nep-afr New Economics Papers
on Africa
Issue of 2007‒05‒19
ten papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  2. Aid Effectiveness: A comparison of Tied and Untied Aid By Josepa Miquel-Florensa
  3. Operationalising Closure in a Colonial Context: The Association of Accountants in East Africa, 1949-1963 By Sian, Suki
  4. Malaria and Primary Education : A Cross-Country Analysis on Primary Repetition and Completion Rates By Josselin Thuilliez
  5. Recursos Naturales y Humanos de Angola: Un abordaje introductorio By Ariel González
  6. Welfare Analysis of HIV/AIDS: Formulating and Computing a Continuous Time Overlapping Generations Policy Model By Shorish, Jamsheed
  7. Human Rights and National Poverty Reduction Strategies: Conceptual framework for human rights analysis of poverty reduction strategies and reviews of Guatemala, Liberia and Nepal By Sakiko Fukuda-Parr
  8. Economic policies coordination: Simulations in CFA countries By DRAMANI, Latif
  9. Multi country model in CFA zone By DRAMANI, Latif
  10. Shadow economies and corruption all over the world : what do we really know? By Schneider, Friedrich

  1. By: Bernard Walters (Economics Discipline Area, School of Social Sciences, University of Manchester)
    Abstract: The HIV/AIDS pandemic has motivated large increases in aid commitments and disbursements, with promises of further large increases in the near future. This aid is urgently required to address the emerging humanitarian crisis and implies immediate, large-scale increases in public expenditure. The central question that this paper examines is whether such increases can effectively address the epidemic without inducing macroeconomic disturbances, especially for those countries, particularly in sub-Saharan Africa, where there is already high aid dependence and parallel commitments to the other MDGs. For the aid to lead to a real resource transfer, the monetary authorities in the recipient countries must accommodate such inflows. However, the twin dangers of ‘Dutch disease’ effects and inflation provide motivation for resisting accommodation. This paper argues that although such dangers are real, they are overemphasized: aid directed at HIV/AIDS is likely to have positive short- and long-term effects on production possibilities in the recipient countries and to be complementary to efforts to achieve the other MDGs. Furthermore, the increased fiscal deficit is a necessary condition for the appropriate resource transfer and is not likely, in itself, to have an inflationary impact. The danger of inflation lies in an effort by the monetary authorities to resist absorption. Recipient governments are understandably fearful of fiscal sustainability and debt sustainability because of the historical record of very high aid volatility and low predictability. However, spending that reduces the debilitating effects of HIV/AIDS is most likely to counteract such effects by raising government revenues in both the short and medium term. Nevertheless, donors have a responsibility to match disbursements to commitments on a more systematic and long-term basis, and reduce the dangers of volatility and unpredictability by shifting aid towards debt relief and grants. The possibility that aid-induced spending will quickly induce decreasing returns is an overly static and pessimistic view: aid targeted at HIV/AIDS can respond very elastically in the medium term and release the supply constraints that limit its effectiveness. Finally, many of the major impediments to aid effectiveness lie in donors’ behaviour, particularly their lack of co-ordination with one another and with the recipient country. In summary, although there are potential dangers in scaling up aid-supported spending to address the HIV/AIDS pandemic, they are manageable and provide no reason for delaying the immediate application of resources on a large scale.
    JEL: B41
    Date: 2007–05
  2. By: Josepa Miquel-Florensa (Department of Economics, York University)
    Abstract: We evaluate the differential effects of Tied and Untied aid on growth, and how these effects vary with the policy environment of the recipient country. To do so, we use Burnside and Dollar (2000) and Easterly, Levine and Roodman (2003) datasets. We find that aid effectiveness is not significantly different for the two types of aid. However, when we condition on policies, we find that untied aid has a greater impact on growth than tied aid. We find that this difference is significant for the sample of low and middle-income countries, and is not statistically significant, but consistent in sign for the sub sample of low-income countries.
    Keywords: Foreign Aid, Aid Contracts, Tied and Untied Aid
    JEL: F35 O40
    Date: 2007–04
  3. By: Sian, Suki (Cardiff Business School)
    Abstract: The migration of British accounting professionals to both settler and non-settler colonies in the late nineteenth and early twentieth centuries bequeathed an enduring legacy for the professionalisation process in these countries. This study sets out to trace the rise of professional accountancy in colonial Kenya, a racially diversified and hierarchical colonial society where non-whites were marginalized and the minority white population ruled. Drawing from archival sources and some oral history data, the study traces the formation and operation of a colonial professional body, the Association of Accountants in East Africa (AAEA), comprised mainly of British expatriate accountants. In particular, it shows how traditional, formal closure devices, such as the restrictive use of designations, examinations and training requirements and the registration of accountants were employed by AAEA in its attempts to exclude unqualified practitioners and control the market for accounting services in the colony. It also presents evidence that attests to the use of more informal closure devices, taking advantage of the socio-cultural conditions specific to this colony, to exclude on the basis of race.
    Date: 2006–01
  4. By: Josselin Thuilliez (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I])
    Abstract: This paper explores the link between P. Falciparum malaria - most of malaria morbidity and mortality is due to the malignant Plasmodium Falciparum - and primary education in terms of school performances at the macroeconomic stage. Cross-country regression analysis shows that the relation between school results (measured by repetition and completion rates) and the P. Falciparum malaria index is strong. The results implies that the achievement of the education Millennium Development Goals will require more than just focusing on expenditure in primary education. It does not imply that resources in education are unnecessary but that increasing resources in education and improving education resources management alone are unlikely to be sufficient. This paper suggests that health conditions and especially diseases that alter cognitive capacities of children such as malaria should be taken into account much more seriously. This study also sees the need to place emphasis on research that will improve the quality of interventions to prevent malaria. Specific education expenditure to face Malaria should be examined in addition to health policies.
    Keywords: Malaria incidence, human capital, development.
    Date: 2007–05–04
  5. By: Ariel González
    Abstract: Angola refleja al África Subsahariana en varias de sus facetas, es una tierra de grandes riquezas y también de grandes desigualdades, que sufrió durante más de 40 años una guerra continua. En los primeros 14 años (desde 1961 a 1975) se desató una guerra de liberación nacional, mientras que los siguientes 27 años dieron lugar a un guerra civil con ingredientes varios como intervención directa de países extranjeros y la intervención indirecta de las superpotencias de la Guerra Fría, Estados Unidos y Rusia. Durante más de 40 años se discutió quien poseía el poder formal y real; dando a una lógica siniestra de suma cero. Angola retrasó el desarrollo nacional y dio entrada a la participación de fuerzas foráneas en su territorio que minaron su margen de maniobra y su soberanía nacional.
    Keywords: angola, natural resources, human resources, civil war, economic growth
  6. By: Shorish, Jamsheed (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria and Department of Economics, University of Illinois at Urbana-Champaign)
    Abstract: We introduce a continuous time overlapping generations demographic model, in which a social planner seeks to generate an optimal policy for influencing the demographic change of the underlying population in a neoclassical growth model. The model has the notable feature that the underlying state space is a continuum, leading to a Hamilton-Jacobi-Bellman PDE system which is defined over a Hilbert space generated by the ages of the population cohorts. In this technical report the dynamic programming problem is presented and the numerical approximation using a finite difference approximation is derived. This analysis is part of a larger research program on welfare analysis and policy development for the HIV/AIDS global pandemic.
    Keywords: Optimal control, continuous time overlapping generations, Hamilton-Jacobi-Bellman PDE, finite difference approximation, HIV/AIDS, demographic modeling
    JEL: C61 C63 D61
    Date: 2007–05
  7. By: Sakiko Fukuda-Parr (The New School)
    Abstract: Poverty is an important human rights concern. Human rights are claims that people have for social arrangements to guarantee their substantive freedoms; poverty reflects failures in these social arrangements and in the actions of duty bearers. It is the poorest people in society --- those with low incomes, education, insecure health, and political power --- who are most vulnerable to severe abuse of their human rights in multiple areas. At the same time, it is lack of human rights protection that leaves people vulnerable to falling into economic and social destitution. Poverty is both a cause and consequence of human rights abuse and lack of protection. Yet human rights agendas are rarely explicitly built into national strategies for poverty reduction. This paper is a consolidated report of a study commissioned by OHCHR on developing a conceptual framework for integrating human rights into national strategies for poverty reduction and identifying operational priorities. It builds on and takes further the 2003 OHCHR conceptual framework on human rights and poverty reduction strategies authored by Hunt, Nowak and Osmani. It incorporates a human rights analysis of poverty reduction policies of Guatemala, Liberia and Nepal. The paper argues that human rights perspectives contribute new approaches in normative, analytical and instrumental dimensions of poverty reduction strategies. First, it brings a strong and explicit normative framework legitimized by the backing of international law that emphasize principles of equality, non-discrimination and concern for the most vulnerable, and a social justice agenda to policy priorities. Second, human rights perspectives introduce new analyses to the causes of poverty - focussing on institutionalized discrimination, lack of political voice, institutional failures to guarantee human rights including weak protection for civil and political rights. Third, human rights have instrumental (not just intrinsic) value for poverty reduction; human rights empower poor people through the power of legal protection for human rights --- civil, political, economic, social and cultural --- of poor people as well as through the power of ideas that legitimize the claims of poor people to surmount obstacles in their lives.
    Date: 2007–04
  8. By: DRAMANI, Latif
    Abstract: Cet article a pour objectif, la quantification de la perte sociale et des pénalités liées au type de régime de coopération dans les pays de la zone CFA. Nous reprenons un modèle de coordination à n pays, élaboré par Patrick Villieu (2000), que nous calibrons par des fonctions de réactions spécifiques estimées sur les pays de la zone UEMOA et CEMAC. Les résultats mettent en évidence, une optimalité du régime de coopération sur le régime de discrétion dans les deux zones. D’autre part corollairement, les pénalités optimales qui permettent d’annuler l’inflation sont plus élevées en zone CEMAC qu’en zone UEMOA.
    Keywords: Coordination économique ; Pénalités optimales ; Fonctions de réactions ; équilibre de Nash ; discrétion ; coopération ; politique monétaire ; politique budgétaire ; policy mix ; théorie des jeux.
    JEL: E52 C71 C72 E58 E17 C70 E1
    Date: 2007–05–14
  9. By: DRAMANI, Latif
    Abstract: La disponibilité d’un modèle de simulation est d’un grand secours pour le décideur public car un tel outil remplit des fonctions aussi importantes que celles de support à la définition des programmes économiques et financiers, d’instrument de dialogue avec les partenaires au développement, de monitoring des politiques économiques et sociales. Dans cette étude, l’accent est mis sur la mise en place d’un modèle multi pays, qui prend en compte les spécificités de l’Etat, et celles de la banque centrale. Le but principal étant de mettre en évidence les interactions entre les politiques budgétaires et monétaires.
    Keywords: VAR; SVAR; Kalman Filter; MCM
    JEL: E50 E52 E58
    Date: 2007–05–11
  10. By: Schneider, Friedrich
    Abstract: Estimations of the shadow economies for 145 countries, including developing, transition and highly developed OECD economies over 1999 to 2003 are presented. The average size of the shadow economy (as a percent of "official" GDP) in 2002/03 in 96 developing countries is 38.7%, in 28 transition countries 40.1% and in 21 OECD countries 16.3%. An increased burden of taxation and social security contributions, combined with a labour market regulation are the driving forces of the shadow economy. Furthermore, the results show that the shadow economy reduces corruption in high income countries, but increases corruption in low income countries. Finally, the various estimation methods are discussed and critically evaluated.
    Keywords: shadow economy of 145 countries, tax burden, tax moral, quality of state institutions, regulation, DYMIMIC and other estimation methods
    JEL: D78 H11 H2 H26 O17 O5
    Date: 2007

This nep-afr issue is ©2007 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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