Thematic Policy Brief


Recent Submissions

Now showing 1 - 5 of 45
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    The Devil is in the Details: On the Robust Determinants of Development Aid in G5 Sahel Countries
    (African Economic Research Consortium, 2023-10-23) Bayale, Nimonka; Kouassi, Brigitte Kanga
    This paper introduces model uncertainty into the empirical study on the determinants of development aid at the regional level. This is done by adopting a panel Bayesian model averaging approach applied to the data of G5 Sahel countries, spanning the period 1980–2018. Our results suggest that, among the regressors considered, those reflecting terrorist attacks, trade stakes including military expenditure, socio-economic prospects and institutional conditions tend to receive high posterior inclusion probabilities. The study explores the relationship between these regressors and foreign aid by employing the fully modified ordinary least squares (FMOLS), the continuously updated fully modified (CUP-FM), the dynamic ordinary least squares (DOLS) long-run estimators, and the Dumitrescu and Hurlin (2012) panel causality test. The results highlight three concerns that may justify aid flows towards G5 Sahel countries: (a) peace and security considerations, (b) the economic interest of donors, and (c) recipient economic needs. The paper recommends that Sahel countries should strengthen international cooperation for security and peace, in compliance with goal 16 of the 2030 Agenda for Sustainable Development of the United Nations (UN) and goal 13 of the African Union’s (AU) Agenda 2063.
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    Identification and Estimation of Quadratic Food Engel Curves: Evidence from Cameroon
    (African Economic Research Consortium, 2023-10-23) Wirba, Ebenezer Lemven
    In this paper we estimate quadratic food Engel curves using data from the 2001, 2007 and 2014 Cameroon household consumption surveys. To address potential mismeasurement of regressors, we employ the heteroscedasticity-based identification strategy. Exploratory non-parametric analyses suggest quadratic forms for the food Engel curves. The regression results in this study confirm these patterns. At lower spending levels, unit increases in total spending increase the food budget share, while at levels above the spending thresholds unit increases in total spending reduce the food budget share. We also find evidence of major shifts in the quadratic food Engel curves over time. These findings suggest that reducing taxes on food items would be more beneficial to poor households.
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    Global Value Chains and Industrialization in Africa
    (African Economic Research Consortium, 2023-10-23) Nguekeng, Bernard; Mignamissi, Dieudonné
    The objective of this study is to analyse the main effects of the integration of African countries in the global value chains (GVCs) on their industrialization level. To this effect, we have specified an industrialization equation that considers the economic characteristics of the continent. We have then estimated that equation by the system GMM estimator method on a sample of 51 African countries with panel data spanning the period 1996‒2018 sourced from international organization databases. The findings of the estimations are the following: (1) the participation and the position of African countries in GVC positively contribute to their industrialization. The imports of intermediate goods facilitate the access to foreign machinery and technologies which stimulate local production. Furthermore, the position in value chains that are limited to assembling activities would also allow to achieve significant industrial progress; (2) the main factors influencing the indirect transmission of GVC to industrialization are the human capital and the physical capital; (3) the results are stable as shown by several robustness check tests related to different modalities of integration in GVC, to the conception of a new participation indicator in GVC, and to sub-regional specificities. Based on these results, we recommend policy actions to enhance participation, but also to improve the position in GVC, while at the same time an appropriate strategy would be designed to accumulate human capital and physical capital in the long term.
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    Facilitating Regional Trade: Lessons from WAEMU and EAC on How to Increase Trade in CEMAC
    (African Economic Research Consortium, 2023-10-23) Bertrand, Nguenkwe Ronie
    This study explores the ways of facilitation and enhancing intra- Central African Economic and Monetary Community (CEMAC) trade, which has remained structurally weak over more than twenty years, by focusing on the East African Community and the West African Economic and Monetary Union (WAEMU). The study uses a descriptive analysis of trade and the indicators of facilitation of trade in those three communities. An econometric analysis of factors underlying the level of trade in those three communities is conducted using an augmented gravity model. The econometric results demonstrate that the number of documents and the number of days required to export has a negative and significant impact on trade in EAC and WAEMU, but a positive impact in CEMAC. Infrastructure services, notably the use of the Internet have a negative impact on intra-zone trade in EAC.
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    How Does Adoption of Mobile Money Technology Affect Child Labour and School Enrolment?
    (African Economic Research Consortium, 2023-10-23) Joseph B. Ajefuand Falecia Massacky
    This paper analyses the impact of adoption of mobile money services on child labour and educational outcomes in Tanzania using an instrumental variables strategy. We identify heterogenous impacts across child’s gender and age, and we find a positive and significant effect of mobile money adoption on educational outcomes, but the results reveal a negative and significant impact on child labour in the farm and households. Moreover, using mediation analysis, we identify remittances and education expenditure as the potential pathways through which mobile money adoption affects child labour and educational outcomes.