nep-afr New Economics Papers
on Africa
Issue of 2009‒01‒24
eight papers chosen by
Quentin Wodon
World Bank

  1. The importance of socio-economic status in determining educational achievement in South Africa By Stephen Taylor; Derek Yu
  2. Determinants of West African Monetary Zone (WAMZ)countries global export trade: do foreign reserves and independent exchange rates matter? By Balogun, Emmanuel Dele
  3. Evaluation of Second National Fadama Development Project in Nigeria: A Rapid Policy Appraisal By Nwachukwu, Ifeanyi/ N; Agwu, Nnanna/M; Ezeh, Chima/I; Mbanasor, Jude/A; Onyenweaku, Chris/O; Kamalu , Chinedu/E
  4. Child Welfare and Old-Age Security in Female Headed Households in Tanzania By Seebens, Holger
  5. Things are different when you open up: Economic openness, domestic economy, and income By Beja, Edsel
  6. Is aid the capital component making countries efficient? By Veiderpass, Ann; Andersson, Per-Åke
  7. The role of institutional design in the conduct of infrastructure industries reforms - An illustration through telecommunications in developing countries By Recuero Virto, Laura; Gasmi, Farid; Noumba Um, Paul
  8. When Does Domestic Saving Matter for Economic Growth? By Philippe Aghion; Diego Comin; Peter Howitt; Isabel Tecu

  1. By: Stephen Taylor (Department of Economics, University of Stellenbosch); Derek Yu (Department of Economics, University of Stellenbosch)
    Abstract: The needs to find ways of lifting people out of poverty and to transform the existing patterns of inequality in South Africa are high on the country’s development agenda. Much hope is often vested in education as an opportunity for children from poor households to overcome the disadvantage of their background and escape poverty. The logic of this is often conceived of in terms of the human capital model, according to which education improves an individual’s productivity, which in turn is rewarded on the labour market by higher earnings. However, there is a circularity in the relationship between socio-economic status (SES) and education, in that it is well known that a student’s SES has an important influence their educational achievement. Drawing on data from the recent Progress in International Reading Literacy Study (PIRLS 2006), this paper investigates the extent to which SES affects educational achievement in the case of South Africa, and moves on to consider the implications of this for the ability of the education system to be an institution that transforms existing patterns of inequality rather than reproducing such patterns.
    Keywords: South Africa, socio-economic status, education, educational achievement, educational inequality, economic development
    JEL: I20 I21 I30 O15
    Date: 2009
  2. By: Balogun, Emmanuel Dele
    Abstract: This study examines the effect of independent exchange rate pursuits and reserve holdings, relative to other determinants, on global export performance of WAMZ countries. The regression results show that exports originating from the Zone to the rest of the world are influenced positively by domestic output, export prices and exchange rate devaluations, but negatively by import price and economic performance of the major global trading partner, proxied by the US GDP. This result is not universal as the Gambia, Ghana and Guinea total exports functions show that exchange rate policy penalized exports contrary to the Nigerian case in which the coefficient estimate is significant and positive. The study infers that these results are consistent with theoretical expectation given the ironical divergence in export basket. Although they are all primary commodity exporters, Nigeria’s exports is mainly crude oil, and a priori expectation is that rapid economic growth or booms in the US should lead to increased demand for energy (healthy competitions). In conclusion, the study infers that since independent flexible exchange rate policy pursuits and reserve holdings makes no difference to the Zonal export performance ex ante, but have great potential for global exports collectively, they could explore an OCA to enhance both intra- and global inter-regional export trade
    Keywords: Exchange rate policy; export trade; panel data regression model; WAMZ
    JEL: F10 C23 F14 F1
    Date: 2009–01–21
  3. By: Nwachukwu, Ifeanyi/ N; Agwu, Nnanna/M; Ezeh, Chima/I; Mbanasor, Jude/A; Onyenweaku, Chris/O; Kamalu , Chinedu/E
    Abstract: The Second National Fadama Development Project was borne out of the need to ensure all year round agricultural production using available Fadama resources in Nigeria and also a follow – up to Fadama 1 that was adjudged successful. Its approach was Community Driven Development (CDD) with emphasis on social inclusiveness and empowerment of the rural people to take charge of their development agenda. The Project focused on increasing sustainably the incomes of Fadama Users via empowerment in terms of capacity building, advisory services, acquisition of productive assets and rural infrastructure development. As at mid – term, beneficiaries have increased their income by about 25%. So far, an estimated 2.3 million Fadama households have benefited from the expansion in incomes and wealth (asset) derived from the previously unavailable services provided by the project. The project had created about 126, 000 permanent jobs and an additional savings of more than $40.8 million have been realized by the majority of the participating states.
    Keywords: Fadama; Agricultural production; food security; poverty alleviation
    JEL: A30 I31
    Date: 2008–11–21
  4. By: Seebens, Holger (University of Göttingen)
    Abstract: This paper is concerned with patterns of expenditure and child welfare among female headed (FHH) and male headed households (MHH) in Tanzania as well as with the underlying cause of potentially different patterns. I estimate semiparametric Engel curves to investigate household expenditure patterns while controlling for household characteristics and find that FHH spend significantly more money on the welfare of children and less on consumption of adult goods. In an attempt to explain this observed difference, I further investigate the empirical content of the old-age security hypothesis, which states that persons lacking the financial means to rely on themselves during old-age invest more in children who care for them in later periods. The results lend support to the idea that old-age security might be the driving force behind the observed differences of expenditure allocated towards the welfare of children. FHH having access to alternative means of old-age security, spend significantly less on child welfare. Furthermore, food expenditure levels of FHH and MHH with access to alternative old-age security become the same.
    Keywords: demand, female headed households, child welfare, old age security
    JEL: D12 J12 J13 J14
    Date: 2009–01
  5. By: Beja, Edsel
    Abstract: “Does economic openness increase income?” is retested using quantity measures of trade, finance, and domestic economic size, and the short answer is: “It de-pends”. The results show that Africa and the Americas lose from both trade and financial openness, while Asia gains from trade openness but loses from financial openness. The industrialized region benefits from both trade and financial open-ness. In all regions, the domestic base compensates for any adverse effects of economic openness. The overall experience of economies with openness can be enhanced with healthier external and domestic engagements. The case study on the Philippines finds that the country gains from trade and financial openness but not from the domestic base. In this case, economic progress is difficult because the gains from external engagement are wiped out by the losses from domestic economy disengagement.
    Keywords: Economic openness; trade; finance; domestic economy; income
    JEL: F40 F00 F20 F10 O10 B50
    Date: 2009–01–15
  6. By: Veiderpass, Ann (Department of Economics, School of Business, Economics and Law, Göteborg University); Andersson, Per-Åke (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Cross country regressions on aid effectiveness have failed to provide substantial evidence on the effects of foreign aid. This study focuses on country performance in a production theory context. By means of the non-parametric DEA method, we study 60 individual low and middle income countries between 1995 and 2000. Is there a systematic correlation between resource intensity and country efficiency? We find indications of a positive relation between capital intensity and country efficiency. We then investigate whether aid is the conclusive part of capital providing this correlation, but when linking country efficiency development to aid, there is no clear pattern to be found.<p>
    Keywords: Aid; efficiency; country comparison; production approach
    JEL: D24 O57
    Date: 2009–01–12
  7. By: Recuero Virto, Laura; Gasmi, Farid; Noumba Um, Paul
    Abstract: This paper discusses the relationship between the quality of political and economic institutions and the performance of the infrastructure industries reform process in developing countries. Our point of departure is that, when thinking about this relationship, it is necessary to take into account the specific features of these countries’ economies (Gasmi and Recuero Virto, 2005, Laffont, 2005). Based on two econometric analysis of time-series-crosssectional data on the telecommunications sector, we present the empirical findings and policy implications pertaining two issues (Gasmi et al., 2006, Gasmi and Recuero Virto, 2007). The first issue concerns the impact of the quality of institutions on the performance of regulation. Our review points to the fact that political accountability of institutional systems is a key determinant of regulatory performance. The second issue relates to the factors that shape the sectorial reforms themselves and the impact on these reforms on the development of the industry. Our main conclusion is that countries’ institutional risk and financial constraints are among the major factors that explain which reforms are actually implemented.
    Keywords: Political accountability; reforms; infrastructure industries; developing countries
    JEL: L96 L51 H11 L97 C23
    Date: 2009
  8. By: Philippe Aghion (Harvard University - Department of Economics); Diego Comin (Harvard Business School, Business, Government and the International Economy Unit); Peter Howitt (Brown University - Department of Economics); Isabel Tecu (Brown University - Department of Economics)
    Abstract: Can a country grow faster by saving more? We address this question both theoretically and empirically. In our theoretical model, growth results from innovations that allow local sectors to catch up with frontier technology. In poor countries, catching up requires the cooperation of a foreign investor who is familiar with the frontier technology and a domestic entrepreneur who is familiar with local conditions. In such a country, domestic saving matters for innovation, and therefore growth, because it enables the local entrepreneur to put equity into this cooperative venture, which mitigates an agency problem that would otherwise deter the foreign investor from participating. In rich countries, domestic entrepreneurs are already familiar with frontier technology and therefore do not need to attract foreign investment to innovate, so domestic saving does not matter for growth. A cross-country regression shows that lagged savings is positively associated with productivity growth in poor countries but not in rich countries. The same result is found when the regression is run on data generated by a calibrated version of our theoretical model.
    Keywords: Savings, growth, technology adoption, TFP, FDI
    JEL: E2 O2 O3
    Date: 2009–01

This nep-afr issue is ©2009 by Quentin Wodon. 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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