Development Economics


Recent Submissions

Now showing 1 - 5 of 42
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    The Effect of Intra-African Immigration on Productivity in Africa
    (African Economic Research Consortium, 2023-08) Gnimassoun, Blaise
    Contrary to popular belief, the majority of Africans who migrate stay in Africa. In a context of low trade openness between African countries and high differences in the prices of goods and factors, intra-African immigration could theoretically play an important role. This paper aims to study the impact of intra-African immigration on labour productivity in Africa, as well as its macroeconomic and sectoral components. Empirically, I rely on a panel of 187 countries, including 53 African countries, over the period 1990‒2019, and a gravity-based 2SLS approach to deal with endogeneity. The results show that intra-African immigration has a positive, significant, and robust impact on labour productivity in Africa. This impact is greater than the effect of immigration in a global sample, and essentially passes through the improvement in total factor productivity and capital efficiency. While immigration tends to deteriorate capital productivity in the world sample, intra-African immigration improves capital productivity in Africa. Furthermore, the results reveal that the service sector is the one that benefits from the positive effect of intra-African immigration in Africa.
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    Explaining Food Insecurity in Sub-Saharan Africa: The Role of Governance and Institutions
    (African Economic Research Consortium, 2023-08) Gafa, Dede; Chachu, Daniel
    The burgeoning literature on global food (in)security suggests that sub-Saharan Africa (SSA) is lagging behind the rest of the world despite a period of decline in the prevalence of severe undernourishment. Using panel data covering 34 countries in the region for the period 2000 to 2015, this study examined the correlates and causes of food insecurity in SSA with emphasis on the role of domestic food production, governance, and institutions. The paper also provides evidence on the mediating role of governance by examining how the quality of governance and institutions influence the effectiveness of domestic food production on food insecurity in the region. The paper uses an instrumental variable strategy. The findings suggest that domestic food production and improvements in governance quality, measured by economic freedom and government effectiveness, are fundamental drivers of food security in SSA. We also found that improving the quality of governance would enable countries to better translate domestic food production into reductions in the depth of food deficit and the prevalence of undernourishment. Nonetheless, in the absence of adequate domestic food production, governance reforms alone would be impotent in fostering food security in SSA.
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    Magnitude and Determinants of Trade Misinvoicing in Burundi
    (African Economic Research Consortium, 2023-08) Ndoricimpa, Arcade
    The study examines trade misinvoicing at both aggregated and disaggregated levels by major trading partners, and by major export and import commodities. Aggregated trade misinvoicing and disaggregated trade misinvoicing by major trading partners are computed using DOTS database of the International Monetary Fund (IMF) over the period 1970‒2019. Disaggregated trade misinvoicing by major trading commodities is computed using UN-COMTRADE database over the period 1993‒2019. The study shows that the most occurring practices in trade misinvoicing are export underinvoicing and import over invoicing. Exports of Burundi to most of its major trading partners are found to be underinvoiced, while imports of Burundi from its major trading partners are in general overinvoiced. The major trading commodities considered are found to be affected by trade misinvoicing to a great extent. Moreover, an empirical analysis of the determinants of those two common practices of trade misinvoicing indicates that financial incentives through tax fraud, civil conflicts, governance, capital account openness, the parallel market premium, and the real exchange rate, are the main determinants of export underinvoicing and import overinvoicing. Drivers of trade misinvoicing at product level were also analysed for some major export and import commodities. The main product-specific factors of trade misinvoicing are found to be the parallel market premium, the real exchange rate, governance, and civil conflicts. The study's findings suggest that reducing political instability, having a more open capital account, improving governance, as well as reducing taxes and duties, could be ways to reduce the extent of trade misinvoicing in Burundi. In addition, more effort is needed in ensuring systematic and transparent reporting of international trade transactions.
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    The Impact of Network Coverage on Adoption of Fintech Platforms and Financial Inclusion
    (African Economic Research Consortium, 2023) Mothobi, Onkokame
    We study the effect of mobile network coverage on adoption of financial technologies and financial inclusion. Using georeferenced survey data for nine sub-Saharan Africa countries combined with information on towers, we find that financial inclusion is positively influenced by coverage. We estimate that investment in Long-Term Evolution (LTE) towers to a radius of 2km per household would increase financial inclusion by 6% in Mozambique and 3% in Ghana, Rwanda and Senegal. In countries where mobile money is common, investment in Global System for Mobile Communications (GSM) and Universal Mobile Telecommunications System (UMTS) would have a larger impact on financial inclusion. We also find no gender disparities in digital financial inclusion. However, financial inclusion inequalities are still explained by differences in incomes, education level and location.
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    Socio-Economic Status and Children’s Schooling Outcomes in Mozambique
    (2022-07) Bongai, Munguni
    This study investigates the association between socio-economic factors and children’s schooling outcomes (school access as proxied by ever enrolled, dropping out and staying in school – current enrolled or still in school) for children in Mozambique using the probit model. The results show that there is not much difference between factors that affect access and those that affect dropping out or staying in school once enrolled. Children from the poorest families, with less educated parents, from the north region, who live far away from a water source and are not the biological children of the household head were found to be most disadvantaged in all the three schooling outcomes compared to their counterparts with educated parents, from wealthy families and with water at home. The rural–urban divide, availability of electricity and land or livestock at home had no significant correlation with children schooling outcomes. This study therefore argues that policymakers must implement policies that improve the socio-economic backgrounds of children, by dealing with the demand-side factors particularly enhancing adult literacy programmes, providing water sources close to households, encouraging pre-primary education centres and improving the general welfare of households where children live. In a nutshell, results showed that demand-side factors were strong hindrances to children’s schooling and have to be prioritized in drafting and implementing of education policies.