|
on Africa |
| By: | Stephen Kingah |
| Abstract: | The year 2014 is a milestone for South Africa. It marks twenty years of the end of apartheid. The moment is right to reflect on how far the country has come. This article focuses on South Africa’s external influence in Africa. Based on the variables of compellence, assurance, prevention and protection, it is argued that the country has been punching well below its weight. Examples are drawn from its actions in the Central African Republic, Côte d’Ivoire, Libya and even Zimbabwe to show that the country is underperforming in the realm of ensuring African security governance. To meet the expectations ascribed to it as an anchor state in Africa the country’s leaders will first need to confront the mammoth domestic problems bedevilling South Africa. |
| Keywords: | governance; leadership |
| Date: | 2014–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0382&r=afr |
| By: | Phiri, Andrew; Nyoni, Botha |
| Abstract: | This study undertakes an examination of asymmetric adjustment effects between electricity consumption and economic growth in South Africa using quarterly data collected from 1983Q1 to 2013:Q4. In our study, we employ a momentum-threshold co-integration method to examine the long-run equilibrium relationship between electricity consumption and economic growth. Our empirical results reveal significant nonlinear co-integration behavior between the time series variables with uni-directional causality running from electricity consumption to economic growth and no causal effects in the short-run. This implies that energy authorities in South Africa should avoid implementing conservative electricity policies as this may hamper long-run economic growth. We further extend our empirical analysis by decomposing the time series into their trend and cyclical components and our estimations also depict stronger nonlinear behavior among the de-trended components with bi-directional causality existing between the variables in both the short and long-run. Generally, our study highlights that co-integration and causal effects between electricity usage and output growth is related with the business cycle. Therefore, ignoring the cyclical components of the variables could prove to be quite costly for South African policymakers. |
| Keywords: | Electricity consumption; Economic growth; Threshold co-integration; Nonlinear granger causality; South Africa |
| JEL: | C32 C51 Q43 |
| Date: | 2014–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:56145&r=afr |
| By: | Teka, Henok Gebremedhin |
| Abstract: | From a neo liberalist’s perspective FDI triggers technology spillovers, assists human capital formation, contributes to international trade integration, helps to create a more competitive business environment and enhances enterprise development. This will contribute to higher economic growth, which is the most potent tool for poverty alleviation. To realize these benefits, many African countries including Ethiopia, have liberalized their trade regime and attempted to create an investment friendly climate through improving their infrastructures and adjusting microeconomic instabilities. Ethiopia has shown significant increase in FDI inflows, though it accounts among the least share (as a percentage of GDP) in sub-Saharan Africa, after the adoption of liberalization measures with the fall of Derg regime in 1990’s. Therefore, this paper seeks to examine the determining factors of FDI inflow and potential factors that hinder it. Accordingly, sample of foreign firms based in the capital Addis Ababa and the nearby cities, and public servants of EIA were taken to collect information. The empirical results derived from the study shows that domestic and regional market seeking, political and social stability and investment incentives were found as the main determinants of FDI. Whereas, exchange rate volatility, corruption, and lack of clear policies and regulatory impediments were identified as the three main factors that have the potential to deter foreign investment in Ethiopia. |
| Keywords: | FDI, Ethiopia, Determinants, Impediments |
| JEL: | E6 E60 F41 |
| Date: | 2014–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55955&r=afr |
| By: | Augustin Kwasi Fosu |
| Abstract: | The present study employs recent World Bank data to shed light, in a global context, on the transformation of income and inequality changes to poverty reduction for a large number of countries in sub-Saharan Africa (SSA). The study begins by shedding light on SSA’s progress on poverty. Next, it presents data on how various African countries have fared on poverty incidence relative to other countries, with special emphasis on the more recent period since the mid-1990s when SSA has generally experienced growth resurgence. The paper, then, decomposes performance on poverty in to income and inequality changes for a sample of SSA countries with the requisite data. The findings are that the recent progress on poverty has been considerable, in contrast to the earlier period. Compared with the progress in a global sample of countries, however, progress has been mixed; although African countries lag behind the BRIC group of countries generally, many of them have actually outperformed India. While income growth is, furthermore, found to be the main engine for poverty reduction in SSA generally, the role of inequality is crucial in certain countries. Moreover, viewed in a global context, the low levels of in come have retarded the effectiveness of income and inequality improvements in reducing poverty in many African countries. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2014-17&r=afr |
| By: | Isaacs, Gilad |
| Abstract: | This paper offers a comprehensive review of macroeconomic policy in democratic South Africa. It does so with two distinctive features. First, macroeconomic policy is analysed on four interlocking, and sometimes conflicting, levels: [1] policy as provided “on paper” in government plans and programmes; [2] the scholarship upon which policy is (purportedly) premised; [3] the rhetoric/ideology that surrounds policy and sometimes obscures its true nature and even intentions; and [4] policy as actually implemented in practice. Second, the manner in which macroeconomic policy has facilitated the restructuring of the South African economy is carefully examined. This runs contrary to the orthodox assertion that macroeconomic policy only plays a “neutral” and/or “stabilising” role. It is shown that the restructuring that has occurred has not reoriented the economy away from its traditional reliance on minerals and energy, mineral-related sectors and finance; rather it has consolidated this structure and corresponding dynamics, albeit with novel features. Macroeconomic policy has, thus, played a leading role in facilitating particular forms of restructuring that, rather than reorienting the economy towards the needs of the impoverished majority, have reinforced the pre-existing dominant sections of capital while incorporating a newly emerging black bourgeoisie. |
| Keywords: | South Africa; Macroeconomic Policy; MEC; Financialization; Neoliberalism |
| JEL: | E6 E60 E61 E62 E63 E65 E66 G0 N1 |
| Date: | 2014–03–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54426&r=afr |
| By: | Ogundipe, Adeyemi; Akinyemi, Opeyemi; Ogundipe, Oluwatomisin |
| Abstract: | This study investigates the implications of foreign land deals in Africa especially with regard to agricultural trade. It is motivated essentially by large scale foreign deals of land in Africa, Latin America, Central Asia and Southeast Asia that have been reported in recent years. One of the driving forces has been attributed to the presumed availability of land in these regions. This study employs data sourced from World Development Indicators and World Governance Indicators on key variables such as arable land per person, agricultural land as percentage of land area, net food import, regulatory quality, among others (1995-2010) on selected African countries where instances of foreign land deals have been reported. The study formulates empirical models that draw from institutional development theory, which is estimated using the Generalized Method of Moments (GMM). The study found LSFLDs to impact negatively on agricultural export in selected countries, the indexes of institutional framework used were found to be significant; likewise, agricultural land becomes highly significant with relative larger magnitude when interacted with institutional indexes. This therefore implies that as more agricultural land is acquired, agricultural export tends to dwindle and incidences of food insecurity are heightened. The preliminary investigation suggests the need for controlling the issue of massive foreign land deals through viable institutional framework, which can be engendered by building sound legal and procedural measures that will protect local rights and take into account the aspirations of local farmers and the welfare of citizenry. |
| Keywords: | Agricultural exports, Food security; Institutional quality; Land deals |
| JEL: | F21 Q15 Q18 R52 |
| Date: | 2013–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:56075&r=afr |
| By: | KUEPIE Mathias; TENIKUE Michel; WALTHER Olivier |
| Abstract: | This paper studies the link between economic performance and social networks in West Africa. Using first-hand data collected on 358 small-scale traders in five border markets between Niger, Nigeria and Benin, we are particularly interested in testing whether the most well-connected actors of trade networks are also the most successful in terms of monthly sales and profit. The paper shows that the overall economic performance of traders is affected by the socio-professional position of the actors with whom they are connected. While social ties with local religious leaders have no effect on their business, support received from civil servants, politicians, and security authorities translates into economic performance. The paper also shows significant differences between countries, regions and marketplaces. Social connections developed with state representatives have a much greater effect on economic performances in Niger and Benin than in Nigeria, where average profit is much higher. Experience is more closely correlated with profit in the region where traders have developed re-export trade activities than where petty trade is the dominant form of business. |
| Keywords: | Social networks; border markets; economic performance; Benin; Niger; Nigeria |
| JEL: | D85 F14 L14 R11 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2014-06&r=afr |
| By: | Ludwig, Markus |
| Abstract: | I argue that large youth cohorts consisting of males aged 15--19 increase the risk of civil conflict, by boosting the pool of potential recruits (PR) along the extensive (cohort size) and intensive (marginalization) margin. As these large cohorts transit out of the pool of PR in their mid-40s, the risk of civil conflict declines again. My estimates show that the size of male cohorts aged 15--19 is strongly positively related to the risk of the onset of civil conflict for a sample of African countries from 1960 to 2009. A one-percent increase in this population group increases the likelihood of the onset of civil conflict by 1.4 percentage points. The results further show that better economic perspectives---in particular, high contemporaneous rainfall, higher agricultural output and foreign aid---considerably hamper this effect. Also urbanization mitigates the impact of youth bulges. This suggests that civil conflict is more likely when several adverse factors coincide and that economic conditions affect civil conflicts via a marginalization of youth population. In turn, a one-percent increase in the male population aged 40--44 reduces the risk of conflict by 0.8 percentage points. To avoid endogeneity and omitted variable bias, I use rainfall variation in the birth year of the respective age cohorts as an instrument for the cohort sizes. To support my argument, I then show that rainfall affects the infant mortality rate, and hence birth cohort sizes. Finally, I show that youth bulges also drive low-level social violence in Africa. |
| Keywords: | Civil conflict, Youth bulge, Rainfall shocks, Instrumental variable regression |
| JEL: | D7 J1 Q1 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53088&r=afr |
| By: | de Vries, H.; Klundert, J.J.; Wagelmans, A.P.M. |
| Abstract: | __Abstract__ Providing African truck drivers with adequate access to healthcare is an effective way to reduce the burden and the spread of HIV and other infectious diseases. Therefore, NGO North Star Alliance builds a network of healthcare facilities along major African trucking routes. Choosing the locations of new facilities presents novel and complex optimization problems. This paper considers a general design problem: the Roadside Health Care Facility location Problem (RHFLP). RFHLP entails to select locations for new facilities and to choose for each of these facilities whether or not to add healthcare services for HIV, STIs, Tuberculosis, and/or Malaria to the standard health service package. The objective combines the maximization of the truck driver patient volume at these facilities and the maximization of the extent to which the truck drivers have continuous access to the needed health service packages. We present three measures for continuous access to health services by mobile patients and integrate these measures in a mixed-integer programming formulation for RHFLP. Moreover, we prove the RHFLP to be strongly NP-hard and derive analytical results for the worst-case effects of impreciseness in the input data. We show how large scale real life problem instances can be solved, presenting numerical experiments for the North-South corridor network (Southern and Eastern Africa) and discuss policy implications. |
| Keywords: | roadside healthcare, truck drivers, facility location, continuous access |
| Date: | 2014–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:ems:eureir:51315&r=afr |
| By: | Muhanji, Stella; Ojah, Kalu |
| Abstract: | In the light of the exigency and apparent irrationality of war and, the fact that most Heavily Indebted Poor Countries (HIPCs) in Africa are associated with prolonged conflicts, there is more than a suspicion that military spending contributes to the indebtedness of Africa’s conflict countries. We therefore model this suspected nexus and compute the impulse response functions to the shock in military spending and, particularly determine what precise time around war external debt accumulation is prevalent. We confirm a positive correlation between military spending and external debt for most of the conflict countries, with external debt increasing in response to a shock to military spending for all these countries. Using panel analysis, we find evidence of military expenditure’s upward pressure on external indebtedness during pre-war, war and post-war periods; interestingly, the post-war period registers the fastest rate of external debt accumulation than other relevant periods. Our results suggest that military spending can be an important and nuanced factor in designing external debt management policies for Africa’s conflict countries and their likes. |
| Keywords: | External debt, Military spending, DSGE model, Conflict countries, Relevant war periods |
| JEL: | F34 F41 F52 |
| Date: | 2014–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:56077&r=afr |
| By: | Szent-Iványi, Balázs |
| Abstract: | The paper examines how flows of foreign aid have reacted to events of democratization in developing countries. Using a panel dataset of 136 aid receiving countries between 1980 and 2009, aid allocation regressions reveal that donors in general have tended to react to visible, major democratic transitions by increasing aid to the partner country, but no significant increases can be identified in case of countries introducing smaller democratic reforms. The increases in aid flows are not sustained over time, implying that donors do not provide long term support to nascent democracies. Also, democratizations in Sub-Saharan Africa do not seem to have been rewarded with higher levels of aid. |
| Keywords: | foreign aid, aid allocation, democratization |
| JEL: | F35 F59 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:cvh:coecwp:1569&r=afr |
| By: | Francis Teal |
| Abstract: | Job creation is a central part of the policy of almost all African countries. The problems are particularly acute in Nigeria where over the period of the early 2000s there was a substantial decline in the number of private wage jobs. While policy discussion focuses on the extent of unemployment the unemployment rate, as measured in labour force surveys, is low in Nigeria. This is a common finding across a range of sub-Saharan African countries. To understand the nature of the employment problem it is argued in this paper that jobs need to be linked to the incomes those jobs generate. While wage jobs do, on average, produce more income than those in self-employment a critical issue is the extent of the distribution of incomes within occupational categories and the overlaps across these sectors. It is the very low incomes we observe in Nigeria at the bottom of the distribution, for both wage and the self-employed, that creates high exit rates from the labour market – the jobs simply pay too little. In this paper the evidence is reviewed as to how far the more rapid growth of recent years has translated into poverty reduction and how these poverty measures link to job creation. There is evidence that the headcount measure of poverty has fallen and has been associated with a rapid rise in rural employment over the period from 1999 to 2006. It is this sector which has seen the largest increases in income. This was not due to investment in human capital, the return for which has fallen over the period, but to a general increase in the returns to the labour and land owned by the poor. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2014-18&r=afr |
| By: | Christophe Muller (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)) |
| Abstract: | In this paper, we test and reject the separability of production and consumption decisions of agricultural households in Ethiopia, using data from a rural household survey conducted in 1994 and an estimated labour demand equation. We also elicit socio-demographic and asset variables that are positively linked with agricultural labour demands. These results reflect the limited development of fully organised labour markets in rural Ethiopia. They also imply that purely market-driven agricultural policies, e.g., price subsidies or taxes, may have only limited or perverse impacts, and should be complemented by policies directly affecting household decisions, such as food aid, technology transfer, free supply of fertilizers, etc. |
| Keywords: | agricultural household; separability; Ethiopia |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00993393&r=afr |
| By: | Catia Batista (Nova School of Business and Economics - Universidade Nova de Lisboa); Tara McIndoe- Calder (Central Bank of Ireland); Pedro C. Vicente (Nova School of Business and Economics - Universidade Nova de Lisboa) |
| Abstract: | Does return migration affect entrepreneurship? This question has important implications for the debate on the economic development effects of migration for origin countries. The existing literature has, however, not addressed how the estimation of the impact of return migration on entrepreneurship is affected by double unobservable migrant self-selection, both at the initial outward migration and at the final inward return migration stages. This paper uses a representative household survey conducted in Mozambique in order to address this research question. We exploit variation provided by displacement caused by civil war in Mozambique, as well as social unrest and other shocks in migrant destination countries. The results lend support to negative unobservable self-selection at both and each of the initial and return stages of migration, which results in an under-estimation of the effects of return migration on entrepreneurial outcomes when using a ‘naïve’ estimator not controlling for self-selection. Indeed, ‘naïve’ estimates point to a 13 pp increase in the probability of owning a business when there is a return migrant in the household relative to non-migrants only, whereas excluding the double effect of unobservable self-selection, this effect becomes significantly larger - between 24 pp and 29 pp, depending on the method of estimation and source of variation used. |
| Keywords: | international migration, return migration, entrepreneurship, selfselection, business ownership, migration effects in origin countries, household survey, Mozambique, sub-Saharan Africa. |
| JEL: | F22 L26 O15 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1417&r=afr |
| By: | Jean-Yves DUCLOS (Université Laval); Abdelkrim ARAAR (FERDI); Luca TIBERTI (FERDI) |
| Abstract: | The importance of taking into account multidimensionality in poverty measurement has been recently emphasized. The poverty alleviation literature has not, however, yet addressed the important issue of policy design for efficient multidimensional poverty reduction. From a positive perspective, it is regularly observed that different poverty dimensions are often correlated and mutually reinforced, especially over time. From a normative perspective, it can be argued that, in addition to being concerned with impacts on multiple dimensions of poverty, policy should also consider impacts on their joint distribution. The paper integrates these two perspectives into a consistent policy evaluation framework. Targeting dominance techniques are also proposed to assess the normative robustness of targeting strategies. The analytical results are applied to data from Vietnam and South Africa and illustrate the role of both normative and positive perspectives in designing efficient multidimensional poverty targeting policies. |
| JEL: | D63 H21 I38 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:1589&r=afr |
| By: | Meng, Ting; Florkowski, Wojciech J.; Sarpong, Daniel; Resurreccion, Anna V. A. |
| Keywords: | Agricultural and Food Policy, Health Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aajs14:166089&r=afr |
| By: | Anderson, Kym; Strutt, Anna |
| Abstract: | Rapid growth in Asia’s emerging economies has boosted export earnings of resource-rich economies over the past decade. Will those high growth rates continue, and how will structural changes in Asia alter the relative importance of their imports of primary products? This paper projects production and trade patterns of Africa and Latin America to 2030 under various growth and policy scenarios in Asia, using the GTAP model of the global economy. We compare a projection assuming relatively conservative economic growth in China and India with a projection in which those economies continue to grow rapidly (albeit slower than in the previous decade). We then compare our conservative growth baseline with two alternative scenarios: one assumes Africa and Latin America choose to invest more in public agricultural R&D to take advantage of Asian import growth; the other assumes China and India dampen that growth by restricting their imports of key foodgrains. The final section summarizes the results and draws out policy implications for Latin America and Africa. |
| Keywords: | Global economy-wide model projections, Asian economic growth and structural change, booming sector economics, food security, International Relations/Trade, D58, F13, F15, F17, Q17, |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare14:165805&r=afr |
| By: | Ojeaga, Paul; Odejimi, Deborah |
| Abstract: | The study investigates the role of social-political institutions on gender discrimination and female employment in five selected African countries, Ghana, Cameroon, Botswana, Kenya and Egypt. The methodology used is the quantile regression analysis, which is based on the premise that estimating the conditional sample median will tend to the distributional median allowing us to obtain consistent estimates. Quantile regressions have some obvious advantages over the ordinary least squares estimation technique they include the fact that they are more robust against outliers in the response measurements, it also allows for the measurement of central tendency and statistical dispersion to obtain a comprehensive analysis and finally the recent quantile regression wrapper (qreg) developed by Machando and Silva (2013) allows for obtaining heteroscedastic errors robust estimates. The results of the study show that institutions matter in improving labor market participation rate for men and women in the countries in the sample. The results of the interactive variable also show that institutions actually do not improve the effect of economic policy effectiveness in promoting labor market participation. School enrollment had a higher significant effect on labor market participation rate for women than for men showing that unskilled men are likely to get hired than unskilled women therefore schooling was probably reducing unemployment more among women than in men. |
| Keywords: | Gender discrimination, Institutions, Labor Market Participation, Quantile regression |
| JEL: | J3 J7 |
| Date: | 2013–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55574&r=afr |
| By: | Nmadu, Job N.; Simpa, James O. |
| Keywords: | Crop Production/Industries, Productivity Analysis, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare14:165865&r=afr |
| By: | Nathalie Guilbert (PSL, Université Paris-Dauphine, LEDa, UMR DIAL, IRD); Karine Marazyan (Université Paris 1 - IEDES- IRD UMR 201 Développement et Sociétés) |
| Abstract: | (english) In this paper, we are interested in the effect of birth status, being born out-of-wedlock or in wedlock, on survival chance before two years old of siblings of same gender in Senegal. The analysis is based on nationally representative data, those from the Demographic and health survey, collected in the country in 2010-2011. Data from the youngest cohort of mothers are exploited. On average, no significant effect is found. This masks significant variations between sub-groups of children. However, contrary to initial expectations, children born out-of-wedlock have similar mortality rate than their siblings born in wedlock, at worst. In some case, their mortality rate is lower. This suggests that resource-based mechanisms exist in Senegal that helps mothers, with an out-of-wedlock birth, to compensate and sometime over-compensate for lack of resource or for fragility. These mechanisms seem to vary between areas and ethnic groups depending on the gender of the child born out-ofwedlock. The only group of children with a higher risk of death is the group of girls born out-ofwedlock, whose mother was adolescent when giving birth to them, belonging to the Serere ethnic group. Informal, private compensatory mechanism does not seem to take place in this specific case. _________________________________ (français) Cet article s'intéresse aux conséquences du statut à la naissance, être né dans le cadre d'une union maritale ou non, sur les chances de survie au cours des deux premières années de vie d'enfants de même sexe et issus d'une même fratrie au Sénégal. L'analyse est réalisée à partir des données des enquêtes démographiques et de santé collectées dans le pays en 2010-2011 et représentatives au niveau national. L'échantillon utilisé pour l'analyse est celui des mères appartenant aux plus jeunes cohortes. En moyenne, nous n'observons pas d'impact significatif d'être né hors mariage sur la mortalité des enfants relativement à leurs frères et soeurs de même sexe nés dans le cadre d'un mariage. Cependant, ce résultat masque des différences importantes parmi plusieurs sous-groupes d'enfants. Contrairement aux attentes initiales, les enfants nés hors mariage ont des taux de mortalité similaires à leurs frères et soeurs nés dans le cadre d'un mariage et, dans certains cas, ils présentent même des taux de mortalité plus faibles. Ces résultats suggèrent l'existence de mécanismes de solidarité au Sénégal qui aident les mères ayant eu une naissance hors mariage à compenser et parfois même surcompenser un manque de ressources ou une plus forte vulnérabilité. Ces mécanismes semblent varier par zones géographiques et groupes ethniques en fonction du sexe de l'enfant né hors mariage. Seules les filles nées hors mariage appartenant au groupe ethnique des Sérères et dont la mère était adolescente à la naissance de son premier enfant, présentent un risque de mortalité plus élevé. Des mécanismes compensatoires privés informels ne semblent pas s'établir dans ce cas spécifique. |
| Keywords: | Premarital fecundity, marriage, children’s mortality, Senegal, Fécondité prémaritale, mariage, mortalité infantile, Sénégal. |
| JEL: | I2 J1 O1 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt201307&r=afr |
| By: | Ndiaye, Cheikh Tidiane; Bates, Samuel |
| Abstract: | Using the structural unobserved component (UC) modeling, this study analyzes the Senegalese economic growth path after 5 decades of independence by focusing on the potential output, the GDP cycle and the type of shocks on the GDP. Empirical evidence suggests that an inventory cycle mainly drives the GDP short-term component with a time-varying extent of fluctuations. The main sources of shocks result from external determining factors with an impact on the long run. However, their persistent effects have been mitigated particularly since the devaluation of 1994. International institutions have partially motivated the relative successful GDP growth path of Senegal. Nevertheless, some structural internal improvements are needed to balance the financial and productive flaws in order to consolidate both the "resilience" to shocks and the macroeconomic stabilization. |
| Keywords: | GDP growth; Unobserved component modeling; Economic history of Senegal; |
| JEL: | C1 E3 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/13298&r=afr |
| By: | Mussa, Richard |
| Abstract: | The paper uses data from the Second and the Third Integrated Household Surveys to examine whether the poor pay more for food in Malawi, and the consequences of the poverty penalty on inequality measurement. The results show that regardless of location and year, poor households pay more for food compared to nonpoor households. It is found that measured inequality based on a new consumption aggregate is much higher than official inequality figures. The paper also finds that nominal inequality underestimates "real" inequality, with the underestimation ranging from 3.9% to 7.1% for the Gini coefficient, 8.4% to 16.2% for the Thiel L, and 0.11% to 24.5% for the Thiel T. The paper therefore finds that official inequality figures understate the inequality problem in Malawi. The high inequality levels may partly explain the puzzle of high economic growth which has led to marginal poverty reduction in Malawi as these high levels of inequality could be impeding the poverty reducing effect of economic growth. |
| Keywords: | poverty penalty; inequality; Malawi |
| JEL: | D10 D30 |
| Date: | 2014–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:56080&r=afr |
| By: | Getinet Haile (University of Nottingham, UK); Ilina Srour (Università Cattolica del Sacro Cuore, Milano and Piacenza); Marco Vivarelli (DISCE, Università Cattolica del Sacro Cuore, Milano and Piacenza) |
| Abstract: | There is a dearth of research on the impact of technological change on employment in the context of least developed countries (LDCs) embarking on globalization, which enhances the prospect of direct technological imports or embodied technological transfer. Using a sample of 1,940 enterprises from Ethiopia over the period 1996–2004 and deploying System Generalized Method of Moments (GMM-SYS), this paper attempts to establish the nature of manufacturing employment in Ethiopia and the role played by trade and FDI in determining employment. The empirical results obtained lend support to globalization having a labour–augmenting effect, increasing total manufacturing employment. The two-equation dynamic framework implemented to analyse enterprise-level employment trends by skill level provides some evidence of skill-bias specific to enterprises with higher share of foreign ownership and those that that are located in the vicinity of the capital city. Exporters are not found to benefit from "learning by exporting" |
| Keywords: | Employment, skills, globalization, FDI, trade, technological change, Ethiopia |
| JEL: | O33 F16 L60 O55 C33 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie2:dises1498&r=afr |
| By: | Tanguy Bernard; Stefan Dercon; Kate Orkin; Alemayehu Seyoum Taffesse |
| Abstract: | Poor people often do not make investments, even when returns are high. One possible explanation is that they have low aspirations and form mental models which ignore some options for investment. This paper reports on findings of an innovative experiment to test this in rural Ethiopia. Firstly, individuals were randomly invited to watch documentaries about people from similar communities who had succeeded in agriculture or small business, without help from government or NGOs. A placebo group watched an Ethiopian entertainment programme and a control group were simply surveyed. Secondly, the number of invitees was varied by village to assess the importance of peer effects in the formation of aspirations. Six months after the screening of the documentaries, aspirations had improved among treated individuals but did not change in the placebo or control groups. Effects were larger for those with higher aspirations at baseline. We also find evidence of treatment effects on savings and credit behaviour, children’s school enrolment and investments in children’s schooling, suggesting that changes in aspirations can translate into changes in forward-looking behaviour. There are also positive treatment effects on a set of related measures from psychology and sociology, including a measure of locus of control, which theory predicts should behave in similar ways to aspirations. We also find that peer effects result in further impact on educational spending and induce more work and less leisure. That a one-hour documentary shown six months earlier induces such actual behavioural change offers challenging and promising areas for further research and the design of poverty-related interventions. |
| Keywords: | aspirations, expectations, future-oriented behaviour, media interventions |
| JEL: | D03 I31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2014-16&r=afr |
| By: | Mathilde MAUREL (Centre d'Economie de la Sorbonne CNRS - Université Paris 1); Zaneta KUBIK (FERDI) |
| Abstract: | We analyze whether Tanzanian households engage in internal migration as a response to weather-related shocks. Our findings confirm that climate shocks lead to a higher probability of migration by reducing agricultural yields, which in turn induces households to send their members away in order to spatially diversify their income. This effect is, however, low, since a 1% reduction in agricultural income induced by weather shock increases the probability of migration by 3% for an average household. What is more, such mechanism is valid only for households whose income is highly dependent on agriculture, but is not significant for diversified livelihoods. |
| JEL: | O13 Q54 R23 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:1593&r=afr |
| By: | Alexander Lippert |
| Abstract: | Do local populations benet from resource booms? How strong are market linkages between the mining sector and the regional economy? This paper exploits exogenous variation in mine-level pro duction volumes generated by the recent copper boom in Zambia to shed light on these questions.Using a novel dataset, I nd robust evidence that an increase in local copper production improves living standards in the surroundings of the mines even for households not directly employed in the mining sector: a 10% increase in constituency-level copper output is associated with a 2% increase in real household expenditure; positive eects on housing conditions, consumer durable ownership and child health are of similar magnitude. The positive spill-overs extend to the rural hinterland of mining cities, neighboring constituencies, and constituencies on the copper transportation route. Additionally,I identify boom-induced changes in the demand for services and agricultural products as key channels through which the urban and rural populations benet from the mine expansions. Since the boom failed to generate scal revenues, these eects can be interpreted as the result of the mines' backward linkages. Taken together, these ndings highlight the welfare potential of local procurement policies in resource rich developing countries. |
| Keywords: | Commodity Shocks, Local Development, Mining, Natural Resources |
| JEL: | I31 O12 O13 Q32 Q33 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:131&r=afr |
| By: | Alimi, R. Santos |
| Abstract: | Government size, its roles and the efficiency of the public sector has becomes a more important issue recently especially when the financial crisis has covered severely almost all Economies worldwide. Using time-series techniques, this study empirically tests the validity of existing theory (Barro, 1990; and Armey, 1995) which stipulates there is a nonlinear relationship between government size and economic growth; such that government spending is growth-enhancing at low levels but growth-retarding at high levels, with the optimal size occurring somewhere in between. This study employed three estimation equations. First, for the size of government, two measures are considered as follows: (i) share of total expenditures to gross domestic product, (ii) share of recurrent expenditures to gross domestic product. Second, the study adopted real GDP (without government expenditure component), as a variant measure of economic growth other than the real total GDP, in estimating the optimal level of government expenditure. The study is based on annual Nigeria country-level data for the period 1970 to 2012. Estimation results show that the inverted U-shaped curve exists for the two measures of government size and the estimated optimum shares are 19.81% and 10.98% respectively. Finally, with the adoption of real GDP (without government expenditure component),the optimum government size was found to be 12.58% of GDP. Our analysis shows that the actual share of government spending on average (2000 - 2012) is about 13.4%. This study adds to the literature confirming that the optimal government size exists not only for developed economies, but also for developing economy like Nigeria. Thus a public intervention threshold level that fosters economic growth is a reality; beyond this point economic growth should be left in the hands of the private sector. This finding has a significant implication for the appraisal of government spending and budgetary policy design. |
| Keywords: | Public Expenditure, Economic Growth, Optimum Level, Fully Modified OLS |
| JEL: | C22 E62 H1 H50 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:56073&r=afr |
| By: | Rama Lionel Ngenzebuke; Bram De Rock; Philip Verwimp |
| Abstract: | We investigate and bring to light the role of kinship networks as a determinantof female’s bargaining power through her decision-making authorityin rural Burundi. We distinguish, on one hand, between immediate andextended family and between extended family members living within andoutside the village on the other hand. We bring to the fore a number of keyfindings. First, kinship network characteristics are strong determinants ofwithin household decision-making power. On one hand, female whose nextof kins are at least as rich as her husband’s counterparts enjoy a greater sayover children and asset-related decision-making. On the other hand, femalewith bigger and richer extended family also enjoy a greater say over childrenand asset-related decision-making. Second, the effect of kinship networkcharacteristics depends on the nature of family ties: the effect of thefemale’s immediate family is significantly and consistently greater than theeffect of her extended family. Third, kinship network characteristics matterfor female’s bargaining power even more importantly than individual andhousehold-level characteristics in rural Burundi. Last but not the least, wefind out that male’s education increases female’s say more than wife’s educationitself, particularly over asset-related decision-making. |
| Keywords: | female decision-making; children; assets; kindship; rural Burundi |
| JEL: | D19 D63 J12 J13 J16 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/163247&r=afr |
| By: | Thorsten Beck; Haki Pamuk; Burak R. Uras |
| Abstract: | What is the relationship between entrepreneurial saving practices and reinvestment? We develop a model of entrepreneurial finance and show that entrepreneurial reinvestment decisions depend on the efficiency of saving practices. Utilizing a novel micro & small enterprise survey from Tanzania we test the empirical implications of this theory. We find (1) saving for business purposes and earnings reinvestment are positively related; (2) the practice of saving in a deposit account of a formal financial institution is more likely to facilitate reinvestment compared to the practice of keeping savings within the household. We also show that the negative impact of saving within-the-household on investment is more pronounced for family members with inherently low intra-household bargaining power - such as females and non-head household members. Our work contributes to the recent debate on the implications of saving instruments in developing countries, and suggests informal saving practices as potential barriers to microenterprise performance. |
| Keywords: | Micro- and small enterprises; savings; reinvestment; Tanzania |
| JEL: | D14 G21 O12 O16 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2014-15&r=afr |
| By: | Julian C. Jamison; Dean Karlan; Jonathan Zinman |
| Abstract: | Evidence on the effectiveness of financial education and formal savings account access is lacking, particularly for youth. We randomly assign 250 youth clubs to receive either financial education, access to a cheap group account, or both. The financial education treatments increase financial literacy; the account-only treatment does not. Administrative data shows the education plus account treatment increases bank savings relative to account-only. But survey-measured total savings shows roughly equal increases across all treatment arms. Earned income also increases in all treatment arms. We find little evidence that education and account access are strong complements, and some evidence they are substitutes. |
| JEL: | D12 D91 O12 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20135&r=afr |