nep-afr New Economics Papers
on Africa
Issue of 2022‒11‒28
six papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. Attaining Sustainable Development Goals (SDGs): New evidence on foreign aid and the “bundling†of domestic revenue mobilization in Sub-Saharan Africa By Oludele Folarin; Isiaka A. Raifu
  2. Exploring the Drivers of Economic Growth in Sub-Saharan Africa: The Interactive Effect of Globalization and Financial Development By Yakubu, Ibrahim Nandom
  3. Thresholds of external flows in financial development for environmental sustainability in sub-Saharan Africa By Simplice A. Asongu; Barbara D. Mensah
  4. African Political Institutions and the Impact of Colonialism By Jutta Bolt; Leigh Gardner; Jennifer Kohler; Jack Paine; James A. Robinson
  5. Understanding Somalia's social contract and state-building efforts: Consequences for donor interventions By Mathieu Cloutier; Hodan Hassan; Deborah Isser; Gaël Raballand
  6. Bargaining Power and Inheritance Norms: Evidence from Polygamous Households in Nigeria By Jennifer Golan; Alessia Isopi

  1. By: Oludele Folarin (University of Ibadan, Ibadan, Nigeria); Isiaka A. Raifu (University of Ibadan, Ibadan, Nigeria)
    Abstract: With the global sustainable development goals, it has become imperative for developing countries, especially sub-Saharan African countries, to think inward on ways to increase domestically mobilized revenue. The recovery of the global economy within the last few years has increased foreign assistance inflow into African countries. However, the direction of its impact on domestic mobilized revenue is unclear. This study revisited the relationship between foreign aid and domestic mobilized revenues for 32 sub-Saharan African countries using a more recent and novel dataset on tax revenue. We employed instrumental fixed effect Quantile regression, a novel technique in aid and tax revenue literature. The study findings show that the impact of foreign aid varies across tax revenue distribution. We found a negative and significant effect in countries with high tax effort, while the effect is insignificant in countries with low tax effortsub-Saharan African countries, especially those with low tax revenue, need to use foreign aid to strengthen their tax administration and adopt modern tax revenue collection technologies. As a result, sub-Saharan African countries should request advanced countries or donors to provide technical support in tax revenue mobilization.
    Keywords: Foreign aid, Tax revenue, Quantile regression, Sub-Saharan Africa
    JEL: F35 H2 H27
    Date: 2022–01
  2. By: Yakubu, Ibrahim Nandom
    Abstract: This study investigates how globalization and financial development interactively stimulate economic growth in Sub-Saharan Africa (SSA). The author employs annual data spanning from 2000 to 2017 for 30 Sub-Saharan African countries and applies the generalized method of moments (GMM) technique. The results show that while globalization significantly reduces economic growth, the impact of financial development on growth is positive when examined independently. With the interactive effect of globalization and financial development, a positive and statistically significant impact is documented. The study further reveals that trade openness significantly enhances growth while inflation inhibits growth. In light of the findings, the author presents key policy recommendations.
    Keywords: Globalization, Financial development, Economic growth, Sub-Saharan Africa
    JEL: F43 F62 G20
    Date: 2022–10–28
  3. By: Simplice A. Asongu (Yaounde, Cameroon); Barbara D. Mensah (University of Professional Studies, Accra, Ghana)
    Abstract: The study complements extant literature by assessing linkages between financial development, external flows and CO2 emissions in 27 sub-Saharan African countries for the period 2002 to 2018. The empirical evidence is based on interactive quantile regressions and external flows consist of remittances, foreign aid, trade openness and foreign investment. The findings establish minimum thresholds of external flows that are needed for the corresponding external flows to interact with financial development in view of promoting environmental sustainability by means of reducing CO2 emissions.
    Keywords: foreign aid, remittances, foreign direct investment, official development assistance, trade, CO2 emissions, quantile regressions
    JEL: C52 O38 O40 O55 P37
    Date: 2022–10
  4. By: Jutta Bolt; Leigh Gardner; Jennifer Kohler; Jack Paine; James A. Robinson
    Abstract: Conventional wisdom proposes deep historical roots for authoritarianism in Africa: either colonial “decentralized despotism” or enduring structural features. We present a new theoretical perspective. Africans sought autonomous local communities, which constrained precolonial rulers. Colonizers largely left constrained institutions in place given budget limitations. Innovation, where it occurred, typically scaled up councils rather than invented despotic chiefs. To test these implications, we compiled two original datasets that measure precolonial institutions and British colonial administrations around 1950 in 463 local government units. Although colonial institutions were authoritarian at the national level, most Native Authorities were constrained by some type of council and many local institutions lacked a singular ruler entirely. The form of Native Authority institutions and the composition of councils are strongly correlated with precolonial institutional forms. The persistence of institutional constraints at the local level suggests alternative channels through which colonial rule fostered postcolonial authoritarian regimes.
    JEL: D7 H1 P51
    Date: 2022–10
  5. By: Mathieu Cloutier; Hodan Hassan; Deborah Isser; Gaël Raballand
    Abstract: Building on a World Bank regional study in Africa aiming at measuring social contracts concepts and within the framework of reflecting on future donor interventions, this paper applies social contracts measurement and complements with qualitative assessments in Somalia. This paper uses the framework developed regionally to explore the citizen-state bargain and social outcomes in Somalia and is relevant for most fragile and conflict-affected countries.
    Keywords: Somalia, Social contract, Security, Tax, Education, State legitimacy, Conflict
    Date: 2022
  6. By: Jennifer Golan; Alessia Isopi
    Abstract: We develop a polygamous household model with child labour improving the value of the future inheritable asset. The model predicts that increasing mothers' relative bargaining power increases children’s labour supply, especially when social norms assign a greater inheritance share to the mother's child. Using data from Nigeria and the variation in mothers' bargaining power and inheritance norms, we find that children of the first wife work more than children of other mothers within the polygamous household. This result is more pronounced for boys, landed households and settings where first wives increase their returns to inheritance via their offspring.
    Date: 2022–11

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