nep-afr New Economics Papers
on Africa
Issue of 2011‒01‒23
six papers chosen by
Quentin Wodon
World Bank

  1. An Instrumental Variables Approach to Estimating Tax Revenue Elasticities: Evidence from Sub-Saharan Africa By Markus Brückner
  2. Race and income distribution: Evidence from the US, Brazil and South Africa By Carlos Gradín
  3. Got Technology? The Impact of Computers and Cell Phones on Productivity in a Difficult Business Climate: Evidence from Firms with Female Owners in Kenya By Menon, Nidhiya
  4. Une Matrice de Comptabilité Sociale (MCS) du Sénégal pour l'année 2006 By Cheickh SADIBOU FALL
  5. Institution building with limited resources: Establishing a supreme audit institution in Rwanda By Isaksson, Ann-Sofie; Bigsten, Arne
  6. The SADC Region and EPA/EBAI - Potential Winners and Losers By Sukati, Mphumuzi

  1. By: Markus Brückner (School of Economics, University of Adelaide)
    Abstract: Consistent estimation of the tax revenue elasticity is complicated by the endogenous response of GDP to changes in tax rates and measurement error in national accounts statistics. This paper exploits the significant response of real GDP growth of Sub-Saharan African countries to exogenous international commodity price and rainfall shocks to construct instrumental variables estimates of the tax revenue elasticity parameter. IV estimates yield that a 1 percent increase in GDP increases tax revenues by up to 2.5 percent. IV estimates therefore point to large responses in the tax revenues collected by Sub-Saharan African governments.
    Keywords: tax revenues, growth, instrumental variables
    JEL: E62 H20 H60 O55
    Date: 2011–01
  2. By: Carlos Gradín (Universidade de Vigo)
    Abstract: The aim of this paper is to provide some empirical evidence about black-white differentials in the distribution of income and wellbeing in three different countries: Brazil, US and South Africa. In all cases, people of African descent are in a variety of ways socially disadvantaged compared with the relatively more affluent whites. We investigate the extent of these gaps in comparative perspective, and analyze to what degree they can be explained by differences in the observed characteristics of races, such as where they live, the types of household they have, or their performance in the labor market. We undertake this analysis with the Oaxaca-Blinder approach at the means and with the DiNardo-Fortin-Lemieux approach at the entire distribution. Our results show how the factors underlying the racial divide vary across countries and income quantiles.
    Keywords: racial inequalities, income distribution, United States, Brazil, South Africa.
    JEL: D31 D63 J15 J82 O15
    Date: 2010
  3. By: Menon, Nidhiya (Brandeis University)
    Abstract: Firms in Kenya rely on technologies such as computers, cell-phones, and generators to overcome constraints associated with regulations, infrastructure, security, workforce, corruption, and finance. This study shows that such reliance has significant positive impacts on productivity as measured by value-added per worker, especially for firms with female principal owners. The exogenous component of technology ownership is isolated by using information on the regional presence of missionary schools from Kenya's colonial past, as well as geographical indicators such as rainfall, changes in forest cover, and average regional elevation. Results indicate that for firms with female owners, technology adoption improves value-added per worker by about 49 percentage points. It is also statistically evident that for such firms, the ownership of technologies such as computers, cell-phones, and generators succeeds in mitigating the costs of business obstacles. For male-owned firms, such patterns are absent.
    Keywords: technology, computers, cell-phones, business obstacles, Kenya, firms, female owners
    JEL: O14 O33 L22 N37
    Date: 2011–01
  4. By: Cheickh SADIBOU FALL
    Abstract: Une Matrice de Comptabilité Sociale (MCS) du Sénégal pour l'année 2006
    Date: 2010–11
  5. By: Isaksson, Ann-Sofie (Department of Economics, School of Business, Economics and Law, Göteborg University); Bigsten, Arne (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This study is about institution building with limited resources. Through a case study of the establishment of a supreme audit institution (SAI) in Rwanda, we examine the tensions between institutional first-best benchmarks and local operational constraints in a developing country institution-building process. More specifically, our aim is to investigate the potential tradeoffs between the programmatic ideal of SAI independence and operational constraints in terms of staff capacity in the development of a supreme audit oversight function in Rwanda. Drawing on data from document studies and key informant interviews, the empirical results suggest that capacity constraints – within the institution as well as among its major stakeholders – negatively affect important aspects of SAI functional independence, but also that there are arguments for compromising the programmatic ideal of SAI independence in order to effectively tackle operational constraints in terms of staff capacity.<p>
    Keywords: Institution building; Capacity constraints; Supreme audit institution; Rwanda
    JEL: D02 H83 O16 O55
    Date: 2011–01–12
  6. By: Sukati, Mphumuzi
    Abstract: The aim of the paper is to investigate convergence tendencies in the SADC region and to determine whether the EPA/EBAI policies between SADC and EU_27 member states will promote such convergence tendencies. The analyses of the EPA/ABAI policies make further conclusion on SADC member states’ potential winners and losers from changes in trade profile brought about by these policies since individual SADC member states are heterogeneous in their trade profile. Therefore these policies outcome will likely have negative or positive effects on economic growth and convergence tendencies of individual member states of the SADC region. The study has found evidence of absolute convergence in the SADC region using income and GDP growth rates data for the year 2008 to 2015. Further analysis of the effects of the EPA/EBAI policies reveal that SADC LDC are likely to be winners except Madagascar and Tanzania while the SADC ACP countries are possible winners on condition they set up enabling environments that promote development of industries where they are likely to benefit more given their export profile which is an indicator of their comparative advantage. It is further concluded that overall the EPA/EBAI will likely promote convergence tendencies and be beneficial to the region as a whole.
    Keywords: EPA/EBAI policies; SADC; EU_27; ACP; LDC; Convergence; GTAP
    JEL: O11 F13
    Date: 2011–01–10

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