How instability lowers African growth

This paper aims to assess the role of instabilities on Africa'slow rates of growth during the seventies and eighties, usingcross-section econometric estimates, on a sample of Africanand non-African countries and two pooled decades. Africa exhibitshigher 'primary' instabilities (climatic, terms of trade andpolitical instabilities), i.e., instabilities which are structuralrather than the result of policy. These 'primary' instabilitiesinfluence African growth more through a lower growth residualthan through a lower average rate of investment. They do soby their impact on economic policy, which is evidenced by theirinfluence on two 'intermediate' instabilities, the instabilitiesof the rate of investment and of the real exchange rate, whichsignificantly lower the rate of growth.     

Economic research and economic growth: Evidence from East Asian economies

Based upon page counts of articles published in 60 quality economics journals, the role of economic research is examined for five East Asian economies. In Hong Kong, causality runs bi-directionally between research productivity and economic growth; in Japan, the causal effects tend to be one direction from economic growth to research publications; in Korea and Taiwan, causality runs the other way around from publications to growth; and in Singapore, the causal effects are small and insignificant. Socioeconomic differences in each economy help to explain the various causal directions found.     

Political instability, investment and economic growth in Sub-Saharan Africa

This paper explores the relationship between political instabilityand economic growth in Sub-Saharan African nations. A more comprehensivemeasure of political instability than has previously been developedis used in combination with a simultaneous equations model anddynamic panel estimation approach to produce several interestinginferences. First, the statistically significant inverse relationshipbetween political instability and economic growth identifiedby earlier studies is confirmed by the estimates presented here.Second, the estimated system of equations indicates that economicgrowth and political instability are jointly endogenous. Third,in addition to the direct impact that political instabilityhas upon growth, estimates confirm the hypothesis that politicalinstability indirectly decreases economic growth by decreasinglong-run capital accumulation. Fourth, failure to account forthe dynamic nature of growth equations as well as the endogeneityof explanatory variables may produce biased effects of politicalinstability on growth. Fifth, the broad measure of politicalinstability we use in this study can better capture the effectsof political instability on economic growth than 'elite' instabilitythat has been used by earlier researchers. Finally, principalcomponents estimation is used to develop a measure of politicalinstability that can serve as an alternative to the arbitraryweighting scheme used in previous research.     

The economic causes and consequences of social instability in China

This paper provides a survey of the economic literature relevant to social instability in China and moulds it into an argument. The objective is to offer a fresh view of economic policy and performance through the lens of the threat posed by social instability. This is a concept that economists rarely analyse, and yet it can lurk behind much economic policy-making. China's leadership has often publicly expressed its concern to avoid ‘social instability’. It is viewed as a threat both to the political order and to the continued rapid growth of the economy. This threat to growth in turn endangers the maintenance of social stability. The paper examines the likely economic determinants of social instability, using both surveys and other evidence. After discussing the determinants of China's rapid growth, the paper goes on to examine the likely mechanisms by which social instability can affect the growth rate. There is a case for more research on the role of social instability in the economic development process.     

Commodity price instability and economic goal attainment in developing countries

This paper reviews the theoretical and empirical micro and macro foundations for the frequent claims that instabilities in international commodity markets have deleterious effects on goal attainment in primary-commodity exporting developing countries. This review leads to the conclusion that the available evidence does not support these claims. The paper concludes with speculation on why such claims are so strong despite the lack of supporting evidence: perhaps it is because of measurement problems and perhaps because of small but articulate groups with vested interests in overstating the problem.     

Recent U.S. economic policies and the Central Caribbean economies

This study examines the trade and investment performances of three economies in the Central Caribbean region since the Caribbean Basin Initiative (CBI) and associated programs. We find that the rapid growth in nontraditional exports from these economies to the United States did not necessarily translate into net foreign exchange earnings. On a per capita basis, export-related investment in Haiti was much lower than in the other two economies — Jamaica and the Dominican Republic. As a percentage of the labor force, gross employment gains for Jamaica have been significantly larger than those in either the Dominican Republic or Haiti. It appears that the policies favoring expansion in the offshore sector may foster employment opportunities of females, especially where traditional sectors are in decline.     

Export instability and economic structure: An east-west comparison

Conclusion The purpose of this paper was to extend Massell’s model of export instability to the case of the European market and centrally planned economies. Using a common measure of export instability we first saw that the MEs displayed significantly greater export instability than the CPEs. Applying our extension of the Massell model we then found that this difference could be satisfactorily explained by the “other” structural characteristics of the economies involved, and one need not therefore invoke the difference in economic systems. In particular, exports of food and raw materials were each found to be significantly associated with greater export instability, while there was also a strong suggestion that countries with higher GNPC tended to experience, net of the other variables in the system, a greater degree of instability. Finally, a comparison of these results with those obtained by Massell revealed striking contrasts, indicating that very different policy conclusions could be drawn from the results of the two studies.     

Political instability and economic development in Sub-Saharan Africa: Further evidence

After more than three decades of independence, many countries in Sub-Saharan Africa have not yet developed stable political systems. Since the 1960s, when African countries began to achieve independence, many of them have encountered significant levels of institutional instability. In recent years, political violence has emerged as the most common method of governmental change. In this study, the effects of political violence on economic and human development in Sub-Saharan Africa are examined. It is seen that political instability is a significant constraint to the improvement of the human condition in the region.     

A South African national economic and environmental policyframework

Most contemporary economic theories upon which conventional national accounting is based regard man‐made assets as productive capital to be depreciated against the value of production. Such production, without replenishment or renewal of the asset or capital stock, is not sustainable. Natural resource assets, however, are not valued in the same way. There is no accounting mechanism to reflect the decrease in potential future pro duction as the resource diminishes or deteriorates. In 1993, the United Nations adopted its guidelines for a ‘System of Integrated Environmental and Economic Accounting’ (SEEA), which allows for the adjustment of the System of National Accounts (SNA) for natural asset stripping and degradation, providing a format for national accounting which assesses the viability and sustainability of economic growth. The concept of an SEEA for South Africa was pursued in 1994 as a pilot study. The framework to be devel oped was termed the South African National Economic Environmental Planning (SANEEP) model. The framework can be used to predict the environmental impact, in terms of natural resource use and degradation, of economic growth, both nationally and at the sectoral level. In addition, it can be used to test the sectoral economic impact, and thus the desirability of certain types of environmental economic instruments such as pol lution taxes, or the imposition of royalties on mineral extraction. Hence, the SANEEP framework has the potential to become a broad‐based, integrated environmental and economic planning tool. This article describes the SANEEP model, its information requirements and applications.     

Evaluating participation in African economic integration schemes: the case of the North African Arab Maghreb

This article makes an attempt to assess the significance ofeconomic integration among African countries, taking the ArabMaghreb Union (AMU) of 1989 as a case study, judged from theperspective of one member country - Algeria. The main conclusionto emerge from the empirical findings is that, while the existenceof trade expansion effects can be demonstrated, their impacton the Algerian economy is quite modest.     

Inflation and economic growth: A dynamic panel threshold analysis for Asian economies

This paper investigates the existence of a threshold level for inflation and how any such level affects the growth of Asian economies. We use a dynamic panel threshold growth regression, which allows for fixed effects and endogeneity. We observe a nonlinear relationship between inflation and economic growth for 32 Asian countries over the period 1980–2009. We detect an inflation threshold of approximately 5.43%, at a 1% level of significance. We find that inflation hurts growth when it exceeds 5.43% but has no effect below this level. Different estimation methods determine that the effect of inflation on growth is robust. Our findings may be useful to central banks as a guide for inflation targeting.     

Export instability and economic development: The case of Colombia

Zusammenfassung Instabilit?t der Exporte und wirtschaftliche Entwicklung: Der Fall Kolumbien. — In diesem Artikel wird über ein Forschungsvorhaben berichtet, in dem die l?ngerfristigen Wirkungen instabiler Exporte auf die wirtschaftliche Entwicklung untersucht werden. Als Analyseinstrument dient ein gesamtwirtschaftliches Modell des allgemeinen Gleichgewichts, das für ein recht typisches rohstoffexportierendes Entwicklungsland, n?mlich Kolumbien, spezifiziert wurde. Das Ergebnis stützt die These, da\ Exportinstabilit?t die wirtschaftliche Entwicklung beeintr?chtigt. Eine st?rkere, durch instabile Exporte induzierte gesamtwirtschaftliche Instabilit?t führt einerseits zu h?heren Ersparnissen und andererseits dazu, da\ die Regierung mehr internationale Reserven nachfragt, um bei gr?\eren transitorischen exogenen Schocks stabilisierend eingreifen zu k?nnen. Insgesamt ergibt sich, da\ bei Einkommensinstabilit?t die Reservenachfrage der Regierung die “freiwillige” Ersparnis der Konsumenten übersteigt, so da\ die realen Investitionen in der Gesamtwirtschaft betr?chtlich sinken. Dies hat negative Folgen für die gegenw?rtige Wohlfahrt und auf l?ngere Sicht auch für das Wirtschaftswachstum in Kolumbien. Von daher kann man schlie\en, da\ internationale wirtschaftspolitische Ma\nahmen, die das Halten einer instabilit?tsbedingt h?heren Reserve in Kolumbien überflüssig machen würden, dem Lande helfen k?nnen, die sch?dlichen Wirkungen der Instabilit?t zu vermeiden.

---

Résumé L’instabilité des exportations et le développement économique: Le cas de la Colombie. — Cet article donne un rapport sur des recherches regardant les effets de l’instabilité des exportations sur le développement économique. L’auteur applique un computable modèle d’équilibre général pour étudier l’impact des fluctuations des exportations sur l’allocation des ressources et le revenu en Colombie, un assez typique pays en voie de développement qui exporte des matières premières. L’analyse supporte la proposition que l’instabilité des exportations est au détriment du développement économique en Colombie. Une instabilité plus haute dans l’économie nationale associée avec l’instabilité des exportations mène d’une part aux épargnes augmentées. D’autre part le gouvernement demande des réserves internationales de plus afin de stabiliser l’économie s’il y a des grands chocs exogènes transitoires. L’auteur arrive au résultat que la demande de réserve gouvernementale excède le montant des ressources mis à disposition par les épargnes volontaires des consommateurs de sorte que l’investissement réel agrégé doit baisser considérablement. Cela a des conséquences négatives pour le bien-être et à long terme aussi pour la croissance économique en Colombie. Sur la base de ces résultats on peut conclure que des mesures qui rendraient inutiles une augmentation des réserves internationales aideraient la Colombie à surmonter les effets adverses de l’instabilité.

---

Resumen Inestabilidad de las exportaciones y desarrollo económico: el caso de Colombia. — El presente artículo informa sobre la investigación sobre los efectos de la inestabilidad de las exportaciones sobre el desarrollo económico. Se utiliza un modelo de equilibrio general computable para estudiar el impacto de las fluctuaciones de exportación sobre la asignación y el ingreso en Colombia, un típico país en desarrollo exportador de materias primas. El análisis efectuado en este artículo da sustento a la proposición que la inestabilidad de exportación es perjudicial para el desarrollo económico en Colombia. Una mayor inestabilidad asociada con inestabilidad de las exportaciones conduce por un lado a mayores ahorros. Por el otro lado el gobierno demanda mayores reservas internacionales con el fin de ejercer una influencia estabilizadora ante la presencia de largos estremecimientos exógenos transitorios. Resulta que la demanda del gobierno por reservas excede la cantidad de recursos proporcionada por los ahorros ?voluntarios? de los consumidores en vista de ingresos inestables, de tal manera que la inversión real agregada tiene que disminuir considerablemente. Esto tiene consecuencias negativas para el bienestar y en el largo plazo también sobre el crecimiento económico de Colombia. Sobre la base de estos resultados se puede concluir que las medidas que conducen a aumentar las reservas internacionales en vista de inestabilidad en las exportaciones, innecesariamente ayudaría a Colombia a sobreponerse a los efectos adversos de la inestabilidad.

     

Political instability and economic development in Sub-Saharan Africa: Some recent evidence

Political instability has become endemic to Sub-Saharan Africa. Since the early 1960s, when most of the African countries began to achieve independence, more than fifty coups have taken place in the continent. This rise in political decay has significantly affected economic development. This study examines the relationship between elite political instability and economic development in Sub-Saharan Africa. It concludes that lack of political stability has contributed significantly to economic stagnation in the continent of Africa.