nep-afr New Economics Papers
on Africa
Issue of 2014‒04‒18
seventeen papers chosen by
Christian Zimmermann
Federal Reserve Bank of St. Louis

  1. Measuring Structural Economic Vulnerability in Africa By Patrick GUILLAUMONT
  2. The Analysis of Export Performance of Newly Industrialized Countries (NICs): The Lesson for African Countries. By Yusuf, Sulaimon Aremu
  3. Africa's Growth Prospects in a European mirror: a Historical Perspective By Broadberry, Stephen; Gardner, Leigh
  4. National Institutions and Subnational Development in Africa By Michalopoulos, Stelios; Papaioannou, Elias
  5. The Effect of African Growth on Future Global Energy, Emissions, and Regional Development By Katherine Calvin; Shonali Pachauri; Enrica De Cian; Ioanna Mouratiadou
  6. Testing the Asymmetric Effects of Financial Conditions in South Africa: A Nonlinear Vector Autoregression Approach By Mehmet Balcilar; Kirsten Thompson; Rangan Gupta; Renee van Eyden
  7. Critical Junctures: Independence Movements and Democracy in Africa By Wantchekon, Leonard; Garcia-Ponce, Omar
  8. The importance of the exchange rate regime in limiting current account imbalances in sub-Saharan African countries By Blaise Gnimassoun
  9. Teacher Wages in South Africa: How Attractive is the Teaching Profession? By Paula Armstrong
  10. Size Matters: The Effect of the Scramble for Africa on Informal Institutions and Development By Dimico, Arcangelo
  11. African economic growth in a European mirror: a historical perspective By Stephen Broadberry; Leigh Gardner
  12. Social Interactions and Malaria Preventive Behaviors in Sub-Saharan Africa By Apouey, B.;; Picone, G.;
  13. The Welfare Impact of Land Redistribution: Evidence from a Quasi-Experimental Initiative in Malawi By Mariapia Mendola; Franklin Simtowe
  14. Growing up together: Cohort composition and child investment By Jones, Kelly M.
  15. Ethnic Inequality By Alesina, Alberto; Michalopoulos, Stelios; Papaioannou, Elias
  16. Assessing organizational capacity in higher education By Rita van Deuren
  17. Globalization and Child Health in Developing Countries: The Role of Democracy By Welander, Anna; Lyttkens, Carl Hampus; Nilsson, Therese

  1. By: Patrick GUILLAUMONT (Ferdi)
    Abstract: Introduction : The challenge of structural economic vulnerability for African development In 2006, at a time when growth had clearly resumed in Africa, the opening speech at the first African Economic Conference organized by the African Development Bank and AERC was entitled “Economic vulnerability, still a challenge for African growth” (Guillaumont 2007, 2008). Eight years on, including a global recession, food and fuel price spikes, and recent state crises in Africa—although in many countries growth has continued—vulnerability remains an issue to be addressed. Both cross-country econometrics and case studies have documented the impact of external, climatic, and political shocks on Africa’s growth, development, and poverty reduction (Ibid.; see also the chapter by Xubei Luo in this book). Although some progress has been recorded in addressing economic vulnerability in Africa, it remains limited; moreover, the scope of vulnerability itself has been changing with the emergence of new--social and environmental—dimensions. Addressing the vulnerability of African economies requires an identification of its sources and determinants, including a conceptual clarification in view of the broadening scope. Section (2) proposes a conceptual framework where structural vulnerability is distinguished from general vulnerability, from physical vulnerability to climate change, and from state fragility as well. Section (3) analyzes the main features and evolution of structural economic vulnerability in Africa on the basis of an economic vulnerability index, highlighting not only higher structural economic vulnerability, but also a slower decline than in other developing economies. It then appears (section 4) that African economic vulnerability is reinforced by higher physical vulnerability to climate change, as shown by a specific index, and that Africa is the continent with the highest proportion of fragile states, suggesting a link between the various forms of vulnerability in Africa. Finally (section 5), measuring the structural vulnerability of African countries provides a useful tool for the international allocation of resources and not just to guide policies aimed at structural transformation and sustainable development. Adequately measured, structural vulnerability, as it is exogenous to current policy, may be a relevant criterion for the international allocation of concessional resources.
    Date: 2014–04
  2. By: Yusuf, Sulaimon Aremu
    Abstract: This paper used quantitative analysis with the help of pure descriptive statistics to examine the export performance of Newly Industrialized Countries; the lesson for African countries. The researcher selected Four NICs and Four African countries based on the data availability from the World Bank Development Index (2012). The NICs considered for the study are; China, India, Brazil and South Africa. While Ivory Coast, Gabon, Egypt and Kenya were selected in Africa based on data availability and geographical representation. The study reveals that the same peculiar hindrances factors that are obstacles to African countries’ export performance and economic success in the long run also applies to NICs but they were able to overcome it and drag themselves out of the poverty net. The necessary policy prescriptions were recommended by the researcher to the African countries to move near the end of “catch up " phase in order to achieve the impressive export performance that will lead to sustainable growth and development.
    Keywords: Export performance, Economic Growth
    JEL: F14
    Date: 2014–03
  3. By: Broadberry, Stephen (London School of Economics and CAGE); Gardner, Leigh (London School of Economics)
    Abstract: Drawing on recent quantitative research on Europe reaching back to the medieval period, and noting a relationship between the quality of institutions and economic growth, this paper offers a reassessment of Africa’s growth prospects. Periods of positive growth driven by trade, followed by growth reversals which wiped out the gains of the previous boom, characterized pre-modern Europe as well as twentieth century Africa. Since per capita incomes in much of sub-Saharan Africa are currently at the level of medieval Europe, which did not make the breakthrough to modern economic growth until the nineteenth century, we caution against too optimistic a reading of Africa’s recent growth experience. Without the institutional changes necessary to facilitate structural change, growth reversals continue to pose a serious threat to African prosperity. Only if growth continues after a downturn in Africa’s terms of trade can we be sure that the corner has been turned.
    Keywords: Africa, Growth prospects.
    Date: 2013
  4. By: Michalopoulos, Stelios (Brown University and NBER); Papaioannou, Elias (London Business School, NBER and CEPR)
    Abstract: We investigate the role of national institutions on subnational African development in a novel framework that accounts both for local geography and cultural-genetic traits. We exploit the fact that the political boundaries in the eve of African independence partitioned more than two hundred ethnic groups across adjacent countries subjecting similar cultures, residing in homogeneous geographic areas, to different formal institutions. Using both a matching-type and a spatial regression discontinuity approach we show that differences in countrywide institutional structures across the national border do not explain within-ethnicity differences in economic performance, as captured by satellite images of light density. The average non-effect of national institutions on ethnic development masks considerable heterogeneity partially driven by the diminishing role of national institutions in areas further from the capital cities.
    Keywords: Africa, Borders, Ethnicities, Development, National Institutions, Regression Discontinuity
    Date: 2013
  5. By: Katherine Calvin (Joint Global Change Research Institute/PNNL); Shonali Pachauri (Organization International Institute for Applied Systems Analysis/IIASA); Enrica De Cian (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center on Climate Change/CMCC); Ioanna Mouratiadou (Potsdam Institute for Climate Impact Research/PIK)
    Abstract: Today Africa is a small emitter, but it has a large and faster-than-average growing population and per capita income that could drive future energy demand and, if unconstrained, emissions. This paper uses a multi-model comparison to characterize the potential future energy development for Continental and Sub-Saharan Africa under different assumptions about population and income. Our results suggest that population and economic growth rates will strongly influence Africa’s future energy use and emissions. We show that affluence is only one face of the medal and the range of future emissions is also contingent on technological and political factors. Higher energy intensity improvements occur when Africa grows faster. In contrast, climate intensity varies less with economic growth and it is mostly driven by climate policy. African emissions could account for between 5% and 20% of global emissions, with Sub-Saharan Africa contributing between 4% and 10% of world emissions in 2100. In all scenarios considered, affluence levels remain low until the middle of the century, suggesting that the population could remain dependent on traditional bioenergy to meet most residential energy needs. Although the share of electricity in final energy, electric capacity and electricity use per capita all rise with income, even by mid-century they do not reach levels observed in developed countries today.
    Keywords: African Growth, Global Energy, Emissions
    JEL: Q4 Q5 Q51
    Date: 2014–03
  6. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, North Cyprus, via Mersin 10, Turkey); Kirsten Thompson (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria); Renee van Eyden (Department of Economics, University of Pretoria)
    Abstract: The negative consequences of financial instability for the world economy during the recent financial crisis have highlighted the need for a better understanding of financial conditions. We use a financial conditions index (FCI) for South Africa previously constructed from 16 financial variables to test whether the South African economy responds in a nonlinear and asymmetric way to unexpected changes in financial conditions. To this end, we make use of a nonlinear logistic smooth transition vector autoregressive model (LSTVAR), which allows for a smooth evolution of the economy, governed by a chosen switching variable between periods of high and low financial volatility. We find that the South African economy responds nonlinearly to financial shocks, and that manufacturing output growth and Treasury Bill rates are more affected by financial shocks during upswings. Inflation responds significantly more to financial changes during recessions.
    Keywords: Financial conditions index, nonlinear vector autoregression, LSTVAR, asymmetry
    JEL: C32 G01 E44 E32
    Date: 2014–04
  7. By: Wantchekon, Leonard (Princeton University); Garcia-Ponce, Omar (New York University)
    Abstract: We show that current levels of democracy in Africa are linked to the nature of its independence movements. Using different measures of political regimes and historical data on anti-colonial movements, we find that countries that experienced rural insurgencies tend to have autocratic regimes, while those that faced urban protests tend to have more democratic institutions. We provide evidence for causality in this relationship by using rough terrain as an instrument for rural insurgency, and by performing a sensitivity analysis. Finally, the evidence suggests that the adoption of rural insurgency perpetuated the use of violence as a form of conflict resolution.
    Keywords: Africa, Colonial History, Critical Junctures, Democracy, Modernization.
    Date: 2013
  8. By: Blaise Gnimassoun
    Abstract: One of the major current concerns of economic policy in developing countries is the choice of the appropriate exchange rate regime to consolidate and accelerate the pace of economic growth. This paper aims to investigate whether the choice of a country’s exchange rate regime may affect current account imbalances for sub-Saharan African economies. To this end, we first use Bayesian model averaging (BMA) to address concerns about model uncertainty and identify the key determinants (fundamentals) of external balances. Then, estimating current account imbalances over the 1980-2012 period, we show that flexible exchange rate regimes are more effective in preventing such disequilibria. Consequently, candidates for membership of monetary unions should discuss widely the possible adjustment mechanisms before forming such unions; one potential measure being the sharing of external risks at regional level
    Keywords: Current account imbalances, Exchange rate regime, Bayesian model averaging, Sub-Saharan Africa.
    JEL: F32 F33 C11
    Date: 2014
  9. By: Paula Armstrong (Department of Economics, University of Stellenbosch)
    Abstract: This paper investigates the state of teacher pay in the South African labour market by comparing the remuneration received by teachers with that received by their non-teaching counterparts. It makes use of wage data from the Labour Force Surveys spanning 2000 to 2007, and 2010. This enables us to investigate the impact of the Occupation Specific Dispensation introduced in 2008 on the age-wage profile of the teaching profession. Remuneration is compared across educational attainment levels, years of experience and across age groups. A Lemieux Decomposition is used to determine what the distribution of teacher wages would look like if teachers were remunerated according to the same structure as non-teachers. It is found that the teaching profession is relatively unattractive to individuals at the top end of the skills distribution in the South African labour market, the result of which may be lower quality candidates entering the teaching profession.
    Keywords: education; wage differentials by occupation, wage level and structure
    JEL: I2 J31
    Date: 2014
  10. By: Dimico, Arcangelo
    Abstract: We argue that the partition of ethnic groups following the Scramble for Africa does not itself matter for development in Africa. It matters only when the partitioned groups are relatively small because small groups lack political representation which may promote ethnic mobilization and foster support for informal (rather than formal) institutions which then may a ect development. Furthermore, the analysis of data from the Afrobarometer shows that the persistence of informal/tribal institutions related to property rights and the rule of law is one of the possible channels through which the size of the partitioned group a ects development --
    Keywords: partition,ethnic groups,development
    JEL: O10 N17 N47
    Date: 2014
  11. By: Stephen Broadberry; Leigh Gardner
    Abstract: New research on historical national accounting has provided a more comprehensive picture of European economic performance from the medieval period through industrialization and the transition to modern economic growth. These data confirm anecdotal arguments that pre-industrial economies were not stagnant but rather experienced periods of growth followed by reversals which erased gains in living standards. They also provide a framework for comparing the absolute level of economic development in different times and places, using a common unit of account. These data are used here to re-assess the economic performance of African economies during the twentieth century. While African economies have been growing rapidly in recent decades, levels of per capita income remain low and this growth has not always been accompanied by the institutional and structural change witnessed in Europe during the transition to modern economic growth. As a result, growth reversals continue to pose a serious threat to African prosperity, and measures of structural change and institutional quality should be given more weight in assessing the extent to which individual countries have moved closer to achieving sustained economic growth.
    Keywords: growth; structural change; institutions; Africa; Europe
    JEL: N0
    Date: 2014–04
  12. By: Apouey, B.;; Picone, G.;
    Abstract: This paper examines the existence of social interactions in malaria preventive behaviors in Sub-Saharan Africa, i.e. whether an individual's social environment has an influence on the individual's preventive behaviors. We focus on the two population groups which are the most vulnerable to malaria (children under 5 and pregnant women) and on two preventive behaviors (sleeping under a bednet and taking intermittent preventive treatment during pregnancy). We define the social environment of the individual as people living in the same region. To detect social interactions, we calculate the size of the social multiplier by comparing the effects of anexogenous variable at the individual level and at the regional level. Our data come from 92 surveys for 29 Sub-Saharan countries between 1999 and 2012, and they cover approximately 660,000 children and 95,000 women. Our results indicate that social interactions are important in malaria preventive behaviors, since the social mulitpliers for women's education and household wealth are greater than one - which means that education and wealth generates larger effects on preventive behaviors in the long run than we would expect from the individual-level specifications, once we account for social interactions.
    Keywords: social interactions; social multiplier; malaria preventive behavior;
    JEL: I12
    Date: 2014–01
  13. By: Mariapia Mendola (University of Milan Bicocca, Centro Studi Luca d\'Agliano and IZA); Franklin Simtowe (African Centre for Social research and Economic Development, Nairobi)
    Abstract: Even though land reform may be an effective means of reducing poverty, evidence on its causal effects is scant. This paper uses household panel data combined with a quasi-experimental program to assess the impact of a joint Malawi/World Bank land redistribution project on households’ productivity and well-being in southern Malawi. Double difference and matching methods are used to address sources of bias in identifying impacts. Results point to average positive effects of the land program on land holdings, agricultural output, income, food security and asset ownership of beneficiary households, while the latter do not see an improvement in access to social services such as schools and health care facilities. There is also evidence of heterogeneous effects by gender and inheritance systems. Overall, our findings suggest that there is scope for reducing poverty and inequality in developing countries by implementing a market- and community-based approach to land reform through the provision of land to land-poor households.
    Keywords: Land Reform, Program Evaluation, Community Based Rural Land Development Program, Malawi
    JEL: O13 Q15
    Date: 2014–04–07
  14. By: Jones, Kelly M.
    Abstract: In sub-Saharan Africa, 60 % of child deaths are preventable by investments in child health as simple as immunizations, bed nets, or water purification. This article investigates how a household’s decisions regarding such investments are affected by the size and gender composition of a child’s cohort. I focus on a previously overlooked type of investment: nonrival, child-specific goods (club goods). I empirically estimate the response of immunization status to cohort characteristics. I carefully address the problem of endogenous fertility, which is common in cohort studies. Because most rural Senegalese households are composed of multiple nuclear families, a child’s cohort is composed of both siblings and nonsibling children. Estimating within households, I instrument cohort characteristics with those of the nonsibling (exogenous) portion. I find that children with larger (or more predominantly male) cohorts of vaccine-eligible age are significantly more likely to receive immunization. These findings suggest that children with larger cohorts may be better off in terms of club investments; this is a significant finding for child health given that many illness prevention methods are of a club good nature.
    Keywords: Family size Household composition Siblings Human capital Club goods
    JEL: D13 J12 J13 O12 O15
    Date: 2014
  15. By: Alesina, Alberto (Harvard University, NBER and IGIER); Michalopoulos, Stelios (Brown University and NBER); Papaioannou, Elias (London Business School, CEPR and NBER)
    Abstract: This study explores the consequences and origins of between-ethnicity economic inequality both across and within countries. First, combining satellite images of nighttime luminosity with the historical homelands of ethnolinguistic groups we construct measures of ethnic inequality for a large sample of countries and show that the latter is strongly inversely related to comparative development. Second, differences in geographic endowments across ethnic homelands explain a sizable portion of ethnic inequality contributing to its persistence over time. Third, exploiting across-district within-African countries variation using individual-level data on ethnic identification and well-being from the Afrobarometer Surveys we find that between ethnic-group inequality is systematically linked to regional under-development. In this sample we also explore the channels linking ethnic inequality to (under) development, finding that ethnic inequality maps to political inequality, heightened perceptions of discrimination and undersupply of public goods.
    Keywords: Ethnicity, Diversity, Inequality, Development, Geography
    Date: 2013
  16. By: Rita van Deuren (Maastricht School of Management, Maastricht, the Netherlands (
    Abstract: The Ethiopian higher education system has realized enormous growth in the recent years and its future ambitions require additional capacity development in quality and in quantity. In planning and monitoring capacity development, organizational assessment plays a major role. This paper outlines the results of the first steps in the design of on organizational capacity assessment tool for Ethiopian new public universities and as such describes dimensions and indicators of university organizational capacity.
    Keywords: organizational capacity assessment, higher education, developing countries, Ethiopia, design-oriented research
    Date: 2014–04
  17. By: Welander, Anna (Lund University); Lyttkens, Carl Hampus (Lund University); Nilsson, Therese (Research Institute of Industrial Economics (IFN))
    Abstract: Good health is crucial for human and economic development. In particular poor health in childhood seems to be of utmost concern since it causes irreversible damage and have implications later in life. Recent research suggests globalization is a strong force affecting adult and child health outcomes. Yet, there is much unexplained variation with respect to the globalization effect on child health, in particular in low- and middle-income countries. One factor that could explain such variation across countries is the quality of democracy. Using panel data for 70 developing countries between 1970 and 2009 this paper disentangles the relationship between globalization, democracy, and child health. Specifically the paper examines how globalization and a country's democratic status and historical experience with democracy, respectively, affect infant mortality. In line with previous economic research, results suggest that globalization reduces infant mortality and that the level of democracy in a country generally improves child health outcomes. We also find that democracy matters for the size of the globalization effect on child health. If e.g. Côte d'Ivoire was a democracy in the 2000–2009 period, this effect would translate into 1,200 fewer infant deaths in an average year compared to the situation without democracy.
    Keywords: Globalization; Democracy; Health; Developing Countries
    JEL: I15 P16
    Date: 2014–04–08

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