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11. Exchange Rate Regimes and Trade: Is Africa Different?

Author:
Mahvash Saeed Qureshi and Charalambos G. Tsangarides
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper revisits the link between exchange rate regimes and trade in the context of Africa's exchange rate arrangements. Applying an augmented gravity model that includes measures of currency unions and pegged regimes, the paper compares Africa's experience with that of the world. Our results suggest that both currency unions and direct pegs promote bilateral trade in Africa vis-à-vis more flexible exchange rate regimes,and that their effect is almost double for the region than that for an average country in the world sample. Further, we find evidence that the effect of conventional pegs is at least as large as that of currency unions in Africa, and that the benefits of fixed exchange rate regimes stem through channels in addition to reduced exchange rate volatility.
Topic:
Economics, International Trade and Finance, Bilateral Relations, and Monetary Policy
Political Geography:
Africa

12. Population Size, Per Capita Income, and the Risk of Civil War: Regional Heterogeneity in the Structural Relationship Matters

Author:
Markus Brückner
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
A common finding in the empirical civil war literature is that population size and per capita income are highly significant predictors of civil war incidence and onset. This paper shows that the common finding of population size and per capita income having a significant average effect on civil war risk in a world sample breaks down once country- and year-specific unobservables are accounted for. However, for Sub-Saharan Africa there continues to be a highly significant average effect of population size and per capita income on civil war risk that is robust to the use of country- and year-fixed effects and instrumental variable techniques.
Topic:
Civil War, Demographics, and Economics
Political Geography:
Africa

13. Does Lack of Innovation and Absorptive Capacity Retard Economic Growth in Africa?

Author:
Steve Onyeiwu
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper reviews the innovative capabilities and absorptive capacities of African countries, and investigates whether they have played significant roles in the region's slow and episodic economic growth. Results from cross-country regressions covering 31 Sub-Saharan African countries suggest that growth in Africa is not simply a question of capital accumulation, fertility rates, aid dependency, and stable macroeconomic environment. It is also about strengthening the capacity of African countries to assimilate and effectively use knowledge and technology. Contrary to the views held by many analysts, the growth of African economies does not depend so much on their ability to innovate, but rather on their capacity to absorb and effectively use new technologies. Beyond technological issues, the paper confirms the stylized facts that the size of the government and political stability are important for the growth performance of African countries.
Topic:
Development, Economics, and Science and Technology
Political Geography:
Africa

14. Globalization Crises, Trade, and Development in Vietnam

Author:
Philip Abbott and Finn Tarp
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Vietnam has been among the most successful East Asian economies, especially in weathering the external shocks of recent globalization crises—the 1997-98 Asian financial crisis and the 2008-09 great recession, financial crisis and collapse of global trade. Its success contradicts its characterization as an example of export-led growth and highlights the role of the state, particularly in maintaining and influencing investment. Examination of economic performance and policy responses shows rising dependence on foreign finance around each crisis, and actions by the government to counteract that dependence and bolster the domestic economy while continuing to restructure the economy toward greater emphasis on the private sector. Growth, employment and poverty alleviation have been maintained at the expense of renewed inflation, larger budget deficits, and currency depreciation. The 'stop-go' nature of present …
Topic:
Development, Economics, Globalization, and International Trade and Finance
Political Geography:
Asia

15. Innovation and Entrepreneurship in Developing Countries

Author:
Wim Naudé, Adam Szirmai, and Micheline Goedhuys
Publication Date:
01-2011
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Nobody can be left in any doubt as to the importance of innovation for prosperity upon reading that “people living in the first decade of the twentieth century did not know modern dental and medical equipment, penicillin, bypass operations, safe births, control of genetically transmitted diseases, personal computers, compact discs, television sets, automobiles, opportunities for fast and cheap worldwide travel, affordable universities, central heating, air conditioning . . . technological change has transformed the quality of our lives.”
Topic:
Development, Economics, Globalization, and Markets

16. The Global Financial Crisis and Africa's "Immiserizing Wealth"

Author:
Luc Soete and Alexis Habiyaremye
Publication Date:
01-2010
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Before the current global recession, many resource-rich African countries were recording unprecedented levels of growth due to a raw material price boom. However, the collapse in raw material prices and the ensuing severe economic difficulties have again exposed the vulnerability of these countries' natural resource export-focussed economic structures. In this research brief, we describe how Africa's abundance of natural resources attracted disruptive and predatory foreign forces that have hindered innovation-based growth and economic diversification by delaying the accumulation of sufficient stocks of human capital. We suggest that for their long-term prosperity, resource-rich African countries shift their strategic emphasis from natural to human resources and technological capabilities needed to transform those natural resources into valuable goods and services to compete in the global market.
Topic:
Economics, Emerging Markets, Industrial Policy, Global Recession, Natural Resources, and Financial Crisis
Political Geography:
Africa, China, and India

17. Promoting Entrepreneurship in Developing Countries: Policy Challenges

Author:
Wim Naudé
Publication Date:
04-2010
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
This policy brief provides some fresh perspectives on the relationship between entrepreneurship and development, and considers policy design issues. It reports on the UNU-WIDER two-year research project “Promoting Entrepreneurial Capacity”, which aimed to understand whether and how entrepreneurship matters for development, how it could derail development, how entrepreneurs function in high growth as well as in conflict environments, and how female entrepreneurship differs across countries at various stages of development.
Topic:
Development, Economics, Emerging Markets, and Third World
Political Geography:
Afghanistan, Iraq, and Burundi

18. The Internationalization of Chinese and Indian Firms: Trends, Motivations and Policy Implications

Author:
Sandeep Kapur and Suma Athreye
Publication Date:
01-2009
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
The last two decades have seen a significant rise in the internationalization of firms from developing economies. In addition to their growing participation in international trade, a number of leading emerging economies are contributing to growing outflows of foreign direct investment (FDI) and cross-border mergers and acquisitions. According to the 2008 World Investment Report, outward flows of FDI from developing countries rose from about US$6 billion between 1989 and 1991 to US$225 billion in 2007. As a percentage of total global outflows, the share of developing countries grew from 2.7% to nearly 13.0% during this period.
Topic:
International Relations, Economics, Globalization, International Political Economy, Markets, Foreign Direct Investment, and Financial Crisis
Political Geography:
United States, China, and India

19. The Global Economic Crisis after One Year: Is a New Paradigm for Recovery in Developing Countries Emerging?

Author:
Wim Naudé
Publication Date:
08-2009
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
T HE ECONOMIC DOWNTURN AND RECESSION, WHICH spread across the globe following the US sub-prime mortgage crisis in September 2008, has become the dominant news topic of the past year. One year into the crisis it has become clear that the paradigm for international development has changed irrevocably. With leadership, moral authority and the capacity of the West diminishing, developing countries' recovery and future growth will critically depend on their own initiatives and solutions.
Topic:
Economics, Globalization, International Trade and Finance, and Financial Crisis
Political Geography:
United States

20. Enhancing Effective Utilization of Aid in Fragile States

Author:
Sanjeev Gupta
Publication Date:
02-2008
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper explores the macroeconomic implications of aid flows in countries with weak institutions. It argues that these countries should take into account their overall macroeconomic position, their capacity to absorb aid at the sectoral and subnational levels, and the strength of their fiscal institutions in deciding how much and how fast to spend aid. These considerations may warrant a gradual use of aid, except when aid is provided for humanitarian purposes. There is some basis for frontloading spending for countries emerging from a conflict, otherwise fragile states should seek to smoothen their spending against the background of aid volatility and uncertainty.
Topic:
Conflict Resolution and Economics