possible to assess the economic performances recorded during the period under review by identifying challenges to their inclusiveness. The research used the quantitative method mobilizing econometric tools including var cointegration modeling and the Kaldor magic square analytical approach.

The following results were obtained: the economic growth of the DRC remains exclusive due to the lower level of the lower level of the average growth rate of the period compared to the required rate (i.e. 1.01% against 4.22%) to maintain or lower the unemployment rate taking into account an average growth rate of the active population of 3% and 89% of natural unemployment. Likewise, this exclusive nature of its mass precariousness, unfavorable levels of indices such as : the social inclusion index, the good governance index, the civil violence and protests, the corruption index, the poverty index, the access to basic services index, the political regime hardening index, the diversification and competitiveness index and the inequality index. And the various macroeconomic and social crises have their deep roots in political instability and armed conflicts. The application of Kaldor’s magic square to the case of the DRC revealed three sub-periods : from 1970 to 2016, economic growth remained exogenous in the sense of the model of (Solow, 1956) ; from 1970 to 1989, the congolese maacroeconomic framework was marked by stagflation in the sense of (Friedman, 1956) and (Hayek, 1935) while the sub-period from 2010 to 2016, the macroeconomic situation of the DRC recorded sluggish growth in the sense of (Fitoussi, 1996). Consequently, the congolese authorities have favored controlling inflation over other economic policy objectives through fiscal policy activism against monetary policy taken as a supporting policy.

Keywords : Economic policies, fiscal policy, monetary policy, economic performance and Kaldor’s magic square

JEL classification : E6

Type of article : Empirical research