nep-afr New Economics Papers
on Africa
Issue of 2019‒04‒22
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. The comparative political economy of plastic bag bans in East Africa: why implementation has varied in Rwanda, Kenya and Uganda By Pritish Behuria
  2. Cronyism, firms’ Productivity and Informal Competition in Egypt By Nesma Ali; Boris Najman
  3. Boosting quality education with inclusive human development: Empirical evidence from Sub-Saharan Africa By Asongu, Simplice A; Odhiambo, Nicholas M
  4. Does International Financial Integration Increase the Standard of Living in Africa? A Frontier Approach By Gilles Dufrénot; Kimiko Sugimoto
  5. The politics of upgrading in global value chains: The case of Rwanda’s coffee sector By Pritish Behuria
  6. A replication of "The long-run impact of foreign aid in 36 African countries: Insights from multivariate time series analysis" (Oxford Bulletin of Statistics and Economics, 2014) By Roger, Lionel

  1. By: Pritish Behuria
    Abstract: The environmental damage that plastic waste is causing has catalysed government action against plastic bags around the world. Despite anti-plastic bag policies gaining traction globally, there has been limited investigation of how the implementation of bans has varied. This paper is the first to comparatively examine why there has been variation in implementing bans on plastic bags, using the examples of three East African countries: Rwanda, Kenya and Uganda. Explanations of why anti-plastic bag policies have been blocked in other countries usually rely on business power-based explanations, with the assumption that plastic manufacturers (and the broader manufacturing sector) have obstructed implementation. The comparatively limited strength and size of plastic manufacturers in Rwanda, as compared to Kenya and Uganda, suggests that business power may partly explain why the ban in Rwanda has been implemented. However, business power-based arguments do not explain the variation between implementation in Kenya and Uganda. In both countries, anti-plastic bag actions have been announced repeatedly but implementation has stuttered, with commitment to implementation stronger and less contested in Kenya than in Uganda. Criticisms of the existing business power literature tend to be weak on examining why governments may go ahead with policies that are against the interests of businesses. This paper argues that developing country government’s ecological modernisation initiatives may be shaped by pressures from three levels – business power, the local environment and the external environment – to explain why implementation of plastic bag bans has varied in Rwanda, Kenya and Uganda.
    Date: 2019
  2. By: Nesma Ali (Heinrich-Heine University Düsseldorf); Boris Najman
    Abstract: This paper investigates the role of informal firms’ competition in determining the micro-level effect of cronyism on formal-firms’ productivity in the aftermath of the 2011 Egyptian revolution. Based on the World Bank panel Enterprise Surveys, we follow a constructive approach to indicate politically connected firms based on the findings of the previous literature. Using a propensity score reweighting – difference-in-difference estimator, we find that being a crony firm after the revolution could generate unsustainable gains in terms of productivity. This is mostly due to cronyism externalities that engenders a stronger intensity of informal competition, which jeopardizes any increase in productivity and creates a large disequilibrium at the firm level. We also provide evidence that crony firms’ excess in labor is the main channel through which this effect occurs. Hence, crony firm survival in Egypt depends on their ability to balance between the sustain provision of privileges and the threats imposed by the growth of the informal sector.
    Date: 2019
  3. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: This study examines the importance of inclusive human development in promoting education quality in a panel of forty-nine Sub-Saharan African countries for the period 2000-2012. The empirical evidence is based on Ordinary Least Squares (OLS), Fixed Effects (FE) and Quantile Regression (QR) estimations. It is apparent from the OLS and FE findings that inclusive human development has a negative effect on the outcome variable. This negative effect implies that inclusive human development improves education quality. This result should be understood in the light of the fact that the adopted education variable is a negative economic signal given that it is computed as the ratio of pupils to teachers. Therefore, a higher ratio reflects diminishing education quality. From QR, with the exception of the highest quantile, the tendency of inclusive human development in reducing poor quality education is consistent throughout the conditional distribution of poor education quality. Policy implications are discussed.
    Keywords: Education; inclusive human development; Africa
    Date: 2019–04
  4. By: Gilles Dufrénot (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Kimiko Sugimoto (Hirao School of Management - Konan University)
    Abstract: We investigate whether a higher financial integration with the rest of the world can help the African countries reduce their production inefficiency and/or push up their efficient frontier of production. We use two alternative empirical approaches based, respectively, on a stochastic frontier analysis and quantile regressions. We provide evidence of heterogeneous situations across countries and time. This paper proposes a new approach for defining, at the aggregate level, a link between financial openness and production efficiency. We show that one size does not fit all: international financial integration can increase or decrease African countries' standard of living.
    Keywords: African countries,financial openness,stochastic frontier,quantile regression
    Date: 2019–04
  5. By: Pritish Behuria
    Abstract: Two parallel tracks of research on economic transformation in developing countries have operated at a distance from each other over the last two decades. A global track – global value chains/global production networks (GVC/GPNs) – has focused on the increasing interconnectedness of global trading networks and has overlooked the role of the state and the explanatory power of domestic political economy. Meanwhile, a domestic track – including literature on developmental states, industrial policy and political settlements – has tended to take a methodologically nationalist perspective to examine economic transformation in developing countries, with limited reflections on external economic and political pressures. This paper contributes to an emerging stream of literature that examines how the domestic and global scales influence how developing country governments and firms tackle the challenge of economic upgrading. By combining insights from the political settlements and GVC/GPNs literature, this paper examines the Rwandan government’s attempt at upgrading its coffee production to enter specialty coffee markets. It shows how the existing GVC/GPNs literature makes an important contribution to describing how multipolar governance influences the pathways for economic upgrading in Rwanda’s coffee sector, but that even where access is granted, benefits are captive to the demands of international buyers, and gains for some have not translated across the sector. Insights from the political settlements literature showcase how domestic politics influences who benefits from insertion to GVC/GPNs and how the unequal provision of opportunities affects political stability.
    Date: 2018
  6. By: Roger, Lionel
    Abstract: Macroeconomic data have been shown to vary substantially between sources, especially so for low-income countries. While the impact of data revisions on inference is well documented for cross-country studies, there is no systematic analysis of the robustness of results obtained from time series analysis. This is despite the fact that time series analysis is an integral part of the econometric toolkit of government analysts, and informs policy decisions in many areas of macroeconomics. This study fills this gap for the notoriously controversial aid-effectiveness debate using the statistical framework by Juselius et al. (2014, Oxf Bull Econ Stat): by adopting alternative sources of GDP data in 36 sub-Saharan African countries The author finds that results remain robust across datasets in two thirds of the countries, but sometimes drastically change in others. These findings suggest that robustness checks such as those carried out here should become standard procedure for macroeconomic analysis using single-country time series.
    Keywords: time-series models,economic growth,economic data,foreign aid
    JEL: C32 F35 O11
    Date: 2019

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