nep-afr New Economics Papers
on Africa
Issue of 2005‒04‒16
fifteen papers chosen by
Suzanne McCoskey
US Naval Academy

  1. On the Challenges of Economic Development in Post-Conflict Sudan By Ali Abdel Gadir Ali
  2. Understanding the role of entrepreneurship for economic growth By Martin Carree; Roy Thurik
  3. IMF concern for reputation and conditional lending failure: theory and empirics By Silvia Marchesi; Laura Sabani
  4. Why are some people (and countries) more protectionist than others? By Anna Maria Mayda (Georgetown University) and Dani Rodrik (Harvard University)
  5. Why do parents their children work ? A test of peverty hypothesis in rural areas in Brukina Faso By Dumas Christelle
  6. Children education in Senegal : how does family background influence achievement By Christelle Dumas; Sylvie Lambert
  7. E-Finance Development in Korea By Choong Yong Ahn; Doo Yong Yang
  8. "Governance, African Debt, and Sustainable Development: Policies for Partnership with Africa" By Haider A. Khan
  9. Working-age Adult Mortality and Primary Sschool Attendance in Rural Kenya By Takashi Yamano; Thomas S. Jayne
  10. Institutions and Agricultural Productivity in Sub-Saharan Africa By Lilyan E. Fulginiti; Richard K. Perrin; Bingxin Yu
  11. Investing in Hope: AIDS, Life Expectancy, and Human Capital Accumulation By Rui Huang; Lilyan E. Fulginiti; E. Wesley Peterson
  12. Unequal Exchange: Developing Countries in the International Trade Negotiations By Julio J. Nogues
  13. The Political Economy of Trade Policy: Empirical Approaches By kishore gawande; pravin krishna
  14. Privatization in Sub-Saharan Africa: Some Lessons from Experiences to Date By Thierry Buchs
  15. Using panel unit root tests to evaluate the income convergence hypothesis in middle East and North Africa countries By Imène Guetat; Francisco Serranito

  1. By: Ali Abdel Gadir Ali
  2. By: Martin Carree; Roy Thurik
    Keywords: entrepreneurship, small firms, economic growth, economic development
    JEL: M13 O10
    Date: 2005–02
  3. By: Silvia Marchesi; Laura Sabani
    Abstract: One possible explanation for the unsatisfactory implementation of IMF conditionality has been attributed to the lack of credibility of the IMF threat of interrupting financial assistance in case of non compliance with the negotiated conditions. In this paper we suggest that such lack of credibility might be due to the dual role played by the IMF which acts at the same time as a creditor and a monitor of economic reforms. We show that the IMF incentive to hide its surveillance failures, in order to preserve its reputation of being a good monitor, may actually distort its lending decisions towards greater laxity (relative to social optimum) in punishing non-compliance with economic reforms. We have empirically tested such theoretical result by supposing that larger departures from efficiency of the IMF lending rule are associated with a longer relationship between a country and the IMF. The longer this relationship, the stronger the IMF reputation will be affected in case it ultimately decides to stop lending. Specifically, we have empirically investigated whether IMF disbursements are affected by the IMF own share of debt, which is taken as a proxy for the duration of the relationship between the Fund and a country. Our empirical results show that a higher IMF debt share does increase IMF disbursements.
    Date: 2005–04
  4. By: Anna Maria Mayda (Georgetown University) and Dani Rodrik (Harvard University) (Department of Economics, Georgetown University)
    Abstract: We analyze two cross-country data sets that contain information on attitudes toward trade as well as a broad range of socio-demographic and other indicators. We find that pro-trade preferences are significantly and robustly correlated with an individual's level of human capital, in the manner predicted by the factor endowments model. Preferences over trade are also correlated with the trade exposure of the sector in which an individual is employed: individuals in nontraded sectors tend to be the most pro-trade, while individuals in sectors with a revealed comparative disadvantage are the most protectionist. Third, an individual's relative economic status has a very strong positive association with pro-trade attitudes. Finally, non-economic determinants, in the form of values, identities, and attachments, play an important role in explaining the variation in preferences over trade. High degrees of neighborhood attachment and nationalism/patriotism are associated with protectionist tendencies. Classification-JEL Codes: F1
    Keywords: Immigration Attitudes, International Migration, Political Economy
  5. By: Dumas Christelle
    Abstract: This article aims at testing whether child labor is caused by poverty. Tests are designed for rural areas in a setting characterized by the absence of a labor market. A model of rural household labor supply is developed that provides testable implications of two different poverty hypotheses. We test if child labor is due to a binding subsistence constraint and if child leisure is a luxury good. We find that, in rural Burkina Faso, children provide labor mostly because of labor market imperfections and not because of household subsistence needs and that child leisure is a normal good.
    Keywords: child labor, rural hoseholds, market imperfections, poverty hypothesis
    JEL: D13 I32 J22 O12 Q12
    Date: 2004–06
  6. By: Christelle Dumas; Sylvie Lambert
    Abstract: This paper aims at studying the relationship between schooling and family background characteristics. The econometric analysis uses an original survey conducted in 2003 in Senegal that, uniquely, provides instruments permitting to deal with the endogeneity of background variables. The estimated effect of father’s education more than doubles when its endogeneity is accounted for. We also present results suggesting that family background has as much impact after entry at school than at younger ages, and that parental education affects children schooling through its contribution to parental preferences (and not only through higher efficiency in the production of human capital).
    Keywords: schooling mobility, education demand
    JEL: D12 I21 O12
    Date: 2005–04
  7. By: Choong Yong Ahn (Korea Institute of International Economic Policy); Doo Yong Yang (Korea Institute of International Economic Policy)
    Abstract: E-finance in Korea has evolved since the late 1980s, when developments in information and telecommunication technology started to be applied to the financial industry. Since the 1990s, e-finance has led a paradigm shift in the financial industry as financial transactions in computer-based tools began increasing. There are several factors that contributed to e-finance development. Korea possess the basic requisite conditions to foster thriving e-finance, including an advanced IT infrastructure, several government e-commerce initiatives and financial restructuring resulting from the financial crisis. In fact, all of these factors have eliminated possible impediments to the development of e-finance in developing countries. This paper shows that the decision for the introduction of internet banking depends on the profit level for the bank rather than the asset size and/or operation costs. Intuitively, large banks are early takers in providing Internet banking de to a huge amount of initial investment costs to establish an Internet banking network. At the same time, cost inefficient banks are inclined to consider the introduction of Internet banking earlier to reduce inefficiency caused by replacing cost-inefficient infrastructure. However, Korea shows an interesting case such that the asset size and operation costs were irrelevant to the establishment of Internet banking networks. On the other hand, profitability was relevant to the introduction of Internet banking. This may imply that relatively profitable banks at the onset of the crisis were able to jump into e-finance earlier than non-profitable banks. Furthermore, this paper shows that the adoption of internet banking has a positive effect of bank profit.
    Keywords: e-fianance development in Korea, Internet Banking, financial industry
    JEL: G21 L86 C33
    Date: 2004–04
  8. By: Haider A. Khan (GSIS, University of Denver)
    Abstract: The purpose of this paper is to review the structure and impact of the structural adjustment policies in Sub-Saharan Africa and find a set of future policy prescriptions. The failure of SAPs for the most part can be traced to the dogmatic pursuit of inappropriate policies derived from an inadequate theoretical framework by the IFIs. However, failure of governance in Africa have also been significant factors. An alternative set of SAPs and a new partnership between donors, trade partners and the Sub-Saharan African economies are proposed as part of a coherent development strategy based on Sen's concept of capabilities enhancement.
    Date: 2005–04
  9. By: Takashi Yamano (Foundation for Advanced Studies on International Development); Thomas S. Jayne (Michigan State University)
    Abstract: The rapid increase in adult mortality due to the AIDS epidemic in sub- Saharan Africa raises great concern about its impact on child welfare. This article estimates the impact of AIDS-related adult mortality on primary school attendance in rural Kenya using a panel of 1,266 households surveyed in 1997, 2000, and 2002. We find a strong correlation between working-age adult mortality and lagged HIV- prevalence rates at nearby sentinel survey sites. School attendance, especially for children in relatively poor households, is negatively correlated with lagged provincial HIV-prevalence rates. Children, especially girls in relatively poor households, are less likely to be in school directly prior to the death of an adult member than children in unafflicted households. By contrast, boys in relatively poor households are less likely to be in school after an adult death. The evidence indicates that rising adult mortality in rural Kenya is adversely affecting primary school attendance especially among the poor. However, these results measure only short-term impacts. Over the longer run, whether school attendance in afflicted household rebounds or deteriorates further is unknown.
    Keywords: HIV/AIDS, Education, Kenya
    JEL: O12 O15 J10 Q12
    Date: 2005–02–21
  10. By: Lilyan E. Fulginiti (University of Nebraska); Richard K. Perrin (University of Nebraska); Bingxin Yu (University of Nebraska)
    Abstract: Agricultural productivity in 41 Sub-Saharan Africa (SSA) countries from 1960 to 1999 is examined by estimating a semi-nonparametric Fourier production frontier. Over the four decades the estimated rate of productivity change was 0.83% per year, although the average rate from 1985-99 was a strong 1.90% per year. Former UK colonies exhibited significantly higher productivity gains than others, while Liberia and countries that had been colonies of Portugal or Belgium exhibited net reductions in productivity. We measure a significant reduction in productivity during political conflicts and wars, and a significant increase in productivity among those countries with higher levels of political rights and civil liberties.
    Keywords: Sub-Saharan Africa, agricultural productivity, institutions, stochastic frontier, Fourier functional form.
    JEL: Q
    Date: 2005–02–28
  11. By: Rui Huang (University of California-Berkeley); Lilyan E. Fulginiti (University of Nebraska); E. Wesley Peterson (University of Nebraska)
    Abstract: A three period overlapping generations model is developed to investigate the impact of shorter life expectancy due to disease, on human capital investment decisions and income growth. This research is particularly relevant to Sub-Saharan Africa given the dramatic reduction in life expectancy due to HIV/AIDS and the potential lasting effects on growth. Our results indicate that as life expectancy shortens so does schooling inducing a lower growth rate of income. These relationships are even more pronounced for the African continent than for the rest of the world.
    Keywords: HIV/AIDS, Africa, life expectancy, growth, overlapping generations.
    JEL: O13 O47 O55
    Date: 2005–02–28
  12. By: Julio J. Nogues (Universidad Di Tella)
    Abstract: The outcome of the Uruguay Round show that the concessions given by developing countries were more valuable than those they received from industrial countries. I suggest that this outcome is explained by the aggresive demands from industrial countries and the lack of resources (human and financial) at the disposal of developing countries. The paper discussess the costs of these unequal exchanges, and the structural factors that help to understand the processess leading to these outcomes.
    Keywords: Uruguay Round, Developing countries, Reciprocity,
    JEL: F1 F2
    Date: 2005–02–08
  13. By: kishore gawande (texas a&m u.); pravin krishna (Johns hopkins u.)
    Abstract: In order to explain the prevalence and persistence of trade protection, a large body of work that departs from the notion of welfare maximizing governments and emphasizes instead political-economic determinants of policy has recently emerged. This survey paper summarizes and evaluates analytically the empirical component of this literature. We discuss a broad set of empirical findings which provide a convincing confirmation of the presence and significance of political economy influences. We also discuss some puzzles and controversies that have emerged in recent work.
    JEL: D72 D78 F12 F13 F14
    Date: 2005–03–09
  14. By: Thierry Buchs
    Abstract: Privatization became a central element of economic reforms in most countries in Sub-Saharan Africa during the 1990s. Yet, empirical evidence regarding the impact of privatization remains scarce. Since the seminal work of CAMPBELL-WHITE & BHATIA [1998], covering transactions on the African continent until 1996, no comprehensive assessment has been conducted. At a time when public opposition to further privatization is growing, this paper aims at giving a broad overview of the impact of privatization in Sub-Saharan Africa from 1991 to 2002 in the light of recent developments, and to derive some general trends and conclusions from the body of empirical evidence available to date. During this period, about 2300 privatization transactions have taken place, generating a total sales value estimated at US$ 9 billion. The main findings on the impact of privatization are as follows: first, privatization has had a minimal one-off impact on the budget; second, firm turnover and profitability have generally increased immediately following privatization but the evidence is mixed regarding the sustainability of the initial post-privatization upswing; third, employment has been adversely affected by privatization, although the latter has not resulted in massive layoffs in absolute terms; fourth, FDI and stock markets have played a limited role in privatization transactions despite some showcase transactions; fifth, regulation and competition have often been overlooked in the privatization process, and even where they have been dealt with, enforcement problems have greatly limited their effectiveness; sixth, privatization has created new political patronage opportunities, leading to numerous corruption scandals which have damaged the credibility of the privatization process; finally, social aspects of privatizations have generally been overlooked, reflecting the tendency to focus on privatization transactions, rather than on sector reorganization at large including wider social objectives.
    Keywords: Africa, competition, governance, privatization, regulation
    JEL: L33 L41
    Date: 2005–02–23
  15. By: Imène Guetat (TEAM); Francisco Serranito (Université Paris 13)
    Abstract: This article aims at testing the convergence hypothesis in MENA region using new tests of a unit root in panel data. Quah (1994, 1998), Evans & Karras (1996) and Bertrand & Jones (1996) recommend this technique to evaluate the income convergence hypothesis. According to them it avoids econometric problems of the cross-countries growth regressions testing convergence and sample bias of the multivariate cointegration techniques. We test both the absolute and the conditional convergence with panel unit roots tests using the Summers and Heston's data 5.2 and 6.1 on the periods of 1960 to 1990 and from 1960 to 2000. The absolute convergence hypothesis use panel unit roots test with no fixed individual effects. The catching-up hypothesis is accepted for most groups of the region countries during both periods (1960 to 1990 and 1960 to 2000). If we allow a break in the unit root tests, the hypothesis is accepted for more groups. The conditional convergence requires panel unit root tests with fixed individual effects. Again, during the whole periods, the conditional convergence is accepted for the major part of the remaining groups of MENA countries.
    Keywords: Conditional convergence, catching-up, panel unit root tests, Middle East and North Africa.
    JEL: B23 F1 O1 O47 O5
    Date: 2005–03

This nep-afr issue is ©2005 by Suzanne McCoskey. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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