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on Africa |
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Issue of 2005‒10‒08
seven papers chosen by Suzanne McCoskey Foreign Service Institute, US Department of State |
| By: | Zeljko Bogetic (The World Bank); Johannes Fedderke (University of Cape Town, South Africa) |
| Abstract: | The paper provides three principal results. First, we benchmark South African infrastructure performance in terms of access, pricing, and quality against key comparator groups of countries using the most recent World Bank benchmarking data base (2005). Second, we establish clear empirical links between infrastructure and productivity using South African time-series data. And third, we estimate long-run demand for electricity and telephony using a panel of 52 low-income and middle- income countries for the period 1980-2002 and then project investment needs in these sectors until 2010. Our projections indicate average annual electricity generating requirement of US$0.5 billion or about 0.2% of GDP, and US$1.98 billion or 0.75% of GDP for telephony. |
| Keywords: | infrastructure, growth, productivity, investment, South Africa |
| JEL: | D5 D6 D7 H O P E C1 C8 |
| Date: | 2005–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwppe:0510006&r=afr |
| By: | Raghuram G. Rajan; Arvind Subramanian |
| Abstract: | We examine one of the most important and intriguing puzzles in economics: why it is so hard to find a robust effect of aid on the long-term growth of poor countries, even those with good policies. We look for a possible offset to the beneficial effects of aid, using a methodology that exploits both cross-country and within-country variation. We find that aid inflows have systematic adverse effects on a country's competitiveness, as reflected in a decline in the share of labor intensive and tradable industries in the manufacturing sector. We find evidence suggesting that these effects stem from the real exchange rate overvaluation caused by aid inflows. By contrast, private-to-private flows like remittances do not seem to create these adverse effects. We offer an explanation why and conclude with a discussion of the policy implications of these findings. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11657&r=afr |
| By: | Ralf Hepp (University of California, Davis) |
| Abstract: | In this paper I investigate the effects of recent debt relief initiatives such as the Heavily Indebted Poor Countries (HIPC) Debt Initiative of 1996 on resource flows to developing countries. Focusing on a sample of low-income countries, I concentrate on the following questions. First, is the HIPC initiative selective in the sense of “rewarding” improved policies in HIPC countries with higher transfers? Measuring improvement directly with dummy variables representing progress in the initiative, I find that good macroeconomic management does not seem to matter in terms of the level of resource transfers and foreign aid received by a HIPC country. Second, have HIPCs and non-HIPCs experienced reductions in aid inflows (other than debt relief) in the 1990s and early 2000s? My estimates suggest that countries classified as HIPCs received higher (official and aggregate) net transfers than non- HIPC countries in the first half of the 1990s. These differences persist after 1996, however, at a lower level. Looking at net official development assistance, differences between HIPC countries and non-HIPC countries persist throughout the 1990s and early 2000s, with higher levels of aid going to HIPC countries. Third, have the debt relief initiatives in the 1990s provided additional resources to low-income countries? Confirming findings in earlier literature, my results suggest that aid flows have not changed significantly in response to debt relief. |
| Keywords: | HIPC debt initiative, foreign aid, selectivity, additionality |
| JEL: | F34 F35 O19 |
| Date: | 2005–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpif:0510004&r=afr |
| By: | Zeljko Bogetic (The World Bank); Issa Sanogo (The World Bank) |
| Abstract: | Recent contributions in economic geography reflect renewed interest in issues of location and spatial concentration of economic activities, yet there are still few empirical studies of developing countries, particularly in Africa. This paper aims to contribute to this body of knowledge by (i) documenting wide regional disparities in economic activity and infrastructure (especially between the north and the south), which were partly determined by regional development policy, and (ii) examining empirically to what extent spatial factors such as agglomeration economies contribute to labor productivity––and therefore to urban dynamics––using recent panel data from Côte d’Ivoire for the period from 1980 to 1996. |
| Keywords: | infrastructure productivity urban Cote d'Ivoire Ivory Coast Africa |
| JEL: | R O P D6 D7 H |
| Date: | 2005–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpur:0510001&r=afr |
| By: | Ralf Hepp (University of California, Davis) |
| Abstract: | The purpose of the paper is twofold. First, I investigate whether numerous debt initiatives during the 1980s and 1990s have had a significant effect on economic growth rates in developing countries in general. The major initiatives during that time period were negotiated as bilateral agreements under the guidance of the Paris Club of Creditors. These agreements were complemented later on by the Heavily Indebted Poor Countries (HIPC) debt relief initiative in 1996 and its “enhanced” version in 1999. I find that, on average, debt relief has no effect on growth rates of developing countries. The second question I address in this paper is whether the effect on growth rates was different for different subsets of developing countries. I find that countries that are not classified as HIPC have benefited significantly from debt relief, whereas the growth rates of HIPC countries have been unaffected. |
| Keywords: | HIPC debt initiative, foreign aid, growth |
| JEL: | F42 F43 O19 |
| Date: | 2005–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpif:0510003&r=afr |
| By: | Ralf Hepp (University of California, Davis) |
| Abstract: | One of the goals of the Heavily Indebted Poor Countries (HIPC) debt initiative is to provide additional resources for basic health care to the population of eligible developing countries. In this paper I investigate the effect of debt relief on per capita health expenditure in a sample of developing countries while controlling for other factors used in the literature. I find that debt relief has – at the margin – little or no effect on health expenditure in countries that are classified as HIPC. The level of health expenditures in HIPC countries, however, is significantly higher than in other developing countries. On the other hand, countries not classified as HIPC increase their per capita health expenditures more than proportionally if they receive debt relief. This result is surprising considering that per capita amounts of debt relief provided to HIPC countries are on average significantly higher than those to Non-HIPC countries. |
| Keywords: | HIPC debt initiative, debt relief, foreign aid, public health expenditure |
| JEL: | F42 O11 I18 |
| Date: | 2005–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpif:0510005&r=afr |
| By: | Nicolas Depetris Chauvin (Princeton University - Inter-American Development Bank); Aart Kraay (World Bank) |
| Abstract: | Between 1989 and 2003, low-income countries received $100 billion in debt relief. The stated objectives for much of this debt relief have been to reduce debt overhang and to free up recipient government resources for development spending that would otherwise have been used for debt service. In this paper we empirically assess the extent to which debt relief has been successful in meeting these objectives, using a newly-constructed database measuring the present value of debt relief for 62 low-income countries. We find little evidence that debt relief has affected the level and composition of public spending in recipient countries. We also do not find evidence that debt relief has raised growth, investment rates or the quality of policies and institutions among recipient countries. Although we cannot rule out the possibility that our failure to find evidence of positive impacts of debt relief is due to a variety of data and statistical problems, the evidence reported here does suggest that some skepticism is in order regarding the likely benefits of further large-scale debt relief. |
| Keywords: | Debt Relief, HIPC, Low-Income Countries, Debt |
| JEL: | F3 F4 |
| Date: | 2005–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpif:0510001&r=afr |