nep-afr New Economics Papers
on Africa
Issue of 2008‒01‒26
thirteen papers chosen by
Suzanne McCoskey
George Washington University

  1. Pro-Growth Alternatives for Monetary and Financial Policies in Sub-Saharan Africa By Robert Pollin; Gerald Epstein; James Heintz
  2. An Estimated DSGE Model for Monetary Policy analysis in Low-Income Countries By Shanaka J. Peiris; Magnus Saxegaard
  3. How Microfinance Associations add value - 2 Observations with references from the Association of MFIs of Uganda (AMFIU) By Schmidt, Oliver
  4. Federal Institutions and the Democratic Transition: Learning from South Africa By Robert P. Inman; Daniel L. Rubinfeld
  5. Finding missing markets (and a disturbing epilogue) : evidence from an export crop adoption and marketing intervention in Kenya By Karlan, Dean; Gine, Xavier; Ashraf, Nava
  6. Estimating the Level and Distribution of Global Household Wealth By James B. Davies; Susanna Sandström; Anthony Shorrocks; Edward N. Wolff
  7. Modeling Inflation for Mali By Mame Astou Diouf
  8. Changing Nature of North-South Linkages: Stylized Facts and Explanations By M. Ayhan Kose; Cigdem Akin
  9. The Monetary Transmission Mechanism in Egypt By Andreas Billmeier; Rania Al-Mashat
  10. Impact de l'AGOA sur les pays éligibles: Analyse à travers le modèle CMS By Boniface Bounoung Fouda
  11. Institutions, histoire et développement dans le monde arabe et musulman. By Fatiha Talahite
  12. Algérie. L’emploi féminin en transition. By Fatiha Talahite
  13. Aid, growth, and real exchange rate dynamics By Thierfelder, Karen; Robinson, Sherman; Page, John; Go, Delfin S.; Devarajan, Shantayanan

  1. By: Robert Pollin (Univ. of Massachusetts); Gerald Epstein (Univ. of Massachusetts); James Heintz (Univ. of Massachusetts)
    Keywords: Pro-Growth Alternatives for Monetary and Financial Policies in Sub-Saharan Africa
    Date: 2008–01
  2. By: Shanaka J. Peiris; Magnus Saxegaard
    Abstract: This paper evaluates monetary policy-tradeoffs in low-income countries using a dynamic stochastic general equilibrium (DSGE) model estimated on data for Mozambique taking into account the sources of major exogenous shocks, and level of financial development. To our knowledge this is a first attempt at estimating a DSGE model for Sub-Saharan Africa excluding South Africa. Our simulations suggests that a exchange rate peg is significantly less successful than inflation targeting at stabilizing the real economy due to higher interest rate volatility, as in the literature for industrial countries and emerging markets.
    Keywords: Monetary policy , Africa , Currency pegs , Inflation targeting , Low-income developing countries ,
    Date: 2007–12–19
  3. By: Schmidt, Oliver
    Abstract: There are manifold reasons for microfinance association; the most common ones are advocacy, information, capacity building. However, the one unifying rationale of this organisational type appears to be wanting. The following paper makes two cases about the rationale of MF associations: 1. MF associations should NOT be regulatory bodies. In Uganda and elsewhere, there is a tendency to transform associations into apexes, to use them for regulation tasks. This is based on two motives: On the one hand, due to under-conceptualisation of associations, their promoters tend to see a promising opportunity in some regulatory role; its impact is often not well understood or neglected. On the other hand, some government agencies that lack resources and reliable systems for fulfilling regulatory tasks tend to see apexes as a convenient "quick fix." 2. The competitive edge of MF associations lies in improving informational efficiency of the Microfinance sector. MF associations are uniquely positioned to compile data for creation of information – e. g. performance monitoring – that are barred to any other organisation. MF associations should be built around that objective and judged by it. Many interventions oscillate around partial issues of informational efficiency, e. g. credit reference and rating services. Yet, its conceptualisation has been curiously neglected by development partners. Consequently appreciation has been insufficient regarding the specific, impressive management demands faced by MF associations. These are the conclusions of over 2 years working with AMFIU. AMFIU, the microfinance association of Uganda, has been commended as one of the leading MF associations of Africa. AMFIU grew its membership and expanded its operations impressively. In its 12th year of existence, AMFIU membership represents about three quarter of the Ugandan microfinance sector in terms of portfolio and client outreach.
    Keywords: Microfinance; Development; Meso-Level Organisations; Associations; Information; Information Management
    JEL: D85 O12
    Date: 2008–01–18
  4. By: Robert P. Inman; Daniel L. Rubinfeld
    Abstract: We present a model of a peaceful transition in South Africa from white, elite rule under apartheid to a multi-racial democracy. We ask how can the emerging majority credibly promise not to exploit the once ruling elite? Under South Africa’s "democratic federalism" the constitution creates an annual policy game where the new majority and the elite each control one policy instrument of importance to the other. The game has a stable, stationary democratic equilibrium that the elite prefer to autocratic rule. For the elite, the move to democracy means higher tax rates, but also higher economic growth; democracy is preferred to apartheid if the elite's rate of time preference is less than the transition's rate of return.
    JEL: H11 H77 P26
    Date: 2008–01
  5. By: Karlan, Dean; Gine, Xavier; Ashraf, Nava
    Abstract: In much of the developing world, many farmers grow crops for local or personal consumption despite export options that appear to be more profitable. Thus many conjecture that one or several markets are missing. This paper reports on a randomized controlled trial conducted by DrumNet in Kenya that attempts to help farmers adopt and market export crops. DrumNet provides smallholder farmers with information about how to switch to export crops, makes in-kind loans for the purchase of the agricultural inputs, and provides marketing services by facilitating the transaction with exporters. The experimental evaluation design randomly assigns pre-existing farmer self-help groups to one of three groups: (1) a treatment group that receives all DrumNet services, (2) a treatment group that receives all DrumNet services except credit, or (3) a control group. After one year, DrumNet services led to an increase in production of export oriented crops and lower marketing costs; this translated into household income gains for new adopters. However, one year after the study ended, the exporter refused to continue buying the cash crops from the farmers because the conditions of the farms did not satisfy European export requirements. DrumNet collapsed in this region as farmers were forced to sell to middlemen and defaulted on their loans. The risk of such events may explain, at least partly, why many seemingly more profitable export crops are not adopted.
    Keywords: Crops & Crop Management Systems,Access to Finance,,Economic Theory & Research,Banks & Banking Reform
    Date: 2008–01–01
  6. By: James B. Davies (University of Western Ontario); Susanna Sandström (UNU-WIDER, Helsinki); Anthony Shorrocks (UNU-WIDER, Helsinki); Edward N. Wolff (New York University)
    Abstract: We provide the first estimate of the level and distribution of global household wealth. Mean assets and debts within countries are measured, partly or wholly, for 39 countries using household balance sheet and survey data centred on the year 2000. Determinants of mean financial assets, non-financial assets, and liabilities are studied empirically, and the results are used to impute values to countries lacking wealth data. Household wealth per adult is US$43,494 in PPP terms, and ranges regionally from US$11,655 in Africa to US$193,147 in North America. Data on the shape of the household distribution of wealth for 20 countries, accounting for 59 per cent of the world’s population and, we estimate, 84 per cent of its wealth are used to establish patterns of wealth inequality within countries. Imputations are again performed for countries lacking wealth data, on the basis of the observed relation between wealth and income distribution for the 20 countries with data. The Gini coefficient for the global distribution of wealth is 0.804, and the share of the top 10 per cent is 71 per cent. Wealth of US$8,325 is needed to be in the top half of the distribution, and US$517,601 is needed to be in the top one per cent. Between-country differences in wealth are two-thirds of global inequality according to the Gini coefficient, indicating a larger role for withincountry inequality than in the case of income according to recent estimates.
    Keywords: wealth; net worth; personal assets; inequality; households; balance sheets; portfolios
    JEL: D31 E01 E21
    Date: 2007
  7. By: Mame Astou Diouf
    Abstract: This paper investigates how consumer price inflation is determined in Mali for 1979-2006 along three macroeconomic explanations: (1) monetarist theories, emphasizing the impact of excess money supply, (2) the structuralist hypothesis, stressing the impact of supply-side constraints, and (3) external theories, describing the effects of foreign transmission mechanisms on a small open economy. The analysis makes use of cointegration techniques and general-to-specific modeling. Average national rainfall, and to a lesser extent deviations from monetary and external sector equilibrium are found to be the main long-run determinants of inflation. The paper offers policy recommendations for controlling inflation in Mali.
    Keywords: Inflation , Mali , Real effective exchange rates , Demand for money ,
    Date: 2008–01–02
  8. By: M. Ayhan Kose; Cigdem Akin
    Abstract: This paper examines the changing nature of growth spillovers between developed economies, the North, and developing countries, the South, driven by the process of globalization?the phenomenon of rising international trade and financial flows. We use a comprehensive database of macroeconomic and sectoral variables for 106 countries over the period 1960- 2005. We consider the South to be composed of two groups of countries, the Emerging South and the Developing South, based on the extent of their integration into the global economy. Using a panel regression framework, we find that the impact of the Northern economic activity on the Emerging South has declined during the globalization period (1986-2005). In contrast, the growth linkages between the North and Developing South have been rather stable over time. Our findings also suggest that the Northern and Emerging Southern economies have started to exhibit more intensive intra-group growth spillovers.
    Keywords: Emerging markets , Globalization , International trade , Capital flows , Economic growth ,
    Date: 2007–12–20
  9. By: Andreas Billmeier; Rania Al-Mashat
    Abstract: This paper examines the monetary transmission mechanism in Egypt against the background of the central bank's intention to shift to inflation targeting. It first describes the changing transmission channels over the last decade. Second, the channels are evaluated in a VAR model. The exchange rate channel plays a strong role in propagating monetary shocks to output and prices. Most other channels (bank lending, asset price) are rather weak. The interest rate channel is underdeveloped but appears to be strengthening since the introduction of the interest corridor in 2005, which bodes well for adopting inflation targeting over the medium term.
    Keywords: Monetary policy , Egypt, Arab Republic of , Inflation targeting , Exchange rates ,
    Date: 2007–12–19
  10. By: Boniface Bounoung Fouda (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: Dans ce papier, nous avons essayé d'identifier l'impact de l'AGOA sur les exportations des pays éligibles. A cet effet, nous avons utilisé le modèle CMS. Sous une approche globale, ce modèle nous a permis de<br />voir que l'augmentation des exportations constatées est due à trois effets: un effet dominant attribuable à l'augmentation de la demande américaine suivi d'un effet dû à la composition des exportations et enfin d'un effet de compétitivité attribuable à l'AGOA. Toutefois, au niveau sectoriel, nous avons plutôt trouvé que l'effet de l'AGOA est apparu plus élevé sur les secteurs autres que les secteurs des exportations traditionnelles. Au niveau régional, l'effet de l'AGOA est apparu plus élevé en Afrique de l'Est par rapport aux autres régions. L'Afrique Australe hors Angola et Afrique du Sud est la deuxième région où l'effet de l'AGOA est apparu élevé, cette région est suivie par l'Afrique Centrale et puis enfin l'Afrique<br />de l'Ouest.
    Keywords: accords commerciaux; politique commerciale; modèle CMS.
    Date: 2007–10–11
  11. By: Fatiha Talahite (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII)
    Abstract: La qualité des institutions peut-elle expliquer le ‘retard’ de développement au Moyen Orient et en Afrique du Nord ? Des travaux récents essaient de répondre à cette question à l’aide de la théorie néo-institutionnaliste de Douglas North, laquelle explique l’essor du monde occidental par l’émergence au Nord de l’Europe au Xe siècle, d’institutions originales qui se diffuseront en Occident grâce à la concurrence entre nations. Pour expliquer les différences de développement entre nations et civilisations, North construit une vision de l’histoire mondiale centrée sur l’Occident et néglige l’apport des autres mondes, en particulier la multitude des échanges et des contacts entre l’Est et l’Ouest qui n’ont cessé depuis le moyen age jusqu’à la période moderne. Cette démarche est interpellée à la lumière des apports de la connaissance historique à l’étude des économies du monde arabe et musulman.
    Keywords: histoire économique, institutions, Moyen-Orient et Afrique du Nord.
    Date: 2008–01–10
  12. By: Fatiha Talahite (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII)
    Abstract: Une première série de travaux réalisé dans les années 1980 avait mis en évidence certains aspects de l’activité et de l’emploi féminins en Algérie ainsi que les évolutions observées durant les décennies 60-80 à partir de conditions initiales prenant en compte la situation coloniale et le statut de la femme dans la société algérienne. Ces études avaient montré, que, au-delà de l’exceptionnelle faiblesse des taux d’activité féminine - y compris en comparaison avec ceux observés dans d’autres pays de la région - cet emploi était essentiellement urbain, salarié, relativement qualifié, avec comme principal employeur l’Etat. Ces caractéristiques pouvaient s’expliquer par la combinaison de plusieurs facteurs parmi lesquels le modèle de développement peu créateur d’emploi, le rôle joué par les revenus des hydrocarbures dans l’économie algérienne, le caractère administré de l’économie et la place de l’Etat dans la création d’emplois, l’exode rural et le déclin de l’agriculture, le faible taux de scolarisation des filles... Cependant, les données et les études alors disponibles ainsi que la courte durée de la période considérée ne permettaient pas d’aller plus loin dans l’analyse des déterminants de l’activité et de l’emploi féminins en Algérie.<br />Aujourd’hui, après un intervalle de plus de 20 ans, nous réexaminons la question, au regard des évolutions qui ont jalonné les années 85-2005, en particulier la nouvelle donne économique (réformes économiques, ouverture extérieure, nouvelles institutions du marché du travail), démographique (transition démographique, etc.), mais également les transformations sociales et culturelles qui affectent les comportements en matière de travail féminin.
    Keywords: marché du travail ; genre; transition; Algérie
    Date: 2008–01–10
  13. By: Thierfelder, Karen; Robinson, Sherman; Page, John; Go, Delfin S.; Devarajan, Shantayanan
    Abstract: Devarajan, Go, Page, Robinson, and Thierfelder argued that if aid is about the future and recipients are able to plan consumption and investment decisions optimally over time, then the potential problem of an aid-induced appreciation of the real exchange rate (Dutch disease) does not occur. In their paper, " Aid, Growth and Real Exchange Rate Dynamics, " this key result is derived without requiring extreme assumptions or additional productivity story. The economic framework is a standard neoclassical growth model, based on the familiar Salter-Swan characterization of an open economy, with full dynamic savings and investment decisions. It does require that the model is fully dynamic in both savings and investment decisions. An important assumption is that aid should be predictable for intertemporal smoothing to take place. If aid volatility forces recipients to be constrained and myopic, Dutch disease problems become an issue.
    Keywords: Economic Theory & Research,Debt Markets,Currencies and Exchange Rates,Emerging Markets,
    Date: 2008–01–01

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