nep-afr New Economics Papers
on Africa
Issue of 2016‒09‒25
eight papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Violence Begets Violence: Armed conflict and domestic sexual violence in Sub-Saharan Africa By Gudrun Østby
  2. Aid on Demand: African Leaders and the Geography of China's Foreign Assistance By Axel Dreher; Andreas Fuchs; Roland Hodler; Bradley C. Parks; Paul A. Raschky; Michael J. Tierney
  3. Building a Korean-Portuguese Business Partnership for Sub-Saharan Africa: Opportunities and Challenges in Mozambique By Luís Mah
  4. Chinese And African Migrant Entrepreneur’s Articulation Shaped By African Agency By Kohnert, Dirk
  5. Does Freer Trade Really Lead to Productivity Growth? Evidence from Africa By Bresnahan, Lauren R.; Coxhead, Ian; Foltz, Jeremy; Mogues, Tewodaj
  6. Crony Capitalism in Mozambique: Evidence from Networks of Politicians and Businessmen By Andes Chivangue
  7. Labor market effects of improved access to credit among the poor: evidence from Cape Verde By Paolo Casini; Olivia Riera; Paulo Santos Monteiro
  8. Unjust Enrichment from Official Corruption in Africa: Theory and Model on how Lenders have benefited By Simplice Asongu; Jacinta C. Nwachukwu

  1. By: Gudrun Østby (Peace Research Institute Oslo)
    Abstract: While the study of the causes of civil conflict is a well-established sub-discipline in the conflict literature, less is known about how political violence affects society. Although the majority of the direct victims of war are men, women face more insidious challenges, such as difficulty in providing for families and coping with sexual violence. The consequences of a conflict in terms of sexual violence are not limited to the abuses performed by conflict actors, nor are they limited to the period when the conflict was active. Drawing on psychological theories, this paper argues that armed conflict can have negative consequences for sexual violence in the private sphere. Combining subnational data on armed conflict events with individual-level data on partner abuse from DHS surveys in 17 Sub-Saharan African countries for a total of 95,913 women aged 15-49, I analyse the impact of conflict intensity on intimate partner sexual violence (IPSV). Individual-level analyses show that there is an independent, significant effect of armed conflict intensity in the home region of the respondent as regards her risk of experiencing IPSV. This result is robust even when controlling for factors such as childhood exposure to parent violence and the husband’s alcohol consumption.
    Keywords: Domestic violence; intimate partner sexual violence; armed conflict; GIS, DHS; Sub-Saharan Africa
    Date: 2016–09
  2. By: Axel Dreher (Heidelberg University); Andreas Fuchs (Heidelberg University); Roland Hodler (University of St. Gallen); Bradley C. Parks (College of William and Mary); Paul A. Raschky (Monash University); Michael J. Tierney (College of William and Mary)
    Abstract: This article investigates whether China's foreign aid is particularly prone to capture by political leaders of aid-receiving countries. We examine whether more Chinese aid is allocated to the birth regions of political leaders and regions populated by the ethnic groups to which leaders belong, controlling for indicators of need and various fixed effects. We have collected data on 117 African leaders' birthplaces and ethnic groups and have geocoded 1,650 Chinese development finance projects across 3,097 physical locations that were committed to Africa over the 2000{2012 period. Our econometric results show that when leaders hold power their birth regions receive substantially more funding from China than other subnational regions. We also find -less robust- evidence that African leaders direct more Chinese aid to areas populated by individuals who share their ethnicity. However, when we replicate the analysis for the World Bank, our regressions show no evidence of favoritism. We also evaluate the impact of Chinese aid on regional development, exploiting time variation in the amount of Chinese aid that results from China's production of steel and geographical variation in the probability that a subnational region will receive such aid. We find that Chinese aid improves local development outcomes, as measured by per-capita nighttime light emissions at the first and second subnational administrative level. We therefore conclude that China's foreign aid program has both distributional and developmental consequences for Africa.
    Keywords: Foreign aid, Favoritism, Aid allocation, Aid effectiveness, Africa, China, Official Development Assistance, Georeferenced data, Spatial analysis
    JEL: D73 F35 P33 R11
    Date: 2016–09–13
  3. By: Luís Mah
    Abstract: Africa continues to show high economic growth and market potential in terms of access to natural resources and new consumers, Korea needs to start thinking about strengthening its engagement with Africa. Unlike Korea, Portugal has been a strong trade partner of Africa, particularly through its investments in two of the fastest growing economies in the continent, Angola and Mozambique. Historical, political, economic, educational, and cultural ties as well as language have played a crucial role in nurturing trade relations. The current economic and financial crisis in the European Union is pushing Portuguese companies to strengthen their presence in booming Portuguese-speaking African countries. Due to Korea’sweak links with the continent, this paper will attempt to critically analyse the opportunities and challenges for Korean businesses in building partnerships with Portuguese companies to enhance their entry into fast-growing African markets. The paper will focus in Mozambique as a case study.
    Keywords: Korea, Korean-Portuguese relations, Sub-Saharan Africa, Mozambique
    Date: 2014–11
  4. By: Kohnert, Dirk
    Abstract: Much has been written on the relationship of China and Africa in the past decade. However, the subject of Chinese migrant entrepreneurs in Africa and their articulation with African counterparts was little explored up to the early 2010s. Apparently, this research gap has been closed, as shown by four publications in recent years: three edited volumes and one monography, focusing on this subject. In view of early prejudices on the passive or even disapproving reception of Chinese migrants by Africans, the state of the art underlines the importance and scope of African agency vis à vis Chinese migrant entrepreneurs in Africa. Book Review Article of: (1) Giese, Karsten, Marfaing, Laurence (eds) (2016) : Entrepreneurs Africains et Chinois. Les impacts sociaux d'une rencontre particulière. Paris : Karthala, 2016. 384 pp. (2) Gadzala, Aleksandra W. (ed) (2015): Africa and China: how Africans and their governments are shaping relations with China. Lanham/Md.: Rowman & Littlefield, xxix + 266 pp. (3) Mohan, Giles, Lampert, Ben et al (eds) (2014): Chinese Migrants and Africa's Development : new imperialists or agents of change? London: Zed books, vi + 185 pp. (4) French, Howard W. (2015): China's Second Continent: how a million migrants are building a new empire in Africa. London: Penguin Random House / New York: Knopf, xi + 304 pp.
    Keywords: African Affairs;migrant entrepreneurs;Chinese Studies;entrepreneurial economics;Sub-Saharan Africa;Ghana;Senegal;Nigeria;Mozambique;Namibia
    JEL: F1 F10 F14 F22 F6 F60 O15 O17 O35 O55 Y3 Z1
    Date: 2016–09–16
  5. By: Bresnahan, Lauren R. (University of Maryland); Coxhead, Ian (University of Wisconsin); Foltz, Jeremy (University of Wisconsin); Mogues, Tewodaj (International Food Policy Research Institute)
    Abstract: Theory predicts that trade liberalization should raise average total factor productivity (TFP) among manufacturing firms. However, this is a generic prediction and depends on maintained assumptions about industries, factor markets, and trade patterns that may not fit well for developing countries. Using firm-level data from Ghana, Kenya, and Tanzania during the 1990s, a period of fairly rapid trade policy liberalization, we estimate productivity effects of trade. Our analysis confirms the well-known association between export intensity and higher productivity of the firm; however, the evidence for "learning by exporting," or an increase in productivity associated with greater exports, is mixed, with several instances of negative average TFP growth among exporters. Our analysis indicates that such declines are likely attributable to the effects of lower external tariffs, because the firm-level productivity margin below which exporting is unprofitable moves down as the external tariff rate is reduced. We also find that sales to the rest of the world and sales to other African economies have differential effects on productivity growth rates, and that for country-specific reasons, these effects are not uniform. Controlling for initial productivity and the destination of exports (within or outside Africa) helps us understand why in some cases, export participation is associated with negative rates of TFP growth.
    Date: 2016–05
  6. By: Andes Chivangue
    Abstract: This paper discusses crony capitalism in Mozambique, by analysing the social networks that exist among political and economic players, using the SNA Social Networks Analysis method. The variables are selected to identify cliques and the covariates that explain this network relationship are taken into account, namely military, ethnicity, family, politics, business, entrepreneurship, political party and gender. Policy implications are derived.
    Keywords: Mozambique, social networks, crony capitalism, multivariate analysis, policy implications
    Date: 2015–07
  7. By: Paolo Casini; Olivia Riera; Paulo Santos Monteiro
    Abstract: In the context of a collective household choice model, we show that the effects of improved credit access on search intensity by the unemployed are heterogeneous across households and dependent on the within-household bargaining power of the unemployed. We find empirical support for the predictions of our model using a household survey conducted by the authors in Cape Verde. These findings have important implications for the optimal design of microfinance programs, in particular concerning the targeting of loans and the use of microfinance as an instrument to support improved labor market outcomes.
    Keywords: Microfinance, Bargaining Power, Collective Household, Job Search
    JEL: D13 D14 J20 O11 O12
    Date: 2015
  8. By: Simplice Asongu (Yaoundé/Cameroun); Jacinta C. Nwachukwu (Coventry University, UK)
    Abstract: A 2015 World Bank report on the achievement of Millennium Development Goals (MDGs) revealed that since the 1990s, extreme poverty has been decreasing in all regions of the world with the exception of Africa where about 50 percent of countries in Sub-Saharan Africa did not achieve the MDG extreme poverty target despite the sub-region enjoying more than two decades of GDP growth resurgence. The purpose of this chapter is twofold. First to understand the interconnections between the large pool of capital transferred to the OECD countries and the corrupt deposits of stolen public funds. Second, to illustrate how such diversion of funds overseas are related to the spread of poverty in the African economies. We enunciate a ‘poverty multiplier theory’ and propose a model for its application within an African context. The ‘poverty multiplier theory’ postulates that: (i) one unit of currency deposited abroad represents a loss in financial development at home (ii) a fraction of the unit currency placed in foreign bank accounts is redirected to the domestic economy in the form of external debt. This external debt is further siphoned overseas through interest and loan principal repayment. Policy implications of these processes are discussed.
    Keywords: Poverty, External Debts, Corruption, Capital flight, Development
    JEL: B20 F35 F50 O19 O55
    Date: 2016–09

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