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on Africa |
| By: | Johan Fourie; Robert Ross; Russel Viljoen |
| Abstract: | Accurate measures of education quality — primarily, years of schooling or literacy rates — are widely used to ascertain the contribution of human capital formation on long-run economic growth and development. This paper, using a census of 4500 missionary station residents in 1849 South Africa, documents, for the first time, literacy and numeracy rates of non-White citizens in nineteenth-century South Africa. The census allows for an investigation into the causes of literacy at missionary stations. We find that age, residency, the missionary society operating the stations and numeracy, as a proxy for parental education, matter for literacy performance. The results provide new insights into the comparative performance of missionary societies in South Africa and contribute to the debate about the role of missionary societies in the economic development of colonial settings. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:284&r=afr |
| By: | Temitope L.A. Leshoro |
| Abstract: | How detrimental is inflation to growth in South Africa? At what level? Motivated by the adoption of inflation targeting by many countries, this paper sets out to empirically determine the threshold level of inflation in South Africa. This study adopts quarterly time series data spanning over the period 1980:Q2 to 2010:Q3. The threshold regression model developed by Khan and Senhadji (2001) was used in this study. The econometric technique used is the Ordinary Least Squares (OLS) and the model was re-estimated using the two-stage least squares instrumental variable (2SLS-IV) to check for robustness. The results show that the inflation threshold level occurs at 4 percent. At inflation levels below and up to 4 percent there is a positive but insignificant relationship between inflation and growth. The relationship becomes negative and significant when the inflation rate is above 4 percent. The tests of robustness support these findings. |
| Keywords: | Inflation, GDP Growth, Threshold level, South Africa. |
| JEL: | E31 C12 C22 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:285&r=afr |
| By: | El-hadj Bah; Lei Fang |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2011-14&r=afr |
| By: | Jacques Kibambe Ngoie (Department of Economics, University of Pretoria); Niek Schoeman (Department of Economics, University of Pretoria) |
| Abstract: | This study investigates the optimality hypothesis of taxation and the volatility thereof in South Africa when using appropriate tax rates within a dynamic stochastic environment. Using a Marshallian macroeconomic model disaggregated by sectors (MMM-DA) several features of the South African economy are analysed that may contribute to the efficiency of the optimal taxation hypothesis. The results show that within a tax regime where revenue from labour and capital income constitutes the most significant source of government income, both such taxes distort the economy but that the distortion from a tax on capital exceeds that of a tax on income. This study has twofold implications. It highlights the impact of efficient optimal taxation on both overall economic growth and fiscal policy in the country. |
| Keywords: | Optimality hypothesis, Dynamic stochastic environment, Marshallian macroeconomic model |
| JEL: | K21 L40 D78 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201218&r=afr |
| By: | Rémi Jedwab (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, LSE - London School of Economics and Political Science - LSE); Alexandre Moradi (Sussex University - Sussex University) |
| Abstract: | We study the impact of transportation infrastructure on agriculture and development in colonial Ghana. Two railway lines were built between 1901 and 1923 to connect the coast to mining areas and the large hinterland city of Kumasi. This unintendedly opened vast expanses of tropical forest to cocoa cultivation, allowing Ghana to become the world's largest producer. This attracted migrants to producing areas and the economic surplus drove urbanization. Using data at a very fine spatial level, we find a strong effect of railroad connectivity on cocoa production due to reduced transportation costs. We then show that the economic boom in cocoa-producing areas was associated with demographic growth and urbanization. We _nd no spurious effect from lines that were not built yet, and lines that were planned but never built. We show that our results are robust to considering nearest neighbor estimators. Lastly, railway construction has durably transformed the economic geography of Ghana, as railway districts are more developed today, despite thirty years of marked decline in rail transportation. |
| Keywords: | Railroads ; Trade Costs ; Urbanization ; Africa |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00607207&r=afr |
| By: | Tachibana, Towa; Sakurai, Takeshi |
| Abstract: | This paper examines the determinants of rice-cultivation adoption in inland-valley bottom areas in Ghana. In West African countries, surging import of rice has shown farmers a new and potentially huge income source. Around the second largest urban area in Ghana, Kumsi, there are inland-valley bottoms which are suitable for rain-fed rice cultivation. The puzzle is that not much part of these inland-valley bottoms has been utilized for rice production. In 2001, in four villages around Kumasi, we conducted a detailed household survey both on lowland-rice and upland-maize farmers. We found that the profit from lowland-rice cultivation was significantly lower than that from upland-maize farming. This paper also examines our predictions made from the profit comparisons in 2001 with the results of rice-farmer census conducted in 2011 in the same four villages. |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:569&r=afr |
| By: | Peterson, Stephen Bovard |
| Abstract: | Little is written about the critical success factors that make or break a project implementing a public financial management reform in Africa. Based on the twelve year experience of Harvard’s DSA project which transformed Ethiopia’s financial management in the third best on the continent, this paper presents the key factors of the projects success: task, context, patrons, roles, staff and decisions. The task was focused from the start on the basics of financial control (budget and accounts and their budget classification, chart of accounts and financial calendar) and the development of an often forgotten end state in PFM reform—the self-accounting unit. Three features of context supported the project: political (close ties between the US and Ethiopia government established during the civil war), task environment (a hard budget constraint) and, serendipity (a war that ensure one set of cooks in the kitchen and removed the inevitable critique by foreign aid agencies, and the government policy of second stage devolution—which made the focal point of district level decentralization). The third CSF, the projects patrons, stayed the course, met stated commitments and did not meddle. The project performed four roles (go-between in the vacuum of decentralization), decider (making the key decisions on pilots), first responder (providing PFM innovations not specified in the terms of reference) and perhaps most important, the furniture (an object that could be kicked and blamed). The project was able to assemble the array of essential staff: all rounders, managers, technicians, networkers and a closer. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:hksfac:4876869&r=afr |
| By: | Walton, Michael; Devarajan, Shantayanan; Khemani, Stuti |
| Abstract: | This paper examines the potential role of civil society action in increasing state accountability for development in Sub-Saharan Africa. It further develops the analytical framework of the World Development Report 2004 on accountability relationships, to emphasize the underlying political economy drivers of accountability and implications for how civil society is constituted and functions. It argues on this basis that the most important domain for improving accountability is through the political relations between citizens, civil society, and state leadership. The evidence broadly suggests that when higher-level political leadership provides sufficient or appropriate powers for citizen participation in holding within-state agencies or frontline providers accountable, there is frequently positive impact on outcomes. However, the big question remaining for such types of interventions is how to improve the incentives of higher-level leadership to pursue appropriate policy design and implementation. The paper argues that there is substantial scope for greater efforts in this domain, including through the support of external aid agencies. Such efforts and support should, however, build on existing political and civil society structures (rather than transplanting "best practice†initiatives from elsewhere), and be structured for careful monitoring and assessment of impact. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:hksfac:5131503&r=afr |
| By: | Steven F. Koch (Department of Economics, University of Pretoria) |
| Abstract: | The abolition of user fees in South Africa, a policy implemented in 1994 for children under the age of six and the elderly, as well as pregnant and nursing mothers, is examined via regression discontinuity. The analysis focuses on provider choice decisions for curative care treatment, but also examines potential externalities that could arise from the policy. As a result of the policy, curative care demand in the public sector is found to increase by approximately 7%; however, the demand for curative care in the private sector is found to decrease by nearly the same amount, suggesting that the policy led to provider choice substitution. The analysis further supports the hypothesis that the health of young children improved marginally. |
| Keywords: | Free Health Care, Regression Discontinuity |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201219&r=afr |
| By: | Sunel Grimbeek; Steven F. Koch; Richard J. Grimbeek |
| Abstract: | The South African Competition Commission's merger decisions for FY2002 through FY2009 are analyzed to empirically identify the factors historically influencing prohibition, conditional approval and unconditional approval. The key explanatory variables are linked to provisions of the 1998 Competition Act, such that the analysis provides insight into the consistency of merger decisions with respect to the legal requirements specified in the Act. Although the legislation includes standard economic concerns, it also includes a provision for advancing public interests and development concerns. Initial results point to differing behaviour over the time period, which suggests that the Commission is inconsistent; however, those inconsistencies are removed, once additional measures of market contestibility are included in the analysis. The final results suggest that the Commission is less likely to approve mergers that they link to markets that are less contestable. In addition to protecting competition, the Commission is simultaneously protecting other public interests. Therefore, our research supports the hypothesis that the Commission consistently applies its legislative remit. |
| Keywords: | South African Competition Commission, Merger Decisions |
| JEL: | K21 L40 D78 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:286&r=afr |
| By: | Papaioannou, Jason; van Zanden, Jan Luiten |
| Abstract: | This paper contributes to the growing literature on the links between political regimes and economic development by studying the effects of years in office on economic development. The hypothesis is that dictators who stay in office for a long time period will become increasingly corrupt, and that their poor governance will impact on economic growth (which is reduced), inflation (which increases) and the quality of institutions (which deteriorates). This may be related to the fact that their time horizon is shrinking: they develop (in the terminology developed by Olson) from ‘stationary bandits’ into ‘roving bandits’. Or they may get caught into a ‘disinformation trap’, caused by the ‘dictator dilemma’. We test these hypotheses and indeed find strong evidence for the existence of a dictator effect: the length of the rule is negatively related to economic growth and the quality of democratic institutions, and positively related to inflation. This effect is particularly strong in young states and in ‘single-party’ regimes. The negative effect of years in office was almost constant in time and did not disappear after about 1992. |
| Keywords: | Africa; dictatorships; economic growth; political institutions |
| JEL: | H7 O2 O55 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8962&r=afr |
| By: | Isabelle Chort (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | This paper investigates the importance and role of migration networks in Senegal using a new nationally representative survey conducted in 2006-2007. Using a sample of 1707 Senegalese households I explore potentially differential effects of networks on international migration depending on their characteristics in terms of composition and destination. Results from logit and multinomial logit regressions show that household networks seem to be destination-specific and have a greater positive influence on migration than community networks. Networks also seem to have heterogeneous effects on migration depending on gender, household wealth or size which is consistent with previous findings in the literatureand backs up a networks effects story. |
| Keywords: | Migration ; Migrant Networks ; Senegal |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00689460&r=afr |
| By: | Edwards, Lawrence; Lawrence, Robert Z. |
| Abstract: | Lesotho and other least developed African countries responded impressively to the preferences they were granted under the African Growth and Opportunities Act with a rapid increase in their clothing exports to the US. But this performance has not been accompanied by some of the more dynamic growth benefits that might have been hoped for. In this study we develop the theory and present empirical evidence to demonstrate that these outcomes are the predictable consequences of the manner in which the specific preferences might be expected to work. The MFA (Multi-fiber Arrangement) quotas on US imports of textiles created a favorable environment for low value-added, fabric-intensive clothing production in countries with unused quotas by inducing constrained countries to move into higher quality products. By allowing the least developed African countries to use third country fabrics in their clothing exports to the US, AGOA provided additional implicit effective subsidies to clothing that were multiples of the US tariffs on clothing imports. Taken together, these policies help account for the program’s success and demonstrate the importance of other rules of origin in preventing poor countries from taking advantage of other preference programs. But the disappointments can also be attributed to the preferences because they discouraged additional value-addition in assembly and stimulated the use of expensive fabrics that were unlikely to be produced locally. When the MFA was removed, constrained countries such as China moved strongly into precisely the markets in which AGOA countries had specialized. Although AGOA helped the least developed countries withstand this shock, they were nonetheless adversely affected. Preference erosion due to MFN reductions in US clothing tariffs could similarly have particularly severe adverse effects on these countries. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:hksfac:4669675&r=afr |
| By: | Simplice A, Asongu |
| Abstract: | Purpose: We make available new critical macroeconomic financial indicators to the research community. Nothing is more powerful than a phenomenon whose time has come. What is the macroeconomic empirical context of growing mobile banking? Perhaps one of the deepest empirical hollows in the financial development literature has been the equation of financial depth in the perspective of money supply to liquid liabilities. This equation has put on the margin, a burgeoning phenomenon whose time has come: mobile banking. Design/Methodology: We decompose financial depth into formal, semi-formal and informal sectors and then assess the incidence of mobile banking on each constituent. Thus the IFS (2008) definition of the financial system is extended to incorporate an informal financial sector in line with Asongu(2011). Three hypotheses based on eight propositions are tested using a plethora of endogeneity-robust and HAC standard errors estimation techniques. Findings: The informal financial sector (a previously missing component in the definition of money supply: M2) is positively affected by mobile banking, while the incidence of mobile banking is negative on formal and semi-formal financial intermediary development. The paper contributes at the same time to the macroeconomic literature on measuring financial development and responds to the growing field of economic development by means of informal financial sector promotion, microfinance and mobile banking. It suggests a practicable way to disentangle the effects of mobile banking on various financial sectors. Research implications: Since empirical research on the phenomenon has been hampered by lack of data, we make available macroeconomic financial indicators to the research community. The present paper is also in response to the numerous calls on the research gap in the literature that emphasize the need for research on mobile banking. The mobile-finance nexus is gaining momentum, yet relatively little scholarly research explores the incidence of these m-banking/m-payment (systems) on financial development. Practical implications: (1) There is a burgeoning role of informal finance in developing countries. (2) The incidence of the growing phenomenon of mobile banking cannot be effectively assessed at a macroeconomic level by traditional financial development indicators. (3) It is a wake-up call for scholarly research on informal financial intermediary development indicators which will guide monetary policy; since a great chunk of the monetary base (M0) in less developed countries is now captured by mobile banking. Originality/value: New financial indicators for mobile banking assessment based on insufficiencies in the financial development literature: liquid liabilities as applied to developing countries is misleading because a great chunk of the monetary base does not transit through the banking system but via informal networks like the growing phenomenon of mobile banking. |
| Keywords: | Banking; Mobile Phones; Shadow Economy; Financial Development; Africa |
| JEL: | O17 O33 E00 D60 G20 |
| Date: | 2012–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38575&r=afr |
| By: | Edward Kutsoati; Randall Morck |
| Abstract: | Ghanaian custom views children as members of either their mother’s or father’s lineage (extended family), but not both. Patrilineal custom charges a man’s lineage with caring for his widow and children, while matrilineal custom places this burden on the widows’ lineage – her father, brothers, and uncles. Deeming custom inadequate, and to promote the nuclear family, Ghana enacted the Intestate Succession (PNDC) Law 111, 1985 and 1998 Children’s Act 560 to force men to provide for their widows and children, as in Western cultures. Our survey shows that, although most people die intestate and many profess to know Law 111, it is rarely implemented. Knowledge of the law correlates with couples accumulating assets jointly and with inter-vivos husband to wife transfers, controlling for education. These effects are least evident for widows of matrilineal lineage men, suggesting a persistence of traditional norms. Widows with closer ties with their own or their spouse’s lineage report greater financial support, as do those very few who benefit from legal wills or access Law 111 and, importantly, widows of matrilineal lineage. Some evidence also supports Act 560 benefiting nuclear families, especially if the decedent’s lineage is matrilineal. Overall, our study confirms African traditional institutions’ persistent importance, and the limited effects of formal law. |
| JEL: | G18 G23 H55 K36 O17 O55 Z1 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18080&r=afr |