nep-afr New Economics Papers
on Africa
Issue of 2006‒10‒28
twelve papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. Review of Monetary Policy in South Africa: 1994-2004 By Aron, Janine; Muellbauer, John
  3. Foreign Aid and Fiscal Policy By Faini, Riccardo
  4. How can countries use cross-national research results to address "the big policy issues" ? (Case studies from Francophone Africa) By Jean-Marc Bernard; Katharina Michaelowa
  5. Services Trade Liberalization at the Regional Level: Does Southern and Eastern Africa Stand to Gain from EPA Negotiations? By Jansen, Marion
  6. Civil War, Crop Failure, and the Health Status of Young Children By Richard Akresh; Philip Verwimp
  7. The Macroeconomics of Targeting: The Case of an Enduring Epidemic By Bell, Clive; Gersbach, Hans
  8. Toward Improved Maize Marketing and Trade Policies to Promote Household Food Security in Central and Southern Mozambique By David Tschirley; Danilo Abdula; Michael T. Weber
  9. Poverty, Inequality and Stochastic Dominance, Theory and Practice: Illustration with Burkina Faso Surveys By Abdelkrim Araar
  10. Development, Democracy and Mass Killings By Easterly, William; Gatti, Roberta; Kurlat, Sergio
  11. Challenges and Opportunities for Resource Rich Economies By van der Ploeg, Frederick
  12. The Distributional Impact of Healthcare Financing in Nigeria: A Case Study of Enugu State By Hyacinth Ementa Ichoku; William Munpuibeyi Fonta

  1. By: Aron, Janine; Muellbauer, John
    Abstract: This paper examines the evolution of monetary policy in South Africa in 1994-2004 in terms of design, the operational framework, the South African Reserve Bank’s (SARB) understanding of monetary policy transmission and the transparency, credibility and predictability of monetary policy. Quantitative indexes of transparency in 1994 and 2004 are compared and expectations data and forward interest rate data used to assess the credibility and predictability of policy under inflation targeting. The forecasting performance of the SARB is evaluated, and monetary policy decisions taken in response to external and domestic shocks assessed. The impact of monetary policy on the level of real interest rates and the role for complementary policies are examined.
    Keywords: inflation targeting; monetary policy; South Africa
    JEL: E52 E58
    Date: 2006–09
  2. By: T.S Jayne (Department of Agricultural Economics, Michigan State University); Antony Chapoto
    Abstract: This note summarizes analysis of trends in net maize exports over the 1960-2005 period and examines whether these trends are being reflected in changing maize price levels in the region. We then highlight the implications of the findings for countries’ agricultural development strategies. Main findings are: 1)Both the eastern and southern Africa regions are moving towards structural maize deficit: 2) Despite the region’s increasing importation of maize, maize grain prices in most of the region have relatively remained constant over the past decade and are actually trending downward in South Africa. Retail maize meal prices are trending downward in Zambia and Kenya, thanks to greater competition at the milling and retailing end of the maize value chain: 3) In most countries of the region, maize market performance since the 1990s reflects not the impacts of “liberalized markets” but rather the mixed policy environment of legalized private trade within the context of continued strong government operations in food marketS; 4) Rising maize imports is not necessarily bad as long as small farmers can be encouraged to diversify successfully into higher-return crops and off-farm activities. Governments and donors can support this process through public goods investments, greater stability in the policy environment, and supporting commercial investment in market development.
    Keywords: food security, food policy, maize, marketing, trade, Zambia, Eastern Africa, Southern Africa household
    JEL: Q18
    Date: 2006
  3. By: Faini, Riccardo
    Abstract: Foreign aid has been on a downward trend since at least the early eighties. Despite the commitments of donor governments, the GDP share of foreign aid for DAC countries has fallen to slightly more than 0,2% in the early part of this decade. The purpose of this paper is to explore the macro determinants of the amount of foreign aid. Surprisingly enough, not much attention has been devoted in the literature to this issue. Most of the research has focussed either on the effectiveness of aid (“does aid promote growth and help alleviating poverty”?) or to the cross country allocation of a given amount of foreign aid (“is foreign aid motivated by donor’s political and commercial interests or by recipients’ needs?”). In both cases, the total aid budget is taken as given and its determinants remain therefore unexplored. Our main finding is that the size of the budget aid is a function of the donor country’s fiscal situation, even after controlling for the government’s political orientation, the cyclical position of the donor economy, and its income per capita level. In light of these results, we argue that advocates of foreign aid should strongly lobby in favour of fiscal discipline. The alternative strategy of pushing for a more lenient budgetary treatment of foreign aid may be loaded with risks, and even turn to be counterproductive, particularly if the list of “virtuous” exceptions becomes exceedingly long. This is exactly what seems to have happened with the revision of the Stability and Growth pact.
    Keywords: fiscal policy; foreign aid
    JEL: E62 F35
    Date: 2006–06
  4. By: Jean-Marc Bernard (IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - [CNRS : FRE5211] - [Université de Bourgogne]); Katharina Michaelowa (HWWA - Hamburg Institute of International Economics - [Hamburgisches Welts-Wirtschafts Archiv])
    Abstract: The “Program on the Analysis of Education Systems“ (PASEC) was launched in 1991 at the conference of francophone education ministers (CONFEMEN) in Djibouti and carried out its first country evaluation one year later in the same country. Since then, 13 individual country evaluations have been carried out in francophone sub-Saharan Africa, including panel studies following primary students from 2nd to 6th grade within a given country. The primary objective of PASEC evaluations is not the comparison of student achievement across countries, but the analysis of key factors relevant to foster educational quality. <br />Created at the initiative of education ministers with the clear objective to inform educational decision making, the translation of PASEC results into actual education policy has yet not been automatic. This paper will discuss specific procedures and measures adopted in order to ensure that PASEC results are actually taken into account by policy makers and other target groups within the education sector. Moreover, this paper will illustrate to what extent PASEC has already contributed to concrete educational policy reform.
    Keywords: Cross-national studies ; Educational quality ; Educational policy ; Subsaharan Africa
    Date: 2006–10–09
  5. By: Jansen, Marion
    Abstract: Given the sluggish progress in multilateral trade negotiations Southern and Eastern African negotiators are likely to focus their attention on the negotiations of Economic Partnership Agreements with the European Union. This paper analyses possible advantages and disadvantages for ACP countries of including the services sector in these regional agreements. It describes the latest developments in a number of services sectors, including financial services, tourism and business services. Particular attention is paid to the possible role of mode 4 flows. For each individual sector the role of regulation, the importance of first mover advantages and the possible role of foreign technical assistance are discussed. The paper attempts to identify possible export opportunities for ACP countries and analyses the risks and benefits for these countries of giving preferential access to EU suppliers in those services sectors where African countries are likely to import.
    Keywords: Africa; European Union; GATS; regional trade agreements; trade in services
    JEL: F13 F15 O19
    Date: 2006–08
  6. By: Richard Akresh (University of Illinois at Urbana Champaign and IZA Bonn); Philip Verwimp (Institute of Social Studies, The Hague)
    Abstract: Economic shocks at birth have lasting impacts on children’s health several years after the shock. We calculate height for age z-scores for children under age five using data from a Rwandan nationally representative household survey conducted in 1992. We exploit district and time variation in crop failure and civil conflict to measure the impact of exogenous shocks that children experience at birth on their height several years later. We find that girls born after a shock in a region experiencing these events exhibit 0.72 standard deviations lower height for age z-scores and the impact is worse for poor households. There is no impact of these shocks on boys’ health status. Results are robust to using household level production and rainfall shocks as alternative measures of crop failure. The analysis also contributes to the debate on the economic conditions prevailing on the eve of the Rwandan genocide.
    Keywords: child health, economic shocks, civil war, rainfall shocks, Africa
    JEL: I12 J13 O12 O15
    Date: 2006–10
  7. By: Bell, Clive; Gersbach, Hans
    Abstract: What is the right balance among policy interventions in order to ensure economic growth over the long run when an epidemic causes heavy mortality among young adults? We argue that, in general, policies to combat the disease and promote education must be concentrated, in certain ways, on some subgroups of society, at first to the partial exclusion of others. This concentration involves what we term the macroeconomics of targeting. The central comparison is then between programs under which supported families enjoy the benefits of spending on health and education simultaneously (DT), and those under which the benefits in these two domains are sequenced (ST). When levels of human capital are uniformly low at the outbreak, DT is superior to ST if the subsequent mortality rate exceeds some threshold value. Outside aid makes DT more attractive; but DT restricts support to fewer families initially and so increases inequality.
    Keywords: education support; epidemic diseases; health policies; HIV/AIDS; macroeconomics of targeting; poverty traps; single and double targeting
    JEL: E62 H20 I10 I20 O11
    Date: 2006–06
  8. By: David Tschirley (Department of Agricultural Economics, Michigan State University); Danilo Abdula; Michael T. Weber
    Abstract: In this paper we examine this challenge through the lens of the country’s primary staple, maize. We choose maize among the country’s several staple foods (including cassava, rice, and wheat products) for a combination of reasons. First, it is the most widely produced staple in the country. In no province do fewer than two-thirds of rural households produce maize; rice’s participation, in contrast, falls below 10% in four provinces, and wheat is not produced locally at all. Second, maize is the most widely sold staple in the country: cassava rivals maize in breadth and level of production, but three times more households sell maize than sell cassava. Third, maize is the only staple food in Mozambique which is regularly exported, generating substantial income for smallholder farmers in the Center and North of the country. Finally, maize is the most widely consumed staple across the country, occupying as much of the average budget share in 2002 as high as rice, cassava, wheat, sorghum, and millet combined.
    Keywords: food security, food policy, maize, marketing, trade, Mozambique, household
    JEL: Q18
    Date: 2006
  9. By: Abdelkrim Araar
    Abstract: In this paper we provide a set of rules that can be used to check poverty or inequality dominance using discrete data. Existing theoretical rules assumes continuity in incomes or in percentiles of population. In reality, with the form of household surveys, this continuity does not exist. However, the said discontinuity can be exploited in testing the stochastic dominance. Moreover, in this paper, we proprose the stochastic dominance conditions that take into account the statistical robustness in testing the stochastic dominance. Findings of this paper are illustrated using the Burkina Faso's household surveys for the years of 1994 and 1998.
    Keywords: Stochastic Dominance, Poverty, Inequality
    JEL: D63 D64
    Date: 2006
  10. By: Easterly, William; Gatti, Roberta; Kurlat, Sergio
    Abstract: Using a newly assembled dataset spanning from 1820 to 1998, we study the relationship between the occurrence and magnitude of episodes of mass killing and the levels of development and democracy across countries and over time. Mass killings appear to be more likely at intermediate levels of income and less likely at very high levels of democracy. However, the estimated relationship between democracy and probability of mass killings is not linear in the full sample. In the 20th century, discrete improvements in democracy are systematically associated with episodes involving fewer victims.
    Keywords: democracy; growth; mass killings
    JEL: N40 O10
    Date: 2006–06
  11. By: van der Ploeg, Frederick
    Abstract: The political economy of resource rich countries is surveyed. The empirical evidence suggests that countries with a large share of primary exports in GNP have bad growth records and high inequality, especially if the quality of institutions and the rule of law are bad. The economic argument that a resource bonanza induces appreciation of the real exchange rate and a decline of non-resource export sectors may have some relevance. More important, a resource boom reinforces rent grabbing, especially if institutions are bad, and keeps in place bad policies. Optimal resource management may make use of the Hotelling rule and the Hartwick rule. However, a recent World Bank study suggests that resource rich economies squander their natural resource wealth and more often have negative genuine saving rates. Still, countries such as Botswana, Canada, Australia and Norway suggest it is possible to escape the resource curse. Some practical suggestions for a better management of natural resources are offered.
    Keywords: corruption; cross-country and panel evidence; debt overhang; dependent economy; Dutch Disease; genuine saving; growth record; Hartwick Rule; Hotelling Rule; institutions; natural resource wealth management; optimal resource depletion; real exchange rate; resource curse; resource dividend; resource fund; rule of law; sustainable development; transparency
    JEL: C12 C13 E1 F43 K42 O41 Q3
    Date: 2006–05
  12. By: Hyacinth Ementa Ichoku; William Munpuibeyi Fonta
    Abstract: The deregulation of healthcare financing and supply in Nigeria has shifted the healthcare system towards competitive market ideals. Households' decision to utilize healthcare is identical with healthcare financing. This financing arrangement has potentials for income redistribution in a society with already high levels of inequality in resource redistribution. This study attempts to examine the extent to which this system of healthcare financing leads to catastrophic expenditures, defined as a threshold percentage of a household's income, and the extend of impoverishment arising from healthcare spending. It also uses the Aronson, Johnson, and Lambert (1994) decomposition framework to analyze redistributive effects in terms of vertical and horizontal inequities, as well as re-ranking effect. The study finds that healthcare spending engenders high incidence of catastrophic spending and impoverishment in the population. It also finds that healthcare spending is pro-rich in its redistributive effect, with significant vertical and horizontal inequities as well as reranking inherent in the system. The paper suggests policy reforms that separate healthcare utilization from healthcare financing if the poor are to have access to healthcare services.
    Keywords: Redistributive effects, Healthcare financing, Catastrophic financing, Impoverishing effects, Equity, Nigeria
    JEL: B41 C52 C81 D63 I11
    Date: 2006

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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