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1. The Impact of Macroeconomic Variables on Capital Market Development in Botswana’s Economy

Author:
Koketso Molefhi
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The study examines the impact of macroeconomic variables on stock and bond markets development in Botswana using Autoregressive Distributed Lag (ARDL)-Bounds Test. The results indicate that macroeconomic variables have an impact on capital market development in Botswana. In the short run, real output, money supply and inflation have a positive influence on the development of the stock market, while real exchange rate retards its development. Real output further supports the development of the stock market in the long run. For the bond market, only two variables, inflation rate and lending rate have positive and negative impact on the bond market in the long run respectively, while none of the variables influence the bond market in the short run. Policy implications include increased efforts by policy makers to increase money supply, gross domestic product for the development of stock market, while the bond market development requires a decrease in lending rates.
Topic:
Economics, Markets, Capital Flows, Macroeconomics, and Economic Development
Political Geography:
Africa and Botswana

2. Conditional Pricing of Currency Risk in Africa's Equity Market

Author:
Odongo Kodongo and Kalu Ojah
Publication Date:
01-2018
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
In this paper, we sought to establish whether Africa’s volatile currencies drive equity risk premium. We use the stochastic discount factor (SDF) framework to estimate various conditional specifications of the International Capital Asset Pricing Model through generalized method of moments technique. Our results show strong evidence of conditional, time-varying currency risk premium in equity returns. Currency risk is also perceived by international investors as important in informing the equities pricing kernel. We also find evidence that international investors are worried about Africa’s small size equity markets and build anticipated low trading into their pricing calculus.
Topic:
Development, Economics, International Trade and Finance, Global Political Economy, Economic growth, Capital Flows, Currency, and Profit
Political Geography:
Africa

3. Econometric Analysis of Gender and Labour Market Outcomes in Urban Cameroon

Author:
Christian Zamo Akono
Publication Date:
01-2018
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
In every country, gender disparities are observed in various aspects of daily life, the most visible ones being those related to labour market outcomes. This paper highlights the importance of the labour market related gender disparities in Cameroon with special focus on the relative contribution of identified determinants on unemployment duration, employment status and remuneration. Based on the 2010 Employment and the Informal Sector Survey by the National Institute of Statistics, both parametric and non-parametric analyses of unemployment durations have been used. They include probit model estimates for the choice of non-wage earner status, estimates of Mincer-type equations and various extensions of the Blinder-Oaxaca decomposition. The results obtained can be summarized in three main points as follows. Firstly, women have longer periods of unemployment and are less likely to leave unemployment for a job than men. Results indicate that these gender disparities in exit probabilities from unemployment are due to differences in human capital endowments and to socioeconomic factors, which have a tendency of increasing women’s reservation wage. Also, unobserved heterogeneity with greater positive duration dependence for women is confirmed. Secondly, there are gender differences in probability transitions to either wage or non-wage employment with women being more likely to be self-employed. Of these gender differences, human capital endowment and job search methods account for 20.64% and 38.20%, respectively. The remaining part is due to unobserved factors. Thirdly, gender differences in labour market earnings are around 6% and 17% among wage and non-wage earners, respectively. Observable factors in wage equations account for only for 6% and 30% in the respective groups. These results suggest the formulation of several policies to reduce the observed differences. Some of these policies relate to the conception and implementation of vocational training targeting women and, to some extent, the setting up of programmes for relocating unemployed individuals to where employment opportunities are greater. Others relate to reducing the
Topic:
Economics, Gender Issues, International Political Economy, International Trade and Finance, Labor Issues, Economic growth, Capital Flows, and Macroeconomics
Political Geography:
Africa and Cameroon

4. A World in Transition: the Rise of Populism and the Fall of Multilateralism? (Full Issue)

Author:
Emily E. Fox, Richard Aidoo, Marten Brienen, Carlos de la Torre, Alexander B. Makulilo, and Joel Martinez
Publication Date:
04-2017
Content Type:
Journal Article
Journal:
The Journal of Diplomacy and International Relations
Institution:
School of Diplomacy and International Relations, Seton Hall University
Abstract:
For the Journal’s 19th issue, we explore modern populism across the world. Richard Aidoo looks at the landscape of anti-Chinese populism in the context of Africa’s resource scramble, while Alexander B. Makulilo takes an in depth look at the siren song of populism in Tanzania. Marten Brienen and Carlos de la Torre hone in on populism in Latin America, exploring its early 21st Century evolution and its relationship with democracy respectively. Additionally, the Journal is proud to publish an interview with Ron Boquier and Raul Castillo, both of whom are active supporters of human rights in Venezuela, a county was a harbinger of recent global populist sentiment. Outgoing editor Joel Martinez speaks with Boquier and Castillo on the roles of the United Nations and United States in helping to advance democratic reform in the country.
Topic:
International Relations, Human Rights, Politics, Natural Resources, Law, Democracy, Populism, Multilateralism, and Capital Flows
Political Geography:
Africa, China, Asia, Latin America, and Tanzania

5. Against Foreign Capital?: The Populist Temptation in Tanzania

Author:
Alexander B. Makulilo
Publication Date:
04-2017
Content Type:
Journal Article
Journal:
The Journal of Diplomacy and International Relations
Institution:
School of Diplomacy and International Relations, Seton Hall University
Abstract:
Populism has always been a contested concept. However, its core message across definitions is simply in defense of the “common people” who are often regarded as marginalized. Hence, as a movement, it claims to seek for “inclusion.” In this regard, its core assumption is just doing away with elites and establishes a more direct democracy thereby reducing inequality and exclusion. As a leader, a populist is associated with “a strongly personalistic leadership style; outsiderism, or the claim that the new leader does not originate from among the existing political class; an anti-system, antiinstitutions and anti-organisations rhetoric, often targeting political parties and political corruption; a call for restoring ‘the power of the people.’” This indicates that an individual leader becomes the center of politics in a polity thereby undermining political institutions. This, in turn, suggests “decisionism” and lack of predictability in the political system. As such, a populist leader tends to free himself from any kind of institutional control hence promoting institutional decay. As such, populism is “anti-party, antielite, anti-establishment, anti-political.” Indeed, populists are hostile to the rich, to finance capital, and to big corporations.
Topic:
Politics, Populism, and Capital Flows
Political Geography:
Africa and Tanzania

6. Natural Resources and Capital Flight: A Role for Policy?

Author:
Lemma W. Senbet, Gregoire Rota-Graziosi, and Rabah Arezki
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
This paper investigates the relationship between natural resources and capital flight in the form of tax avoidance from multinational corporations. In particular, it focuses on the spillover effects in terms of tax revenue mobilization and stock market development from the thin capitalization rule, a policy instrument aimed at limiting firm tax avoidance through setting limits on a firm’s foreign indebtedness. We exploit the plausibly exogenous within-country variations of data on oil discoveries for a panel of 117 countries during the period 1970–2012. We find evidence that oil discoveries significantly enhance both tax revenue mobilization and stock market development, but only when a thin capitalization rule is in place. We argue that these findings can be explained through the limiting role of a thin capitalization rule in multinational companies’ use of financial transactions among their affiliates or tax havens to transfer part of the profit. The thin capitalization rule may thus not only help limit the erosion of the domestic tax base but may also entice multinational corporations to resort to using and developing the domestic financial system.
Topic:
Development, Economics, International Trade and Finance, Financial Markets, Economic growth, Capital Flows, and Capital Flight
Political Geography:
Africa