nep-afr New Economics Papers
on Africa
Issue of 2018‒03‒19
five papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Chinese development assistance and household welfare in sub-Saharan Africa By Martorano, Bruno; Metzger, Laura; Sanfilippo, Marco
  2. The tipping point: The impact of rising electricity tariffs on large firms in South Africa By Angelika Goliger; Landon McMillan
  3. The effect of weather index insurance on social capital: Experimental evidence from Ethiopia By Nigus, Halefom; Nillesen, Eleonora; Mohnen, Pierre
  4. The negotiated politics of social protection in sub-Saharan Africa By Sam Hickey; Tom Lavers; Miguel Niño-Zarazúa; Jeremy Seekings
  5. The economic evidence in the relationship between corporate tax and private investment in Ghana By Tweneboah Senzu, Emmanuel; Ndebugri, Haruna

  1. By: Martorano, Bruno (UNU-MERIT); Metzger, Laura (ETH Zürich, Center for Development and Cooperation (NADEL)); Sanfilippo, Marco (University of Bari, Italy and IOB, University of Antwerp)
    Abstract: By combining geocoded project-level data on Chinese development assistance with geocoded household-level data from the Demographic and Health Survey (DHS), we investigate the effect of Chinese project assistance on household welfare in 13 sub-Saharan African countries. We exploit the geographic proximity of household clusters across two different DHS survey waves (before and after the influx of Chinese aid) and use a difference-in-difference design in order to investigate the impact of Chinese aid on households' wealth and education. Our results consistently point to an overall positive effect of Chinese project assistance on household welfare: areas that receive Chinese projects are more likely to be wealthier, stay in school longer, and achieve a higher educational attainment than areas which did not receive such projects. Results are robust to various alternative model specifications.
    Keywords: OECD-DAC, Aid Allocation, aid effectiveness, China, Africa, emerging donors, project level, household welfare, DHS, geocoded data
    JEL: F35 O19 R20
    Date: 2018–02–21
  2. By: Angelika Goliger; Landon McMillan
    Abstract: While much research has been done on the economic impacts of load-shedding in South Africa, fewer studies have focused on the effects of the rapidly rising electricity tariffs. The issue of tariff increases has now become even more critical, with technological developments making it easier and cheaper for consumers to reduce their demand for grid-based electricity. There have been some South African studies that have attempted to estimate the price elasticity of electricity demand or to show vulnerable sectors, but all have struggled to demonstrate the potential impacts on the competitiveness of individual firms and their decisions to invest in their own generation, and the longer-run impacts on electricity demand. This study examines the timing and type of own-generation investment decisions that are viable for 21 large companies, and the likely impactof this on South Africa’s electricity utility.
    Date: 2018
  3. By: Nigus, Halefom (UNU-MERIT); Nillesen, Eleonora (UNU-MERIT); Mohnen, Pierre (UNU-MERIT)
    Abstract: In this study, using data from lab-in-the-field experiment, we explore whether the introduction of weather index insurance crowds in or crowds out social capital in northern Ethiopia. We use contributions in the public good game as a measure of social capital. We find that weather index insurance crowds out social capital. The free-riding problem created by the positive externality of weather index insurance and development of self-sufficiency behaviour are found to be the causal mechanisms behind the crowding out phenomenon. Our results indicate that formal insurance mechanisms do not occur in a vacuum and may have unintended effects. Hence, this study suggests that novel insurance product design and marketing strategies should be used to ameliorate such unintended effects.
    Keywords: Weather index insurance, social capital, public goods game, Ethiopia
    JEL: C93 G22 H41 O17
    Date: 2018–02–19
  4. By: Sam Hickey; Tom Lavers; Miguel Niño-Zarazúa; Jeremy Seekings
    Abstract: Social assistance programmes proliferated and expanded across much of the global South from the mid-1990s. Within Africa there has been enormous variation in this trend: some governments expanded coverage dramatically while others resisted this. The existing literature on social assistance, or social protection more broadly, offers little in explanation of this variation. Drawing on the literature on political settlements and democratic politics, we argue that variation results from the political contestation and negotiation between political elites, voters, bureaucrats, and transnational actors. The forms of politics that matter at each of these inter-related sites of negotiation include struggles over ideas as well as material interests, and reflect the ways in which social assistance is being used to advance certain political as well as developmental projects in subSaharan Africa.
    Date: 2018
  5. By: Tweneboah Senzu, Emmanuel; Ndebugri, Haruna
    Abstract: Understanding and appreciating the crucial role privates’ investment plays in developing economies towards it sustainable growth, it became an imperative assignment to investigate the effect of corporate taxes and it impacts on privates’ Investment in developing countries, but focused the study on Ghana for the hypothetical test. For this very reason, the study sort to derive a cogent argument between corporate tax and it impacts on private investment including controllable variables like real GDP, Inflation estimated under consumer price index, exchange rate measured nominally, government expenditure and finally domestic credits as a vector indicators using Johansen approach to co-integration.
    Keywords: Corporate Taxes, Private Investment, Macroeconomics, monetary policies, econometrics
    JEL: E2 E22 E4 E44 E5 E52
    Date: 2018–02–20

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