nep-afr New Economics Papers
on Africa
Issue of 2015‒05‒30
nine papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Women’s Empowerment in Action: Evidence from a Randomized Control Trial in Africa By Oriana Bandiera; Niklas Buehren; Robin Burgess; Markus Goldstein; Selim Gulesci; Imran Rasul; Munshi Sulaiman
  2. Entrepreneurship and the Business Environment in Africa: An Application to Ethiopia By Zuzana Brixiová; Mthuli Ncube
  3. Public Debt Sustainability in Africa: Building Resilience and Challenges Ahead By Ncube, Mthuli; Brixiova, Zuzana
  4. Re-visting the electricity-growth nexus in South Africa By Phiri, Andrew; Bothwell, Nyoni
  5. Examining asymmetric effects in the South African Philips curve: Evidence from logistic smooth transition regression (LSTR) models By Phiri, Andrew
  6. Constraints to the development, operation and maintenance of spate irrigation schemes in Ethiopia By Erkossa, Teklu; Langan, Simon J.; Hagos, Fitsum
  7. Economic Development In Africa And Europe : Reciprocal Comparisons By Broadberry, Stephen; Gardner, Leigh
  8. Reducing Crime and Violence: Experimental Evidence on Adult Noncognitive Investments in Liberia By Christopher Blattman; Julian C. Jamison; Margaret Sheridan
  9. Bank Competition and Risk Appetite: Evidence from Tunisia By ZAGHDOUDI, Khemais; HAMDI, Helmi; DKHILI, Hichem; HAKIMI, Abdelaziz

  1. By: Oriana Bandiera; Niklas Buehren; Robin Burgess; Markus Goldstein; Selim Gulesci; Imran Rasul; Munshi Sulaiman
    Abstract: Women in developing countries are disempowered relative to their contemporaries in developed countries. High youth unemployment and early marriage and childbearing interact to limit human capital investment and enforce dependence on men. In this paper we evaluate an attempt to jump-start adolescent women's empowerment in the world's second youngest country: Uganda. In this two-pronged intervention, adolescent girls are simultaneously provided vocational training and information on sex, reproduction and marriage. Relative to adolescents in control communities, after two years the intervention raises the likelihood that girls engage in income generating activities by 72% (mainly driven by increased participation in self-employment), and raises their monthly consumption expenditures by 41%. Teen pregnancy falls by 26%, and early entry into marriage/cohabitation falls by 58%. Strikingly, the share of girls reporting sex against their will drops from 14% to almost half that level and preferred ages of marriage and childbearing both move forward. The findings indicate that women's economic and social empowerment can be jump-started through the combined provision of vocational and life skills, and is not necessarily held back by insurmountable constraints arising from binding social norms.
    JEL: I25 J13 J24 O12
    Date: 2014–03
  2. By: Zuzana Brixiová (African Development Bank, IZA and Research Affi liate, SALDRU, University of Cape Town); Mthuli Ncube (University of Oxford)
    Abstract: Policymakers in developing countries have recognized that productive entrepreneurship can help eliminate extreme poverty. This paper develops a search model of costly entrepreneurial start-ups under a constraining business environment and skill gaps, where one of the equilibrium outcomes is a low-productivity trap. The model reflects stylized facts from the urban labor markets in low income countries such as Ethiopia where low rates of productive entrepreneurship coexist with high output growth in some sectors. Creating an enabling business environment could help move the economy into the high-productivity equilibrium if the regulatory improvements are substantial and other bottlenecks such as skill gaps addressed. We test the role of the business environment in entrepreneurial sales on data from a recent World Bank survey of enterprises in Addis Ababa.
    Keywords: Model of start-ups, productivity, multiple equilibria, low income countries, Africa
    JEL: L26 J24 J48 O17
    Date: 2015
  3. By: Ncube, Mthuli (University of Oxford); Brixiova, Zuzana (African Development Bank)
    Abstract: The increased access of African countries to international capital markets has put public debt sustainability once again high on the continent’s policy agenda. Utilizing the ‘stabilizing primary balance’ approach, we find that the primary balances exceeded those required to keep public debt at the 2007 level in about half of the countries studied. In several cases with high debt burdens, the balances were above those needed to reduce public debt-to-GDP to sustainable thresholds. In most countries the main driver of sustainability has been the interest rate – growth differential (IRGD), underscoring the importance of supporting growth and utilizing the borrowing space for growth-enhancing outlays. Fiscal policies will need to play a greater role in maintaining debt sustainability in the future, especially since the IRGDs are likely to narrow over the longer term. The recent developments such as the fall of the commodity prices and uneven global growth underscore the need for sound macroeconomic and risk management.
    Keywords: public debt, sovereign bonds, interest-growth differential, primary balance, Africa
    JEL: H6 E6 O23
    Date: 2015–05
  4. By: Phiri, Andrew; Bothwell, Nyoni
    Abstract: This research study contributes to the ever-expanding literature by examining multivariate cointegration and causality relationships between electricity consumption, economic growth and other growth determinants for quarterly South African data collected between 1994/Q1 – 2014/Q4. The motivation behind this current research case study becomes apparent when taking into consideration that no previous studies have gone further than bivariate and trivariate analysis in investigating the electricity-growth nexus in South Africa. In conducting our empirical investigation, our obtained empirical results are two-fold in nature. Firstly, we find significant multivariate long-run cointegration relationships between economic growth, electricity consumption and other growth determinants. Secondly, our empirical analysis offers support in favour of the neutrality hypothesis, that is, the notion of no causal effects existing between electricity consumption and economic growth in the long-run. However, we find that exports directly cause electricity consumption whereas economic growth, domestic investment and employment levels causally flow to exports.
    Keywords: Electricity consumption; Economic growth; Investment; Inflation; Employment; Exports; Co-integration; Granger causality; South Africa
    JEL: C22 C32 Q43
    Date: 2015–05–20
  5. By: Phiri, Andrew
    Abstract: This study contributes to the foregoing literature by investigating asymmetric behaviour within the South African short-run Phillips curve for three versions of the Phillips curve specification namely; the New Classical Phillips curve, the New Keynesian Phillips curve and the Hybrid New Keynesian Phillips curve. To this end, we employ a logistic smooth transition regression (LSTR) econometric model to each of the aforementioned versions of the Phillips curve specifications for quarterly data spanning from 1970:01 to 2014:01. Our empirical results indicate that both the marginal-cost based as well as the output gap based versions of the Hybrid New Keynesian Philips curve provide a good fit for South African data. Therefore, our empirical results indicate that monetary policy in South Africa has an influence on the demand side of the economy through inflation inertia and inflation expectations whilst appearing to exhibit no significant effects on the supply side of the economy.
    Keywords: New Classical Phillips Curve; New Keynesian Phillips curve; Hybrid New Keynesian Phillips curve; inflation; output gap; marginal costs; smooth transition regression; monetary policy; South Africa, developing country
    JEL: C22 E31 E37
    Date: 2015–05–20
  6. By: Erkossa, Teklu; Langan, Simon J.; Hagos, Fitsum
    Abstract: Flood-based farming is among the potential options in ensuring access to water for crop and livestock production for small-scale farmers in the arid and semiarid lowlands of sub-Saharan Africa, and Ethiopia in particular. Flood-based irrigation while inexpensive is rooted in tradition in many rural communities which is in contrast to many other irrigation types which are unavailable (in terms of water source, technology or capacity) or are costly to develop. Spate irrigation has been practiced in different parts of Ethiopia for many decades, but it was only recently that it gained the government\u2019s attention. This study was conducted through a review and informal discussion with the objectives of documenting the current status, trends and prospects of spate irrigation in the country and the associated challenges, taking cases of selected schemes in different regional states. The study revealed that spate irrigation is expanding either through improvement of traditional schemes or by developing new ones. Neither the traditional nor modern schemes are free of challenges. The traditional schemes suffer from floods that damage their diversion structures, while poor design and construction of diversion structures have led to the failure of new ones. A range of socio-technical improvements in the planning, implementation and operation of schemes is proposed, including the design of headworks and canals consistent with the size and nature of expected flows, structures to minimize sedimentation, building capacity of farmers and district officers, and monitoring and improving the management that currently adversely impacts the performance of the schemes. Consulting farmers at every stage of the development, and building the capacity of engineers to deal with the unique nature of spate flows are the most likely interventions to ensure successful agricultural production using spate irrigation.
    Keywords: Irrigation schemes; Spate irrigation; Flood irrigation; Traditional farming; Livestock production; Crop production; Arid lands; Semiarid zones; Community involvement; Sedimentation; Smallholders; Farmers
    Date: 2014
  7. By: Broadberry, Stephen (London School of Economics); Gardner, Leigh (London School of Economics and Stellenbosch University,)
    Abstract: Recent advances in historical national accounting have allowed for global comparisons of GDP per capita across space and time. Critics have argued that GDP per capita fails to capture adequately the effects of new technology on living standards, and have developed alternative measures such as the human development index (HDI). Whilst recognising that this provides an appropriate measure for assessing levels of welfare, we argue that GDP per capita remains a more appropriate measure for assessing development potential, encompassing production as well as consumption. Twentieth-century Africa and pre-industrial Europe are used to show how such data can guide reciprocal comparisons to provide insights into the process of development on both continents.
  8. By: Christopher Blattman; Julian C. Jamison; Margaret Sheridan
    Abstract: We show self control and self image are malleable in adults, and that investments in them reduce crime and violence. We recruited criminally-engaged Liberian men and randomized half to eight weeks of group cognitive behavioral therapy, teaching self control skills and a noncriminal self-image. We also randomized $200 grants. Cash raised incomes and reduced crime in the short-run but effects dissipated within a year. Therapy increased self control and noncriminal values, and acts of crime and violence fell 20--50%. Therapy's impacts lasted at least a year when followed by cash, likely because cash reinforced behavioral changes via prolonged practice.
    JEL: D03 J22 K42 O12
    Date: 2015–05
  9. By: ZAGHDOUDI, Khemais; HAMDI, Helmi; DKHILI, Hichem; HAKIMI, Abdelaziz
    Abstract: In this paper, we investigate whether bank competition increases risk taking for the case of the Tunisian banks. Our data set covers nine Tunisian banks observed during the period from1980 to 2009 and we conducted an econometric model based on panel data estimations. The econometric results reveal the presence of a positive relationship between competition and bank risk taking. This shows that the functions of Tunisian banks remain based on the basic traditional activities and banks need to diversify their activities in safe functions to keep the banking sector stable and avoid bank failure.
    Keywords: Bank competition, Tunisian banks, Bank risk taking, Panel data analysis.
    JEL: G21 L11
    Date: 2015–05–19

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