nep-afr New Economics Papers
on Africa
Issue of 2005‒03‒13
nine papers chosen by
Suzanne McCoskey
US Naval Academy

  1. Regionalism in West Africa: Do Polar Countries Reap the Benefits? A Role for Migration By Konseiga, Adama
  2. Peer Effects and Textbooks in Primary Education: Evidence from Francophone Sub-Saharan Africa By Frölich, Markus; Michaelowa, Katharina
  3. Why Are Ethnically Divided Countries Poor? By Benjamin Bridgman
  4. Forms of Democracy, Policy and Economic Development By Torsten Persson
  5. Financial Crises, 1880-1913: The Role of Foreign Currency Debt By Michael Bordo; Christopher Meissner
  6. The Barrier Model of Productivity Growth: South Africa By Torfinn Harding; Jørn Rattsø
  7. Reform, FDI and Economic Growth: Tale of the Tortoise and the Hare By Bruno Merlevede; Koen Schoors
  8. Not Separate, Not Equal: Poverty and Inequality in Post-Apartheid South Africa By Johannes G. Hoogeveen; Berk Özler
  9. Funeral Costs, Saving Behaviour and HIV/AIDS By Sandra Freire

  1. By: Konseiga, Adama (Center for Development Research (ZEF) and IZA Bonn)
    Abstract: In the present globalization era an increasing attention is paid to the ambiguous relationship between international migration, brain drain, and economic growth, but few papers analyzed the growth impact of skilled migration. The paper filled the research gap by building the first dataset on brain drain from seven countries of the western African Union (WAEMU) and highlighted the size of the brain loss toward Côte d’Ivoire and France. Burkina Faso shows a more severe brain drain to Cote d’Ivoire compare to other similar sahelian countries whereas the reverse holds when considering the destination France. The subsequent empirical strategy consists in comparing the growth performance of an economy without migration to the counterpart economy. The regional growth convergence analysis shows higher convergence rate once the brain circulation is accounted for. However, the effect of brain gain holds only for countries with migration outside WAEMU toward an industrialized country (France) and failed when migration, as is the case for Burkina Faso, flows into Cote d’Ivoire the polar economy of the Union. Therefore, migration can be used as a powerful force working toward income convergence between capital-rich and capital-poor countries.
    Keywords: economic growth, brain drain, human capital formation, measurement error, panel estimation
    JEL: E13 F22 J24 C23 O15 C82
    Date: 2005–03
  2. By: Frölich, Markus (University College London, IFAU Uppsala and IZA Bonn); Michaelowa, Katharina (HWWA)
    Abstract: As opposed to many other school inputs, textbooks have frequently been demonstrated to significantly foster student achievement. Using the rich data set provided by the 'Program on the Analysis of Education Systems' (PASEC) for five francophone, sub-Saharan African countries, this paper goes beyond the estimation of direct effects of textbooks on students' learning and focuses on peer effects resulting from textbooks owned by students' classmates. Applying and extending nonparametric estimation methods from the treatment evaluation literature we separate the direct effect of textbooks from their peer effect. The latter clearly dominates but depends upon the initial level of textbook availability.
    Keywords: primary education, student achievement, evaluation, nonparametric estimation
    JEL: C14 C21 O15
    Date: 2005–03
  3. By: Benjamin Bridgman
  4. By: Torsten Persson
    Abstract: The paper combines insights from the recent research programs on constitutions and economic policy, and on history, institutions and growth. Drawing on cross-sectional as well as panel data, it presents new empirical results showing that the form of democracy (rather than democracy vs. non-democracy) has important consequences for the adoption of structural polices that promote long-run economic performance. Reforms into parliamentary (as opposed to presidential), proportional (as opposed to majoritarian) and permanent (as opposed to temporary) democracy appear to produce the most growth-promoting policies.
    JEL: F43 H11 O57
    Date: 2005–03
  5. By: Michael Bordo; Christopher Meissner
    Abstract: What is the role of foreign currency debt in precipitating financial crises? In this paper we assemble data for nearly 30 countries between 1880 and 1913 and examine debt crises, currency crises, banking crises and twin crises. We pay special attention to the role of foreign currency and gold clause debt, currency mismatches and debt intolerance. We find fairly robust evidence that more foreign currency debt leads to a higher chance of having a debt crisis or a banking crisis. However, a key finding is that countries with noticeably different backgrounds, and strong institutions such as Australia, Canada, New Zealand, Norway, and the US deftly managed their exposure to hard currency debt, generally avoided having too many crises and never had severe financial meltdowns. Moreover, a strong reserve position matched up to hard currency liabilities seems to be correlated with a lower likelihood of a debt crisis, currency crisis or a banking crisis. This strengthens the evidence for the hypothesis that foreign currency debt is dangerous when mis-managed. We also see that countries with previous default histories seem prone to debt crises even at seemingly low debt to revenue ratios. Finally we discuss the robustness of these results to local idiosyncrasies and the implications from this representative historical sample.
    JEL: F33 F34 N20
    Date: 2005–03
  6. By: Torfinn Harding (Statistics Norway and Department of Economics, Norwegian University of Science and Technology); Jørn Rattsø (Department of Economics, Norwegian University of Science and Technology)
    Abstract: The barrier model of productivity growth suggests that individual country productivity is related to the world technology frontier disturbed by national barriers. We offer a country study of the barrier model exploiting the dramatic changes in the linkages to the world economy in South Africa. The productivity growth in the manufacturing sector panel for 1970-2003 covers a period of political and economic turbulence and international sanctions. The econometric analysis uses tariffs as measure of barrier and fixed effects estimation to concentrate inference to time series properties. The model shows how productivity growth can be understood as a combination of world frontier growth and the tariff barrier to international spillovers. The estimates establish a long run relationship where domestic productivity follows the world frontier and with change of the barrier affecting transitional growth.
    Keywords: Barriers to growth; technology spillover; South Africa; total factor productivity; econometric analysis.
    JEL: F13 F43 O11 O33 O55
    Date: 2005–02–16
  7. By: Bruno Merlevede; Koen Schoors
    Abstract: Our main interest is the impact of the choice of the speed of economic reform on economic growth. We estimate a system of 3 equations where economic growth, economic reform and FDI are jointly determined. We find that new reforms affect economic growth negatively but attract FDI, whereas the level of past reform leads to higher growth. This means that the immediate adjustment cost of new reforms is counterbalanced by an immediate increase in FDI inflows and higher growth in the future through a higher level of past reform. Reform reversals contribute to lower growth. We use the model to simulate the impact of big bang reform and gradualist reform on economic growth. This is only meaningful in the presence of reform reversals, which requires aggregate uncertainty about the appropriate reform path. Using the coefficients from the empirical model we find that even relatively small ex ante reversal probabilities suffice to tilt the balance in favour of gradualism. This could be reinforced by the shortsightedness of policymakers, but may be moderated by voter myopia.
    Keywords: policy reform, gradualism, big bang, FDI, economic growth
    JEL: O57 P21 P26 P27
    Date: 2004–11–01
  8. By: Johannes G. Hoogeveen; Berk Özler
    Abstract: As South Africa conducts a review of the first ten years of its new democracy, the question remains as to whether the economic inequalities of the apartheid era are beginning to fade. Using new, comparable consumption aggregates for 1995 and 2000, this paper finds that real per capita household expenditures declined for those at the bottom end of the expenditure distribution during this period of low GDP growth. As a result, poverty, especially extreme poverty, increased. Inequality also increased, mainly due to a jump in inequality among the African population. Even among subgroups of the population that experienced healthy consumption growth, such as the Coloureds, the rate of poverty reduction was low because the distributional shifts were not pro-poor.
    Keywords: Poverty, Inequality, South Africa
    JEL: D63 I32
    Date: 2005–01–01
  9. By: Sandra Freire (TEAM)
    Abstract: The purpose of the paper is to highlight that funeral costs matter in households' decisions. In particular they do matter in the understanding of the impact of HIV/AIDS on households' wealth in developing countries. Nevertheless the magnitude of the implications on households through the channel of funerals depends deeply on funeral social norms and on individual characteristics. Four funeral motives household models are drawn in order to understand the complex relationship between households' wellbeing, funreals and HIV/AIDS. They differ in the existence of funeral social norms and in two specific funeral motives, joy of proper funeral or altruistic funeral motive. A preliminary analysis of the Centre for Health Systems Research & Development survey on socioeconomic impact of HIV/AIDS in South Africa illustrates first that funeral costs alter the long term behaviour of households. Then it suggests that HIV/AIDS changes the funeral behaviour in particular by lowering life expectancies. A relative funeral social norm rather than an absolute on influences the magnitude of funeral expenses. Finally, households appear to behave according to the joy of proper funeral motive rather than the altruistic funeral motive.
    Keywords: HIV/AIDS, saving behaviour; household, decision theory; optimal control; funerals
    JEL: D11 D91 I12 J26
    Date: 2004–10

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