nep-afr New Economics Papers
on Africa
Issue of 2008‒10‒28
twelve papers chosen by
Marco Novarese
University Amedeo Avogadro

  1. Beyond Macroeconomic Stability: The Quest for Industrialization in Uganda By Abebe Aemro Selassie
  2. Fast Track Land Reform and Agricultural Productivity in Zimbabwe By Zikhali, Precious
  3. Understanding Low Average Returns to Education in Africa: The Role of Heterogeneity across Education Levels and the Importance of Political and Economic Reforms By Uwaifo Oyelere, Ruth
  4. Public Financial Management and Fiscal Outcomes in sub-Saharan African Heavily-Indebted Poor Countries By Ezequiel Cabezon; Tej Prakash
  5. Breaking the “Insecurity Trap”? How Violence and Counter-violence are Perpetuated in Elite Power Struggles By Andreas Mehler
  6. Tenure Security and Investments: Micro-evidence from Zimbabwe’s Fast Track Land Reform Programme By Zikhali, Precious
  7. AIDS, Access to Medicines, and the Different Roles of the Brazilian and South African Governments in Global Health Governance By Jan Peter Wogart; Gilberto Calcagnotto; Wolfgang Hein; Christian von Soest
  8. Migration Impact on Moroccan Unemployment : a Static Computable General Equilibrium Analysis By Bernard Decaluwé; Fida Karam
  9. Constraints to Economic Development and Growth in the Middle East and North Africa By Juliane Brach
  10. Foreign Direct Investment, Macroeconomic Instability And Economic Growth in MENA Countries By Mustapha Sadni Jallab; Monnet Benoît Patrick Gbakou; René Sandretto
  11. Domestic resources, governance, global links, and the economic performance of Sub-Saharan Africa By Amavilah, Voxi Heinrich
  12. Foreign Direct Investment (FDI) and Stock market Development: Ghana Evidence By Adam, Anokye M.; Tweneboah , George

  1. By: Abebe Aemro Selassie
    Abstract: Uganda has registered one of the most impressive economic turnarounds of recent decades. The amelioration of conflict and wide ranging economic reforms kick-started rapid economic growth that has now been sustained for some 20 years. But there is a strong sense in policy making circles that despite macroeconomic stability and reasonably well functioning markets, economic growth has not translated into significant structural transformation. This paper considers (i) Uganda's record of economic transformation relative to the high growth Asian countries and (ii) the contending explanations as to why more transformation and higher growth has proved elusive.
    Keywords: Financial stability , Uganda , Industrialization , Economic recovery , Economic reforms , Economic growth , Economic policy ,
    Date: 2008–10–01
  2. By: Zikhali, Precious (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In the year 2000 the government of Zimbabwe launched the Fast Track Land Reform Programme (FTLRP) as part of its ongoing land reform and resettlement programme, which seeks to address the racially skewed land distribution pattern inherited at independence in 1980. This paper uses data on beneficiaries of the programme and a control group of communal farmers to investigate the programme’s impact on the agricultural productivity of its beneficiaries. The data reveals significant differences between the two groups, not only in household and parcel characteristics but also in input usage. The results suggest that FTLRP beneficiaries are more productive than communal farmers. The source of this productivity differential is found to lie in differences in input usage. In addition we find that FTLRP beneficiaries gain a productivity advantage not only from the fact that they use more fertiliser per hectare, but also from attaining a higher rate of return from its use. Furthermore we find evidence that soil conservation, among other factors, has a significant impact on productivity. Our results also confirm the constraints imposed on agricultural productivity by poverty, suggesting that policies aimed at alleviating poverty would have a positive impact on agricultural productivity.
    Keywords: Land reform; Agricultural productivity; Zimbabwe
    JEL: D24 Q12 Q15 Q18
    Date: 2008–10–21
  3. By: Uwaifo Oyelere, Ruth (Georgia Tech)
    Abstract: Until very recently, the conventional wisdom was that the return to education was very high in Africa. However, some recent analysis point to low average returns to education in some African countries including Nigeria. Given these low returns to education, a relevant question is what causes low returns or what can cause changes in returns to education? In this paper, I examine the hypothesis that economic and political reforms can lead to increased returns to schooling using the case of Nigeria. Following the sudden death of military general Sanni Abacha, Nigeria moved to democracy in 1999, ending an over 15 years stretch of military rule. This move was followed by significant institutional and economic reforms, which provide an opportunity to examine the short term impact of reforms on returns to education. The average return to education is estimated using instrumental variables exploiting a quasi experiment in Nigeria. The results provide evidence that reforms implemented post democracy in Nigeria led to a 2.6% point increase in average returns to education. Furthermore, I find that the low average return to schooling in Nigeria reflects more the low returns at the primary and secondary levels.
    Keywords: returns to education, wage reform, military, democratic reform
    JEL: J08 O12 O15 P5
    Date: 2008–10
  4. By: Ezequiel Cabezon; Tej Prakash
    Abstract: This paper examines, in a formal econometric framework, the linkages between public financial management and fiscal outcomes in sub-Saharan African countries. Similar analyses have been done for Latin America, Europe, and the United States, but none in the context of low-income countries. Using public financial management indicators, as measured in two recent assessments related to the Heavily-Indebted Poor Countries Initiative, this study shows that improving public financial management leads to better fiscal outcomes, as measured by the overall fiscal balance and external debt levels, after controlling for other characteristics that might alter fiscal outcomes.
    Keywords: Financial management , Sub-Saharan Africa , Heavily indebted poor countries , Fiscal sector , Public sector , Economic indicators , External debt , Economic models , Fiscal policy , Working Paper ,
    Date: 2008–09–15
  5. By: Andreas Mehler (GIGA Institute of African Affairs)
    Abstract: Half a century after independence, African elites, at least those in conflict-ridden countries, often live in constant fear for their life. Real or invented coup attempts, political assassinations, beatings of opposition leaders, the distribution of death lists, etc. have a profoundly traumatizing and self-perpetuating effect. Purges, not least in the security apparatus, are not uncommon, particularly after changes in government, be they peaceful or violent. These purges come at a cost: the excluded elites are frequently tempted to use violence to come back into the “dining room”—and the excluding government tries to prevent reentry by all means. This contribution draws a dense picture of elite (in)security in three African countries (Central African Republic, Côte d’Ivoire and Liberia). A comparative analysis of elite security needs and devices is undertaken, permitting the author to draw some preliminary sconclusions: The ineffectiveness of state institutions (presidential guards, etc.) in breaking the insecurity trap by providing special elite-protection services is obvious. The record of private security services is most debatable and efforts by international actors need to be looked at more closely: UN peacekeepers can be effective when they are sufficient in number and have the appropriate mandate. The record of French interventions in former colonies has over time become ever more ambivalent and has lost any preventive meaning.
    Keywords: Africa, elites, security, Central African Republic, Côte d’Ivoire, Liberia
    Date: 2008–09
  6. By: Zikhali, Precious (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The government of Zimbabwe launched the Fast Track Land Reform Programme (FTLRP) in 2000 as part of its ongoing land reform and resettlement programme aimed at addressing a racially skewed land distribution. Its goal has been to accelerate both land acquisition and redistribution, targeting at least five million hectares of land for resettlement. This paper investigates the impact of the FTLRP on its beneficiaries’ perceptions of land tenure security, and how these subsequently impacted soil conservation investments. Evidence suggests that the programme created some tenure insecurity, which adversely affected soil conservation investments among its beneficiaries. We find support for the contention that households invest in land-related investments to enhance security of tenure. The results underscore the need for the government of Zimbabwe to clarify and formalise land tenure arrangements within the programme.<p>
    Keywords: Land reform; Tenure security; Investments; Zimbabwe
    JEL: O12 O13 Q15 Q24
    Date: 2008–10–21
  7. By: Jan Peter Wogart (GIGA German Institute of Global and Area Studies); Gilberto Calcagnotto (GIGA Institute of Latin American Studies); Wolfgang Hein (GIGA Institute of Latin American Studies); Christian von Soest (GIGA Institute of African Affairs)
    Abstract: The present article illustrates how the main actors in global health governance (GHG)— governments, nongovernmental organizations (NGOs), intergovernmental organizations (IOs), and transnational pharmaceutical companies (TNPCs)—have been interacting and, as a result, modifying the global health architecture in general and AIDS treatment in particular. Using the concept of “power types” (Keohane/Martin) and “interfaces” (Norman Long), the authors examine the conflicts among major GHG actors that have arisen surrounding the limited access to medicines for fighting HIV/AIDS basically as a result of the Agreement on Trade Related Intellectual Property Rights (TRIPS), in force since 1995. They then analyze the efforts of Brazil and South Africa to obtain fast and low-cost access to antiretroviral medication against AIDS. They conclude that while policy makers in the two countries have used different approaches to tackle the AIDS problem, they have been able, with the support of NGOs, to modify TRIPS and change some WTO rules at the global level along legal interfaces. At the national level the results of the fight against AIDS have been encouraging for Brazil, but not for South Africa, where authorities denied the challenge for a prolonged period of time. The authors see the different outcomes as a consequence of Brazil’s ability to combine discoursive, legal, administrative, and resource-based interfaces.
    Keywords: global health governance; HIV/AIDS in Brazil and South Africa; discoursive, legal, organizational and resource-based interfaces; WTO; transnational pharmaceutical companies; NGOs
    Date: 2008–09
  8. By: Bernard Decaluwé (Université Laval - Département d'Economie); Fida Karam (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: Recently, much research interest is directed towards the impact of migration on the sending country. However, we think that this literature does not successfully analyse the effects of migration on unemployment and wage rates especially in urban areas. It studies the effect of one king of migration flow, mainly international migration, on labour market in the country of origin and shows that international migration is able to reduce the unemployment rate and/or raise the wage rates. However, it is common to find labour markets affected simultaneously by inflows and outflows of workers. Using a detailed CGE model applied to the Moroccan economy, we show that if we take simultaneously into account Moroccan emigration to the European Union, immigration from Sub-Saharan Africa into Moroccan urban areas and rural-urban migration, the impact on Moroccan urban labour market disaggregated by professional categories is ambiguous.
    Keywords: Imperfect labor market, migration, computable general equilibrium model.
    Date: 2008–04
  9. By: Juliane Brach (GIGA Institute of Middle East Studies)
    Abstract: When comparing the speed and extent of economic development in different geographic regions of the world over the past 20 years, the under-average performance of Arab countries in general and Arab Mediterranean countries in particular is striking. This is despite an overall favorable geo-strategic situation at the crossroads of three continents, with excellent connections to sea and waterways and in direct proximity to the European Union, one of the world’s economic hubs. It is also despite the minor importance of negative factors such as a high-burden diseases or high levels of ethnic fractionalization. In this paper, I focus on identifying the most important constraints on Arab Mediterranean economic development. I use state-of-the-art econometric tools to quantify constraints that have been identified through economic theory and studies of the political economy characteristics of the region. The empirical results offer support for the central hypothesis that limited technological capacities and political economy structures are the primary constraints on economic development. With a view to international structural adjustment efforts, my findings imply that the limited success of the Euro-Mediterranean policy to stimulate the economic development of the Arab Mediterranean countries might be because structural adjustment efforts do not tackle—or at least do not sufficiently tackle— these constraints.
    Keywords: economic development, quantitative analysis, political economy, Arab countries
    JEL: F50 O10 O53 C30
    Date: 2008–09
  10. By: Mustapha Sadni Jallab (United Nations Economic Commission for Africa and African Trade Policy Center); Monnet Benoît Patrick Gbakou (GATE, University of Lyon, CNRS, ENS-LSH, Centre Léon Bérard, France); René Sandretto (GATE, University of Lyon, CNRS, ENS-LSH, Centre Léon Bérard, France)
    Abstract: This paper aims at analyzing the possible influence of foreign direct investment (FDI) on economic growth in the particular case of Middle East and North African countries (MENA). During the last years, the relation between FDI and growth in LDCs has been discussed extensively in the economic literature. However, the view that FDI stimulates economic growth does not receive an unanimous support. In order to access empirically this relation in MENA countries, we use a dynamic panel procedure with observations per country over the period 1970-2005. To improve efficiency, we use the standard “difference” and “system” GMM and 2SLS estimators. Our findings show that there is no independent impact of FDI on economic growth. The growth-effect of FDI does not also depend on degree of openness to trade and income per capita. But, the positive impact of FDI on economic growth depends on macroeconomic stability: there is a threshold effect of annual percentage change of consumer prices.
    Keywords: Foreign Direct Investment, Macroeconomic stability, Economic Growth, Middle East and North Africa, Two-stage Least Squares, Generalized Moments Methods
    JEL: C32 C33 F21 F23 F43
    Date: 2008
  11. By: Amavilah, Voxi Heinrich
    Abstract: This paper uses a simple production function to show that the economic performance of a group of African countries in 2007 depended on three broad sources: domestic resources, governance, and global links. The results reveal that investment plays the most important part. The effects of education (knowledge) as a component of human capital is modest, while the health (life expectancy) part of human capital is negative. At the aggregate level external relations, measured as openness, are positively correlated with per capita income. However, disaggregated as integration, aid dependency, and net tourism, all three global links have a negative effect on performance. Also, two indicators of institutional quality (governance) show that average improvement in the quality of institutions has helped economic performance. Considering different dimensions of institutions, the rule of law, and safety and security of property rights are the most constraining aspects of institutions in this group of countries. The findings leave enough room technical for fine-tuning and sophisticated estimators, which cautions interpretation. However, it seems clear that developing countries do better improving domestic resources and institutions than relying for performance on external relations, even though such links cannot be dismissed lightly.
    Keywords: resources; factors and forces of production; governance; institutional quality; perfomance Afican countries
    JEL: F35 O55 O47 O43 C21
    Date: 2008–10–18
  12. By: Adam, Anokye M.; Tweneboah , George
    Abstract: Using multivariate cointegration and Innovation Accounting Methods, this paper examines the impact of Foreign Direct Investment (FDI) on stock market development in Ghana. The paper finds long-run relationship between FDI and stock market development in Ghana. Using impulse responses and Variance Decomposition from Vector Error Correction Model we find that shocks in FDI significantly influence the development of stock market in Ghana
    Keywords: Stock Market Development; Foreign Direct Investment and Market Capitalization
    JEL: F20 C50 G20
    Date: 2008–10

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