nep-afr New Economics Papers
on Africa
Issue of 2020‒03‒23
four papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Inherent effects of corruption on the erosion of political trust in developing countries:Evidence from Ghana By Julia Pullbeck; Firmin Doko Tchatoka
  2. Beyond the chains: Slavery and Africa’s wealth gap with the world By Andrew Phiri
  3. What US strategy gets wrong about China in Africa By Cullen S. Hendrix
  4. Uncertainty and Tourism in Africa By Carolyn Chisadza; Matthew Clance; Rangan Gupta; Peter Wanke

  1. By: Julia Pullbeck (School of Economics, University of Adelaide); Firmin Doko Tchatoka (School of Economics, University of Adelaide)
    Abstract: A growing literature highlighting the inherent effects of corruption on the erosion of political trust has emerged recently, but few studies focus on Sub-Saharan African countries. The paper uses an identification strategy based on a control function approach, along with individual level data to disentangle the nexus between perceived corruption and political trust in Ghana. Results show that perceived corruption substantially erodes political trust, whilst political trust only slightly impacts people’s perception of corruption. In essence, perceived corruption propagates a climate of mistrust in Ghana. Moreover, heterogeneous effects on these relationships are observed across regions, ethnic groups, gender and education. For example, men tend to perceive the presidency office as corrupt whilst trusting the president, thereby repudiating the general view that individuals who trust more automatically perceive less corruption.
    Keywords: Corruption; Mistrust; Simultaneity; Ghana; Presidency office; Control function approach.
    JEL: O17 N27 C35
    Date: 2020–02
  2. By: Andrew Phiri (Department of Economics, Nelson Mandela University)
    Abstract: Slave trades represent one of the most controversial historical events experienced over the last millennium and many researchers are in consensus of the legacy of slavery being one of the deepest underlying factors behind Africa’s current state of underdevelopment. This study seeks to quantify the effects which slave exports exerted on per capita GDP differences between 49 Africa and the rest of the world during the period of 2000-2018. Our findings unanimously point to a statistically significantly inverse relationship between slave exports and income differences hence supporting the intuition of slavery being a fundamentally deep root of developmental differences between Africa and the rest of the world. Our results are robust to adjusted measures of slave exports; inclusion of additional control variables; colonial dummy effects well as to the exclusion of outliers.
    Keywords: Slave exports; income gap; Sub-Saharan Africa (SSA).
    JEL: C21 D63 I31 N17
    Date: 2020–03
  3. By: Cullen S. Hendrix (Peterson Institute for International Economics)
    Abstract: The Trump administration’s Africa strategy is rooted in three misconceptions about China’s African footprint—and a fourth about US-Africa economic relations—that are either factually incorrect or overstated in terms of the broader strategic challenges they pose to US interests: (1) Chinese engagement in Africa crowds out opportunities for trade and investment with and from the United States; (2) Chinese engagement in Africa is resource-seeking—to the detriment of US interests; (3) Chinese engagement in Africa is designed to foster debt-based coercive diplomacy; and (4) US-Africa economic linkages are all one-way and concessionary (i.e., aid-based). Hendrix finds little evidence to suggest Chinese trade and investment ties crowd out US trade and investment opportunities. China’s resource-seeking bent is evident in investment patterns, but it is more a function of Africa’s having comparatively large, undercapitalized resource endowments than China’s attempt to corner commodity markets. Chinese infrastructural development—particularly large projects associated with the Belt and Road Initiative—may result in increased African indebtedness to the Chinese, but there is little reason to think debt per se will vastly expand Chinese military capacity in the region. And finally, US-Africa economic relations are much less one-sided and concessionary (i.e., aid-based) than conventional wisdom suggests.
    Date: 2020–03
  4. By: Carolyn Chisadza (Department of Economics, University of Pretoria, Private Bag X20, Hateld 0028, South Africa); Matthew Clance (Department of Economics, University of Pretoria, Private Bag X20, Hateld 0028, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hateld 0028, South Africa); Peter Wanke (COPPEAD Graduate Business School, Federal University of Rio de Janeiro, Rua Paschoal Lemme, 355, Rio de Janeiro CEP 21949-900, Brazil)
    Abstract: Tourism growth is on the rise in Africa, and yet limited empirical evidence exists that explores the factors that drive this important contributor of economic growth on the continent. Previous literature focusses mainly on developed countries. This study weighs in on the recent debate on African tourism by providing evidence on the role that economic uncertainties have on tourist arrivals. Using panel data from 1996 to 2017, we find that economic uncertainties reduce tourist arrivals in Africa in comparison to other global regions, such as Europe and Latin America. Further disaggregation by African regions reveals that economic uncertainties in the north, south and west regions drive these adverse results. These regions have been the hardest hit by political instability and social unrest during the period under review, which may have acted as a deterrent to tourists.
    Keywords: panel data, uncertainty, tourism, Africa
    JEL: C23 Z32 O55
    Date: 2020–02

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