Thorvaldur Gylfason "assesses African development prospects using Iceland’s economic ascent over the last century as a benchmark":

When Iceland was Ghana, by Thorvaldur Gylfason, Vox EU: Believe it or not: in 1901, Iceland’s per capita national output was about the same as that of Ghana today. Today, Iceland occupies first place in the United Nations’ ranking of material success according to the Human Development Index that reflects longevity, adult literacy, and schooling as well as the purchasing power of peoples’ incomes. Can Iceland’s rags-to-riches story be replicated in Africa and elsewhere in the developing world? If so, what would it take?

Grandmother-verifiable statistics

In 1901, my grandmother was twenty-four. She had six children, as was common in Iceland at the time, even if the average number of births per woman had decreased from almost six in the early 1850s to four around 1900, like in today’s Ghana. In fact, the number of births per woman in Iceland was four in 1960, so Iceland and Ghana are separated in this respect by a half-century or less. It took Ghana less than fifty years, from 1960 to date, to reduce the number of births per woman by three, from almost seven to four. It took Iceland a century and a half, from the late 1850s to date, to reduce the number of births per woman by three, from five to two (or 2.1 to be precise, the critical number that keeps the population unchanged in the absence of net immigration).

True, Ghana has made more rapid progress on the population front than many other African nations. The average number of births per woman in Sub-Saharan Africa has decreased from 6.7 in 1960, as in Ghana, to 5.3 in 2005. These averages, however, mask a wide dispersion in fertility across countries. Mauritius is down to two births per woman compared with almost six in 1960. Botswana is down to three, from seven in 1960. The women of Kenya, Tanzania, and Uganda now have five, six, and seven children each on average compared with eight, seven, and seven in 1960.[1]

Goodbye to short lives in large families

The point of this comparison of demographic statistics is that social indicators often provide a clearer view than economic indicators of important aspects of economic development. Moreover, several social indicators of health and education – fertility, life expectancy, literacy, and such – are readily available for most countries and in some cases reach farther back in time than many economic statistics. Fertility matters because most families with many children cannot afford to send them all to school and empower them to make the most of their lives. Families with fewer children – say, two or three – have a better shot at being able to offer a good education to every child, thus opening doors and windows that otherwise might remain shut. Reducing family size, therefore, is one of the keys to more and better education and higher standards of life. As Hans Rosling has pointed out very vividly, short lives in large families are no longer a common denominator in developing countries.[2]

Around the globe, including in many parts of Africa, there is a clear trend toward smaller families and longer lives. In Ghana, for example, life expectancy at birth has increased by more than three months per year since 1960, from 46 years in 1960 to 58 years in 2005. In Sub-Saharan Africa on average, all 48 countries included, life expectancy increased less rapidly, from 41 years in 1960 to 47 years in 2005. Average life expectancy is now on the rise again in Africa, having reached a peak of 50 years in the late 1980s and then decreased mostly on account of the HIV/AIDS epidemic.

Iceland’s economic history through African eyes

Let us now return to Iceland and briefly trace its economic history since 1901 through African eyes, as it were. In 1901, Iceland’s Gross Domestic Product (GDP) per capita was about the same as that of Ghana today, measured in international dollars at purchasing power parity. This observation, illustrated in Figure 1, follows from two simple facts: