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on Africa |
| By: | Rémi Bazillier (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne, CNRS-IRD); María Moraga-Fernández (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne, CNRS-IRD, Ruhr University Bochum - Institute of Development Research and Development Policy) |
| Abstract: | Despite the widespread use of minimum wage policies to combat poverty in Africa, research on their effects remains limited. This paper addresses this gap by examining the economic impact of minimum wage shocks on firms across the African continent using firm-level data from the World Bank Enterprise Surveys. We document that all but four African countries have a minimum wage system. Between 2002 and 2019, we identify 13 shocks-defined as a 30% real increase-in 11 countries. Employing a difference-in-differences approach, we estimate the causal effects of these shocks on labor costs, employment, sales, and productivity. To address potential endogeneity, we instrument minimum wage changes using social protest intensity. We find that minimum wage shocks significantly increase labor costs per worker, suggesting at least a partial enforcement of regulations. However, we detect no robust impact on employment. Instead, firms partly offset higher labor costs through increased sales or productivity. We identify three complementary mechanisms: (1) a cleansing effect, where less productive firms exit; (2) capital investment as an adjustment channel; and (3) a local demand boost, with stronger sales effects in large markets |
| Keywords: | Minimum Wages; Africa; employment; firms; labor regulations |
| JEL: | J38 E24 O15 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:mse:cesdoc:25006 |
| By: | Magbondé, Kadoukpè Gildas |
| Abstract: | Despite the expansion of global value chains (GVCs) over the last three decades, African countries trail the other developing regions in terms of GVC integration. Yet, the drivers of African countries' GVC participation are not well understood compared to developed countries. The current paper fills this knowledge gap by providing empirical evidence of the institutional drivers of GVC participation in Africa. It uses the instrumental variable approach based on a panel dataset of 37 African countries spanning the period 2002-2018 to examine the impacts institutions have on total, backward, forward GVCs as well as GVC position. Though no significant effect is recorded with respect to total GVC participation, the instrumental-variable estimates suggest that upgraded institutions encourage backward GVCs and reduce both forward GVCs and upstreamness. For a successful transition from upstream stages of GVCs, African countries must consider strengthening their political and economic institutions. |
| Keywords: | Institutions, global value chains, African countries and instrumental variable approach |
| JEL: | F13 F23 P48 E02 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:sgscdp:314433 |
| By: | Ezzat, Asmaa; Zaki, Chahir |
| Abstract: | Efficient institutions matter in promoting Global Value Chains (GVCs) participation since they help reduce transaction costs for firms that engage in trade. Competition policy is considered an important dimension of these institutions. This paper investigates whether competition policy matters for participation of emerging countries in GVCs, with a special focus on African countries. To do so, we use the EORA dataset on backward and forward linkages and merge it with different indicators pertaining to the de jure (competition law) and the de facto (market dominance, antimonopoly, etc.) measures of competition policy. We find that both the de jure and the de facto dimensions of competition policy matter for backward and forward GVC participation. In addition, our findings indicate that this relationship is non-linear as the market can become saturated. Two important transmissions channels can explain this effect: market diversification and trade liberalization. These results remain robust after we control for the endogeneity between GVC and competition. In the case of African countries, we find that more diversified economies benefit from competitive markets, whereas other results remain unchanged, especially for the de jure measures. |
| Keywords: | competition policy, GVC, Africa |
| JEL: | D40 F12 F14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:sgscdp:314432 |
| By: | Banao, Fawzi |
| Abstract: | In a context of persistent challenges surrounding border security in Africa, this study investigates the impact of defense policies on internal security by using gold-related customs fraud as a proxy for cross border crime over the period 2000–2019. Defense policy is captured through two key indicators: military expenditures and the size of armed forces personnel. The empirical strategy relies on multiple econometric techniques, including Ordinary Least Squares (OLS), Two-Stage Least Squares (2SLS), and the Generalized Method of Moments (GMM). The results reveal that both increased military spending and expansion of armed forces personnel are significantly associated with a reduction in gold-related customs fraud. Moreover, the findings indicate that expanding the size of armed forces is more effective than merely increasing defense budgets in curbing such illicit activities. The impact is particularly pronounced in the Sahel region, where intensified military mobilization leads to a more substantial decline in cross-border smuggling compared to other parts of the continent. The study concludes with a set of strategic policy recommendations, emphasizing the importance of targeted interventions in high-risk and vulnerable regions such as the Sahel. |
| Keywords: | Gold customs fraud, Military expenditures, National armed forces personnel |
| JEL: | H56 O17 F52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:314453 |
| By: | Shelley Liu |
| Abstract: | Literature on rebel governance has examined various ways in which rebels engage with civilians, build informal governing institutions, and exert social control during civil war. When rebels win, how does rebel governance affect post-war politics? This paper explores how varieties of insecurity that the victor faces after war—external threat, internal challengers, or electoral politics—explain the role of rebel-civilian ties in helping the new ruling party to successfully consolidate power. |
| Keywords: | Post-conflict, Governance, Zimbabwe, Civil conflict |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-6 |