External Debt, Public Investment and Economic Growth in Cameroon

This study investigates the extent to which external debt and public investment contributes to economic growth in Cameroon - emphasising on how public investment modulates the effect of external debt on economic growth. Time series data spanning the period 1980-2018 obtained from the World Bank’s world development indicators are used, together with the Dynamic Ordinary Least Squares (OLS) approach to ascertain the nature of the long-run relationship between external debt, public investment and economic growth. Consistent with the debt-overhang and crowding-out literature, the study reveals a negative significant influence of external debt on economic growth in Cameroon. Results also reveal that there is a positive and significant direct effect of public investment on economic growth in the long run. Further results indicate that public investment and external debt positively and significantly engender economic growth. This is evidence that public investment is modulating the effect of external debt on economic growth in Cameroon. These findings suggest the need for developing country governments to create an enabling environment for private sector development, while accompanying external debt resources with domestic revenue mobilization by broadening the tax base - taxes on landed property being potential candidates

Diversifying a resource-dependent economy: private–public relationships in the Kuwaiti economy

The Kuwaiti economy is characterized by two major structural imbalances—heavy dependence on oil production and dominance of the public ownership. Kuwait has struggled over the years to implement a two-pronged development strategy —diversifying the country’s economic base away from the oil sector and promoting private sector development. This paper explores the economic impact of some policy reform options currently being considered. It employs a unique set of input–output tables, derived from supply–use tables, that distinguishes transactions made by private and public enterprises as well as providing a matrix of imports by industry. The public–private sector interdependence analysis revealed interesting results regarding sectoral differences in strengths of forward and backward linkages. For instance, the findings indicated that the strength of the publicly owned oil sectors lie in their forward linkages, supplying other sectors with their outputs, but their backward linkages is weak. On the other hand, the chemicals industry is identified as one of a few sectors with balanced and relatively strong forward and backward linkages in both public and private sector. The policy analyses conducted in this paper are highly relevant to the ongoing policy debate in Kuwait over the design of the economic reform programs. The public–private linkage analysis has revealed insights into policy synergies through which one instrument can affect more than one policy target.

Capital investment in telecommunications infrastructure and tourist arrivals in developing countries: Does the public–private sectors relationship matter?

This study investigates the relationship between capital investment in telecommunications infrastructure (TELCOM) and tourist arrivals in developing countries. Additionally, it examines whether the public–private sectors relationship moderates the effect of TELCOM on inbound tourism. The model is empirically tested for 46 developing countries for the years 2005–2019. Applying system generalized method of moments and dynamic fixed-effects estimators, the results show there is a positive and significant relationship between TELCOM and tourist arrivals. We also find that a stronger relationship between the public and private sectors magnifies the positive effect of TELCOM on inbound tourism. The moderating effect of quality of regulations on TELCOM-tourism nexus is a novel finding, highlighting the important role of governments in creating and implementing sound policies and regulations that permit and promote private sector development.

Rwanda’s Commercialization of Smallholder Agriculture: Implications for Rural Food Production and Household Food Choices

Rwanda has experienced exceptional economic growth since 2000 despite more than 60% of the predominately-agrarian population living on less than $1.25 a day. Approximately 76% of the country’s working population are engaged in agricultural production, which makes up about one-third of the national economy. Agriculture is also an important source of foreign exchange, making up about 63% of the value of Rwanda’s exports. An important component of household diets – food produced on subsistence agriculture parcels averaging 0.6 ha – faces the challenge by government and private sector development to replace subsistence farming with a value-creating market-oriented food sector. A complex set of relationships across public incentives and programs encourages participation in markets. Designed to promote wealth, the Crop Intensification Program (CIP) has increased access to land, inputs, extension services, markets, supply chains, etc. Wealth and access to land are the dominant predictors of the ability to participate in markets and the extent of participation. For example, smallholders producing a diversity of crops are more likely to sell in markets. Within the confluence of competing policy objectives and market forces, further research is necessary to understand the household-level tradeoffs of both producers and consumers along the food value chain.

Good business practices improve productivity in Myanmar’s manufacturing sector: Evidence from two matched employer–employee surveys

We look into the relationship between business practices and enterprise productivity using panel data with matched employer and employee information from Myanmar. The data show that micro, small, and medium-size enterprises in Myanmar typically do only a few modern business practices. Even so, through estimates of value-added functions and labour demand relations we find a positive and economically important association between business practices and productivity. The results are confirmed when we utilize employer–employee information to estimate Mincer-type wage regressions. In combination, the value-added functions and the Mincer regressions show that at least half of the productivity gain from improved business practices stems from selection effects of employment of more productive workers. This sorting channel is important to keep in mind when supporting enterprises in Myanmar’s manufacturing sector through entrepreneurial training activities. While our results indicate that implementation of more structured business practices could be a key ingredient of a private sector development strategy in Myanmar, the full effect of such a strategy may take time to materialize. Moreover, entrepreneurial training should be accompanied by labour market initiatives aimed at improving productive matches of employers and employees.