nep-afr New Economics Papers
on Africa
Issue of 2006‒10‒21
eight papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. Aiding Violence or Peace? The Impact of Foreign Aid on the Risk of Civil Conflict in Sub-Saharan Africa By Joppe de Ree; Eleonora Nillesen
  2. Is the Relationship Between Aid and Economic Growth Nonlinear? By Chih Ming Tan; Xiaobo Zhang; Andros Kourtellos
  3. When instability increases the effectiveness of aid projects By Guillaumont, Patrick; Laajaj, Rachid
  4. Child Labor and Youth Employment: Ethiopia Country Study By L.Guarcello; S.Lyon; F.Rosati
  5. Should New Anti-Malarial Drugs be Subsidized? By Laxminarayan, Ramanan; Parry, Ian W.H.; Smith, David L.; Klein, Eili
  7. Le Joola, Ndiaga Ndiaye, cars rapides... : les victimes des transports en commun, l'affaire de tous ? By Maïdadi Sahabana
  8. Relative Risks and the Market for Sex: Teenagers, Sugar Daddies and HIV in Kenya By Dupas, Pascaline

  1. By: Joppe de Ree; Eleonora Nillesen
    Abstract: This paper considers the impact of foreign aid on the risk of civil conflict. Previous studies on this topic have not properly addressed the problem of endogeneity between aid and conflict as well as the distorting influences of country specific time invariant effects. We propose GDP levels of donor countries as new and powerful instruments for foreign aid flows in the conflict regression. Aid flows are often defined as a fixed percentage of Donor’s GDP hence they are strongly correlated. Changes in donor GDP constitute an exogenous shock to aid received by developing countries, as Donor GDP is not expected to have a direct effect on the risk of civil conflict in sub-Saharan Africa (SSA). We find a statistically significant and economically important negative effect of foreign aid on the risk of civil conflict. A ten percent increase in foreign aid decreases the risk of civil conflict by about six percent.
    Keywords: Civil conflict, Foreign aid, Sub-Saharan Africa
    JEL: D74 F35 O55
    Date: 2006–10
  2. By: Chih Ming Tan; Xiaobo Zhang; Andros Kourtellos
    Abstract: In this paper, we investigate the relationship between foreign aid and growth using recently developed sample splitting methods that allow us to uncover evidence for the existence of heterogeneity and nonlinearity simultaneously. We also implement a new methodology that allows us to deal with model uncertainty in the context of these methods. We find some evidence that aid may have heterogeneous effects on growth across two growth regimes defined by ethnic fractionalization. In particular, countries that belong to a growth regime characterized by levels of ethnic fractionalization above a threshold value experience a negative partial relationship between aid and growth, while those in the regime with ethnic fractionalization below the threshold experience no growth effects from aid at all. Nevertheless, there exists substantial model uncertainty so that attempts to pin down the typology of these growth regimes as being decisively characterized by ethnic fractionalization remain inconclusive. When we account for model uncertainty, we find no evidence to suggest that the relationship between aid and growth is nonlinear. Overall, our results suggest that the partial effect of aid on growth is very likely to be negative although we cannot reject the hypothesis that aid has no effect on growth. In this sense, our findings suggest that aid is potentially counterproductive to growth with outcomes not meeting the expectations of donors.
    Date: 2006
  3. By: Guillaumont, Patrick; Laajaj, Rachid
    Abstract: The authors assess the effect of economic instability on the success of projects funded by the World Bank using the outcome of the projects, which is a notation of their overall success determined by the Bank ' s Independent Evaluation Group. It has been argued in macroeconomic studies that aid effectiveness is higher in vulnerable countries because it dampens the negative effects of shocks. The authors show that this finding is not inconsistent with the observation that the success of the projects is lower in an unstable environment. Instability, in particular the instability of exports, harms aid projects as it harms the rest of the economy, while the success of projects decreases when the total amount of aid received increases, due to absorptive capacity limitations. But this decrease is slower when instability is higher, showing a positive effect of aid through its stabilizing impact. The authors find the same results keeping only the projects funded by nonconcessionary loans, which suggests that the cushioning effect of aid extends not only to aid funded projects but to whole sets of projects. Corroborating macroeconomic findings, their results lead to the same conclusion that more aid should be allocated to more vulnerable countries, in spite of the lower success of the projects in an unstable environment: project evaluations cannot include the macrostabilizing effect of the aid delivered through projects.
    Keywords: Development Economics & Aid Effectiveness,Banks & Banking Reform,School Health,Poverty Monitoring & Analysis,Economic Theory & Research
    Date: 2006–10–01
  4. By: L.Guarcello; S.Lyon; F.Rosati
    Abstract: Ethiopia accounts for the largest youth population in Sub-Saharan Africa and the lack of employment opportunities for Ethiopian young people is among the critical developing challenges facing the country. The specific factors affecting youth employment in Ethiopia have received little research attention. There is therefore limited empirical basis for formulating policies and programs promoting youth employment and successful school to work transitions. This study is aimed at beginning to fill this gap by analyzing a set of youth employment indicators drawn primarily from the 2001 Ethiopia Labor Force Survey. The study looks specifically at the labor market outcomes of young people and key factors influencing these outcomes, including early labor market entry and human capital accumulation. It also examines the process of labor market entry, and, for those who attended school, the duration of the transition from school to work.
    Date: 2006–07
  5. By: Laxminarayan, Ramanan (Resources for the Future); Parry, Ian W.H. (Resources for the Future); Smith, David L.; Klein, Eili (Resources for the Future)
    Abstract: We use analytical and numerical models to explain and quantify the welfare effects of subsidies for artemisinin combination treatments (ACTs), a valuable new class of antimalarial drugs. There are two (second-best) efficiency rationales for such subsidies: by expanding drug use, they reduce infection transmission from one individual to another, and they slow the evolution of drug resistance by deterring use of substitute monotherapy drugs for which resistance emerges more rapidly than for ACTs. Our analysis merges epidemiological models of malaria transmission among individuals and mosquitoes, evolution of drug resistance, and economic models of the demand for alternative drugs; parameter values for the simulations are representative of malaria prevalence in sub-Saharan Africa. We find that large subsidies for ACT are welfare improving across many plausible scenarios for malaria transmission, drug-demand elasticities, and evolution of drug resistance; the benefits of the policy are often several times larger than the costs.
    Keywords: antimalarial drugs, resistance externality, transmission externality, subsidies, welfare effects
    JEL: I18 H23 O15
    Date: 2006–09–25
  6. By: Frimpong, Joseph Magnus; Oteng-Abayie, Eric Fosu
    Abstract: The main objective for this paper is to study the causal link between FDI and GDP growth for Ghana for the pre- and post-SAP periods. We also study the direction of causality between the two variables, based on the more robust Toda-Yamamoto (1995) Granger no-causality test which allows the Granger test in an integrated system. Annual time-series data covering the period 1970-2002 was used. The study finds no causality between FDI and growth for the total sample period and the pre-SAP period. FDI however caused GDP growth during the post-SAP period.
    Keywords: Ghana; FDI; seemingly unrelated regression; Granger causality; cointegration
    JEL: O49 C32 F39
    Date: 2006–08–26
  7. By: Maïdadi Sahabana (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat])
    Abstract: Dans la nuit du 26 au 27 septembre 2002, l'Afrique devait connaître son "Titanic". Au large du Sénégal, le ferry, Le Joola, qui assurait la liaison Dakar-Ziguinchor sombrait en faisant plus de 1200 victimes. Si la tragédie du Joola est exceptionnelle par son nombre de victimes, elle vient s'ajouter à une longue liste de catastrophes impliquant les transports collectifs, ferroviaires ou routiers, en Afrique subsaharienne. En particulier dans les rues des villes africaines, les cars, minibus et autres véhicules de transport en commun font au quotidien plusieurs victimes. Lorsqu'on les additionne, elles peuvent atteindre un nombre effroyablement considérable comme l'atteste les chiffres sur Dakar. A travers, une analyse du fonctionnement du secteur, l'article tente de situer les responsabilités d'une telle tragédie.
    Keywords: Transport en commun ; sécurité ; Dakar (Sénégal)
    Date: 2006–10–06
  8. By: Dupas, Pascaline
    Abstract: An information campaign that provided Kenyan teenagers in randomly selected schools with the information that HIV prevalence was much higher among adult men and their partners than among teenage boys led to a 65% decrease in the incidence of pregnancies by adult partners among teenage girls in the treatment group relative to the comparison. This suggests a large reduction in the incidence of unprotected cross-generational sex. The information campaign did not increase pregnancies among teenage couples. These results suggest that the behavioral choices of teenagers are responsive to information on the relative risks of different varieties of a risky activity. Policies that focus only on the elimination of a risky activity and do not address risk reduction strategies may be ignoring a margin on which they can have substantial impact.
    JEL: O12
    Date: 2005–10

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