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on Africa |
| By: | Alagidede, Paul; Panagiotidis, Theodore |
| Abstract: | The extent to which the stock market provides a hedge to investors against inflation is examined for African stock markets. By employing parametric and nonparametric cointegration procedures, we show that the point estimates of the elasticities of stock prices with respect to consumer prices range from 0.015 for Tunisia to 2.264 for South Africa, evidence of a positive long-run relationship. Further, the time path of the response of stock prices to innovations in consumer prices exhibits a transitory negative response for Egypt and South Africa, which becomes positive over longer horizons: important indication that the stock market tends to provide a hedge against rising consumer prices in African markets. |
| Keywords: | Inflation; African Stock Markets; Fisher Effect; Cointegration; Stock Prices |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2010-07&r=afr |
| By: | Lelio Iapadre; Francesca Luchetti |
| Abstract: | The intensity of trade among countries belonging to the same region depends not only on the existence and effectiveness of a regional integration agreement, but also on other factors, which include the overall trade policy orientation and the relative level of geo-graphic and economic barriers affecting intra- and extra-regional trade. After presenting a set of indicators aimed at measuring correctly the intensity of bi-lateral trade preferences, this paper shows that most African countries tend to trade more intensely with partners belonging to the same region than with the rest of the world. However, this is not so much the result of the weak regional integration agreements that are in force in Africa, as a consequence of the manifold barriers limiting the degree of international openness of African countries. Under this perspective, a relatively high level of intra-regional trade, far from revealing the success of preferential integration policies, confirms that Africa’s participation in the process of globalisation is still very limited. |
| Keywords: | Regional integration, Trade, Africa, Statistical indicators, Network analysis |
| Date: | 2010–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/54&r=afr |
| By: | Yaw Nyarko |
| Abstract: | Brain Circulation between the European Union (EU) and Sub-Saharan Africa is a crucial ingredient in Human Capital formation in the latter. A major constraint to African development is the very low base of skilled and highly educated workers and professionals. The production of skilled workers has been low, and only recently has seen a dramatic increase. Recent papers by many authors have indicated that a channel for human capital growth has been, paradoxically, the possibility of the brain drain which serves as both an incentive mechanism and which results in higher human capital when the drainers return. After a review of some of the literature, these insights are applied to the debates raging today on European Union migration policy: the Blue Card, Migration Con-tracts, anti-Brain Drain legislation, etc. This paper argues that a careful calibration of the EU policies may enable faster Human Capital growth in Africa, while, at the same time, being beneficial to the EU by supplying critically needed skills into the EU economy. By carefully planning the production of human capital and the consequent flow of skilled migrants into Europe, the EU can assist in the development of vitally needed numbers of trained or skilled workers in Africa. |
| Keywords: | Brain Drain, Immigration, Migration, Human Capital, Economic Development |
| Date: | 2010–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/30&r=afr |
| By: | Jesse McConnell |
| Abstract: | The challenge of institution building in African countries remains a major threat to the establishment of peace and justice, and the entrenchment of sustainable social and economic development. This may be attributed largely to the dynamic and complex social landscape of most African countries. While single borders bring political definition to post-independent countries, such countries often struggle to find a single national identity that transcends numerous tribal, ethnic or historic identities. The role of central government in creating an effective structure of governance is crucial in the steps towards postconflict nation-building. However, national institution building is not necessarily the right answer, especially in contexts difficult to govern, such as vast geographic areas or complex social and ethnic realities. It is in this sense that this paper – and the initial states of this research – seeks to find an alternative to ‘institution building’ as a way forward in good governance practices, suggesting rather a decentralised and localised approach. The case study that will be brought to be bear as an example of this is Rwanda and a recent governance mechanism – Imihigo – as an approach that has helped create a new national identity while instilling a culture of service delivery and accountability amongst its public servants and political leadership. What this paper will seek to argue – in looking at the approach by Rwanda in decentralising its government – is that institution building is not necessarily the way forward in Africa’s ‘good governance’ discourse. Instead, this paper – and the broader borders of what my research is seeking to explore and understand – seeks to present a reformed approach to good governance in Africa, especially contexts that have been divided along complex lines such as ethnicity, geography, national identity, or the competition for natural resources. Though it will be beyond the scope of this research paper specifically, intended environments that this research is hoped to be applicable – and will therefore involve further research around the applicability of such – include the Democratic Republic of Congo, Cote d’Ivoire, Burundi and Sudan. |
| Keywords: | governance; decentralisation; institution; service delivery; Rwanda |
| Date: | 2010–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/39&r=afr |
| By: | Vermaark, Claire |
| Abstract: | South African household surveys typically contain coarsened earnings data, which consist of a mixture of missing earnings values, point responses and interval-censored responses. This paper uses sequential regression multivariate imputation to impute missing and interval-censored values in the 2000 and 2006 Labour Force Surveys, and compares poverty estimates obtained under several different methods of reconciling coarsened earnings data. Estimates of poverty amongst the employed are found not to be sensitive to the use of the multiple imputation approach, but are sensitive to the treatment of workers reporting zero earnings. Multiple imputing earnings for all workers with missing, interval-censored or reported zero earnings, the proportion of workers earning less than R500 per month falls by almost a third between 2000 and 2006. |
| Keywords: | coarsened data, multiple imputation, poverty, wage distribution, working poor |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-86&r=afr |
| By: | Quamrul Ashraf (Williams College); Oded Galor (Brown University) |
| Abstract: | This research argues that deep-rooted factors, determined tens of thousands of years ago, had a significant effect on the course of economic development from the dawn of human civilization to the contemporary era. It advances and empirically establishes the hypothesis that, in the course of the exodus of Homo sapiens out of Africa, variation in migratory distance from the cradle of humankind to various settlements across the globe affected genetic diversity and has had a long-lasting effect on the pattern of comparative economic development that is not captured by geographical, institutional, and cultural factors. In particular, the level of genetic diversity within a society is found to have a hump-shaped effect on development outcomes in both the pre-colonial and the modern era, reflecting the trade-off between the beneficial and the detrimental effects of diversity on productivity. While the intermediate level of genetic diversity prevalent among Asian and European populations has been conducive for development, the high degree of diversity among African populations and the low degree of diversity among Native American populations have been a detrimental force in the development of these regions. Further, the optimal level of diversity has increased in the process of industrialization, as the beneficial forces associated with greater diversity have intensified in an environment characterized by more rapid technological progress. |
| Keywords: | The "Out of Africa" hypothesis, Human genetic diversity, Comparative development, Income per capita, Population density, Neolithic Revolution, Land productivity |
| JEL: | N10 N30 N50 O10 O50 Z10 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2010-05&r=afr |
| By: | Thierry Verdier |
| Abstract: | The purpose of this paper is to discuss how regional integration processes may contribute to statebuilding and promote exit from fragility for countries characterised by weak state institutions. After presenting a simple conceptual framework to discuss the effects of external and regional integration on fragile states, we analyse the policy trade-offs that may arise in such contexts. The paper then reviews the specific regional experiences of Sub-Saharan countries and their inter-actions with fragility issues. Finally, we discuss policy implications for the EU in the context of its regional trade and development policies with African fragile countries. The central conclusions of the analysis are the following: I) a two-tier approach to regional integration, which combines both top-down and bottom-up processes, is necessary; 2) the EU approach to regional integration in Africa should promote “Building-Blocks” and not “Stumbling-Blocks”; and 3) specific considerations should be given to make the trade integration strategy “fragility responsive”. |
| Date: | 2010–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/38&r=afr |
| By: | Teklewold, Hailemariam; Köhlin, Gunnar |
| Abstract: | Soil degradation is one of the most serious environmental problems in the highlands of Ethiopia. The prevalence of traditional agricultural land use and the absence of appropriate resource management often result in the degradation of natural soil fertility. This has important implications for soil productivity, household food security, and poverty. Given the extreme vulnerability of farmers in this area, we hypothesized that farmers’ risk preferences might affect the sustainability of resource use. This study presents experimental results on the willingness of farmers to take risks and relates the subjective risk preferences to actual soil conservation decisions. The study looks at a random sample of 143 households with 597 farming plots. We found that a high degree of risk aversion significantly decreases the probability of adopting soil conservation. This implies that reducing farmers’ risk exposure could promote soil conservation practices and thus more sustainable natural resource management. This might be achieved by improving tenure security, promoting access to extension services and education, and developing off-farm activities that generate income. |
| Keywords: | adoption, Ethiopia, risk preference, soil conservation |
| JEL: | Q12 Q16 Q24 D81 |
| Date: | 2010–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-19-efd&r=afr |
| By: | Robinson, James A. |
| Abstract: | Particular sets of institutions, once they become established in a society, have a strong tendency to persist. In this paper I argue that understanding how elites form and reproduce is key to understanding the persistence of institutions over time. I illustrate this idea with a simple political economy theory of institutions and through examples from Liberia, the US, South Africa and Germany I show how elites influence institutions. To change institutions requires having an understanding of how reforms influence the preferences, capabilities and strategies of elites. |
| Keywords: | elites, political economy, persistence of institutions |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-85&r=afr |
| By: | Cabral, Manuel Heredia Caldeira; Veiga, Paula |
| Abstract: | This paper studies the political and economic factors that determine successful export diversification (ED) and export sophistication (ES) strategies in the Sub-Saharan African (SSA) countries and also the way in which successful ED and sophistication strategies contribute to explain the improving in some of the millennium development goals (MDG). We run separate regressions for the determinants of ES and ED, using disaggregated data of the 48 SSA countries, from 1960 to 2005. The results suggest that better governance is an important determinant for the success of diversification and sophistication strategies in SSA. In particular the level of corruption, transparency and accountability are important factors in limiting or promoting the scope of diversification and the level of sophistication of the exports. The results also suggest that increases in human capital in SSA countries promote both ED and ES, showing that the level of education of the workforce is positively related with ES and ED, with higher levels of education (tertiary) playing a more important role in explaining ES, while lower levels of education (primary) being more important as determinants of ED. In the second part we explore the links between ED and ES and growth presenting evidence that ED and ES are linked to growth stability in SSA. This study also suggests that the Sub-Saharan countries that were more successful in achieving ED and ES tend to be more successful in improving the living conditions of their population. Using different variables of Infant Mortality (one of the MDG) and life expectancy as dependent variables, we present evidence that suggests that in SSA higher ED and ES are associated with lower infant mortality and higher life expectancy. We show that this result is robust, presenting positive and significant results even when a large number of different control variables are introduced, or when fixed effects and instrumental variables are considered. The evidence suggests that ED and ES are part of the solution for a successful development of SSA. JEL codes: |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp550&r=afr |
| By: | Necla Tschirgi |
| Abstract: | How can development policy support weak, dysfunctional or fragile states? What constitutes state fragility and what are the appropriate instruments for state-building? After reviewing two recent quantitative indexes (The Index of State Weakness in the Developing World and The Ibrahim Index of African Governance), this paper cautions against the current tendency to categorise a large number of countries as weak, fragile or failing states. Drawing upon country case studies on Namibia, Somalia and Guinea-Bissau, the paper argues that state-building is fundamentally a political process and external “state-builders” need to develop greater understanding of the internal dynamics of individual societies in order to provide appropriate support to address state fragility. Current strategies for statebuilding are heavily weighted in favour of technical, institutional and formal arrangements. Moreover, since 9/11, the international state-building agenda has increasingly focused on state weakness as a challenge for international peace and security, rather than as an issue of national governance. As a result, many preferred policy prescriptions risk weakening the very states that they hope to strengthen. |
| Keywords: | security development nexus, statebuilding, state formation, state fragility, state failure, weak states, governance |
| Date: | 2010–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/35&r=afr |
| By: | Abena D. Oduro |
| Abstract: | This paper presents evidence on the wide range of adverse shocks reported by African households. The current financial and economic crisis adds another layer of risk to al-ready vulnerable households and firms. In responding to an adverse shock, households are involved in a balancing act that is aimed at maintaining consumption and/or assets above critical levels. Households mainly use coping mechanisms that depend on family and other networks and self-insurance. There is limited recourse to public social protection and formal credit and insurance markets. The paper examines some informal financial arrangements. Some of these are not designed to smooth consumption when there is an adverse shock. These informal mechanisms have the potential to be the platform to expand access and utilisation of formal finance particularly in rural communities. There is a clear role for publicly provided interventions. This is because informal risk sharing mechanisms do not cover all shocks. The premium paid may not be adequate to cover the entire financial implications of the shock. Finally, the design of the risk-sharing institutions can result in the very poor being excluded. |
| Keywords: | shocks, coping strategies, financial institutions |
| Date: | 2010–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/31&r=afr |
| By: | Lopes, Jose Mario; Santos, Fabio |
| Abstract: | We compare the performance of Cape Verde and Mozambique concerning financial credibility as measured by Exchange Market Pressure, an institutional feature that has often been overlooked in the literature as a relevant institution for economies. Drawing on previous research by Macedo et al. (2009), we expand their analysis and, using several definitions of “financial credibility”, all related to different angles on Exchange Market Pressure indices, we conclude that - against reasonable benchmarks in their respective regions - financial credibility has been very good for Cape Verde and fairly good for Mozambique. JEL codes: |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp549&r=afr |
| By: | Niagalé Bagayoko-Penone |
| Abstract: | Analysing how the SSR process in CAR has been defined and then implemented, this article puts emphasis on the international interactions between institutional actors who may be geographically/territorially situated at different levels of the policy-making process in different places around the world, thus suggesting ways to grasp multi-actor and multi-sited governance. Therefore, it advocates an approach which consists of expanding the agenda of the traditional multi-level governance approach. The issue at stake here is to capture the interactive institutional dynamic at an international level, thus developing a methodological framework that is likely to seize both the topdown and the bottom-up dynamics of decision-making processes. The first objective is to capture the sets of actors and procedures which drive the process, and to map out the various levels of government at which decisions are made, either the more top-down, or the more bottom-up oriented ones, answering two sets of questions: How is security governance organised? Who decides, and on which matters? Secondly – and more fundamentally – is to capture the intermingling of domestic and international decision-making processes which increasingly overlap and interfere with each other in Southern countries. |
| Keywords: | security sector reform, SSR, Africa, European Union security policy, multi-level governance |
| Date: | 2010–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/47&r=afr |
| By: | Gebreegziabher, Zenebe; Mekonnen, Alemu; Kassie, Menale; Köhlin, Gunnar |
| Abstract: | Dependency of urban Ethiopian households on rural areas for about 85 percent of their fuel needs is a significant cause of deforestation and forest degradation, resulting in growing fuel scarcity and higher firewood prices. One response to reducing the pressure on rural lands is for urban households to switch fuel sources (from fuelwood to electricity, for example) to slow deforestation and forest degradation and reduce indoor air pollution. However, such an energy transition is conditioned on the adoption of appropriate cooking appliances or stove technologies by the majority of users. This paper investigates urban energy transition and technology adoption conditions using a dataset of 350 urban households in Tigrai, in northern Ethiopia. Results suggest that the transition to electricity is affected by households adopting the electric mitad cooking appliance, which in turn is influenced by the level of education and income, among other things. |
| Keywords: | urban energy transition, electric mitad cooking appliance, technology adoption, bivariate probit, Tigrai, Ethiopia |
| JEL: | Q4 Q41 Q48 |
| Date: | 2010–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-22-efd&r=afr |
| By: | Bezabih, Mintewab; Gebreegziabher, Zenebe; GebreMedhin, Liyousew; Köhlin, Gunnar |
| Abstract: | Devoting time to off-farm activities, while complementing agricultural incomes, may be constrained by labor availability and financial capacity. This paper assesses the importance of rainfall patterns, which condition the availability of agricultural labor, and financial constraints on off-farm employment decisions. Using panel data from Ethiopia, which include experimental rate-of-time preference measures, we found that these and rainfall are significant determinants off-farm employment. Rural development policies should take into account the financial capacity of households and the role of off-farm opportunities as safety nets in the face of weather uncertainty. |
| Keywords: | off-farm employment, rainfall variability, reduced availability of water, rate-of time-preferences, multinomial logit, Ethiopia |
| JEL: | Q13 D81 C35 C93 |
| Date: | 2010–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-21-efd&r=afr |
| By: | Gebreegziabher, Zenebe; Oskam, Arie J.; Bayou, Demeke |
| Abstract: | This paper investigates the opportunities for reducing the pressure of urban centers on rural forest areas, using a dataset of 350 urban households in Tigrai in northern Ethiopia. We applied an almost-ideal demand system to fuels. Because the same fuels were not always used by households, the analysis started with a probit model of fuel use. The inverse Mills ratios derived from it were inserted into the estimation of the fuel demand system to obtain a full set of price and income elasticities. The results suggest that reducing the pressure of urban centers on local forests cannot be seen in isolation from broader development policies aimed at raising the level of education and income of the population. Higher income also stimulates the demand for fuel. |
| Keywords: | price elasticities, income elasticities, almost-ideal fuel demand system, reducing deforestation, Ethiopia |
| JEL: | O13 O18 Q23 |
| Date: | 2010–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-20-efd&r=afr |
| By: | Wong, Sam |
| Abstract: | Community-based development has been criticized for its inadequate understanding of power relationships at the local level, which thus leaves room for elite capture. This paper compares and contrasts two case studies, both of which take power seriously in their institutional designs. The solar home system in Bangladesh, represents the ‘counter-elite’ approach and explicitly excludes local elites from the decision-making process. The trans-boundary water governance project in Ghana, in contrast, adopts the ‘co-opt-elite’ approach and deliberately absorbs local elites into the water committee. This paper suggests that, while the ‘counter-elite’ approach is not necessarily effective in challenging elite domination, because of the structural asset dependence of poor people on the elites, the ‘co-opt-elite’ approach risks legitimizing the authority of the elites and worsening poverty by implementing ‘anti-poor’ policies. This paper concludes that the success of dealing with elite capture lies in the flexible use of the ‘counter-elite’ and ‘co-opt-elite’ approaches together with the need to secure alternative livelihoods and to achieve empowerment with the poor. |
| Keywords: | elite capture, power, poverty, community development, water management, solar lighting |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-82&r=afr |
| By: | Saten Kumar; Gail Pacheco |
| Abstract: | Lifting the long run growth rate is, arguably, the pursuit of every economy. What should Kenya do to enhance its long run growth rate? This paper attempts to answer this question by examining the determinants of total factor productivity (TFP) in Kenya. We utilized the theoretical insights from the Solow (1956) growth model and its extension by Mankiw, Romer and Weil (1992) and followed Senhadji’s (2000) growth accounting procedure. We find that growth in Kenya, until the 1990s was mainly due to factor accumulation. Since then, TFP has made a small contribution to growth. Our findings imply that while variables like overseas development aid, foreign direct investment and progress of financial sector improves TFP, trade openness is the key determinant. Consequently, policy makers should focus on policies that improve trade openness if long run growth rate is to be raised. |
| Keywords: | Solow model, growth accounting, total factor productivity. |
| JEL: | O10 O15 |
| Date: | 2010–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2010_16&r=afr |
| By: | Wagura Ndiritu, Simon; Nyangena, Wilfred |
| Abstract: | This paper presents an empirical study of schooling attendance and collection of environmental resources using cross-sectional data from the Kiambu District of Kenya. Because the decision to collect environmental resources and attend school is jointly determined, we used a bivariate probit method to model the decisions. In addition, we corrected for the possible endogeneity of resource collection work in the school attendance equation by using instrumental variable probit estimation. One of the key findings is that being involved in resource collection reduces the likelihood of a child attending school. The result supports the hypothesis of a negative relationship between children working to collect resources and the likelihood that they will attend school. The results further show that a child’s mother’s involvement in resource collection increases school attendance. In addition, there is no school attendance discrimination against girls, but they are overburdened by resource collection work. The study recommends immediate policy interventions focusing on the provision of public amenities, such as water and fuelwood. |
| Keywords: | environmental goods collection, firewood, water, children, schooling, Kenya |
| JEL: | O13 O15 |
| Date: | 2010–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-18-efd&r=afr |
| By: | d'Artis Kancs; Pavel Ciaian |
| Abstract: | In 2009 the EU adopted a new migration policy instrument - the Blue Cards (BC) - for attracting highly skilled workers to the EU. The present paper examines the potential impacts, which BC may cause on the less developed sending countries (LDC). According to the adopted framework of innovative capital, the BC will reduce human capital in LDC. In addition, BC will also have a negative impact on knowledge capital. These findings suggest that the BC is not coherent with the EU’s development policy. Without appropriate policy responses, BC fade the developing country growth prospects away. In order to address the skill drain issues, we propose and examine alternative migration policy options for the LDC. |
| Keywords: | African sending countries, high-skill migration, EU Blue Cards, innovative capital, economic growth, LDC. |
| JEL: | F02 F22 J24 J61 O15 |
| Date: | 2010–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2010_10&r=afr |