Weak economic institutions in Africa: a destiny or design?

2019 ◽  
Vol 46 (7) ◽  
pp. 904-919
Author(s):  
Abdulkareem Alhassan ◽  
Abdulhakeem Abdullahi Kilishi
Keyword(s):  
Political Institutions ◽  
Deep Understanding ◽  
Economic Institutions ◽  
Economic Policies ◽  
African Countries ◽  
Policy Makers ◽  
Research Attention ◽  
Content Type ◽  
Economic Progress ◽  
Policies And Programs

Purpose The primacy of institutions for economic progress has been established in the literature. Yet, less research attention is paid to the existence and persistence of weak economic institutions in Africa. Thus, the purpose of this paper is to empirically explore the determinants of the quality of economic institutions in Africa. Design/methodology/approach Hausman–Taylor instrumental variable estimator of panel regression was employed for a sample of 43 Sub-Sahara African countries over the period 1995–2017. Findings The study finds that the existence and persistence of weak economic institutions in Africa is more of design than destiny. That is, weak economic institutions are created and sustained more by bad political institutions rather than cultural diversity and geographical factors. Therefore, strong political institutions need to be entrenched to reverse the equilibrium of weak economic institutions and dismal economic performance in the continent. Practical implications The study provides deep understanding of the determinants of economic institutions. This is imperative for policy makers, development agencies and stakeholders in designing viable economic policies and programs for the continent. Originality/value The novelty of the study is rooted in the examination of the factors responsible for the development and persistence of weak economic institutions in Africa. The idea is original because previous studies focus on political institutions and neglected economic institutions.

Foreign aid’s impact on domestic business climates

2016 ◽  
Vol 5 (3) ◽  
pp. 365-382 ◽  
Author(s):  
Nabamita Dutta ◽  
Russell S. Sobel ◽  
Sanjukta Roy
Keyword(s):  
Middle East ◽  
Foreign Aid ◽  
Political Institutions ◽  
North American ◽  
Negative Impact ◽  
Political Elite ◽  
Economic Institutions ◽  
Business Climate ◽  
Government Regulations ◽  
Content Type

Purpose Existing literature has expressed significant pessimism about the outcomes of foreign aid received by developing nations. Foreign aid can lead to negative outcomes by generating greater rent-seeking opportunities and creating aid dependence. While aid’s negative impact has been explored in the context of growth, political institutions, and economic institutions, the literature has not investigated the effect of aid on business climate of recipient nations. The purpose of this paper is to explore foreign aid’s impact on government regulations on the business climate in Sub-Saharan African (SSA) and Middle East and North American countries. Design/methodology/approach The authors consider a panel of 64 countries over six years. Since foreign aid is most likely to be endogenous, as identified in most studies, the identification strategy follows two methodologies – system GMM estimator, that creates its own instruments via moment generating conditions and instrumental variable approach that relies on an external instrument. Findings The authors find that aid worsens the business climate by increasing government restrictions. Foreign aid provides the recipient governments and the political elite resources to strengthen their power and reinforce predatory policies that are harmful for the business climate. The results further show that in the presence of long-lasting and sustainable democratic regimes, the negative impact of foreign aid on business climate mitigates to a certain extent. Originality/value While aid’s negative impact has been explored in the context of growth, political institutions, and economic institutions, the literature has not investigated the effect of aid on business climate of recipient nations. The authors explore the impact of foreign aid on government regulations on the business climate in SSA and Middle East and North American countries.

Automatic enrolment to pension plans in small organisations: a research agenda

2019 ◽  
Vol 41 (1) ◽  
pp. 142-157 ◽  
Author(s):  
Maureen Maloney ◽  
Alma McCarthy
Keyword(s):  
Firm Size ◽  
Pension Plans ◽  
Occupational Pension ◽  
Pension Policy ◽  
Policy Makers ◽  
Research Attention ◽  
Content Type ◽  
The Usa ◽  
The Uk ◽  
Small Employers

PurposeThe purpose of this paper is to analyse how firm size impacts pension workforce coverage with a particular focus on automatic enrolment (AE) to pension plans in small organisations.Design/methodology/approachThe paper examines the alignment of government AE interests with those of small employers, their employees and pension providers to better understand how firm size impacts pension workforce coverage.FindingsThe alignment of interests between stakeholders (government, pension providers, employers and employees) differs between large and small organisations, and empirical findings from large organisations cannot be assumed to apply in small organisations.Research limitations/implicationsThe paper calls attention to the need for future empirical research and identifies a number of research questions for further analysis to examine how AE impacts pension participation in small organisations and advance the field.Originality/valueThe policy of automatically enroling employees into occupational pension plans, recently legislated for all eligible workers in the UK and under consideration in the USA and Ireland, was developed from research conducted in a small number of large organisations. Pension coverage is particularly inadequate for the large number of employees working in small organisations (1–49 employees). However, little research attention has been focussed on pensions in small organisations with pension policy makers assuming that legislated AE will work as effectively in small organisations as it did in large organisations. This paper addresses this gap in the field.

Public debt, corruption and shadow economy in Africa: an empirical analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Victor Owusu-Nantwi ◽  
Gloria Owusu-Nantwi
Keyword(s):  
Public Debt ◽  
Shadow Economy ◽  
African Countries ◽  
Correction Model ◽  
Content Type ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
Policies And Programs

PurposeThe purpose of this paper is to examine the effect of corruption and shadow economy on public debt in 51 African countries. In addition, the study explores the causal linkage between corruption, shadow economy and public debt.Design/methodology/approachThe study employs vector error correction model and Kao cointegration test to examine the long-run relationship between corruption, shadow economy and public debt in Africa.FindingsThe study finds a positive and statistically significant relationship between corruption and public debt. Further, the study reports a positive and statistically significant effect of shadow economy on public debt. In the short run, the study finds a unidirectional causal relationship between corruption, shadow economy and public debt with the direction of causality running from corruption and shadow economy to public debt, respectively.Practical implicationsThis study recommends that countries should pursue policies and programs that would provide resources to agencies tasked with the responsibility of fighting corruption. This would ensure that countries have effective institutions that curb vulnerabilities to corruption and reduce the size of the shadow economy and public debt.Originality/valueThis study contributes to the literature by showing how corruption and shadow economy affects public debts of African countries. To the best of the author's knowledge, this is the first attempt to examine this relationship in the context of Africa.

Capital or people – what is the true purpose of education?

2017 ◽  
Vol 25 (1) ◽  
pp. 4-6 ◽  
Author(s):  
Tanweer Ali
Keyword(s):  
Design Methodology ◽  
Extensive Literature ◽  
Mainstream Economic ◽  
Capital Theory ◽  
Policy Makers ◽  
Content Type ◽  
Proper Role ◽  
Economic Progress ◽  
True Purpose

Purpose The purpose of this study is to present the book Education, Economy and Society, edited by Salim Vally and Enver Motala (UNISA Press, Pretoria, 2014), which highlights the main concepts introduced and discussed. Design/methodology/approach The study primarily summarizes the critique of human capital theory (HCT) which is developed in the book. This is done using different approaches and is comprehensive in scope. The study also introduces some of the alternative visions of education as presented by the contributing authors. The author of the review also draws on other literature which addresses the same fields. Findings HCT dominates the discourse on the role of education in society, but the concept is hard to measure and evidence of its importance is scant. Despite the criticism of this theory, it continues to dominate the mainstream economic theory. Research limitations/implications The main premise merits more systematic study, ideally drawing on more extensive literature, and extending beyond the confines of any one country. As a review, this study aimed to maintain a focus on this one important collection. Social implications HCT tends to promote a view of education as a tool of material economic progress. This excludes a discussion of social justice and de-emphasizes the role of education in advancing individual fulfilment and in strengthening democratic values. A view of useful human activity outside of production within a corporate environment is also ignored. This book covers all of these ideas. Originality/value This study draws attention to an important book which discusses the proper role of education in economic development and critiques policy making in South Africa. The book is broad enough in scope to be of relevance to educators, academics and policy makers in the developing and developed worlds.

Knowledge management and global climate change regime negotiations

foresight ◽  
2015 ◽  
Vol 17 (1) ◽  
pp. 53-62 ◽  
Author(s):  
Mohamad Zakaria
Keyword(s):  
Climate Change ◽  
Knowledge Management ◽  
Global Climate Change ◽  
Global Climate ◽  
Deep Understanding ◽  
Policy Makers ◽  
Content Type ◽  
Climate Change Negotiations ◽  
Critical Issues ◽  
Practical Implications

Purpose – The purpose of this paper is to discuss some of the important factors that negotiators and policy-makers need to take into account while putting their strategies to negotiate global climate change regimes. Design/methodology/approach – This paper is based on qualitative research using the deductive approach. Integrating the theoretical and empirical material in the analysis is used to enhance the readers’ value and interest in the paper. Findings – Without deep understanding of why some international negotiations related to climate change have previously failed, it is difficult to successfully negotiate them in the future. Flexibility and openness during negotiations and to consider the views and concerns of all global actors in finding optimum solutions and cooperation are among the many essential factors that bring the world leaders into a compromise agreement and a global climate change regime. Knowledge management including taking into account the discussed factors may help the negotiators and public to be more prepared to understand the obstacles that may complicate negotiating the international climate change regimes. Research limitations/implications – This paper is not intended for those who have years of experience in climate change negotiations nor for those seeking deep theoretical knowledge about this topic. Practical implications – This paper has practical implications as it combines the theories of international relations with practical evidences from previous Conference of the Parties of the United Nations Framework Convention on Climate Change. Social implications – This paper is an essential read to students and young scientists, as well as to young policy-makers within the environmental politics. Originality/value – The paper deals with a very important and current issue and little has been published on the process of preparation for negotiating climate change negotiation. It covers some critical issues and determining factors in such negotiations.

Does FDI moderate the role of public R&D in accelerating agricultural production in Africa?

2018 ◽  
Vol 9 (3) ◽  
pp. 290-304 ◽  
Author(s):  
Philip Kofi Adom ◽  
Dosse Mawussi Djahini-Afawoubo ◽  
Saidi Atanda Mustapha ◽  
Stephane Gandjon Fankem ◽  
Nghargbu Rifkatu
Keyword(s):  
Political Institutions ◽  
Agricultural Production ◽  
Public Investment ◽  
Fixed Effect Model ◽  
Foreign Direct Investments ◽  
Domestic Investment ◽  
African Countries ◽  
Content Type ◽  
Agriculture Sector ◽  
Positive Effects

PurposeThe agriculture sector in Africa is a major employer, but production levels have fallen short of demand. To match future demand, public investment in research and development (R&D) is required. The purpose of this paper is to investigate how foreign direct investments (FDIs) moderate the effects of public R&D on Africa’s agricultural production.Design/methodology/approachThis study estimates an unbalanced panel fixed effect model that consists of 28 African countries covering the period 1980–2014.FindingsPublic R&D increases production in the agriculture sector, however, the effects reverse after ten years. Though FDIs have direct positive effects on production, indirectly, it reduces the productivity potential of public R&D due to the possible dependency syndrome associated with FDIs. Traditional inputs like land, capital, and labour and good political institutions positively drive production, but adverse changes in the weather reduce production.Practical implicationsThere should be a frequent update of R&D and improvement in maintenance culture. FDIs should be seen as complementary efforts, and not as substitute efforts to domestic investment efforts in R&D.Originality/valueInsufficient domestic investment has increased the dependence on FDIs. In this regard, FDIs effect on production could be tricky since it increases the volatility in agricultural R&D. This paper contributes to the literature by examining how FDIs moderate the effects of public R&D on output.

scholarly journals Should banks be averse to elections? A GMM analysis of recent elections in Ghana

2019 ◽  
Vol 24 (47) ◽  
pp. 47-65
Author(s):  
Mohammed Yaw Broni ◽  
Mosharrof Hosen ◽  
Hardi Nyagsi Mohammed ◽  
Ganiyatu Tiamiyu
Keyword(s):  
Political Institutions ◽  
Banking Sector ◽  
Annual Data ◽  
Economic Policies ◽  
Content Type ◽  
Management Efficiency ◽  
Financial Conditions ◽  
Business Entities ◽  
The Impact ◽  
Practical Implications

Purpose Actions of incumbent politicians and firms’ managers during election years have been cited as sources of many problems that afflict economies and business entities. Given the controversies surrounding the impact of elections on firms’ soundness, this paper poses a question of whether banks should be averse to elections. Specifically, this study aims to investigate the impact of elections on the profitability and efficiency of banks. Design/methodology/approach Based on the authors’ knowledge, this is maiden analysis in this context for Ghana where relatively advanced appropriate GMM technique has been used on annual data from 2012 to 2016. Findings This study reveals that banks make higher returns in election years. Additionally, the authors report that government’s economic policies in election years are detrimental to management efficiency, though insignificant. Practical implications From an emerging economy perspective, this study would guide policymakers in designing policies that respond to, or minimize, the impact of elections on bank performance. The result of this analysis would also substantiate the market reaction to the changes in the economic, political and financial conditions. Originality/value This analysis suggests that firms’ performances in an election year depend on policies and political institutions in place. The authors argue that Ghana, with its exemplary democratic credentials and strong institutions, living alongside a high perception of corruption, is different. The contribution to literature is, first, by limiting this work to the banking sector of Ghana and, second, by incorporating the behaviors of incumbent governments and individuals in the regression specification model.

scholarly journals BEYOND RHETORICS: UNLOCKING THE POTENTIALS OF AFRICAN INDUSTRIALISATION

2018 ◽  
Vol 1 (2) ◽  
Author(s):  
Nkemdili Au. Nnonyelu
Keyword(s):  
Social Welfare ◽  
Paradigm Shift ◽  
Development Economic ◽  
African Countries ◽  
Policy Makers ◽  
Industrial Policies ◽  
Industrial Activities ◽  
Economic Progress

Industrialisation is largely acknowledged as one of the drivers of development, economic progress and social welfare. In most African countries however, the drive towards industrialisation has largely been inchoate, and driven by rhetoric without commensurate proactive actions. Given the evidence of woeful state of industrialisation in Africa, the often trumpeted industrial policies do not seem propitious for the promotion of industrial activities. The paper rejects the official platitudes that have been mouthed by policy makers as based on a faulty premise. The paper appreciates the stumbling blocks and dilemmas that African countries face as global latecomers to contemporary industrialisation, but calls for a paradigm shift in policy, a comprehensive redesigning of industrial policies, emplacement of pragmatic enablers and systematic implementation of these policies, that will provide new options and route to industrialisation.

scholarly journals Urban Conflict, Rent Seeking, and Corruption Economic and Political Institutions in a Historical Perspective

2018 ◽  
Vol 10 (2) ◽  
pp. 96
Author(s):  
Marie-Christine THAIZE CHALLIER
Keyword(s):  
Political Institutions ◽  
Historical Context ◽  
Rent Seeking ◽  
Policy Makers ◽  
Social Unrest ◽  
Abuse Of Power ◽  
Medieval France ◽  
Limiting Property ◽  
Urban Conflict ◽  
Commitment Problems

This paper is an empirical analysis to explore the relationships between urban conflict and both rent seeking and corruption. It examines social disturbances in medieval France through a sample of twelve towns examined over the period 1270-1399 in a real context of informational asymmetries, commitment problems, and issues indivisibilities. As regards the economic corruption class, it is found that townspeople rebel more often and more intensely against the extortion of funds carried out by policy makers than against the embezzlement of a part of these funds. As to the political corruption class, the findings highlight that abuse of power against municipalities is identified in more social unrest than influence peddling against these local institutions. Furthermore, it is shown that rent-seeking-related policies (like arbitrary actions limiting property rights, economic rules-based policies, and targeted political measures) have less influence on urban conflict than corrupt policies do. These findings produce insights that apply beyond the historical context and analysis of the paper. Situations presenting over-indebted towns despite overtaxed people disturb also modern democracies.

Financial access and economic development: the moderating role of financial consumer protection

2019 ◽  
Vol 15 (4) ◽  
pp. 406-424 ◽  
Author(s):  
Maryam Kriese ◽  
Joshua Yindenaba Abor ◽  
Elikplimi Agbloyor
Keyword(s):  
Economic Development ◽  
World Bank ◽  
Financial Literacy ◽  
Compliance Monitoring ◽  
Financial Access ◽  
Policy Makers ◽  
Content Type ◽  
The World Bank ◽  
Moderating Role

Purpose The purpose of this paper is to examine the moderating role of financial consumer protection (FCP) in the access–development nexus. Design/methodology/approach The study is based on cross-country data on 102 countries surveyed in the World Bank Global Survey on FCP and Financial Literacy (2013). The White heteroscedasticity adjusted regressions and Two-stage least squares regressions (2SLS) are used for the estimation. Findings Interactions between FCP regulations that foster fair treatment, disclosure, dispute resolution and recourse and financial access have positive net effects on economic development. However, there is no sufficient evidence to suggest that interactions between financial access and enforcement and compliance monitoring regulations have a significant effect on economic development. Practical implications First, policy makers should continue with efforts aimed at instituting FCP regimes as part of strategies aimed at broadening access to financial services for enhanced economic development. Second, instituting FCP regimes per se may not be enough. Policy makers need to consider possible intervening factors such as the provision of adequate resources and supervisory authority, for compliance monitoring and enforcement to achieve the expected positive effect on economic development. Originality/value This study extends evidence in the law–finance–growth literature by providing empirical evidence on the effect of legal institution specific to the protection of retail financial consumers on the access–development nexus using a nouvel data set, the World Bank Global survey on FCP and Financial Literacy (2013).

Sign in / Sign up

Export Citation Format

Share Document