Democracy, Globalization and Private Investment in Ghana

The article examines the effects of democracy and globalization on private investment in Ghana for the period 1980–2012, using the autoregressive distributed lag (ARDL) bounds test for cointegration and the error correction model (ECM). Two models are used. In Model 1, democracy is proxy by an index for institutional quality (Polity 2), while Model 2 uses an index for civil liberties as proxy for democracy. The results for Model 1 show globalization and public investment increase private investment, while exchange rate volatility and trade openness decrease private investment in both the long and short run. In addition, national income and interest rate reduce private investment in the short run. In the case of Model 2, credit to the private sector and public investment increase private investment, while exchange rate volatility and trade openness decrease private investment in both the long and short run. Finally, national income and interest rate reduce private investment in the short run. The findings and policy recommendations of the article provide vital information for policy implementation in Ghana

Konvergenz- und Wachstumseffekte der europäischen Regionalpolitik in Deutschland

This article analyses the impact of EU structural policy on the economic development of German regions between 1995 and 2004. In this period East-German regions have converged, while regional disparities have been increasing in West-Germany. In addition East-German Landkreise have caught up with poor western regions. However the overall gap between rich and poor Landkreise has risen. Economic theory describes a trade-off between regional convergence and aggregate growth. Our empirical findings support this hypothesis. It is shown that the EU's regional transfers speed up convergence, but have a negative impact on long-run aggregate growth. Copyright 2007 die Autoren Journal compilation 2007, Verein für Socialpolitik und Blackwell Publishing Ltd.