Engendering Economic Recovery: Modeling Alternatives to Austerity in Europe

This article explores a gendered expansionary macroeconomic scenario for Europe as an alternative to current austerity policies over the medium term. Using a non-equilibrium structuralist macroeconomic model, it demonstrates that the dual aim of economic growth and increases in men’s and women’s employment can be achieved by adopting gender-sensitive expansionary macroeconomic policies. Based on historical data series, three scenarios for Europe for the 2015–25 period are compared: continued austerity, a gender-neutral expansionary scenario, and a gendered expansionary scenario. Projections for the gendered expansionary scenario suggest that 7.4 million more jobs could be created for women in the Eurozone and United Kingdom by reversing austerity policies and gendering and increasing government expenditure and private investment. Further, higher growth rates under this scenario lead to significant reductions of debt-to-GDP ratios and lower budget deficits. The study recommends Europe should roll back austerity policies and embark on a new gender-aware economic trajectory.     

The modern impact of precolonial centralization in Africa

We empirically assess the possibility, stressed by African scholars, that stronger precolonial political institutions allowed colonial and postcolonial African governments to better implement modernization programs in rural areas. Using anthropological data, we document a strong positive association between the provision of public goods such as education, health, and infrastructure in African countries and the centralization of their ethnic groups’ precolonial institutions. We develop an empirical test to distinguish among alternative explanations for this finding. The evidence supports the view that precolonial centralization improved public goods provision by increasing the accountability of local chiefs. Our results stress the importance for developing countries to create mechanisms to monitor local administrators of public projects. These mechanisms should be consistent with these countries’ preexisting and informal arrangements.     

Household Social Mobility for Paid Domestic Workers and Other Low-Skilled Women Employed in South Africa

This paper explores the theme of patronage by examining how the social mobility prospects of paid domestic workers differ from other vulnerable low-skilled black and colored women in post-apartheid South Africa. The literature provides contradictory predictions about the effects of a relationship with an affluent employer on a vulnerable employed woman and her household. Using data from the 2002–8 General Household Survey, this study uses propensity score matching (PSM) to compare paid domestic workers versus employed women with similar labor market characteristics. It finds that the household members of paid domestic workers tend to have a lower likelihood of unemployment, lower unemployment duration, higher likelihood of owning assets, and lower prevalence of hunger. It is, however, important to see evidence of such benefits in the context of a complicated employment relationship and to highlight that such benefits can reflect both altruistic and self-serving employer motivations.     

Middle Class in Africa: Determinants and Consequences

This study complements the inclusive growth literature by examining the determinants and consequences of the middle class in a continent where economic growth has been relatively high. The empirical evidence is based on a sample of 33 African countries for a 2010 cross-sectional study. Ordinary least squares, two-stage-least squares, three-stage-least squares and seemingly unrelated regressions estimation techniques are employed to regress a plethora of middle class indicators, notably, the: floating, middle-class with floating, middle-class without floating, lower-middle-income and upper-middle-income categories. Results can be classified into two main strands. First, results on determinants broadly show that GDP per capita and education positively affect all middle class dependent variables. However, we establish a negative nexus for the effect of ethnic fragmentation, political stability in general and partially for economic vulnerability. Simple positive correlations have been observed for: the size of the informal sector, openness and democracy. Second, on the consequences, the middle class enables the accumulation of human and infrastructural capital, while its effect is null on political stability and democracy in the short run but positive for governance and modernisation. Policy implications are discussed.     

Economic Citizenship: Neoliberal Paradoxes of Empowerment

ABSTRACT

This paper provides an empirical analysis of the impact of the Child Support Grant (CSG) implemented in South Africa on the labor supply of the parents of beneficiary children. The aim is to assess whether the program improved or lessened gender inequality in the labor market. Using data from a national panel survey and applying a fuzzy regression discontinuity design that exploits an expansion in eligibility due to a discontinuous change in age eligibility, the results show that the CSG had a negative effect on the probability of parents of beneficiary children being employed and mixed effects on the participation in the labor force, with substantial heterogeneity by gender and by other individual and household characteristics. Overall, the evaluation suggests that the program provided support to members of vulnerable households in coping with the constraints of the South African labor market, but it did not reshape existing gender inequalities.     

Inequality of opportunity in sub-Saharan Africa

Inequality of opportunity is defined as the difference in individuals’ outcome systematically correlated with morally irrelevant pre-determined circumstances, such as ethnicity, socio-economic background, area of birth. This definition has been extensively studied by economists on the assumption that, in addition to being normatively undesirable, it can be related to low potentials for growth. However, empirical estimations of inequality of opportunity require accessing rich data sources, rarely available in poorer countries. In this paper, we exploit 13 consumption household surveys to evaluate inequality of opportunity in 10 Sub-Saharan African countries. According to our results, the portion of total inequality that can be attributed to exogenous circumstances is between 40% and 56% for the generality of countries. Our estimates are significantly higher than what has been found by previous studies. We detect a positive association between total consumption inequality and inequality of opportunity, and we study the different sources of unequal opportunities. The place of birth and the education of the father appear to exert the most relevant role in shaping inequality of opportunity in the region.     

Gender Effects of Trade Openness in Sub-Saharan Africa

ABSTRACT

More than thirty years into the modern era of globalization, scholars are now in a position to evaluate the distributive effects of the policy shifts that have led to greater economic integration. One region of the world for which little robust empirical evidence exists on gendered employment effects is Sub-Saharan Africa (SSA). To identify whether there is an impact of economic and trade structure on women's relative access to work, this contribution empirically explores these issues for thirty-eight SSA countries, and for two subgroups. Panel data for the period 1991–2010 is examined using fixed effects, random effects and two-stage least-squares estimation techniques. Findings suggest that trade liberalization has gendered employment effects, with the direction depending on the structure of the economy. However, the more robust finding is that a country's infrastructure has played a determining role in gendered labor market outcomes in SSA since the early 1990s.     

Earnings inequality and unemployment in South Africa

Unemployment and earnings inequality have moved together remarkably closely in South Africa in recent years. This article explores the relationship between unemployment and earnings inequality in South Africa, investigating the extent to which changes in unemployment can account for changes in earnings inequality. Static and dynamic decompositions of earnings inequality by employment status reveal the centrality of unemployment in accounting for the both level and trend of earnings inequality. The distribution of employment in the formal and informal sectors is found to be of lesser importance in explaining earnings inequality, as is wage dispersion within each of these categories. The findings point to the central importance of reducing unemployment in South Africa if the extremely high levels of inequality are to be reduced.     

Size and Implication of Informal Economy in African Countries: Evidence from a Structural Model

This paper presents estimates of the informal economy in 41 African countries, including North Africa, Southern Africa, East Africa, Central Africa and West Africa during the period 2007–2013. Using a structural equation model with latent variables, the empirical results indicate that the average size of the informal economy in Africa (in% of formal gross domestic product) in 41 countries is 42.9%, 39.9% in 5 countries in North Africa, 40.02% in 11 countries in southern Africa, 43.24% in 6 countries of East Africa, 45.5% in 7 countries of Central Africa and 45.21% in 12 countries in West Africa. We suggest economic policy recommendations to solve the dilemma of the informal economy not only in the regions but also in different countries such as: identifying the causes of informality, the barriers to formalization and how to eliminate them; developing policies, procedures and institutions that can help informal activities meet market economy requirements, reforming legal systems and ensuring equal access for all; and finally, establishing affordable social benefits for workers.     

Institutional Quality and Economic Development in Sub-Saharan Africa: Can Management Effort and Bribes Compensate for Low-Quality Institutions?

The industrial development in sub-Saharan Africa is perhaps more affected by the quality of institutions than that of other regions. We investigate what alternatives managers may have and what their firms would need to function in case the institutional furniture they encounter is of low quality. We find that, in high quality institutional environments, management spending effort to deal with the authorities and to navigate regulations negates the effect of the institutional environment. Managers do not need to spend such efforts. Perhaps surprisingly, we find that the positive effect of high-quality institutional environments on firm performance is enhanced by making informal payments.     

Financing enterprise development in sub-Saharan Africa

This paper examines some critical gaps in the financial infrastructurein sub-Saharan Africa, which have contributed to the poor performanceof productive investment by private agents. It first analysesthe performance of financial systems, encompassing both formaland informal financial sectors, in relation to the changingpolicy environment, and key features of the financial marketstructure. It then identifies those gaps in financial servicesthat have been particularly detrimental to private investment,enterprise growth and transformation. Finally, the paper considerspolicy implications drawn from East Asian experiences with respectto financial policies, institutional arrangements and marketintegration measures for financing enterprise development.     

Patriarchy versus Islam: Gender and Religion in Economic Growth

ABSTRACT

This contribution evaluates whether affiliation with Islam is a theoretically and statistically robust proxy for patriarchal preferences when studying the relationship between gender inequality and economic growth. A cross-country endogenous growth analysis shows that direct measures of patriarchal institutions dominate a variety of religious affiliation variables and model specifications in explaining country growth rates, and that using religious affiliation, particularly Islam, as a control for culture produces misleading conclusions. This result is robust to the inclusion of measures of gender inequality in education and income, indicating that establishing and maintaining patriarchal institutions (a process this study calls “patriarchal rent-seeking”) exact economic growth costs over and above those measured by standard gender inequality variables. One of the key contributions of this study is to draw on unique institutional data from the Organisation for Economic Co-operation and Development's Gender, Institutions and Development (GID) database to better understand the gendered dynamics of growth.     

Indirect Taxation and Gender Equity: Evidence from South Africa

Abstract

This study adds to the growing literature on the distributional effects of indirect or consumption taxes in developing countries by exploring whether these taxes have differential gender outcomes. Using data from Statistics South Africa's 2000 Income and Expenditure Survey, the study investigates differences in tax incidence between “female-type” and “male-type” households, classified according to their demographic and economic attributes. The results suggest that zero-rating a well-targeted selection of basic foodstuffs and fuel for household use is important in protecting female-type households, especially those in the lowest quintiles and with children, from bearing an otherwise disproportionate share of the tax burden. In contrast, high taxes on alcohol, tobacco, and fuel for private transport result in a larger incidence on male-type households. The study also suggests ways in which the indirect tax structure could be refined to further reduce the large gender (and income) inequities that exist in South Africa.     

Marketising the commons in Africa: the case of Ghana

The recent surge in the marketisation of the commons in Africa – especially of water bodies – warrants careful political economic analysis. Three questions remain intractable: (1) Were there markets in the beginning? If so, how have they transformed and if not, how did markets arise and transform over the years? (2) what are the outcomes of such markets for people, their livelihoods, and their environment? And (3) how to interpret the outcomes of water markets and whether water should be commodified at all. For new institutional economists, water markets have arisen because of the inferior nature of Indigenous or customary systems which are incapable of offering precisely what water markets offer Africa: economic and ecological fortunes. Using an institutional political economy approach and drawing on experiences in Ghana, the paper investigates the social history of marketisation of the commons and probes the effects of marketisation in terms of absolute, relative, and differential/congruent outcomes as well as the opportunity cost of the current water property rights regime. The empirical evidence shows that markets have been socially created through imposed and directed policies. Some jobs have been created through investment, but such employment is not unique to marketisation and private investment. Indeed, the private model of property rights has worsened the distribution of water resources not only within different property relations in Africa but also between diverse property relations. Water markets have been responsible for much displacement and trouble not only for communities but also nature. Overall, there is no necessary congruence between the promises made by new institutional economists and how communities experience water markets. Tighter regulations for the use of inland and transboundary water sources might temporarily halt the displacement of communities sparked by marketisation of the commons, but only one fundamental change can guarantee community well-being: to regard the access to and community control of water as constitutionally sanctioned human rights and as res communis.     

中国经济转型:社会资本视角

本文从社会资本角度对中国和俄罗斯的经济转型作了比较，分析两国原来存在的非正式网络在两佃不同转型方式下对转型所造成的影响，并在承认扩展信任对经济发展和转型重要性的基础上讨论了两国转型的缺陷，指出规范政府行为和建设市场支持性的正式制度对转型过程中实现扩展信任的重要性。     

Fuelled Power: Oil,Financiers and Central Bank Policy in Nigeria

While the literature on business power and global finance has illuminated the ways in which financial institutions limit the policy autonomy of states in developing countries, we know much less about the circumstances under which the power of financiers is undermined. In this article, I advance explanations of these circumstances by arguing that state access to natural resource revenues reduces the power of financial institutions and enhances the capacity of the state to pursue central bank policies which violate the interests of major financiers. I employ a case study of central bank policy in Nigeria to probe this argument and find evidence that supports the claim that whenever the Nigerian government's access to resource revenues increased, the state's capacity to diverge from financiers’ preferred central bank policies and to advance its own preferences increased as well. The analysis provides the basis for broader propositions about the policy space of developing countries vis-à-vis financial institutions and the variability of structural power.     

Reforms and education inequality in Ghana

We analyze the evolvement of education inequality and the gender gap in Ghana before and after two major education reforms. Using different measures of inequality, our findings suggest that the gender gap at the basic school level has closed following the introduction of the education expansion policies, but inequalities persist at the postbasic school levels and across regions. We further demonstrate that the educational expansion–schooling inequality nexus is best illustrated by an inverted U-shaped Kuznets curve. We find that after an average of 6 years of schooling has been reached, inequality starts to decline, and gender equality can be achieved when the average years of schooling reach 9.     

结构转变、经济增长与城乡收入差距

经济增长体现为一个结构转变的过程,并通过结构转变影响城乡收入差距。综合分析产业结构、城乡结构转变,以及经济增长对城乡收入差距的作用机理,并基于1978—2011年的相关统计数据进行实证检验。结果显示：中国的经济增长与城乡收入差距存在库兹涅茨倒u型关系;城乡二元经济结构的转变有助于缩小城乡收入差距;城市化对城乡收入差距的影响则出现阶段性特征,城乡收入差距随城市化水平的提高呈现出先扩大后缩小的特征。应注重经济增长、转变经济发展方式、以科学发展观推进城市化发展。     

THE BLACK SOCIAL ECONOMY: PERSEVERANCE OF BANKER LADIES IN THE SLUMS

In a neoliberal world where commercial financial services are controlled by elites, poor Black women in the slums are usually excluded from financial programs – even microfinance ones. In my empirical study of 491 people in Jamaica, Guyana and Haiti, I argue that the participation in informal banking systems by the poor, not only provides coping tools for livelihood survival, but banker ladies insert a program of social connectedness and political action when they organize these local resources. Banker ladies have a clear social justice agenda: to validate the business activities of marginalized people. Informal banks are a counter project to neoliberalism because it is focused on the collective, where poor Afro‐Caribbean women are creating alternative financial programs that are squarely part of the social economy.     

Homo Oeconomicus Returns: Neoliberalism,Socio-Political Uncertainty and Economic Policy

The aim of this paper is to discuss how neoliberal policy is changing the way people conceive of the economy and of society. After a brief outline of the main features of neoliberal policies, it argues that neoliberalism does not consist in a mere set of wrong economic theories or in the plain reflection of vested interests. It is a full-fledged view of how society should be organized. The paper then argues that these policies and the ideology that backs them up determine major institutional changes which affect economic, social and polity-related variables but also the general understanding that peo-ple have of the economy and of society. More specifically, it enhances uncertainty about one’s future and favors a non-solidaristic view of social relations. These changes tend to prejudge the effectiveness of employment policies and to reinforce the neolib-eral consensus. The conclusion is that it is not possible to conceive of an appropriate macroeconomic policy unless institutional changes are taken into account that trans-cend macroeconomics as such and re-establish the social underpinnings for that policy. These include changes in how the economy is coordinated but also changes in the bar-gaining power of workers and citizens relative to business.