nep-afr New Economics Papers
on Africa
Issue of 2021‒01‒25
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Estimating the effect of Democracy, Governance and Militarisation on Peace in Africa By Chimere O. Iheonu; Kingsley O. Odo; Davidmac O. Ekeocha
  2. Religion and Educational Mobility in Africa By Alberto Alesina; Sebastian Hohmann; Stelios Michalopoulos; Elias Papaioannou
  3. The impact of Foreign Aid on Economic Growth in Sub-Sahara Africa: The mediating role of Institutions By ADUSEI, ELIZABETH
  4. Is The Agricultural Sector Cursed Too? Evidence From Sub-Saharan Africa By Elizavetta Dorinet; Pierre-André Jouvet; Julien Wolfersberger
  5. The impact of institutions and infrastructure on intra-regional trade: The Economic Community of West African States By Abban, Stanley
  6. Elections, Political Connections and Cash Holdings: Evidence from Local Assemblies By David Adeabah; Charles Andoh; Simplice A. Asongu; Isaac Akomea-Frimpong

  1. By: Chimere O. Iheonu (University of Nigeria, Nsukka, Nigeria); Kingsley O. Odo (University of Nigeria, Nsukka, Nigeria); Davidmac O. Ekeocha (University of Nigeria, Nsukka, Nigeria)
    Abstract: Peace has been deemed paramount to socioeconomic progress and economic development across nations. It is for this reason nations strive to improve the peaceful coexistence of citizens. This study investigates the effect of democracy, governance and militarisation on peace in 43 African countries for the year 2018 in a cross sectional framework. The Ordinary Least Square (OLS), the Tobit regression and the Quantile Regression (QR) were employed as estimation strategies. The empirical results firstly reveal that democracy increases peace in Africa, particularly in countries where the initial level of peace is at its highest level. Secondly, militarisation of Africa reduces peace in the region only in countries where the initial level of peace is at its highest level. Thirdly, the influence of governance on peace in Africa depends majorly on the measure of governance utilised. The control of corruption, government effectiveness and regulatory quality increase peace where the initial level of peace is at its lowest level. Political stability increases peace across the entire quantiles utilised while rule of law increases peace in countries where the initial level of peace is low. In conclusion, governance in general increases peace in the countries where initial level of peace is very low. Policy recommendations based on these findings are discussed.
    Keywords: Democracy; Governance; Militarisation; Peace; Africa
    Date: 2020–01
  2. By: Alberto Alesina; Sebastian Hohmann; Stelios Michalopoulos; Elias Papaioannou
    Abstract: This paper offers a comprehensive account of the intergenerational transmission of education across religious groups in Africa, home to some of the world’s largest Christian and Muslim communities. First, we use census data from 20 countries to construct new upward and downward religion-specific intergenerational mobility (IM) statistics. Christian boys and girls have much higher upward and lower downward mobility than Muslims and Animists. Muslims perform well only in a handful of countries where they are small minorities. Second, we trace the roots of these disparities. Although family structures differ across faiths, this variation explains only a small fraction of the observed IM inequities (roughly 12%). Inter-religious differences in occupational specialization and urban residence do not play any role. In contrast, regional features explain nearly half of the imbalances in educational mobility. Third, we isolate the causal impact of regions from spatial sorting exploiting information on children whose households moved when they were at different ages during childhood. Irrespective of the religious identity, regional exposure effects are present for all children moving before 12. Fourth, we map and characterize the religious IM gaps across thousands of African regions. Among numerous regional geographic, economic, and historical features, the district's Muslim share is the most important correlate. Children adhering to Islam underperform Christians in areas with substantial Muslim communities. Fifth, survey data reveal that Muslims display stronger in-group preferences and place a lower valuation on education. Our findings call for more research on the origins of religious segregation and the role of religion-specific, institutional, and social conventions on education and opportunity.
    JEL: N0 N37 O0 O1 O15 O55 Z12
    Date: 2020–12
    Abstract: The study examines the impact of aid on economic growth in Sub-Saharan Africa and also investigates whether institutions mediate the absorptive capacity of aid in the region. The concept of foreign aid has been flagged as the solution to ending Africa’s poverty predicament by some scholars; as such Least Developing countries depend on it to finance their budget and embark on other developmental projects. The study observed that aid positively affect economic growth in the region. Thus it serves as a form of investment in the region, thereby increasing capital accumulation. However, the study also observed that institutional quality alone does not mediate the effectiveness of aid on economic growth in the region. Other factors including good fiscal policies, monetary policies, etc. need to be considered to increase the absorptive capacity of aid in the region.
    Keywords: Keywords: Foreign aid; per capita income growth rate; Human capital index; labour force participation rate; Institutional quality.
    JEL: F35 O1
    Date: 2020–05–27
  4. By: Elizavetta Dorinet (ECO-PUB - Economie Publique - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Pierre-André Jouvet (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Julien Wolfersberger (ECO-PUB - Economie Publique - AgroParisTech - INRA - Institut National de la Recherche Agronomique, Chaire économie du climat - Chaire économie du climat)
    Abstract: Extractive and agricultural resources do not have the same impact on poverty reduction and can compete with each other. We examine how extractive resource windfalls affect agricultural productivity, measured as the amount of output per worker in the agricultural sector. This is important since agricultural productivity is a key element of structural transformation and poverty reduction. To do this, we exploit a panel dataset of 38 countries over 1991-2016 and construct a country-specific commodity price index that captures resource-related gains and losses in aggregate disposable income. We find that an increase in the commodity price index leads to a drop in agricultural productivity in Sub-Saharan economies. Among the possible mechanisms to explain this result, our findings highlight the lack of spillovers across sectors and the low level of agricultural investment in autocratic regimes, both related to the exploitation of extractive resources. We also find that higher agricultural productivity is positively associated with the release of workers towards manufacturing and services, confirming its importance for structural transformation.
    Keywords: Agricultural productivity,Structural transformation,Natural resource curse
    Date: 2020–12–02
  5. By: Abban, Stanley
    Abstract: Institutions and infrastructure are key to stimulate trade flows and economic growth. This study seeks to investigate the role of institutions on trade in the Economic Community of West African States. Additionally, the study investigates the impact of trade and transport infrastructure. The study used a Poisson Pseudo Maximum Likelihood (PPML) estimator for the augmented gravity model of international trade. The results show that Rule of Law and Political Stability facilitated intra-regional trade while Regulatory Quality, Corruption Control and Government Effectiveness hindered trade. Additionally, the study showed that trade and transport infrastructure has a negative but insignificant effect on trade. The study recommends a new institutional framework to aid curtail the ills and emphasize the need to intensify security as a paramount requirement to facilitate trade in the community.
    Keywords: Institution; Infrastructure; Poisson Pseudo Maximum Likelihood (PPML);intra-regional trade
    JEL: F1 F14
    Date: 2020–08–26
  6. By: David Adeabah (Legon, Ghana); Charles Andoh (Legon, Ghana); Simplice A. Asongu (Yaoundé, Cameroon); Isaac Akomea-Frimpong (Sydney University, Australia)
    Abstract: We examine the relationship between elections, political connections, and cash holdings in Ghanaian local assemblies. Using a panel dataset of 179local assemblies over a period 2012 to 2017, a panel regression and the generalized method of moments estimation techniques was employed for the analysis. We find that local assemblies hold less cash during election years, which suggests that election may be one of the potential factors to mitigate agency conflict in weak governance environment. Further, we demonstrate that local assemblies that have political connections hold less cash; however, political uncertainty makes these entities conducive to agency problems than their non-connected peers because they hold more cash. Additional analysis indicates that one year prior to elections, managerial conservatism kicks-in and leads managers to hold more cash in local assemblies that have political connections, which continues and becomes more pronounced in election years. Our results have implications for regulations on the cash management practices of local assemblies.
    Keywords: agency problem; cash holdings; generalized method of moments;panel regression; political connections
    Date: 2021–01

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