Transforming Economic Growth to Human Development in Sub-Saharan Africa: The Role of Elite Political Instability

In the light of the increasing attention on human development (HD) as well as the importance of political instability (PI) in economic performance, this paper examines the role of PI in the transformation of economic growth to HD. It finds that élite PI—the frequency of coups d'état in sub-Saharan Africa—adversely affected the transformation of economic growth to HD, measured as the change in an index of life expectancy and literacy, between 1970 and 1985. Coupled with an additional indirect negative effect on GDP growth, élite PI is found to have engendered a significant adverse impact on HD.     

Gains from Trade: Implications for Labour Market Adjustment and Poverty Reduction in Africa

Abstract: This paper reassesses the gains from trade for sub‐Saharan Africa, and draws their implications for labour market adjustment and poverty reduction. It reviews previous studies on multilateral liberalization, focusing on the findings from Computable General Equilibrium (CGE) models with relevance to African economies. The implications of these findings for poverty reduction are discussed. Our own CGE exercise supports the hypothesis that African countries cannot expect substantial gains from further multilateral liberalization. Moreover, given the sharp contraction of import‐competing sectors in response to trade liberalization in many African economies, coupled with insufficient compensation through labour market adjustments in other sectors, this study suggests that the ultimate impact on poverty reduction is likely to be small or even negative.     

Financial Contracting with Optimistic Entrepreneurs

Optimistic beliefs are a source of nonpecuniary benefits forentrepreneurs that can explain the "Private Equity Puzzle."This paper looks at the effects of entrepreneurial optimismon financial contracting. When the contract space is restrictedto debt, we show the existence of a separating equilibrium inwhich optimists self-select into short-term debt and realistsinto long-term debt. Long-term debt is optimal for a realistentrepreneur as it smooths payoffs across states of nature.Short-term debt is optimal for optimists for two reasons: (i)"bridging the gap in beliefs" by letting the entrepreneur takea bet on his project’s success, and (ii) letting the investorimpose adaptation decisions in bad states. We test our theory on a large data set of French entrepreneurs.First, in agreement with the psychology literature, we findthat biases in beliefs may be (partly) explained by individualcharacteristics and tend to persist over time. Second, as predictedby our model, we find that short-term debt is robustly correlatedwith "optimistic" expectation errors, even controlling for firmrisk and other potential determinants of short-term leverage.     

Accounting for South Korean GDP Growth: Index-Number and Econometric Estimates

The paper estimates the contribution of each one of the major determinants of South-Korean nominal GDP growth: technological change, movements in the terms of trade, increases in the endowments of labor and capital, and changes in domestic output prices. An index-number technique is used as well as an econometric approach. Both have a tight theoretical foundation, being based on the GDP function approach to modeling the production sector of an open economy.     

Explaining Slow Growth in Africa

This paper critically reviews the empirical literature on growth, with a view to drawing some lessons for Africa. It illustrates the diversity of the results found by different authors, and calls for a more rigorous approach, paying attention to the identification of structural parameters and to simultaneity biases. It emphasizes the part played by openness and export orientation as the main policy variables affecting growth. Then, the choice of bad policies, which seems to be the main proximate cause of slow growth in Africa, is traced to the lack of social capital and deficient political institutions. Cet article est une critique de la littérature empirique sur le développement dont le but est d’en tirer quelques leçons sur l’Afrique. L’article démontre la diversité des conclusions tirées par plusieurs auteurs et fait appel à une démarche plus rigoureuse, prenant en compte l’identification des paramètres structurels et des penchants simultanés qui existent. L’importance du marché et son orientation vers l’export sont soulignées comme étant les deux variables principales qui touchent directement la croissance. Les auteurs démontrent ensuite que le choix de mauvaises politiques, qui semble Átre la cause principale de la faible croissance africaine, est due en effet à un manque de capital social ainsi qu’aux institutions politiques défectueuses.     

The effects of public deficits on money growth in the European Union

The impact of government debt on the money supply has been studied for different countries, with an emphasis on developing countries and the U.S. This topic becomes especially interesting in European Union countries that have high public deficits and low inflation rates. It is also very relevant in the monetary union, with a European central bank controlling monetary policy and introducing monetary measures for all the member countries. The main goal of this paper is to analyze if there is any relationship between public deficits and monetary growth in the European Union. The conclusions presented in the previous literature are ambiguous. Some studies concluded that there is little evidence that government debt influences money in some of the member countries.     

Creating space for innovation—The case of mobile telephony in MSEs in Ghana

Mobile telephones have become important tools for socio-economic activities. In Africa, their diffusion is phenomenal. This paper adopts the innovation system conceptual framework for analyzing the state of mobile telephony in Ghana, the trends and implications for enhancing benefits. The paper emphasizes the role of the critical actors, and the internal and external environments they operate in. It uses primary and secondary data in analyzing the real and potential innovative use of mobile telephones by the MSEs in Ghana. It also examines the range of applications of mobile telephones in the MSEs, and assesses current public policies and the outcomes of such policies on innovations in MSEs. Finally, it advocates for a more holistic promotion of innovations from the broad perspectives. Efforts to stimulate innovation must be on the demand side of innovation as well as on the supply side.     

Mapping Growth into Economic Development

A bstract .   The study finds that elite political instability (PI)—the incidence of coups d'etat—has negatively influenced the mapping of GDP growth into economic development, measured as the algebraic difference in the United Nations Human Development Index, in Sub-Saharan Africa (SSA) between 1970 and 1985. Taking into account the additional adverse impact of PI on economic development through its deleterious influence on economic growth, the study estimates that PI has exacted a substantial toll in SSA's economic development.     

The role of oil and gas in China's energy strategy: an overview

China is well endowed with energy resources, having large quantities of coal, oil, gas and hydropower, as well as tremendous solar, wind and biomass energy potential. It even has its own uranium. To date, the country has relied mainly on coal and hydropower to generate its electricity and on oil to power its vehicles. However, with climate change and consequent rising sea levels, increased incidence of drought, intense storms, etc., China, having become the world's largest emitter of CO_2, is under strong international pressure to re-examine its energy strategy and find ways to reduce its carbon emissions. Thus, the government plans to greatly increase its use of natural gas in power generation. Gas emits less than half the CO₂ that coal emits. It is argued here that over the next 20 years, massive imports of gas via pipeline and liquefied natural gas tankers, combined with the development of unconventional gas reserves in the country may partly substitute for the large quantities of coal currently being used to generate electricity, but will not likely completely replace them. As for transport fuels, China, like all other countries, has little choice but to continue relying on oil regardless of whether it is imported or China develops its own large-scale shale oil operations. There is no alternate fuel of the same density available at the same or better price. The use of biofuels and electric/hybrid vehicles will not supplant the use of gasoline or diesel in the near future. Thus, the role of oil and gas in China's energy strategy are set to remain very significant over the next 20 years.