nep-afr New Economics Papers
on Africa
Issue of 2017‒08‒06
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Ethnolinguistic Favoritism in African Politics By Andrew Dickens
  2. Myth-busting? How research is refuting common perceptions about unconditional cash transfers By Amber Peterman; Jennifer Yablonski; Silvio Daidone; UNICEF Office of Research - Innocenti
  3. Exchange Rate Uncertainty and Domestic Investment in Ghana By Njindan Iyke, Bernard; Ho, Sin-Yu
  4. Sex and the Mission: The Conflicting Effects of Early Christian Investments on the HIV Epidemic in sub-Saharan Africa By Cagé, Julia; Rueda, Valeria
  5. Food, Drought and Conflict Evidence from a Case-Study on Somalia By Astrid Sneyers
  6. The dynamic relationship between financial development and economic growth: New evidence from Zimbabwe By Munyanyi, Musharavati Ephraim

  1. By: Andrew Dickens (Department of Economics, Brock University)
    Abstract: I document evidence of ethnic favoritism in a panel of 163 ethnolinguistic groups partitioned across 35 African countries. In contrast to previous studies, I construct a computerized lexicostatistical measure of linguistic similarity between each ethnic group and the national leader as a novel measure of ethnic proximity. I exploit the arbitrary placement of African political borders as a source of exogenous within-group variation, where the similarity of the same partitioned group varies over time according to the ethnolinguistic identity of the national leader on each side of the border. To quantify patronage at the group level, I isolate time variation in night light luminosity resulting from changes in the ethnolinguistic identity of a leader. Using a triple-difference estimator I find that a one standard deviation increase in linguistic similarity yields a 7.0 percent increase in luminosity, which corresponds to a 2.1 percent increase in group-level GDP per capita. I then use the continuity of linguistic similarity to show that favoritism exists among groups that are not coethnic to the leader, where the mean effect of non-coethnic similarity is one quarter the size of the coethnic effect. I corroborate this evidence using individual-level data and establish that it's where an individual lives and the attached ethnolinguistic identity that predicts favoritism, not the identity of the individual respondent. I relate these results to the literature on coalition building, and provide evidence that ethnicity is one of the guiding principles behind high-level government appointments.
    Date: 2017–07
  2. By: Amber Peterman; Jennifer Yablonski; Silvio Daidone; UNICEF Office of Research - Innocenti
    Abstract: Six common perceptions associated with cash transfers are investigated using data from eight rigorous evaluations of government unconditional cash transfer programmes across seven countries in sub-Saharan Africa. The evidence refutes each claim. Used in policy debates, these perceptions undermine well-being improvements and poverty reduction, in Africa and globally.
    Date: 2017
  3. By: Njindan Iyke, Bernard; Ho, Sin-Yu
    Abstract: The impact of exchange rate uncertainty on domestic investment remains a topical issue in international finance. The existing studies based on macro- or micro-level data have produced mixed findings leaving the issue widely open for further investigation. We revisit this issue at the macro-level by differentiating the short-run impacts of exchange rate uncertainty from long-run impacts. Using annual data for Ghana covering the period 1980–2015, we found that exchange rate uncertainty has differential impacts on domestic investment in the short run. That is, while the current level of uncertainty enhances investment, previous levels of uncertainty dampen investment. In the long run, exchange rate uncertainty has a positive impact on domestic investment. These findings are robust to alternative specifications of our model.
    Keywords: Exchange Rate Uncertainty; Domestic Investment; Ghana.
    JEL: C22 F31
    Date: 2017
  4. By: Cagé, Julia; Rueda, Valeria
    Abstract: This article investigates the long-term historical impact of missionary activity on the prevalence of HIV/AIDS in sub-Saharan Africa. On the one hand, missionaries were the first to invest in modern medicine in a number of countries. On the other hand, the Christian influence on norms may have affected sexual beliefs and behaviors. We built a new geocoded dataset locating Protestant and Catholic missions in the early 20th century, as well as their health investments. We show that missionary presence has conflicting effects on HIV today. Regions close to historical mission stations exhibit higher HIV prevalence. This higher prevalence is robust to multiple specifications accounting for urbanization. Less knowledge about condom use is a likely channel. Moreover, among regions historically close to missionary settlements, proximity to a mission with a health investment is associated with lower HIV prevalence. Safer sexual behaviors around missions with health investments are a possible explanatory channel.
    Keywords: health investments; historical persistence; HIV/AIDS; missions; sexual behavior
    JEL: D72 N37 N77 O33 Z12 Z13
    Date: 2017–07
  5. By: Astrid Sneyers (nternational Security and Development Center LICOS, Centre for Institutions and Economic Performance, University of Leuven, Belgium)
    Abstract: This paper aims at disentangling the mutual link between conflict, drought and food security in Somalia. The analysis is conducted using various indicators for food security and on different (national and sub- national) aggregation levels. The evidence is partly based on datafrom a household-level survey, collected in various regions in Somalia in 2013. In addition, we use geo-spatial regional and district level data, which combines (geo-referenced) drought data, with information on conflict from the joined ACLED-PRIO database, together with other location-specific variables. Overall, we find a positive effect of drought on the percentage underweight individuals for pastoral livelihoods on the regional level. At the same time, drought seems to have a small linear increasing effect on the ratio of rural populations in stressed, crisis, and emergency food security situations, while there seems to be no significant effect for urban populations. Based on household panel data, a negative effect of drought on non-food expenditures is found as well as a negative effect of conflict on non-food expenditures, confirming that these households buy less non-food items when confronted with distressing situations. Furthermore, we find an increasing effect of one-sided, intrastate, and internationalized conflict on the percentage underweight individuals on the regional level. In addition, we also find a negative effect of conflict exposure on food expenditures for pastoral (rural) households, in contrast with urban households. This emphasizes the fact that conflict has a more profound effect on the food security of rural households, notwithstanding their functions as food producers. Finally, on the district level, we do not find substantial evidence that drought triggers conflict. In contrast, on the household level we find strong evidence for this, suggesting that conflict analysis at a lower aggregation level does reveal findings that we may not pick up on at a higher aggregation level.
    Keywords: none JEL Classification: none
  6. By: Munyanyi, Musharavati Ephraim
    Abstract: This study seeks to examine the causal relationship between financial development and economic growth in Zimbabwe, and it follows the works of Furqani and Mulyany (2009). Two models of financial development and economic growth are constructed for the Zimbabwean economy. Time series data is used; all variables are at their end period rates and are all in yearly frequencies. The data set stretches from the year 1965 to 2015, giving a total of 51 observations. According to the results, the direction of causality between these two variables is quite sensitive to the choice of measurement for financial development in Zimbabwe. In consideration of the result findings, the study concludes that the relationship between financial development and economic growth in Zimbabwe confirms the demand-following hypothesis and is through bank deposits. In essence, financial development in Zimbabwe does not automatically guarantee a boost in economic growth. Therefore, the study then suggests that the Zimbabwean government should gear its policies toward boosting its economic performance so as to strengthen and develop its financial sector in the process.
    Keywords: Financial Development, Economic Growth, Zimbabwe, ARDL, Supply-leading hypothesis, Demand-following hypothesis, Toda and Yamamoto Granger Causality Analysis
    JEL: O43
    Date: 2017–07–20

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