1. Macroeconomic Impact of Capital Flight in Sub-Saharan Africa
- Author:
- John Weeks
- Publication Date:
- 09-2014
- Content Type:
- Working Paper
- Institution:
- African Economic Research Consortium (AERC)
- Abstract:
- This paper assesses the impact of capital flight on growth in thirty-one sub-Saharan African countries. It first considers the “macro fundamentals” hypothesis that capital flight would be lower in a country whose government adhered to “sound” macroeconomic policies. Analytical considerations fail to support this hypothesis. Second, it develops a growth estimating equation derived from the Harrod-Domar framework. The growth estimations support the conclusion that capital flight had a major impact on growth over the last three decades, 1980–2010. The negative impact was greatest for the petroleum-exporting countries and those affected by internal conflict, but it was also substantial for the other countries, with a few exceptions.
- Topic:
- Economics, Markets, Global Markets, Economic growth, Economic Policy, Macroeconomics, and Capital Flight
- Political Geography:
- Africa, Sudan, Nigeria, Angola, Chad, Cameroon, Global Focus, Gabon, and Republic of Congo