nep-afr New Economics Papers
on Africa
Issue of 2006‒12‒09
eleven papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. Lost Decades: Lessons from Post-Independence Latin America for Today's Africa By Bates, Robert H; Coatsworth, John H; Williamson, Jeffrey G
  2. An Assessment of South Africa's Investment Incentive Regime with a Focus on the Manufacturing Sector By Paul Barbour
  3. Fiscal Implications of Aids in South Africa By Johansson, Lars
  4. Interpersonal, Intertemporal and Spatial Variation in Risk Perceptions: Evidence from East Africa By Cheryl Doss; John McPeak; Christopher Barrett
  5. Volatility of Development Aid: From the Frying Pan Into the Fire? By Aleš Bulir; A. Javier Hamann
  6. The Dynamic Implications of Foreign Aid and Its Variability By Cristina Arellano; Aleš Bulir; Timothy D. Lane; Leslie Lipschitz
  7. EU, its 10 new members and North Africa : polarization of trade and lack of hubs effects (In French) By Dalila NICET-CHENAF (CED-IFReDE-GRES)
  8. Brain Drain and Inequality Across Nations By Frédéric Docquier
  9. Analyse de l'incidence des dépenses publiques en éducation en Côte d'Ivoire: une approche par dominance stochastique By Mathieu Audet; Paul Makdissi; Quentin Wodon
  10. Les mesures multidimensionnelles de la pauvreté: une application sur l'Afrique du Sud et l'Égypte By Sami Bibi; Abdel-Rahmen El Lahga
  11. Poverty and Inequality Nexus: Illustrations with Nigerian Data By Abdelkrim Araar; Awoyemi Taiwo Timothy

  1. By: Bates, Robert H; Coatsworth, John H; Williamson, Jeffrey G
    Abstract: Africa and Latin America secured their independence from European colonial rule a century and half apart: most of Latin America after 1820 and most of Africa after 1960. Despite the distance in time and space, they share important similarities. In each case independence was followed by political instability, violent conflict and economic stagnation lasting for about a half-century (lost decades). The parallels suggest that Africa might be exiting from a period of post-imperial collapse and entering a period of relative political stability and economic growth, as did Latin America a century and a half earlier.
    Keywords: Africa; development; economic history; Latin America; lost decades
    JEL: N0 O10 O54 O55
    Date: 2006–11
  2. By: Paul Barbour
    Abstract: This paper investigates whether South Africa’s tax incentives have been effective in generating additional manufacturing investment (both local and foreign direct investment). South Africa’s investment incentive regime compares favourably with international best practice. However, the qualitative and quantitative evidence reviewed supports the hypothesis that the impact on manufacturing investment has been negligible. The paper concludes with some recommendations for the way forward, notably to rationalise the number of incentives and to move away from the use of discretionary allocation systems.
    Keywords: South Africa, investment incentives, tax incentives, manufacturing, METR analysis
    Date: 2005–12
  3. By: Johansson, Lars (Dept. of Economics, Stockholm University)
    Abstract: The number of people living with HIV is alarmingly large. In addition to the incomprehensible human suffering of those directly affected, AIDS also has large, negative economic effects. In this paper, I study the fiscal implications of the HIV/AIDS epidemic in South Africa in a standard neo-classical growth model. I find that an antiretroviral program is to a large extent self financing. Improvement in dependency ratios and health care cost savings would pay for Rand 144 billion of a full epidemiological intervention. The indirect effect through the changing demographic structure will be more important than the direct health care cost saving effect. I also explore different taxation policies. The households would be willing to sacrifice an amount equal to 12% of GDP in the first period to be subject to an optimal (Ramsey) fiscal policy rather than an alternative fixed debt to GDP policy. The optimal policy implies an increase in government debt during the peak of the epidemic.
    Keywords: AIDS; Fiscal Impact; Economic Impact; Fiscal Policy; Taxation
    JEL: E17 E21 E23 E62 H21 H23
    Date: 2006–12–04
  4. By: Cheryl Doss (Yale University); John McPeak (Syracuse University); Christopher Barrett (Cornell University)
    Abstract: This study investigates variation over time, space and household and individual characteristics in how people perceive different risks. Using original data from the arid and semi-arid lands of east Africa, we explore which risks concern individuals and how they assess their relative level of concern about these identified risks. Because these assessments were gathered for multiple time periods, sites, households and individuals within households, we are able to identify the degree to which risk perceptions vary across time, across communities, across households within a community, and across individuals within a household. We find the primary determinants of risk rankings to be changing community level variables over time, with household specific and individual specific variables exhibiting much less influence. This suggests that community based planning and monitoring of development efforts that address risk exposure should be prioritized. We also find that individuals throughout this area are most concerned about food security overall, so that development efforts that directly address this problem should be given the highest priority.
    Keywords: risk ranking, risk perceptions, intrahousehold, Africa, Kenya, Ethiopia
    JEL: O12 D80 Q0
    Date: 2006–11
  5. By: Aleš Bulir; A. Javier Hamann
    Abstract: The positive impact of foreign aid is limited by the erratic behavior of aid flows. The introduction in 1999 of various initiatives anchored in Poverty Reduction Strategy Papers (PRSPs) which were aimed at strengthening coordination among donors, improving the design of financial support programs, and improving domestic records of policy implementation should have led to an improvement in the time series properties of aid flows. We find no evidence of any fundamental changes in the way aid has been delivered in the past five years. If anything, aid volatility has worsened somewhat and the information value of long-term lending commitments has declined. We take these results to mean that the main causes of the volatility and unpredictability of aid, and the broader issue of macroeconomic instability in low-income countries, have not been addressed in a systematic manner by the donor community.
    Keywords: Development assistance , Financial programs , Low income developing countries ,
    Date: 2006–03–21
  6. By: Cristina Arellano; Aleš Bulir; Timothy D. Lane; Leslie Lipschitz
    Abstract: The paper examines the effects of aid and its volatility on consumption, investment, and the structure of production in the context of an intertemporal two-sector general equilibrium model. A permanent flow of aid finances mainly consumption, a result consistent with the historical failure of aid inflows to translate into sustained growth. Shocks to aid are reflected mainly in investment fluctuations, as a result of consumption smoothing. Aid shocks result in substantial welfare losses, suggesting that aid variability should be taken into account in designing aid architecture. These results are consistent with the evidence from cross-country regressions of manufactured exports.
    Date: 2005–06–27
    Abstract: This paper determines which are, among different type of gravity model, those best adapted to the study of the evolution of trade of several economic areas and of the heterogeneity of the behaviors of the countries constitutive of these zones (fixed effect model; random effect model; model with correction endogeneity biasis). Applied to the three blocks which are the EU, its 10 new members and North Africa, the model with random combined effects (country – partners ) and with correction of endogeneïty biasis the most adequate to apprehend the specific bonds between different countries and apprehend trade creation and trade diversion effects.
    Keywords: Regional Integration, Trade creation, Trade deviation, Gravity model
    JEL: F14 F15 C33
    Date: 2006
  8. By: Frédéric Docquier (FNRS, IRES, Université Catholique de Louvain and IZA Bonn)
    Abstract: Is the brain drain a curse or a boon for developing countries? This paper reviews what is known to date about the magnitude of the brain drain from developing to developed countries, its determinants and the way it affects the well-being of those left behind. First, I present alternative measures of the brain drain and characterize its evolution over the last 25 years. Then, I review the theoretical and empirical literature. Although the brain drain is a major source of concern for origin countries, it also induces positive effects through various channels such as remittances, return migration, diaspora externalities, quality of governance and increasing return to education. Whilst many scientists and international institutions praise the unambiguous benefits of unskilled migration for developing countries, my analysis suggests that a limited but positive skilled emigration rate (say between 5 and 10 percent) can also be good for development. Nevertheless, the current spatial distribution of the brain drain is such that many poor countries are well above this level, such as sub-Saharan African and Central American countries.
    Keywords: F22, J61
    Date: 2006–11
  9. By: Mathieu Audet; Paul Makdissi; Quentin Wodon
    Abstract: Dans cet article, nous utilisons et adaptons une approche par dominance stochastique proposée par Duclos, Makdissi et Wodon (2005) à l'analyse des dépenses publiques en éducation en Côte d'Ivoire. Nous montrons qu'une réallocation des dépenses publiques en éducation vers le niveau primaire et secondaire peut faire diminuer la pauvreté et que cette conclusion demeure valide pour une large classe d'indices et de seuils de pauvreté. Nous analysons aussi le rôle de l'efficacité relative des dépenses aux différents niveaux et montrons que même si on tient compte de cette différence relative entre les dépenses publiques au niveau universitaire et technique et celle au niveau secondaire et primaire, la conclusion précédente sur la réallocation des dépenses publiques demeure vérifiée.
    Keywords: Analyse d'incidence, pauvreté, dominance stochastique
    JEL: D31 H42 I32 I38
    Date: 2006
  10. By: Sami Bibi; Abdel-Rahmen El Lahga
    Abstract: Il est souvent admis que la pauvreté est un phénomène multidimensionnel. Néanmoins, rares sont les travaux qui ont tenu compte des multiples facettes de la pauvreté dans un cadre unifié. Récemment, des nouvelles approches se sont développées dans le but de dériver des indices synthétiques des multiples facettes de la privation individuelle sous la forme de mesures multidimensionnelles de pauvreté. Toutefois, les fondements normatifs de ces mesures demeurent méconnus et peu discutés dans la littérature. La présente étude analyse de façon détaillée les fondements éthiques qui sous-tendent la procédure d'agrégation des multiples aspects de la pauvreté adoptée sous chacune de ces nouvelles approches. Elle offre également une application empirique des principales approches développées afin d'établir un classement complet et partiel de l'Afrique du Sud et l'Égypte en termes de pauvreté bi-dimensionnelle.
    Keywords: Pauvreté multidimensionnelle, analyse de robustesse, Afrique du Sud, Égypte
    JEL: D31 D63 I32
    Date: 2006
  11. By: Abdelkrim Araar; Awoyemi Taiwo Timothy
    Abstract: The main aim of this paper is to explore the link between poverty and inequality. In developing countries, there is a general consensus that high inequality can dampen significantly the impact of economic performance on poverty. In this paper, we propose a new theoretical framework that links poverty and inequality. We also show between and within group inequalities, as well as inequality in income sources, can contribute to total poverty. The methodology of the paper is illustrated using the 2004 Nigerian national living standard survey.
    Keywords: Poverty, Inequality
    JEL: D63 D64
    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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