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This paper quantifies the aggregate impact of communal land tenure ar- rangements that prevail in Sub-Saharan Africa. Such tenure regimes limit land transfer- ability by prohibiting sales, subjecting rented-out land to the risk of expropriation, and redistributing it to existing farmers in a progressive fashion. We use a general equilibrium two-sector selection model featuring agents heterogeneous in skills to compute the result- ing occupational and operational choices as well as land allocations. The quantification of the model is based on policies deduced from Ethiopia. In the Sub-Saharan African context we find that such policies substantially dampen nominal agricultural relative to non-agricultural productivity, by 25%. Real relative agricultural productivity, however, only falls by 4% since cross-sectoral terms of trade adjust strongly, with excess agricul- tural employment only amounting to some 1.5 percentage points. The loss in GDP is small, about 2%. That serves as a reminder that ostensibly highly distortionary policies need not have substantial bite when individuals strategically adjust to them and equilib- rium prices adapt. For example, the model predicts that at given prices 62% of farmers in an economy such as Ethiopia would leave farming if tenure were secured, casting land insecurity as a major obstacle. Yet only 9% would actually switch sectors after price adjustments are factored in.

We aim at understanding the triggers of electoral violence, which spoiled 80% ofelections in Africa during the last decades. We focus on Burundi, a country wherepolls were organized in 2010, only few months after the end of a long-lasting civilwar. We find that an acute polarization between ex-rebels’ groups is highly conduciveto electoral violence. In particular, we predict a five-fold increase in electoralviolence between the lowest- and highest-polarized municipality. However, neitherethnic nor political cleavages significantly determine such electoral malpractices.These results are robust to numerous specifications. We therefore argue that policiessupporting the transition of ex-rebel groups from warfare to the political arenashould be reinforced., info:eu-repo/semantics/published

In this paper, we study the effect of exogenous global crop price changes on migration from agricultural and non-agricultural households in Sub-Saharan Africa. We show that, similar to the effect of positive local weather shocks, the effect of a locally-relevant global crop price increase on household out-migration depends on the initial household wealth. Higher international producer prices relax the budget constraint of poor agricultural households and facilitate migration. The order of magnitude of a standardized price effect is approx. one third of the standardized effect of a local weather shock. Unlike positive weather shocks, which mostly facilitate internal rural-urban migration, positive income shocks through rising producer prices only increase migration to neighboring African countries, likely due to the simultaneous decrease in real income in nearby urban areas. Finally, we show that while higher producer prices induce conflict, conflict does not play a role for the household decision to send a member as a labor migrant., CEPA Discussion Papers; 26

Real wage rises for the unskilled are one mechanism by which poor people can obtain rises in their incomes and a reduction in their economic vulnerability. In this paper it is shown that over a period in Ghana when measured poverty declined, 1988 to 1992, real wages for the unskilled rose, by about 11 per cent. Over the 1990s evidence from the manufacturing sector suggests substantial falls in the real wages of the unskilled, some 23-26 per cent between 1992 and 1998. In the longer term such wages are lower than those of the mid 1980s and approximately one-third the level of the early 1970s. Even if poverty can be reduced in this context, any fall in poverty will omit one of the most vulnerable groups of the working population. There is evidence that high rates of inflation and low investment are two factors explaining these falls in real wages.

Following the wave of democratization during the 1990s, elections are now common in low-income societies. However, these elections are frequently flawed. We investigate the Nigerian general election of 2007, which is to date the largest election held in Africa and one seriously marred by violence. We designed and conducted a nationwide field experiment based on randomized anti-violence grassroots campaigning. We find direct effects on violence outcomes from exploring both subject-surveying and independent data sources. Crucially, we establish that voter intimidation is effective in reducing voter turnout, and that the violence was systematically dissociated from incumbents. We suggest that incumbents have a comparative advantage in alternative strategies, vote buying and ballot fraud. Voter intimidation may be a strategy of the weak analogous to terrorism.

How did Ghanaian manufacturing firms change in the period between 2003 and 2013? This paper presents results from a survey of 1000 firms in Ghana, conducted in 2013, which were randomly selected from the 2003 Ghanaian National Industrial Census. This survey allows us to track survival and exit of firms between 2003 and 2013. We find strong regional differences and also differences for small, medium and large firms. The exit rate of firms in Kumasi, the second city, is lower than in Accra, but the growth rate of firms in Kumasi was also lower. Small firms were more likely to exit than large firms. Overall, the picture we paint of manufacturing in Ghana is not a positive one: total employment by firms operating before 2003 decreased from 134 863 in 2003 to 74 319 in 2013. It remains a question to what extent this was compensated by new employment by firms that entered after 2003, who were not surveyed. We also consider the firm size distribution evolution, and show that selection plays some role in explaining the positive correlation between firm size and age, but that this is less strong than in earlier studies.

In this paper the links from measures of consumption to welfare and well-being are discussed drawing on a study of changes in consumption in Ghana in the 1990s. It is argued that household consumption can act as an opportunity measure of welfare. The widespread distrust of such a welfare measure may be explicable, at least in part, by how misleading it can be if averages of welfare change are presented. In Ghana is has been argued that poverty fell based on a consumption measure of welfare. In this paper it is shown that the welfare measure can be presented informatively in terms of types of households. Doing this for Ghana over the period of the 1990s reveals that while on average per capita consumption rose across all percentiles of the distribution this was not true for farmers who are on average the poorest. We also show how it is possible to present results for household types where certain characteristics remain unchanged. We focus on education and household size. The falls in welfare for farmers nearly doubles if we control for education and household size while the overall rise in consumption per capita is reduced from 11 to 3 per cent per decade. Such simple empirical analysis shows how consumption can be used as an opportunity welfare measure and that a decrease in poverty does not imply at all that most people in the economy had greater opportunities.

In this paper we determine the cost of fatalities resulting from road traffic injuries (RTIs) in South Africa. We express the costs in terms of reduced life expectancy and years of potential life lost (YPLL). Our main data source is the Injury Mortality Survey, a retrospective descriptive study carried out in 2009 in South Africa. Using the mortality rates by sex and age from the mortuary data we calculate actual life expectancy at birth. In our counterfactual analysis we assume a reduction of 15% reduction per year in road fatalities for a period of 10 years. A comparison of the estimated actual and counterfactual life expectancies suggests that the average gain in life expectancy at birth would be 0.58 years. Since the overwhelming majority of road traffic fatalities are male (75.7%), there is a considerable gender difference. Men would gain 0.85 years while women would gain 0.30 years in life expectancy, closing the gender gap in life expectancy by about 14%. We then discuss how a reduction in RTIs could be achieved. South Africa’s legislation already covers all important aspects of road safety (e.g. seat belt use, drink driving restrictions, speed limits, infrastructure improvements), however, enforcement is relatively weak and should be improved. There are a raft of measures that have been well researched in other countries, most interventions aim to modify the behaviour of road users and have been found to be cost effective. In addition to stricter enforcement, evidence from social science suggests that compliance could be increased through a change in social norms regarding road usage. published

This paper presents a computable general equilibrium model (CGEM) able to measure the impacts of the affirmative action policy set up in South Africa. In order to decrease inequalities inherited from the former regime, the government encourages firms to employ Historically Disadvantaged Persons (HDP). Through this study, we evaluate the impact of this policy on employment, poverty and inequality. To evaluate impacts on poverty and inequality, we use a CGE Top Down approach. The paper analyses two scenarios; the first one deals with the impact of affirmative action on skilled jobs. The second scenario adds to the previous by including semi skilled workers in the simulation. Both of these scenarios show a deep decrease in unemployment as well as a fall of poverty for each population groups.

Despite high growth rates in recent decades, Burkina Faso is still a poor country. The government acknowledges the need for a stronger commitment to reach the Millennium Development Goals (MDGs), particularly regarding the reduction of poverty. At the same time, the Burkinabe budget deficit has grown in recent years in response to various crises which have hit the country. There are strong pressures to rapidly reduce this budget deficit, but there are active concerns about how this will be achieved. The country thus faces difficult choices: how to ensure better living conditions for children, attain the millennium goals and ensure they have a better future in the present budgetary context? To answer this question, three policy interventions were identified: (i) an increase in education spending, (ii) a school fees subsidy and (iii) a cash transfer to households with children under the age of five. The same total amount is injected into the economy in each of the three cases, facilitating comparison between the three scenarios. The discussions also made it possible to identify the three financing mechanisms that appear most realistic: (i) a reduction in subsidies, (ii) an increase in the indirect tax collection rate and (iii) an extension of the timeframe to reduce the public deficit to ten years rather than five. The results indicate that increased public education spending helps raise school participation and pass rates, thus increasing the supply and education level of skilled workers, leading to a reduced incidence and depth of both monetary and caloric poverty. School fees subsidies have more differentiated effects on education: they promote children’s entry into school to a greater degree, but are less effective at inducing them to pursue their studies. Finally, the supply of skilled workers increases slightly, but their average level of education is lower than in the reference scenario. This type of intervention has a beneficial impact on poverty, greater than under increased public education spending. Cash transfers have a limited impact on educational behaviour, and thus on the supply of skilled workers, but substantially reduce the incidence and depth of poverty. The results are qualitatively similar under each financing approach. In sum, if the objective is to achieve improved education and economic performance, the best intervention appears to be to focus on increased public education spending. However, if reducing child poverty is prioritized, it is cash transfers to families that appear more suitable. Regardless of the intervention considered, the most suitable financing mechanism appears to be a temporary increase in the public deficit, because it is accompanied by a smaller negative effect on the quality of life of the most destitute.

We estimate the effects of one of the largest anti-vote-buying campaigns ever studied — with half a million voters exposed across 1427 villages—in Uganda’s 2016 elections. Working with civil society organizations, we designed the study to estimate how voters and candidates responded to their campaign in treatment and spillover villages, and how impacts varied with campaign intensity. Despite its heavy footprint, the campaign did not reduce politician offers of gifts in exchange for votes. However, it had sizable effects on people’s votes. Votes swung from well-funded incumbents (who buy most votes) towards their poorly-financed challengers. We argue the swing arose from changes in village social norms plus the tactical response of candidates. While the campaign struggled to instill norms of refusing gifts, it leveled the electoral playing field by convincing some voters to abandon norms of reciprocity—thus accepting gifts from politicians but voting for their preferred candidate.

We show that the long-run consequences of historical warfare are different for Sub-Saharan Africa than for the rest of the Old World. We identify the locations of over 1,750 conflicts in Africa, Asia, and Europe from 1400 to 1799. We find that historical warfare predicts greater state capacity today across the Old World, including in Sub-Saharan Africa. There is no significant correlation between historical warfare and current civil conflicts across the rest of the Old World. However, this correlation is strong and positive in Sub-Saharan Africa. Thus, while a history of conflict predicts higher per capita GDP for the rest of the Old World, this positive consequence is overturned for Sub-Saharan Africa.

Purpose– A major lesson of the European Monetary Union crisis is that serious disequilibria in a monetary union result from arrangements not designed to be robust to a variety of shocks. With the specter of this crisis looming substantially and scarring existing monetary zones, the purpose of this paper is to complement existing literature by analyzing the effects of monetary policy on economic activity (output and prices) in the CEMAC and UEMOA CFA franc zones.Design/methodology/approach– VARs within the frameworks of Vector Error-Correction Models and Granger causality models are used to estimate the long- and short-run effects, respectively. Impulse response functions are further used to assess the tendencies of significant Granger causality findings. A battery of robustness checks are also employed to ensure consistency in the specifications and results.Findings–H1. monetary policy variables affect prices in the long-run but not in the short-run in the CFA zones (broadly untrue). This invalidity is more pronounced in CEMAC (relative to all monetary policy variables) than in UEMOA (with regard to financial dynamics of activity and size).H2. monetary policy variables influence output in the short-term but not in the long-run in the CFA zones. First, the absence of cointegration among real output and the monetary policy variables in both zones confirm the neutrality of money in the long term. With the exception of overall money supply, the significant effect of money on output in the short-run is more relevant in the UEMOA zone, than in the CEMAC zone in which only financial system efficiency and financial activity are significant.Practical implications– First, compared to the CEMAC region, the UEMOA zone’s monetary authority has more policy instruments for offsetting output shocks but fewer instruments for the management of short-run inflation. Second, the CEMAC region is more inclined to non-traditional policy regimes while the UEMOA zone dances more to the tune of traditional discretionary monetary policy arrangements. A wide range of policy implications are discussed. Inter alia: implications for the long-run neutrality of money and business cycles; implications for credit expansions and inflationary tendencies; implications of the findings to the ongoing debate; country-specific implications and measures of fighting surplus liquidity.Originality/value– The paper’s originality is reflected by the use of monetary policy variables, notably money supply, bank and financial credits, which have not been previously used, to investigate their impact on the outputs of economic activities, namely, real GDP output and inflation, in developing country monetary unions.

We discuss and test the relevance of the adaptation of the controversial sociological concept of “Middle Class” to African rural areas. We propose the concept of Moderate Prosperity and apply it to the Malagasy rural area, particularly in the Itasy region. This paper aims to emphasize the rural dynamics and to understand the ongoing socioeconomic changes in Madagascar as an agriculture-based country. Adopting a case study, we use detailed data on 510 households from the 2008 Itasy Observatory. We first define Moderate Prosperity households as being those in the top three quintiles of the income distribution. Then we classify the households thus identified using, simultaneously, the household head’s education level, the household’s income structure and its rice land tenure. We describe five different Moderate Prosperity clusters that reflect the agro-economic diversity of Itasy : (i) the large, vulnerable group of uneducated, non-farming and livestock farming households with formal land title, (ii) the traditional group of uneducated rice farmers with large holdings, (iii) the emerging group of skilled, polyculture farmers with traditional land ownership, (iv) the upper moderate group of educated non-agricultural workers and (v) the lower moderate cluster of skilled smallholders in independent and non-farm activities without any land tenure.

We assess empirically the changes in returns to education at the subnational level in Uganda using the Uganda National Household Surveys for 2002/2003 and 2005/2006. Our results indicate that average returns to schooling tended to converge across regions in the last decade. The overall trend in convergence of returns to schooling took place at all levels of educational attainment and this behaviour in returns to education is mostly driven by the dynamics of returns to schooling in urban areas. We analyse subnational convergence in returns to education and unveil deviant dynamics in Northern Uganda. We discuss the potential challenges to inclusive economic growth in Uganda which are implied by our results. (authors' abstract)

The significant change in South Africa’s trade patterns over the past two decades should affect the impact of shocks in the rest of the world on the country, since South Africa is a small open economy. We investigate the effect with the use of a global vector autoregression (GVAR) model from 1979Q2 to 2009Q4. To account for changes in international trade linkages, we assemble the country-specific foreign variables with time-varying trade-weighted data. We show that the long-term impact of a shock to Chinese GDP on South African GDP is 330% stronger in 2009 than in 1995, due to the substantial increase in South Africa’s trade with China since the mid-1990s. By 2005, a United States (US) GDP shock only has a quarter of the long-term impact on South African GDP compared to 1995, as trade with the US declined noticeably. By 2009, the impact of a US GDP shock on South African GDP is insignificant. The results indicate why the recent global crisis did not affect South Africa as much as it affected developed economies. It also stresses the increased risk, to the South African economy and economies in the rest of the world, should China experience slower GDP growth.

This paper measures the impact of low-cost transport by rail in Malawi on the dispersion of agricultural commodities prices across markets by exploiting the quasi-experimental design of the nearly total collapse of domestic transport by rail in January 2003 due to the destruction of a railway bridge at Rivirivi, Balaka. Estimations are based on monthly market prices of four agricultural commodities (maize, groundnuts, rice, and beans) in 27 local markets for the period 1998–2006. Market pairs connected by rail when the railway line was operational are intervention observations. Railway transport services explain a 14 percent to 17 percent reduction in price dispersion across markets. Geographical reach of trade varies by crop, most likely related to storability and geographical spread of production. Perishability appears to increase impact reflecting limited scope for arbitrage. Overall, impacts are remarkably similar in size across commodities.

Eleven percent of the Malawian population is HIV infected. Eighteen percent of sexual encounters are casual. A condom is used one quarter of the time. A choice-theoretic general equilibrium search model is constructed to analyze the Malawian epidemic. In the developed framework, people select between different sexual practices while knowing the inherent risk. The analysis suggests that the efficacy of public policy depends upon the induced behavioral changes and general equilibrium effects that are typically absent in epidemiological studies and small-scale field experiments. For some interventions (some forms of promoting condoms or marriage), the quantitative exercise suggests that these effects may increase HIV prevalence, while for others (such as male circumcision or increased incomes) they strengthen the effectiveness of the intervention. The underlying channels giving rise to these effects are discussed in detail.

(english) The classical and more recent theories on development all fail to explain Madagascar’s long-running economic underperformance. This paper proposes a reinterpretation of Malagasy history based on the analytical framework of political economy. Our analyses point to the fact that, despite deep-rooted blockages, Madagascar has shown an unexpected capacity to transform and modernise: economic transition (with the emergence of a new entrepreneurial class) and political transition (with democratic alternation of power); the setting up of sound institutions that characterise “modern” societies; control of violence; and the Malagasy people’s expression of their economic and civic aspirations. However, three structural constraints hinder the country’s development. Firstly, social fragmentation, an atomised population and the atrophy of intermediary bodies foster a high concentration of power in the hands of a few elites who are neither compelled nor encouraged to develop a medium- or long-term vision and take the interests of the vast majority into consideration. Secondly, although the Malagasy people lay claim to democratic principles, they remain torn between the demands of democratic and meritocratic nature and the traditional values that impose respect for the real and symbolic hierarchies they have inherited from the past. Finally, although the policies promoted and sometimes imposed by international donors may have had some positive effects, they have also had a hugely negative impact on the State’s capacity to regulate society. _________________________________ (français) Les théories classiques et récentes du développement sont impuissantes à expliquer la contreperformance économique malgache sur longue période. Cet article propose une relecture de l'histoire malgache en mobilisant le cadre d’analyse de l’économie politique. Nos analyses pointent qu’en dépit de facteurs de blocage profonds, Madagascar a fait montre d'une capacité de transformation d'une modernité inattendue : transitions économique (avec l'arrivée d'une classe d'entrepreneurs nouveaux) et politique (avec les alternances démocratiques) ; mise en place d'institutions solides caractéristiques des sociétés « modernes » ; contrôle de la violence ; expression des aspirations économiques et citoyennes de la population. Trois entraves structurelles s’opposent en revanche au développement du pays : la fragmentation de la société, l'atomisation de la population et l'atrophie des corps intermédiaires favorisent une forte concentration du pouvoir aux mains d'une poignée d'élites qui n'est ni contrainte ni incitée à avoir une vision de moyen/long terme et à prendre en compte les intérêts de la grande majorité ; malgré sa revendication des principes démocratiques, la population reste tiraillée entre des revendications citoyennes de type démocratique et méritocratique et des valeurs traditionnelles qui imposent le respect de hiérarchies réelles et symboliques héritées du passé ; enfin, les politiques promues, voire imposées, par les bailleurs de fonds, si elles ont pu avoir des effets positifs, ont également eu un impact négatif majeur sur la capacité de l'Etat à réguler la société.

Adolescence is a period that is marked by an identity crisis which is itself a consequence of the balance-unsettling puberty transformations following the earlier resolution of the oedipal complex. Balance will be once again activated after the latency period. These transformations trigger others on the affective level (emotional, bonds to earlier objects). A crisis in the social bond can also be observed through this questioning of norms along with family and social values. These different crises contributing to identity construction are "developmental tasks" typical in subjects who actually go through this period; hence they constitute an important process of maturation. The subject can however face difficulties fulfilling those tasks. The article engages this challenge of grieving the passing infancy with its particular symbols as experienced by some adolescents in their responsibility to work out new symbols. In fact, every developmental crisis should, according to Wallon (1963), mediate the passing to the next stage. It is therefore manageable. In the special case of adolescents in the street, the persistence of the crisis characterized by anti-social behaviors specific to this population is nothing else but the difficulty in letting go of the symbols of infancy. This argument about the ‘grieving over infancy’ or mourning of infancy draws on works such as Nasio (2004); Delvenne Nicolis (2007); Marteaux (2008) and Franceschini (2012). The results collected through interviews and observations show the persistence in ‘street adolescents’ of behaviors unfavorable to the realization and reorganization of identity.

This paper uses a production function to examine the channels through which remittances affect output per worker in 31 Sub-Saharan African countries from 1980 to 2010. Lagged remittances increase physical capital per worker, average years of schooling and total factor productivity, but the effectiveness of remittances varies with the income level of the recipient nation. Although remittances have increased both physical capital and total factor productivity among the upper middle income nations, among the lower middle income, they have increased only the physical capital. Meanwhile a reduction in institutional risk has encouraged investment and efficiency, but its relationship to the effectiveness of remittances has been inconclusive.

In this paper, we empirically investigate the relationship between international migration and education attainment levels. We ask whether rural children who live in households that experience migration or/and receiving remittances are more likely to complete school at a given age than children who live in non-migrant households. Higher secondary and higher education levels are examined separately. Our results clearly show that children in remittance-receiving households complete significantly more years of schooling. In particular, remittances increase the probability of a male child completing high school. However, the evidence suggests that the international migration lowers deeply the chances of children completing higher education. Evidence also indicates the utmost importance of households’ socio-economic status in determining to what extent the household mitigates the possible detrimental effects of migration on their children’s educational outcomes.

This paper employs the Autoregressive Distributed Lag (ARDL) bounds methodological approach to investigate the relationship between economic growth, combustible renewables and waste consumption, carbon dioxide (CO2) emissions and international tourism for the case of Tunisia spanning the period 1990-2010. The results from the Fisher statistic of both the Wald-test and the Johansen test confirm the presence of a long-run relationship among the variables under investigation. The stability of estimated parameters has been tested, while Granger causality tests recommend a short-run unidirectional causality running from economic growth and combustible renewables and waste consumption to CO2 emissions, a bidirectional causality between economic growth and combustible renewables and waste consumption and unidirectional causality running from economic growth and combustible renewables and waste consumption to international tourism. In the long-run, the error correction terms confirm the presence of bidirectional causality relationships between economic growth, CO2 emissions, combustible renewables and waste consumption and international tourism. Our long-run estimates show that combustible renewables and waste consumption increases international tourism, and both renewables and waste consumption and international tourism increase CO2 emissions and output. We recommend that: (i) Tunisia should use more combustible renewables and waste energy as this eliminates wastes from especially tourist zones and increases the number of tourist arrivals, leading to economic growth, and (ii) a fraction of this economic growth generated by the increase in combustible renewables and waste consumption should be invested in clean renewable energy production (i.e., solar, wind, geothermal) and energy efficiency projects.

This paper examines the causal relationship between poverty reduction and economic growth in Swaziland during the period 1980–2011. Unlike some of the previous studies, the current study uses the newly developed ARDL-bounds testing approach to co-integration, and the ECM-based Granger causality method to examine this linkage. The study also incorporates financial development as a third variable affecting both poverty reduction and economic growth – thereby leading to a trivariate model. The results of this study show that economic growth does not Granger cause poverty reduction in Swaziland – either in the short run or in the long run. Instead, the study finds a causal flow from poverty reduction to economic growth in the short run. These findings, however, are not surprising, given the high level of income inequality in Swaziland. Studies have shown that when the level of income inequality is too high, economic growth alone may not necessarily lead to poverty reduction.

Recent studies find that democracy increases economic growth but often do not address through what channels such an effect could travel. This study considers whether or not democracy strengthens the rule of law, an institutional measure purported to increase economic growth. Utilizing a panel dataset from 1984 to 2007 for 127 countries and both fixed effect and dynamic GMM methodologies, we examine whether democracy promotes the rule of law. We generally find a short run positive influence upon the rule of law although effects are greatest for low income countries.Keywords: Democratization, Institutions, Rule of Law, Economic GrowthJEL classification: O40, O50, O55(ProQuest: ... denotes formulae omitted.)1. INTRODUCTIONMany studies point to the importance of institutions for economic growth, including Acemoglu et al. (2001), Hall and Jones (1999), Engermann and Sokoloff (1997), and Dollar and Kraay (2003).1 Acemoglu et al. (2005) and Acemoglu (2010) provide surveys of this literature. North (1990) defines institutions as "the humanly devised constraints that shape human interaction." He asserts that institutions that secure property rights promote economic development. One specific component of institutions that has received attention is adherence to the rule of law. By "rule of law" we mean a judicial regime in which no one is above the law and everyone is equal before the law (Dicey, 1889). People abide by judicial decisions and people's day-to-day actions are generally lawful in that they do not conflict with legal codes. One reason to focus on the rule of law is its importance in protecting property and promoting productive activities. Rodrik et al. (2004) state that in principle the rule of law captures more elements describing institutional quality than do other measures.Given this presumed importance, a question then arises as to why the rule of law is more prevalent in some countries than in others. Some have examined the effects of long-run historical factors such as the degree of European influence or geographic factors. These factors determine the type of institutions which then affect long-run income levels. Hall and Jones (1999) and Acemoglu et al. (2001) provide examples. We examine a more contemporaneous factor. Specifically, we consider whether democracy promotes the rule of law and so whether democratization could then improve the rule of law.2 Using panel data estimation methodologies, recent studies show that democracy raises economic growth.3 Our study explores whether promoting the rule of law could be a channel that explains these findings.Barro (1996) considered a similar issue. He found that although greater maintenance of the rule of law is favorable to economic growth, he found little evidence that democracy promotes the rule of law. Our study differs from Barro's in several dimensions. First, Barro utilizes cross-sectional variation to identify long-run patterns. A possible problem of this specification could arise from omitted variable bias and reverse causality (Giavazzi and Tabellini, 2005). Second, a cross-country sample does not utilize the within country variation in the degree of democracy or adherence to the rule of law. A panel can exploit such variation. This could be especially important given Barro's application. His democracy variable comes from 1975 whereas his rule of law variable is from 1980. Therefore, he does not incorporate the post-1980 events into his analysis, including the large number of countries that democratized when the Soviet Union fell. Our study considers a panel dataset, spanning 1984 to 2010, and so considers these changes. Use of a panel also allows us to examine timing issues which were not feasible given Barro's approach. We consider short and long-run effects of democracy upon the rule of law. Perhaps democracy initially supports the rule of law but then the effects of democracy turn negative as rent-seeking becomes more frequent. …

This paper constructs a Good Society Index for 45 African countries, termed the Good African Society Index (GASI). The GASI consists of nine main indexes: (1) economic sustainability, (2) democracy and freedom, (3) child well-being, (4) environment and infrastructure, (5) safety and security, (6) health and health systems, (7) integrity and justice, (8) education, and (9) social sustainability and social cohesion. Each component is split into four sub-components for a total of 36 indicators. Tunisia ranks highest on the GASI, followed by Cape Verde and Botswana. Chad has the lowest GASI score, followed by Central African Republic and Cote d’Ivoire. The GASI is strongly related to the 2012 Human Development Index and Fragile States Index, to a lesser extent, GNI per capita.

En raison du role determinant des systemes financiers pour le soutien a l’activite economique et l’acces a des biens et services essentiels, les bailleurs de fonds accompagnent l’emergence en Afrique de secteurs financiers solides et perennes, accordant les financements adequats aux agents economiques. Les institutions financieres de developpement mobilisent une grande diversite d’instruments qui, par leur complementarite, concourent au developpement financier africain. L’action du groupe Agence francaise de developpement s’organise autour de quatre principaux axes : contribuer a la structuration et au developpement du secteur financier, favoriser une meilleure accessibilite aux services financiers, diversifier la palette des instruments financiers a disposition des acteurs et orienter les financements vers la mise en œuvre des politiques publiques.Classification JEL : G21, O16, O55.

Cet article evalue l’empreinte economique et financiere de la Chine en Afrique. Les echanges ont ete « gagnant-gagnant » pour les exportateurs africains de petrole et de produits miniers qui ont beneficie de la hausse des cours et diversifie leurs debouches ; dans les annees a venir, d’autres pays pourraient en beneficier. En investissant en Afrique, les entreprises chinoises ont privilegie les mines et le petrole, et leurs investissements manufacturiers sont limites. Les entreprises chinoises sont tres presentes dans la construction ou elles beneficient de l’appui financier chinois. En moins de dix ans, la Chine est devenue le premier creancier de l’Afrique du fait de son aide, proche de l’aide francaise, et plus encore de ses credits. Son empreinte financiere est offshore car ses credits ne transitent pas par les systemes financiers africains. On assiste a l’utilisation croissante du RMB dans les echanges bilateraux. En conclusion, l’article propose un indicateur synthetique de l’empreinte chinoise dont l’importance est assez correlee a l’essor des economies.Classification JEL : F21, O16, O55.

Les systemes financiers des pays d’AfSS sont peu profonds et peu developpes. Ils s’appuient principalement sur un secteur bancaire peu mature et concentre, offrant surtout des financements de court terme. Les marches financiers des pays d’AfSS sont embryonnaires avec des marches obligataires domines par l’emission d’obligations souveraines et des marches boursiers reserves a quelques grandes entreprises. Les gouvernements et la communaute internationale ont un role majeur a jouer pour developper et approfondir les systemes financiers des pays d’AfSS et ainsi maximiser la contribution des ressources domestiques privees dans le financement du developpement : les gouvernements, en limitant les incertitudes liees a la reglementation, en bâtissant des institutions et des infrastructures afin de favoriser la confiance des agents et l’efficacite des marches et en promouvant la concurrence et l’insertion des systemes financiers dans le marche mondial, et la communaute internationale, en accompagnant les reformes, en fournissant de l’assistance technique et des services de renforcement des capacites ou encore en soutenant les entreprises du secteur.Classification JEL : F65, O16, O55.

Le traite constitutif de l’Union du Maghreb arabe (UMA) a ete signe le 17 fevrier 1989 par les chefs d’Etat de cinq pays : Algerie, Maroc, Mauritanie, Libye et Tunisie. Pourtant l’integration maghrebine notamment financiere n’a pas eu lieu en raison de tensions politiques entre les Etats membres et des resistances internes a la liberalisation des echanges. Cet article se focalise sur l’integration financiere en Afrique du Nord et plus particulierement dans l’UMA. Il examine l’evolution des systemes financiers dans la region et les implications de la liberalisation notamment en matiere d’integration.Classification JEL : F15, G21, G34, O16, O55.

L’Afrique devient de plus en plus integree au systeme financier et economique mondial. Cet article examine le role de la notation dans cette evolution. Certes, les notes facilitent l’emission de la dette par les entites notees mais elles servent egalement a d’autres fins. Elles fournissent un point de reference quant au risque que presentent les economies et permettent de surmonter les asymetries d’information entre les investisseurs et les emetteurs de dette. Bien que l’Afrique puisse se vanter de taux de croissance parmi les plus eleves au monde, la recente et forte demande des investisseurs pour la dette africaine est plutot une consequence des conditions exterieures, en particulier des taux d’interet historiquement bas sur les marches plus developpes. En outre, malgre des progres encourageants, les systemes financiers du continent restent relativement sous-developpes.Classification JEL : G24, O16, O55.

Cet article presente le processus d’integration du marche des assurances dans les Etats membres de la CIMA et les acquis depuis sa mise en place, avant d’examiner les principaux defis de la regulation pour les prochaines annees. En definissant un cadre juridique clair et en instaurant des standards de gestion et d’organisation coherents, la CIMA a impulse une pratique saine des operations d’assurance. Un important travail d’assainissement du secteur a ete effectue malgre les difficultes inherentes a un environnement naguere peu coutumier d’une discipline forte. Les marches connaissent encore de nombreuses faiblesses qui renvoient une image de l’assurance qui n’est pas rassurante sur une grande frange de la population. Des reformes sont necessaires dans le domaine de la gouvernance, de l’adaptation aux standards internationaux et de l’instauration d’un marche unique.Classification JEL : G22, O16, O55.

We assemble more pieces on the puzzle of the aid-corruption nexus. In essence, we extend the debate on the effect of foreign aid on corruption by providing evidence on dynamic effects of wealth, legal origin, religious-domination, regional proximity, openness to sea, natural resources and politico-economic stability. The empirical evidence from dynamic panel GMM estimation is based on 53 African countries for the period 1996-2010. The findings show that the positive effect of foreign aid on corruption is most significant in: Middle-income, French civil-law, Christian-dominated, non-oil exporting and landlocked countries. Moreover, there is also some scanty evidence of foreign aid increasing corruption-control in Lower Middle income and Not-landlocked countries. Justifications for the dynamics are discussed.

The study investigates the long-term relationship and dynamic short-term impact of public debt on foreign private investment for a developing country – Nigeria during the period 1962 to 2012. The paper deploys cointegration model to examine long-term relationship between the variables. The study also examines dynamic short-term impact and causality between public debt and foreign private investment using the VECM and Granger causality test. The study further examines the response paths of foreign private investment variable due to public debts shocks using variance decomposition. The results confirm absence of long-term relationship between public debt and foreign private investment in Nigeria. The results also show that external debt has negative impact on foreign private investment in the short-term. Finally, the results show that there is no causality between foreign private investment and public debt. The major economic implication of these findings is for debt management authorities to be conscious of growing external debts as it discourages foreign private investments into Nigeria.

This paper provides new empirical evidence concerning the relationship between human capital (measured by education and health related variables) and economic growth for a large sample of 49 African countries over the period from 1996 to 2010. Using traditional cross-section and dynamic panel techniques, we find that public expenditures on education and health have a negative impact on economic growth, whereas human capital stock indicators have a slight positive effect. Furthermore, our empirical investigations suggest that education and health spending are complementary. Then, public investment in education and health should be jointly increased and their efficiency in order to expect positive impact of human capital on growth in African countries.

With the start of this new century China entered into a new phase of aid, after 3 decades of double digit growth China has become the world largest exporter and second largest economy today. In the light of these economic developments China has become strong enough to significantly increase its presence as a donor of official development aid (ODA). One of the main traits of Chinese aid is that economic co-operation is linked to development assistance and there is not a clear distinction between them. Economic co-operation is seen as the ultimate goal and development assistance plays a part in that. Analysing the evolution of foreign aid policies and its institutional framework would offer a better understanding on how China intends to achieve that goal and this article tries to provide that. A foundation needed for a further in depth study of its foreign aid policies.

This article discusses the features of sovereign wealth funds (SWFs) created from accumulated foreign reserves in African countries that export commodities. The author describes the investment targets of African SWFs, using empirical data and a research method based on a detailed analysis of available information on the investment activities of SWFs in the last 20 years. Conclusions from the analysis indicate that, due to the poor transparency of African SWFs, gathering the necessary statistics, general information and literature on the institutional arrangements and business strategies involved still remains a challenge. The study uses press articles and reports that are compared against other sources of information in order to increase credibility. Due to the small size of African SWFs, their role in stimulating the economic development of the continent is limited by many institutional, economic and political factors. African SWFs are not a homogeneous group. They can be beneficial for nations if they are used and structured properly in order to take advantage of their full potential. This implies that most of the African SWFs would have to expand their stabilization goals and move gradually to instruments intended for achieving economic development, intergenerational transfers of resources, financial sector stabilization, and promotion of regional integration.

This paper examines the relative importance of the global and regional markets for financial markets in developing countries, particularly during the US financial crisis and the European sovereign debt crisis. Specifically, we examine the way in which the degree of regional (seven African markets combined), global (China, France, Germany, Japan, the UK and the US), commodity (gold and petroleum), and nominal effective exchange rate (Euro and US dollar) spillovers to individual African countries evolved during the two crises through the econometric method introduced by Diebold and Yilmaz (2012). We find that African markets are most severely affected by spillovers from global markets and only modestly from commodity and currency markets. Conversely, regional spillovers within Africa are smaller than global ones, and hence, African markets are insulated from global crises. We also find that the aggregated spillover effects of European countries to the African markets exceeded the corresponding effects of the US, even in the wake of the US financial crisis.

This paper uses exhaustive individual-level data from the Malian 1976, 1987 and 1998 censuses to analyze the urbanization process and economic specialization of cities in Mali. We first construct an exhaustive panel data set of the 10,000 Malian localities. In order to analyze urban areas that make sense from an economic point of view, we develop a consistent method to construct functional urban agglomerations, based on a density threshold for contiguous localities. Our definition of "cities" therefore abstracts from any administrative criteria. These data enable us to study the dynamics of the complete distribution of urban and rural localities from 1976 to 1998. We show that the urbanization process in Mali is mainly due to the spatial extension and population growth of Bamako, the capital city and to the demographic growth of small rural market towns. Consequently, the density of the Malian urban system is very low and urban primacy very high. We then turn to an econometric analysis of the determinants of non-agricultural employment growth between 1987 and 1998 by locality. We focus on two main factors: population density, which may induce agglomeration externalities that attract workers and firms; and the degree of specialization of economic activities that could capture industry level externalities. Controlling for a range of other characteristics like distance to the road network, administrative status, physical geography, and rainfall shocks, we show that total employment has been spreading out mainly due to the spreading out of primary employment. Primary sector dynamic is impacted by market access. Services and industry jobs cluster in cities and small towns, due mainly to public infrastructure amenities rather than urbanization externalities or sectoral externalities, the latter being not significant and the former significant but weak. _________________________________ A partir de données exhaustives des recensements maliens de la population de 1976, 1987 et 1998, cette étude analyse le processus d’urbanisation et de spécialisation économique des 10 000 localités maliennes. Grâce à un travail d’appariement minutieux, rarement entrepris même dans les pays développés, nous constituons un panel de l’ensemble des localités et nous définissons les agglomérations urbaines en fonction de leurs tailles, densités et contiguïtés. Nous montrons que le Mali est un pays où la concentration des populations s’est opérée prioritairement à Bamako et dans des petits bourgs ruraux et que son tissu urbain est très peu dense. La primatialité du système urbain est alors très élevée. L’analyse de la dynamique de l’emploi révèle que le processus d’urbanisation du Mali s’accompagne plutôt d’un processus de dispersion spatiale des emplois. Cependant, on observe que la croissance des emplois des branches secondaire et tertiaire au sein des villes et des bourgs ruraux de plus de 1 000 habitants dépend positivement de la taille des marchés. Les villes maliennes et leurs concentrations d’habitants permettent donc un dynamisme plus important de l’emploi dans les branches non agricoles. On observe que les zones d’expansion de la culture du coton sont les zones où la croissance démographique des localités est plus forte, sans pour autant que cela occasionne un dynamisme plus important de l’emploi non agricole.

In this paper, we investigate how powerful a mechanism migration is in the transmission of social norms, taking Mali and Female Genital Mutilation (FGM) as a case study. Mali has a strong FGM culture and a long-standing history of migration. We use an original household-level database coupled with census data to analyze the extent to which girls living in villages with high rates of return migrants are less prone to FGM. Malians migrate predominantly to other African countries where female circumcision is uncommon (e.g. Côte d’Ivoire) and to countries where FGM is totally banned (France and other developed countries) and where anti-FGM information campaigns frequently target African migrants. Taking a two-step instrumental variable approach to control for the endogeneity of migration decisions, we show that return migrants have a negative and significant influence on FGM. We also show that adults living in villages with return migrants are more in favor of legislation against FGM.________________________________ Dans cet article, nous examinons dans quelle mesure la migration est un vecteur de transferts de normes sociales en étudiant le lien entre migration et excision au Mali. Alors que l’excision est fortement répandue au Mali, ce pays a une forte tradition migratoire vers les pays limitrophes et les pays du Nord où l’excision est soit moins pratiquée soit sanctionnée par la loi. Nous testons l’hypothèse que les migrants acquièrent des opinions différentes en la matière dans les pays d’accueil où l’excision est moins fréquente voire interdite et qu’une fois de retour ils induisent un changement de comportement dans leurs villages d’origine. Nous mobilisons une base originale de données sur l’excision des filles de 0 à 14 ans couplée avec des données de recensement qui permettent de mesurer les taux de migration (courante et de retour) des villages de résidence des personnes interrogées et mettons en œuvre une méthode instrumentale pour contrôler de l’endogénéité de la migration. Nous montrons que les migrants de retour ont effectivement une influence négative et significative sur le risque d’excision et que ce résultat provient essentiellement des migrants de Côte d’Ivoire. Nous montrons également que les adultes vivant dans les villages avec des migrants de retour sont plus en faveur de la législation contre les mutilations génitales.

(english) After debt cancellations, in particular MDRI (Multilateral Debt Relief Initiative) debt ratios in Low Income Country dropped to historic lows. They are now getting into debt again, because of Bretton Woods Institutions (BWI) new loans, of emerging countries’ (namely China) loans, and sometimes because they are able to borrow from international financial markets. BWI try to slow this new debt cycle by putting limits on the non-concessional borrowing of the country that have an agreement with IMF and by better assessing the debt sustainability (IDA-IMF Debt sustainability framework). The lack of transparent data is a major problem. Nevertheless, some convergence between China and traditional donors may be seen, namely in the field of debt relief. This is consistent with the rise of emerging countries in international financial institutions. _________________________________ (français) Après les réductions de dette, notamment l’initiative d’allégement de la dette multilatérale de 2005 (IADM), beaucoup de pays à faible revenu se sont retrouvés avec des niveaux d’endettement extrêmement bas. Leur réendettement progresse à des rythmes variables sous l’effet de nouveaux prêts des Institutions de Bretton Woods (IBW), mais aussi des pays émergents (notamment de la Chine), et parfois même des marchés financiers internationaux. Les IBW cherchent à freiner le réendettement de ces pays en conditionnant leurs prêts à la limitation des financements non concessionnels et en posant des limites aux ratios d’endettement (Cadre de Viabilité de la Dette). Il est difficile de bien analyser le rôle spécifique des pays émergents, car les données ne sont difficiles à réunir précisément. Il apparaît cependant une certaine convergence des positions chinoises envers les pays africains avec celles des autres bailleurs de fonds, visible notamment en matière de réduction de dette. Ceci est cohérent avec la montée en puissance des pays émergents dans les institutions financières internationales.

(english) This paper assesses the relevance of the North, Wallis and Weingast (2009) framework to explain the performances of Burkina in terms of economic growth and development. The political history of Burkina has been very unstable until president Compaoré took power in 1987. Since then, stability has been based on low intensity violence, with bursts of open violence like those of the mutinies of 2011 or the final upheaval of 2014. This “stability” is based on the balance of power between two main “elite” groups, the Army and the traditional chiefs. Trade unions, the Catholic Church and donors also play a role, especially in case of trouble. The political class in power and its cronies are extracting rents by creating de facto monopolies, which enables them to tame violence, to a certain extent. The paradox is that the Burkinabe economy is growing steadily (GDP per capital grew at an average 1.5 per cent rate since independence), rather smoothly in the medium run – one of the best records in West-Africa. Because of high inequality, this impressive growth is far from inclusive. _________________________________ (français) L’approche de North, Wallis et Weingast (2009) est utilisée pour expliquer les performances économiques et sociales du Burkina Faso (croissance par tête de 1,5 % par an depuis 1960, inégalement répartie, sans transformation structurelle du système productif). La difficulté est que la croissance est assez faible, mais plus rapide que dans les pays voisins. Nous montrons que ces deux aspects peuvent s’expliquer par le type d’élites dominantes (l’armée et les chefs traditionnels), qui gèrent la violence par la création de rentes dans un contexte contraint par les autres élites internes (église catholique, syndicats et société civile) et par le cadre institutionnel international qui limite l’utilisation de la violence. Ceci confère une certaine « stabilité » à l’ordre social sans toutefois lui insuffler la dynamique qui lui permettrait d’atteindre une croissance rapide.

(english) This paper is an attempt to assess the relevance of the use of the North, Wallis and Weingast (2009) framework to explain the performances of Burkina Faso in terms of economic growth and development. The political history of Burkina Faso has been very unstable until president Campaoré took power in 1987. Since then, the stability has been based on low intensity violence, with bursts of open violence like those of the mutinies of 2011. This “stability” is based on the balance of power between two main “elite” groups, the army and the traditional chiefs. Trade unions, the Catholic Church and Donors also play a role, especially in case of trouble. The political class in power and its cronies are extracting rents by creating de facto monopolies, which enables them to tame violence, to a certain extent. The paradox is that the Burkinabe economy is growing steadily (GDP per capital grew at an average 1.5 per cent rate since independence), rather smoothly in the medium run – one of the best records in West-Africa. Because of high inequality, this impressive growth is far from inclusive. _________________________________ (français) Nous évaluons dans ce document la pertinence de l’approche de North, Wallis and Weingast (2009) pour expliquer les performances du Burkina Faso en termes de croissance économique et de développement. L’histoire politique du Burkina Faso a été très agitée avant que le président Campaoré prenne le pouvoir en 1987. Depuis, la stabilité repose sur une violence de faible intensité, avec des explosions sporadiques de violence ouverte, comme les mutineries de 2011. Cette « stabilité » repose sur un équilibre des pouvoirs entre deux principales « élites », l’armée et les chefs traditionnels. Les syndicats, l’église catholique et les bailleurs de fonds jouent également un rôle, notamment en cas de troubles. Le groupe qui détient le pouvoir avec ses affidés extrait des rentes en créant des monopoles de fait, ce qui leur permet de maintenir la violence sous contrôle, du moins dans une certaine mesure. Le paradoxe est que l’économie burkinabè connaît une croissance soutenue (le PIB par tête a cru à un taux de 1,5 % en moyenne depuis l’indépendance), et de manière assez stable à moyen terme, ce qui constitue une des meilleures performances en Afrique de l’Ouest. Du fait d’une inégalité élevée, cette croissance assez impressionnante ne bénéficie pas à tout le monde.

After two debt relief initiatives launched in 1996 (the Heavily Indebted Poor Countries, HIPC Initiative) and in 1999 (The enhanced HIPC initiative), the G7 decided to go further by cancelling the remaining multilateral debt for these HIPC countries through the Multilateral Debt Relief Initiative (MDRI, 2005). A few papers tried to assess the desired fiscal response effects of those initiatives. This paper uses an extended dataset and alternative econometric techniques in order to tackle methodological issues as endogeneity and fixed effects. We found that debt relief and especially the enhanced HIPC initiative have had a positive impact on the total domestic revenue and the public investment (as percentages of the GDP). Thanks to our large observation span, we also observed that the MDRI led to a significant additional improvement of the level of public investment and domestic revenues ratio, although these effects are smaller than the HIPCs ones.; Après deux initiatives de réduction de dette (PPTE I fin 1996 et PPTE II en 1999), le G7 décida d’annuler la totalité de la dette multilatérale (Initiative d’Annulation de la Dette Multilatérale, IADM en 2005). Quelques travaux ont essayé d’évaluer l’impact de ces mesures sur les finances publiques des pays bénéficiaires. Ce travail utilise une base de données plus étendue et des méthodes économétriques alternatives pour tenir compte de l’endogénéïté et des effets fixes. Nous trouvons que les réductions de dette (en particulier l’initiative PPTE II) ont eu un impact positif sur la pression fiscale et sur les investissements publics (en pourcentage du PIB). Grâce à l’extension de la période d’étude, nous observons également que l’IADM a un effet similaire, quoique moins persistent.

This study provides a survey of recent advances in the literature on proposed African monetary unions. The survey comprises about 70 empirical papers published during the past 15 years. Four main strands are discussed individually and collectively. They comprise the proposed: (i) West African Monetary Zone (WAMZ), (ii) East African Monetary Union (EAMU), (iii) Southern African Monetary Union (SAMU) and (iv) African Monetary Union (AMU). We observe a number of issues with establishing the feasibility and/or desirability of potential monetary unions, inter alia, they are variations in: choice of variables, empirical strategies, sampled countries and considered periodicities. We address this ambiguity by reviewing studies with scenarios that are consistent with Hegelian dialectics and establish selective expansion as the predominant mode of monetary integration. Some proponents make cases for strong pegs and institutions as viable alternatives to currency unions. Using cluster analysis, disaggregating panels into sub-samples and distinguishing shocks from responses in the examination of business cycle synchronisation provide more subtle policy implications. We caution that for inquiries using the same theoretical underpinnings, variables and methods just by modifying the scope/context and periodicity may only contribute to increasing the number of conflicting findings. Authors should place more emphasis on new perspectives and approaches based on caveats of, and lessons from the European Monetary Union (EMU) and CFA zones.

This paper investigates the effect of remittance inflows on the real exchange rate in Sub-Saharan Africa (SSA) using annual data from 1980 to 2008 for 34 SSA countries, generalised method of moments by Arellano and Bover (1995) and feasible generalised least squares by Parks (1967) and Kmenta (1971, 1986). We find that when cross-sectional dependence and individual effects are controlled for, remittances to SSA as a whole appreciate the underlying real exchange rate of recipient countries. However the Dutch-disease effect is not experienced via the loss of export competitiveness, because the exchange rate appreciation is mitigated by monetary policy positioning and overdependence on imports due to low levels of domestic production in these countries. We also find reverse causality between remittances and the real exchange rate. (This abstract was borrowed from another version of this item.)

Rather than a rigid racial ideology, it is argued that South African apartheid was a pragmatic response of a white oligarchy to changing economic and political constraints. Consequently, the degree to which apartheid principles were applied and enforced by the South African state varied over time. A public choice model is developed to explain apartheid as endogenous policy, the parameters of which are determined by political support-maximizing politicians. The model suggests that the enforcement of apartheid was responsive to changes in such exogenous variables as defence costs, the gold price and the reservation wage of black unskilled labour. Predictions of the model hold implications for the causes of the democratic transition of the 1990s, including the role played by international sanctions.

Ample anecdotal evidence summarized in, inter alia, Gillson (2011) and Charalambides and Gillson (2011) suggests that non-tariff measures (NTMs), whether protectionist in intent or not, raise trade costs and inhibit regional trade in Africa.1 Beyond old-style quantitative restrictions (QRs) and bans, even measures that could be potentially justified by market failures like Sanitary and Phytosanitary (SPS) measures or product standards are often ill-suited to both consumer protection needs and State monitoring capabilities, generating unnecessary hurdles. The result is, potentially, higher prices hurting low-income households. The product lines can also be weighted by the amount of imports. However, this tends to understate the importance of restrictive NTMs since imports will be reduced where they are most restrictive. Similarly, if a particular NTM becomes more restrictive and reduces imports then the coverage indicator may actually fall the opposite of what should happen. Making the NTM more restrictive may then reduce the coverage ratio, which is the opposite of what a coverage ratio is supposed to pick up. This is a well-known problem which affects weighted-average tariffs as well. As for the NTMs' effect on trade (their severity), an important strand of the literature has focused on the variation in trade flows induced by the presence of NTMs to infer their ad-valorem equivalents (AVEs), i.e. the rate at which tariffs would have the same effect on trade flows. As for the NTMs' effect on trade (their severity), an important strand of the literature has focused on the variation in trade flows induced by the presence of NTMs to infer their ad-valorem equivalents (AVEs), i.e. the rate at which tariffs would have the same effect on trade flows.

This paper assesses the adjustment of inflation with financial dynamic fundamentals of money (financial depth), credit (financial activity) and efficiency. Three main findings are established. (1) There are significant long-run relationships between inflation and the fundamentals. (2) The error correction mechanism is stable in all specifications but in case of any disequilibrium, only financial depth is significant in adjusting inflation to the long-run relationship. (3) In the long-run, short-term adjustments in the ability of banks to transform money into credit do not matter in correcting inflation. This is most probably due to surplus liquidity issues. Policy implications are discussed.