From Complexity to Inclusion: Multidimensional Economic Complexity as a Structural Precondition for Pro-Poor Development in Africa

<title>Abstract</title> <p>Africa's development paradox is stark: decades of sustained growth have coexisted with the world's deepest concentration of extreme poverty. This study asks whether what economies produce, rather than how fast they grow, governs the translation of growth into inclusive welfare. A Multidimensional Economic Complexity Index (MECI) is constructed for seventeen African economies (2010 to 2024) as the first principal component of trade, technology and research complexity, and is related to the Inequality-Adjusted Human Development Index (IHDI) through a triangulated framework of panel error correction models, an asymmetric NARDL-type specification, threshold regression, heterogeneous causality testing, Necessary Condition Analysis and interpretable gradient boosting. Complexity emerges as a powerful separator of inclusive development: one standard deviation of MECI corresponds to 5.8 additional IHDI points, with the three dimensions jointly explaining 40.5 per cent of IHDI variance. Trade and technology complexity are binding necessary conditions for high inclusive development; research complexity is not. Strikingly, no linear long-run complexity dividend is detectable within countries. The relationship is instead sharply asymmetric: welfare losses from complexity deterioration are roughly 3.7 times larger than gains from equivalent improvement, consistent with capability hysteresis. An apparent complexity threshold vanishes once common year effects are absorbed, a caution for short-panel threshold applications. The central implication reverses conventional policy emphasis: economic complexity is a structural precondition whose preservation matters more, over policy-relevant horizons, than its marginal expansion.</p>