nep-afr New Economics Papers
on Africa
Issue of 2006‒05‒13
thirteen papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. Context Matters – Rethinking the Resource Curse in Sub-Saharan Africa By Matthias Basedau
  2. Major Flaws in Conflict Prevention Policies towards Africa. The Conceptual Deficits of International Actors’ Approaches and How to Overcome Them By Andreas Mehler
  3. Trade Liberalisation, Poverty and Inequality in South Africa: A CGE-Microsimulation Analysis By Nicolas Hérault
  4. AIDS, Reversal of the Demographic Transition and Economic Development: Evidence from Africa By Sebnem Kalemli-Ozcan
  5. Some policy proposals for future infrastructure investment in South Africa By Johan Fourie
  6. Debt Relief By Serkan Arslanalp; Peter Blair Henry
  7. Aid and Foreign Direct Investment : International Evidence By M. Uður Karakaplan; Bilin Neyaptý; Selin Sayek
  8. Global Health Governance: Conflicts on Global Social Rights By Wolfgang Hein; Lars Kohlmorgen
  9. Economic Partnership Agreements: Redesigning trade and development among EU and ACP Countries By Nicolo' Tomaselli
  10. Income Shocks and Gender Gaps in Education: Evidence from Uganda By Björkman, Martina
  12. A Paradox of Plenty? Rent Distribution and Political Stability in Oil States By Matthias Basedau; Wolfram Lacher
  13. A Spatial Model of Growth: Taking Technology Seriously By Zuoquan Zhao

  1. By: Matthias Basedau (GIGA Institute of African Affairs)
    Abstract: Natural resources in sub-Saharan Africa suffer from a bad reputation. Oil and diamonds, particularly, have been blamed for a number of Africa’s illnesses such as poverty, corruption, dictatorship and war. This paper outlines the different areas and transmission channels of how this so-called “resource curse” is said to materialize. By assessing empirical evidence on sub-Saharan Africa it concludes that the resource curse theory fails to sufficiently explain why and how several countries have not or only partly been affected by the “curse”. Theoretically, the paper argues that whether or not natural resources are detrimental to a country’s socio-economic and political development depends on a number of contextual variables, divided into country-specific conditions and resource-specific conditions (type, degree/level of abundance and dependence, resource revenue management, involved companies etc.). Methodologically, a future research agenda needs to examine the complex interplay of these contextual variables by adding sophisticated comparative research designs, especially “small and medium N” comparisons, to the tool box which has been widely confined to the juxtaposition of “large N” and country case studies.
    Keywords: Sub-Saharan Africa; Natural Resources, Political Economy, Institutions, Violent Conflict, Socio-Economic Development, Democracy
    JEL: B25 N5 N57 O13
    Date: 2005–05
  2. By: Andreas Mehler (GIGA Institute of African Affairs)
    Abstract: Current thinking on African conflicts suffers from misinterpretations (oversimplification, lack of focus, lack of conceptual clarity, state-centrism and lack of vision). The paper analyses a variety of the dominant explanations of major international actors and donors, showing how these frequently do not distinguish with sufficient clarity between the ‘root causes’ of a conflict, its aggravating factors and its triggers. Specifically, a correct assessment of conflict prolonging (or sustaining) factors is of vital importance in Africa’s lingering confrontations. Broader approaches (e.g. “structural stability”) offer a better analytical framework than familiar one-dimensional explanations. Moreover, for explaining and dealing with violent conflicts a shift of attention from the nation-state towards the local and sub-regional level is needed.
    Keywords: Sub-Saharan Africa, Conflict Prevention, Conflict Factors, Root causes, Conflict Prolonging Factors, Escalation Patterns, Peace Order, Structural Stability
    Date: 2005–06
  3. By: Nicolas Hérault (Centre d'Économie du Développement (IFReDE-GRES) Université Montesquieu Bordeaux IV and Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: This paper aims to study the effects on poverty and income inequality of trade liberalisation in South Africa. This is achieved by using a micro-macro model. The main issue of interest is the effect of international trade on households (especially their income); some changes may contribute to reduce poverty while other changes could work against the poor. The approach presented in this paper relies on combining a macro-oriented computable general equilibrium (CGE) model and a microsimulation (MS) model. Combining these two models the microeconomic effects (on poverty and inequality) of a macroeconomic policy (trade liberalisation) can be analysed. The paper gives details about the MS model, the CGE model and the "top-down" approach used to link the two models. The main concern regarding poor households is whether the decrease in real (or nominal) earnings for formal low-skilled and skilled workers is offset by the upward trend in formal employment levels. This appears to be the case implying a decrease in poverty due to trade liberalisation. Although whites emerge as the main winners, the increase in inter-group inequality is more than compensated by the decrease in intra-group inequality.
    Date: 2005–11
  4. By: Sebnem Kalemli-Ozcan
    Abstract: This paper presents empirical evidence on a specific mechanism through which demographic transition affects economic growth. The evidence provides support for models of demographic transition emphasizing the demand for children. Using a panel of African countries during 1985−2000, I show that the HIV/AIDS epidemic affects the total fertility rates positively and the school enrollment rates negatively. These patterns are consistent with theoretical models that argue the existence of a precautionary demand for children in the face of uncertainty about child survival. Parents who are faced with a high mortality environment for young adults choose to have more children and provide each of them with less education, leading to a reversal in the fertility transition and a reduction in the aggregate amount of human capital investment. The empirical estimates predict that parents in a country with a high level of HIV/AIDS prevalence, such as Congo, have 2 more children compared to a country with a low level of HIV/AIDS prevalence, such as Madagascar. A country such as Botswana that has witnessed a quadrupling in HIV/AIDS prevalence, has had 1.5 more births per woman and 30 percentage points lower primary school enrollment since 1985. The results imply lower economic growth and welfare for current and future African generations.
    JEL: O11 I12 J11 J13
    Date: 2006–05
  5. By: Johan Fourie (Department of Economics, Stellenbosch University)
    Abstract: The South African government has begun to ramp up economic infrastructure investment. This is an important policy shift and in line with the government’s aim of increasing economic growth to 6% and halving poverty by 2014. It follows that we are left with the question: What are the most important areas for infrastructure investment, both type and location? This paper provides a short review of the essential characteristics of infrastructure as well as a guide to the past and present features of South Africa’s infrastructure stock. Three main policy proposals are made: provide basic infrastructure to all, improve the quality of existing infrastructure, and provide transnational infrastructure. Since 1994, the government has increased the access to basic services of a large part of the population, although there is still room for improvement. However, a lack of institutional and managerial capacity at the local level seems to be a constraint on delivering basic infrastructure services. Furthermore, comparative analysis reveals that the country’s infrastructure quality lag those of other countries. However, politicians may prefer to provide new infrastructure rather than improving existing infrastructure, as it provides a wider support base. This could lead to significant inefficiencies, especially with the politically sensitive 2010 Soccer World Cup approaching. Regional integration is an important long-term requirement to ensure sustainable economic growth and prosperity for the countries of southern Africa. Currently, South Africa is poorly integrated into the rest of Africa. The current transnational institutions – SACU, SADC, NEPAD – do not have the institutional and financial capacity to provide such infrastructure. A strong emphasis on providing transnational infrastructure – specifically transport, energy and ICT infrastructure – is proposed.
    Keywords: infrastructure, South Africa, basic services, transnational
    JEL: H54 N77 R53 L90
    Date: 2006
  6. By: Serkan Arslanalp; Peter Blair Henry
    Abstract: The G-8 Multilateral Debt Relief Initiative (MDRI) is the next step of the Highly Indebted Poor Countries Initiative (HIPC). There are two reasons why MDRI is unlikely to help poor countries. First, the amount of money at stake is trivial. The roughly $2 billion of annual debt payments to be relieved under MDRI amounts to roughly 0.01 percent of the GDP of the OECD countries—a mere one-seventieth (1/70) of the quantity of official development assistance agreed to by world leaders on at least three separate occasions (1970, 1992, 2002). Second, the existence of debt overhang is a necessary condition for debt relief to generate economic gains. Since the world's poorest countries do not suffer from debt overhang, debt relief is unlikely to stimulate their investment and growth. The principal obstacle to investment and growth in the world’s poorest countries is the fundamental inadequacy in these countries of the basic institutions that provide the foundation for profitable economic activity. In light of these facts, the MDRI may amount to a Pyrrhic victory: A symbolic win for advocates of debt relief that clears the conscience of the rich countries but leaves the real problems of the poor countries unaddressed.
    JEL: E F O
    Date: 2006–05
  7. By: M. Uður Karakaplan; Bilin Neyaptý; Selin Sayek
    Date: 2005
  8. By: Wolfgang Hein (GIGA German Institute of Global and Area Studies); Lars Kohlmorgen (GIGA German Institute of Global and Area Studies)
    Abstract: This paper analyses the impact of new institutional structures in global health governance on the realization of social rights in poor countries. Meanwhile, health is broadly seen as an import precondition for social and economic development. This leads to an integration of the “diseases of the poor” (basically infectious diseases) into strategies of fighting poverty. Considering the example of global HIV/AIDS politics, the paper argues that new governance modes increase the participation of civil society groups and affected communities, but that they are also frequently instrumentalised by powerful actors to pursue their particular interests. In fact, increasing resources are mobilized for the fight against poverty related diseases. The paper concludes that global health governance is characterized by a combination of moral values and material interests which does not guarantee a comprehensive realization of social rights, but which allows some progress in the fight against poverty-related diseases – a precondition of the possible further realization of social rights.
    Keywords: Global Health Governance; New Governance Modes, International Organizations, Social Rights, Global Social Justice, Developing Countries, HIV/AIDS Politics
    Date: 2005–08
  9. By: Nicolo' Tomaselli (Department of Agricultural Economics and Engineering, Alma Mater Studiorum - University of Bologna)
    Abstract: The European Union is currently engaged in redesigning its trade relations with many of its partners in the Southern hemisphere. The present study assesses the economic implications of the negotiations of Economic Partnership Agreements between the European Union and ACP’s regional groupings. These new trade arrangements, natural evolution of the Cotonou Agreements, represent an outstanding opportunity to favour the insertion of ACP countries into the world trade system and a genuine attempt to promote economic development and regional integration in developing world. Is this project bound to fail? Which are the prerequisites to make it work? Which lessons can be drawn from empirical evidences?
    Keywords: EPA, Trade and development, Market access, Regional integration, Cotonou agreements, Kenya and Mauritius
    JEL: F13 F15 O19
    Date: 2005
  10. By: Björkman, Martina (Institute for International Economic Studies, Stockholm University)
    Abstract: This paper uses exogenous variation in rainfall across districts in Uganda to estimate the causal effects of household income shocks to in children’s enrollment and cognitive skills conditional on gender. I find negative income shocks to have large negative and highly significant effects on female enrollment in primary schools and the effect grows stronger for older girls. The effect on boys’ enrollment is smaller and only marginally significant. Moreover, I find that a negative income shock has an adverse effect on test scores in general and test scores of female students in particular. The results imply that households respond to income shocks by varying the quantity and quality of girls’ education while boys are to a larger extent sheltered – a finding consistent with a model where parents’ values of child labor differ across sexes.
    Keywords: Rainfall; education; test scores; gender
    JEL: D13 I21 O12
    Date: 2006–03–02
  11. By: Marie Suzanne Badji (GREDI, Département d'économique, Université de Sherbrooke); Dorothée Boccanfuso (GREDI, Faculte d'administration, Université de Sherbrooke)
    Abstract: Au lendemain du sommet mondial de l’enfant, le Sénégal a épousé une nouvelle vision sur le plan nutritionnel. Toutefois, les études mettant en relation l'état nutritionnel des enfants avec des caractéristiques spécifiques des ménages, du genre, de l’enfant, de l'environnement etc. sont encore quasi inexistantes au Sénégal. Dans ce travail, les taux de malnutrition ont été calculés à partir de trois indicateurs anthropométriques à partir desquels nous avons mis en exergue la tendance d'évolution de la santé nutritionnelle des enfants âgés de moins de cinq ans avant et après la dévaluation du F.CFA. De plus, un modèle logistique a permis d'exprimer le risque pour un enfant d’avoir un retard de croissance (rabougrissement) en fonction de ses propres caractéristiques, de celles spécifiques à sa mère et à son ménage d’appartenance. Enfin, nous avons étudié l’effet du niveau de vie, de l'âge et du cycle de vie de l'enfant, du niveau d’éducation de la mère, etc. sur la santé nutritionnelle de l’enfant à l’aide d’un modèle linéaire. Sur la base de nos résultats, nous proposons une série de mesures de politiques économiques et sociales qui tiendraient compte de l'ensemble de ces facteurs et contribueraient à améliorer le statut nutritionnel des enfants âgés entre 0 et 5 ans au Sénégal.
    Keywords: mesures anthropologiques, déterminants, santé nutritionnelle, enfants
    JEL: I12 C51 O15
    Date: 2006
  12. By: Matthias Basedau (GIGA Institute of African Affairs); Wolfram Lacher (School of Oriental and African Studies, University of London)
    Abstract: Resource curse theory claims that resource abundance encourages violent conflict. A study of 37 oil-producing developing countries, however, reveals that oil states with very high levels of oil revenue are remarkably stable. An analysis of the ways in which governments spend oil revenues identifies two distinct types of rentier systems – the large-scale distributive state and the patronage-based system – which are strongly linked to instability or its absence. However, some deviant cases, such as Equatorial Guinea and Gabon, illustrate the need for further research. Apparently, the notion of a “paradox of plenty” has neglected rentier mechanisms that avoid conflict.
    Keywords: Resource Curse, Paradox of Plenty, Oil, Rentier State, Violent Conflict, Political Stability, Developing World
    JEL: N5 N50 O13
    Date: 2006–04
  13. By: Zuoquan Zhao
    Abstract: This paper attempts to develop a spatial model of economic growth in which technology and externalities are assumed to be accountable for production in geographical space. Linking externalities to the extent of intensity of production across locations in continuous space, we introduce spatial range into the production function for technological, human, and physical capitals. Our model argues that the long-run growth rate of an economy is determined not just by the growth rates of the three factors of production but by their rates of change in spatial range over the territory of the economy. In other words, spatial intensity and accumulation matter for growth. Our model is consistent with studies on knowledge spillovers, geographical agglomeration, urban and regional growth, and trade. The primary policy implication of our model is the significance of establishing efficient mechanisms or channels that promote innovation, diffusion, trade, and factor mobility over the territory of an economy. It is not as if we always have it everywhere, but there is a process in which knowledge is being created all the time in different places, and is then being diffused. This evolving distribution should be reflected in a model of production, if it is to describe an entire economy in which different people know different things. As a consequence, the idea of an aggregate production function becomes very dubious, unless a new variable is introduced, representing the distribution and diffusion of new knowledge.
    Date: 2006–05

This nep-afr issue is ©2006 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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