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511. Aid, Debt Burden and Government Fiscal Behaviour: A New Model Applied to Côte d'Ivoire

Author:
Mark McGillivray and Bazoumana Ouattara
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the impact of foreign aid on public sector fiscal behaviour in Côte d'Ivoire. A special interest is the relationship between aid, debt servicing and debt, given that Côte d'Ivoire is a highly indebted country. The theoretical model employed differs from those of previous studies by highlighting the interaction between debt servicing and the other fiscal variables. This model is estimated using 1975–99 time series data. Key findings are that the bulk of aid is allocated to debt servicing and that aid is associated with increases in the level of public debt.
Topic:
Debt, Development, Economics, and International Trade and Finance
Political Geography:
Africa

512. Trade Liberalization, Agriculture, and Poverty in Low-income Countries

Author:
Kym Anderson
Publication Date:
03-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper offers an economic assessment of the opportunities and challenges provided by the WTO's Doha Development Agenda, particularly through agricultural trade liberalization, for low-income countries seeking to trade their way out of poverty. After discussing links between poverty, economic growth and trade, it reports modelling results showing that farm product markets remain the most costly of all goods market distortions in world trade. It focuses on what such reform might mean for countries of South Asia and sub-Saharan Africa in particular, both without and with their involvement in the MTN reform process. What becomes clear is that if those countries want to maximize their benefits from the Doha round, they need also to free up their own domestic product and factor markets so their farmers are better able to take advantage of new market-opening opportunities abroad. Other concerns of low-income countries about farm trade reform also are addressed: whether there would be losses associated with tariff preference erosion, whether food-importing countries would suffer from higher food prices in international markets, whether China's WTO accession will provide an example of trade reform aggravating poverty via cuts to prices received by Chinese farmers, and the impact on food security and poverty alleviation. The paper concludes with lessons of relevance for low-income countries for their own domestic and trade policies.
Topic:
Agriculture, Economics, Emerging Markets, International Trade and Finance, and Poverty
Political Geography:
Africa and China

513. Aid Disaggregation, Endogenous Aid and the Public Sector in Aid-Recipient Economies: Evidence from Côte d'Ivoire

Author:
George Mavrotas and Bazoumana Ouattara
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The present paper examines the impact of different aid types, namely project aid, programme aid, technical assistance and food aid on the fiscal sector of the aid-recipient economy by using time-series data for Côte d'Ivoire over the period 1975–99. Empirical results obtained by estimating correctly the solution of the theoretical model show that when a single value (or aggregated) for aid is used, foreign aid is fully consumed in the case of Côte d'Ivoire. However, results obtained under the assumption of aid heterogeneity clearly suggest that the government responds differently according to the nature of the aid inflows. Our approach sheds plenty of light on how the aid-recipient government reacts to different categories of foreign aid inflows and the empirical findings clearly demonstrate the importance of the aid disaggregation approach for delving deeper into aid effectiveness issues.
Topic:
Development, Economics, Emerging Markets, and Non-Governmental Organization
Political Geography:
Africa

514. Financial Sector Reforms and Savings Mobilization in Zambia

Author:
George Mavrotas and Samuel Manzele Maimbo
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper explores the relationship between financial sector reforms and savings mobilization in Zambia. Although there exists an extensive literature on financial sector development and savings levels in developing countries, there does not seem to exist satisfactory work on the above nexus for sub-Saharan African countries, particularly Zambia. Along these lines, the paper examines the linkages between the financial reforms of the early 1990s and savings mobilization. It considers the characteristics of banks and non-bank financial institutions, especially micro finance institutions, and savings levels and identifies problems associated with the relatively poor performance of savings in recent years and concludes with a set of policy guidelines for strengthening savings mobilization, highlighting the expected effect on povertyreducing growth.
Topic:
Development, Economics, Emerging Markets, and International Trade and Finance
Political Geography:
Africa and Nordic Nations

515. Savings and Financial Sector Development: Panel Cointegration Evidence from Africa

Author:
George Mavrotas and Roger Kelly
Publication Date:
02-2003
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The paper uses different measures of financial sector development for a dynamic heterogeneous panel of 17 African countries to examine the impact of financial sector development on private savings. An innovative econometric methodology is also employed related to a series of cointegration tests within a panel. This is an important contribution since traditional panel data analysis adopted in previous studies suffers from serious heterogeneity bias problems. The empirical results obtained vary considerably among countries in the panel, thus highlighting the importance of using different measures of financial sector development rather than a single indicator. The evidence is rather inconclusive, although in most of the countries in the sample a positive relationship between financial sector development and private savings seems to hold. The empirical analysis also suggests that a change in government savings is offset by an opposite change in private savings in most of the countries in the panel, thus confirming the Ricardian equivalence hypothesis. Liquidity constraints do not seem to play a vital role in most of the African countries in the group, since the relevant coefficient is negative and significant in only a small group of countries
Topic:
Development, Economics, Emerging Markets, and Poverty
Political Geography:
Africa

516. Lessons of the Euro for the Rest of the World

Author:
Barry Eichengreen
Publication Date:
12-2002
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
Europe's single currency is widely invoked as a potential solution to the monetary and exchange rate problems of other regions, including Asia, Latin America, North America and even Africa. This lecture asks whether the Europe's experience in creating the euro is exportable. It argues that the single currency is the result of a larger integrationist project that has political as well as economic dimensions. The appetite for political integration being less in other parts of the world, the euro will not be easily emulated. Other regions will have to find different means of addressing the tension between domestic monetary autonomy and regional integration. Harmonized inflation targeting may be the best available solution.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Africa, Europe, Asia, and Latin America

517. Security and Development in Sierra Leone

Author:
Lotta Hagman
Publication Date:
06-2002
Content Type:
Working Paper
Institution:
International Peace Institute (IPI)
Abstract:
In Sierra Leone and elsewhere, the fields of security and development are intrinsically linked and cannot be treated as separate spheres. Just as activities by security actors have an impact on development programs, development activities have security implications. More work is needed in defining a common agenda at the intersection of security and development in order to foster strategies in both areas that are mutually reinforcing. On an operational level, making development thinking part of a peacekeeping operation from the outset, both in planning and implementation should be a priority.
Topic:
Security, Economics, Peace Studies, and United Nations
Political Geography:
Africa

518. Insolvency and Debt Recovery Procedures in Economic Development: An Overview of African Law

Author:
Clas Wihlborg
Publication Date:
02-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Insolvency and debt recovery procedures are as crucial to a well-performing financial sector as credit provision itself. They are even more important in Africa, where attempts are underway to create fully-fledged financial markets. For the financial system to be credible, creditors must be ensured that lenders will meet their obligations and that cases against them will be brought to closure. A good legal framework for insolvency also ensures distressed firms a form of orderly exit, thereby enabling their owners to start afresh. However, institutions of this nature take time to take effect, and need to be supported politically and by reforms in other sectors of the economy.
Topic:
Development, Economics, and Government
Political Geography:
Africa

519. Privatization in sub-Saharan Africa: On Factors Affecting Implementation

Author:
Steve Kayizzi-Mugerwa
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Although privatization has been a key feature of economic policy in Africa since the early 1990s its sequencing and intensity have varied from country to country, with donor leverage being an important determinant of the pace of implementation. However, although many privatization schemes were undertaken in response to donor demands for reduced government participation in business, the process soon achieved its own dynamics. The positive view of privatization suggests that it went ahead, in spite of domestic opposition, because politicians and bureaucrats perceived real benefits to themselves and their supporters. They could influence the sales to their own benefit, while, on the other hand, a more focused public sector improved service delivery.
Topic:
Development, Economics, and Government
Political Geography:
Africa

520. Performance of Microfinance Institutions in Burkina Faso

Author:
Youssoufou Congo
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study tests the performance of microfinance institutions (MFIs) in Burkina Faso using indicators such as the sustainable interest rate and the subsidy dependence index. The results indicate that MFIs outreach performance remains very low compared with potential demand, and the factors responsible appear to be both the refusal of most MFIs to mobilize local savings and the high costs of supply of microfinancial services. The results also show that MFIs are not viable and sustainable. Their interest rates are kept low and do not allow them to cover all the costs. In addition, the results indicate that MFIs are dependent on subsidies. However, the oldest MFIs and/or institutions providing deposit services have the lowest subsidy dependence index. It is suggested that more attention should be placed on savings mobilization and ceilings on interest rates should be removed in order to allow MFIs to charge sustainable interest rates.
Topic:
Development and Economics
Political Geography:
Africa