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on Africa |
|
Issue of 2007‒05‒04
twelve papers chosen by Suzanne McCoskey Foreign Service Institute, US Department of State |
| By: | Alexander Chudik; Joannes Mongardini |
| Abstract: | This paper presents a methodology to estimate equilibrium real exchange rates (ERER) for Sub-Saharan African (SSA) countries using both single-country and panel estimation techniques. The limited data set hinders single-country estimation for most countries in the sample, but panel estimates are statistically and economically significant, and generally robust to different estimation techniques. The results replicate well the historical experience for a number of countries in the sample. Panel techniques can also be used to derive out of sample estimates for countries with a more limited data set. |
| Keywords: | Equilibrium exchange rates , Africa , panel estimations , |
| Date: | 2007–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/90&r=afr |
| By: | Clara Delavallade (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]) |
| Abstract: | This paper empirically analyzes the main microeconomic determinants of different forms of corruption supply. Our study is based on a new database of near 600 Algerian, Moroccan and Tunisian firms. We show that the undeclared part of firms' sales is a major factor of their involvement in administrative corruption. The latter increases with the part of the firm's informal activity as far as it is inferior to 55% of total sales, before slightly decreasing. State capture is rather strengthened by a failing enforcement of property and contract rights. Moreover, both forms of corruption help to compensate a loss of competitiveness, which contradicts previous results on this issue. Finally, we draw a comparison of the factors of corruption in North Africa, Uganda and transition countries and derive policy recommendations. |
| Keywords: | Supply of corruption, administrative corruption, state capture, informal activity, competitiveness, North Africa. |
| Date: | 2007–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00143412_v1&r=afr |
| By: | Jean-Jacques Hallaert |
| Abstract: | Madagascar plans to start phasing out its customs tariffs on imports from the Southern African Development Community in 2007. This paper uses a CGE model to evaluate the impact of the SADC FTA on Madagascar economy. The results suggest that the SADC FTA would only have a limited impact on Madagascar's real GDP because the liberalization affects only a small share of its total imports. However, Madagascar's trade and production pattern would change and benefit the textile and clothing sector. Removing rigidities in the labor and capital market would increase the gains but they would remain limited. Gains from the SADC FTA become substantial only when the regional liberalization is accompanied by a multilateral liberalization. |
| Keywords: | Trade Policy , CGE , Regional integration , SADC , Madagascar , International trade agreements , Madagascar , Trade policy , Southern African Development Community , Africa , Trade liberalization , Economic models , |
| Date: | 2007–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/66&r=afr |
| By: | Persson, Maria (Department of Economics, Lund University) |
| Abstract: | The aim of the paper is to assess the potential benefits from trade facilitation in terms of increased trade flows both on average and specifically for the six regional groupings of ACP countries negotiating Economic Partnership Agreements (EPAs) with the EU. We use data from the World Bank’s Doing Business Database on the time required to export or import as indicators of cross-border transaction costs. A gravity model on two-way bilateral trade between 22 EU countries and 106 developing countries is estimated using a sample selection approach. We find that time delays both on the part of the exporter and the importer on average significantly decrease trade flows. We also find that this relationship is not linear: an extra day of waiting has smaller marginal effects if the time requirements are already high. On average, lowering border delays in the exporting country with one day from the sample mean would yield an export increasing effect of about 1 percent, while the same reduction in the importing country would give an import increase of about 0.5 percent. More specifically, we also find that countries negotiating in the EPA groups for SADC, West Africa, Eastern and Southern Africa (ESA), and the Caribbean have negative and significant effects from export transaction costs, as do EU and non-ACP developing countries. The effects for the SADC, West Africa and ESA groups are the largest. Countries in the Pacific, SADC, West Africa and the EU have significantly negative effects from import transaction costs, with the effects being largest for the two former groups. The results are generally robust to a number of alternative estimation methods such as Poisson estimation, IV estimation and the sample selection approach suggested by Helpman, Melitz and Rubinstein (2007). |
| Keywords: | Trade Facilitation; EU; ACP; Economic Partnership Agreements; Gravity Model; Sample Selection |
| JEL: | C21 F15 O24 |
| Date: | 2007–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2007_008&r=afr |
| By: | Dorothée Boccanfuso (GREDI, Faculte d'administration, Université de Sherbrooke); Antonio Estache (World Bank and, the European Centre for Advanced Research in Economics and Statistics at the Free University of Brussels); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke) |
| Abstract: | This paper uses a computable general equilibrium (CGE) microsimulation model to explore the distributional and poverty-related effects of price reform in the electricity sector of Mali, a poor country in West Africa. In the first part of the paper we analyze the distribution of electricity in Mali by income deciles, showing that few poor households are connected to the electricity grid. We then apply a sequential CGE microsimulation model to track the transmission mechanisms between increases in electricity prices and changes in poverty and inequality among different household groups. Our results show that direct price increases have a minimal effect on poverty and inequality, whereas the general equilibrium effects of such increases are quite strong and negative. The compensating policies we tested do not help those who lose from the pricing reform. In fact they amplify the negative effects |
| Keywords: | computable general equilibrium model, micro-simulation, poverty analysis, income distribution, privatization, water utilities |
| JEL: | D58 D31 I32 L33 L93 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:07-10&r=afr |
| By: | Samer Y. Saab; Jerome Vacher |
| Abstract: | This paper considers the extent of retail banking integration in the Communauté Economique et Monétaire d'Afrique Centrale (CEMAC) and the level of bank competition at the regional level. Using a mix of quantitative and qualitative indicators, the paper finds some evidence of price convergence in average interest rate spreads. However, this observed fact is not supported by an increase in cross-border flows in retail loans and deposits, and price convergence may merely reflect excess liquidity in the region. Other data also indicate that bank competition within the CEMAC as a region is limited, complementing the findings on integration. Addressing shortfalls in legal and regulatory frameworks, infrastructure, and markets would facilitate integration. |
| Keywords: | CEMAC , monetary union , banking sector integration , bank ccompetition , |
| Date: | 2007–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/3&r=afr |
| By: | Coulibaly, Souleymane |
| Abstract: | Many recent papers have pointed to ambiguous trade effects of developing regional trade agreements (RTAs), calling for a reassessment of their economic merits. The author focuses on seven such agreements currently in force in Sub-Saharan Africa (ECOWAS and SADC), Asia (AFTA and SAPTA) and Latin America (CACM, CAN, and MERCOSUR), estimating their impacts on their members ' trade flows. Instead of the usual dummy variables for RTAs, he proposes a variable taking into account the number of years of membership. He then combines a gravity model with kernel estimation techniques to capture the non-monotonic trade effects while imposing minimal structure on the model. The results indicate that except for SAPTA, these RTAs have had a positive impact on their members ' intra-trade over the estimation period (1960-99). AFTA seems to be the most successful among them, with an estimated positive impact on its members ' imports from the rest of the world (hence no trade diversion), but its impact on their exports to the rest of the world is rather limited. During its first 10 years of existence, ECOWAS appears to have had a positive impact on its members ' imports from the rest of the world (hence no trade diversion), but this positive impact vanished over time. SAPTA ' s negative impact on its members ' intra-trade is probably an implicit effect of the India-Pakistan tensions over the estimation period. |
| Keywords: | Free Trade,Trade Law,Trade Policy,Economic Theory & Research,Trade and Regional Integration |
| Date: | 2007–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4220&r=afr |
| By: | Hunt, Jennifer |
| Abstract: | In this paper, I examine the role of household income in determining who bribes and how much they bribe in health care in Peru and Uganda. I find that rich patients are more likely than other patients to bribe in public health care: doubling household consumption increases the bribery probability by 0.2-0.4 percentage points in Peru, compared to a bribery rate of 0.8%; doubling household expenditure in Uganda increases the bribery probability by 1.2 percentage points compared to a bribery rate of 17%. The income elasticity of the bribe amount cannot be precisely estimated in Peru, but is about 0.37 in Uganda. Bribes in the Ugandan public sector appear to be fees-for-service extorted from the richer patients amongst those exempted by government policy from paying the official fees. Bribes in the private sector appear to be flat-rate fees paid by patients who do not pay official fees. I do not find evidence that the public health care sector in either Peru or Uganda is able to price-discriminate less effectively than public institutions with less competition from the private sector. |
| Keywords: | bribery; corruption; governance; health care |
| JEL: | H4 K4 O1 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6274&r=afr |
| By: | Katleen Van den Broeck (Department of Economics, University of Copenhagen); Stefan Dercon (University of Oxford) |
| Abstract: | This paper analyses whether agricultural information flows give rise to social learning effects in banana cultivation in Nyakatoke, a small Tanzanian village. Based on a village census, full information is available on socio-economic characteristics and banana production of farmer kinship members, neighbours and informal insurance group members. This allows a test for social learning within these groups and the identification of different types of social effects. Controlling for exogenous group characteristics, the effect of group behaviour on individual farmer output is studied. The results show that social effects are strongly dependent on the definition of the reference group. It emerges that no social effects are found in distance based groups, exogenous social effects linked to group education exist in informal insurance groups, and only kinship related groups generate the endogenous social effects that produce positive externalities in banana output. |
| Keywords: | social interactions; social learning; agricultural information networks |
| JEL: | O12 O13 O55 Q12 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:0708&r=afr |
| By: | Giorgio Brosio; Maria Gonzalez; Ehtisham Ahmad |
| Abstract: | This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. A politically driven and ambitious decentralization program implemented by the authorities since the late 1990s has had mixed results in terms of enhancing service delivery. Paradoxically, concerns with the results of service delivery, partially driven by donors' requirements, have resulted in a deconcentrated system relying on conditional grants and unfunded mandates. This has reduced the incentives, responsibility, and ownership for local authorities to improve service delivery. Crucially, for functions where the local authorities have had full responsibility, better service quality has resulted than in those areas in which there are overlapping responsibilities between the center and the local authorities. |
| Keywords: | Fiscal policy , intergovernmental fiscal relations , |
| Date: | 2006–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/279&r=afr |
| By: | Ian Lienert |
| Abstract: | Several features of Tanzania's budget system find their roots in the arrangements inherited from the United Kingdom. These include a legal framework that emphasizes accountability; a cabinet of ministers with strong budget decision-making powers; a parliament with very limited budget powers; and a similar external audit organization. In both countries, budget execution is decentralized to individual ministries, with accounting officers responsible to a parliamentary accounts committee. These similarities are blended with contrasts, including in Tanzania: a presidential system of government, one dominant political party, a written constitution, and some fragmentation in central budget decision-making within the executive. |
| Keywords: | Budget , legislature , executive , constitution , law , Minister of Finance , Chancellor , Exchequer , Permanent Secretary , Accounting Officer , |
| Date: | 2007–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/78&r=afr |
| By: | Daniel Leigh; Stéphane Carcillo; Mauricio Villafuerte |
| Abstract: | In a number of oil producing countries, oil revenue accounts for the majority of government revenue, but is expected to be depleted in a relatively short time frame. Ensuring that fiscal policy is on a sustainable path is thus a high priority, but political and social adjustment costs create incentives to delay fiscal consolidation. This paper estimates how the permanently sustainable non-oil primary deficit (PSNOPD) depends on the speed of consolidation, using an optimization model with habit formation. Realism is added by allowing for negative growth-adjusted interest rates during a temporary period of catch-up growth. Applied to the Republic of Congo, this approach leads to the following conclusions: (i) the current fiscalpolicy stance is unsustainable; (ii) social adjustment costs justify spreading the bulk of the adjustment over five years; and (iii) the slower the adjustment, the lower the PSNOPD level. |
| Keywords: | Sustainable fiscal policy , habit formation , permanent-income hypothesis , catch-up growth , oil , Republic of Congo , |
| Date: | 2007–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/80&r=afr |