nep-afr New Economics Papers
on Africa
Issue of 2015‒09‒18
five papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Ghana : Poverty Reduction Over Thirty Years By Andrew McKay; Jukka Pirttilä; Finn Tarp
  2. Exploring the oil prices and exchange rates nexus in some African economies By Vitaly Pershin; Juan Carlos Molero; Fernando Pérez de Gracia
  3. "Roots of Autocracy" By Oded Galor; Marc Klemp
  4. Spate irrigation and poverty in Ethiopia By Hagos, Fitsum; Erkossa, Teklu; Lefore, Nicole; Langan, Simon
  5. Minimum Wages in Sub-Saharan Africa: A Primer By Haroon Bhorat; Ravi Kanbur; Benjamin Stanwix

  1. By: Andrew McKay; Jukka Pirttilä; Finn Tarp
    Abstract: Ghana is relatively rare among Sub-Saharan African countries in having had sustained positive growth every year since the mid-1980s. This paper analyses the nature of the growth and then presents an analysis of the evolution of both consumption poverty and non-monetary poverty outcomes over this period, showing improvements in almost all indicators over this period. At the same time, inequality has risen over the past 20 years and spatial inequality, in both monetary and non-monetary outcomes, remains an important concern. This increase in inequality is one reason why growth has not led to faster poverty reduction.
    Date: 2015
  2. By: Vitaly Pershin (University of Navarra); Juan Carlos Molero (University of Navarra); Fernando Pérez de Gracia (University of Navarra)
    Abstract: This paper investigates the relationship between oil prices and exchange rates in three African countries using a Vector AutoRegressive (VAR) model. We use daily dataset on nominal exchange rates, oil prices and short term interbank interest rates from 01/12/2003 to 02/07/2014. The results suggest that the exchange rate of three selected countries displayed differing in the event of an oil price shock, not only before and after the oil peak of July of 2008, but also between each other, implying that no general rule can be made for net oil importing sub-Saharan countries, such as Botswana, Kenya and Tanzania. From our analysis we conclude that after an oil price peak, the Botswanan pula clearly appreciates against the US dollar, the Kenyan and Tanzanian shilling.
    Keywords: oil prices, exchange rates, African economies, VAR model.
    JEL: F31 F41 Q43
    Date: 2015–08–27
  3. By: Oded Galor; Marc Klemp
    Abstract: This research explores the origins of the variation in the prevalence and nature of political institutions across globe. It advances the hypothesis and establishes empirically that variation in the inherent diversity across human societies, as determined in the course of the exodus of Homo sapiens from Africa tens of thousands of years ago, shaped the nature of political institutions across regions and societies. The study establishes that, while human diversity has amplified the beneficial e?ects of institutions, mitigating the adverse e?ects of non-cohesiveness, its simultaneous contribution to heterogeneity in cognitive and physical traits has fostered the scope for domination, leading to the formation and persistence of autocratic institutions. A larger degree of human diversity within societies diminished cohesiveness and therefore stimulated the emergence of institutions that have mitigated the adverse e?ects of non-cohesiveness on productivity. However, the dual impact of human diversity on the emergence of inequality and class stratification have diverted the nature of the emerging institutions towards extractive, autocratic ones. Developing a novel geo-referenced dataset of genetic diversity and ethnographic characteristics among ethnic groups across the globe, the analysis establishes that genetic diversity contributed to the emergence of autocratic pre-colonial institutions. Moreover, the findings suggest that the contribution of diversity to these pre-colonial autocratic institutions has plausibly operated through its dual e?ect on the formation of institutions and class stratification. Furthermore, reflecting the persistence of institutional, cultural, and genetic characteristics, the spatial distribution of genetic diversity across the globe has contributed to the contemporary variation in the degree of autocracy across countries.
    Keywords: Autocracy, Economic Growth, Genetic Diversity, Institutions, Out-of-Africa Hypothesis of Comparative Development
    Date: 2015
  4. By: Hagos, Fitsum; Erkossa, Teklu; Lefore, Nicole; Langan, Simon
    Abstract: The study examined whether the use of spate irrigation in drought-prone areas of Ethiopia reduced poverty. Each of about 25 users of indigenous and modern spate irrigation schemes and an equal number of corresponding nonusers from the same peasant associations in Oromia and Tigray regional states were interviewed. The survey found that the poverty level of the spate irrigation users was significantly lower than that of the nonusers in terms incidence, depth and severity. Access to improved spate irrigation has led to reduced poverty, measured by all poverty indices, compared to traditional spate. Finally, the dominance test showed that the poverty comparison between users and nonusers was robust. From the study, it can be concluded that the use of spate irrigation in areas where access to other alternative water sources is limited, either by physical availability or by economic constraints, can significantly contribute to poverty reduction, and that modernizing the spate system strengthens the impact.
    Keywords: Irrigation schemes, Spate irrigation, Traditional farming, Poverty, Arid zones, Households, Income, Ethiopia, Africa, Agribusiness, Community/Rural/Urban Development, Consumer/Household Economics, Farm Management, Financial Economics, Public Economics,
    Date: 2014
  5. By: Haroon Bhorat; Ravi Kanbur; Benjamin Stanwix (Development Policy Research Unit; Director and Professor)
    Abstract: In this paper we provide a basic overview of minimum wage regimes in Sub Saharan Africa (SSA) where data are available, as well as some more detailed work for several countries using household survey data. We begin by providing a brief literature review of more recent minimum wage work, and build on Neumark and Wascher's (2007) meta-review to provide an updated overview of the empirical wage-employment trade-off estimates, focused on LMI countries. We document the level of minimum wages in the region, and present simple Kaitz ratios and use this to make comparisons with wage levels and ratios elsewhere in the world. We then proceed to examine compliance levels in seven SSA countries using household survey data, and again compare the outcomes to estimates for a selection of non-SSA LMI countries. We end by reflecting on possible early lessons for wage-setting regimes in the region, and the research agenda to inform the policy makers on key trade-offs in minimum wage setting.
    Keywords: Sub-Saharan Africa, minimum wages, wage regulation, employment elasticities, Kaitz indices, compliance
    JEL: J08 J20 J21 J30 J38
    Date: 2015–06

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