Kenya's quest for growth stabilization and reforms - but political stability ?

Kenya has long had a reputation of being politically risky, manifested in corruption, uncertainty about policies, and the importance of political connections in doing business. Kenya began its economic liberalization in 1993. Reform picked up speed after a tightening of aid by donors on governance grounds and an attempt to re-establish credibility following the costly Goldenberg scandal uncovered in 1992. But tangible results in the shape of favorable government debt dynamics and a pick up in growth took a decade to materialize. The paper argues that the peaceful presidential election and transfer of power in December 2002 was central to the economic upswing after 2002. The subsequent decline in political risk was singled out by the private sector as an important development. The paper draws on an analysis of debt dynamics, the evolution of domestic interest rates, and the latest Investment Climate Assessment to present evidence on the criticality of low political risk in facilitating good economic outcomes after 2003. The December 2007 elections have highlighted other aspects of political risk - ethnic and social tensions with roots in inequality. The findings of this paper underline the importance of establishing a foundation for long-term political stability and social cohesion in view of the disruptions following the December 2007 elections. This process is likely to be at least as difficult and lengthy as fundamental economic policy and institutional reform.Debt Markets,Emerging Markets,,Public Sector Expenditure Analysis&Management,Access to Finance

Unpleasant surprises : sovereign default determinants and prospects

This paper uses model averaging techniques to identify robust predictors of sovereign default episodes on a pooled database for 46 emerging economies over the period 1980-2004. Sovereign default episodes are defined according to Standard&Poor’s or by non-concessional International Monetary Fund loans in excess of 100 percent of the country’s quota. The authors find that, in addition to the level of indebtedness, the quality of policies and institutions is the best predictor of default episodes in emerging market countries with relatively low levels of external debt. For emerging market countries with a higher level of debt, macroeconomic stability plays a robust role in explaining differences in default probabilities. The paper provides evidence that model averaging can improve out-of-sample prediction of sovereign defaults, and draws policy conclusions for the current crisis based on the results.Debt Markets,External Debt,Bankruptcy and Resolution of Financial Distress,Economic Theory&Research,Currencies and Exchange Rates

The"how to"of fiscal sustainability : a technical manual for using the fiscal sustainability tool

Fiscal sustainability analysis (FSA) is an important component of macroeconomic analysis for many developing countries. To further enhance understanding of fiscal policy and the constraints faced by policymakers, the authors develop a toolkit for FSA in middle-income countries which builds on previous work in this area and on new developments in dealing with uncertainty. The FSA toolkit includes an Excel-based FSA tool and a technical manual accompanying it. The FSA tool is standardized and simple, but at the same time flexible enough to allow for user-defined country-specifics. This manual provides step-by-step technical instructions for running the FSA tool and includes mathematical appendices and a glossary.Economic Theory&Research,External Debt,Strategic Debt Management,Economic Stabilization,Public Sector Economics&Finance

Volatility, Debt and Growth: the Role of Fiscal Policy in Low Income Countries. Overview of theory and empirical evidence using case studies

La ricerca sugli effetti negativi del debito sulla crescita economica si è concentrata principalmente sui paesi a reddito medio (PRM) e paesi con accesso ai mercati finanziari, un gruppo PRM con accesso illimitato ai mercati internazionali dei capitali. La letteratura sugli effetti della volatilità macroeconomica sulla crescita, che si e' concentrata sui PRM, è stata sviluppata nel 1990. Un numero limitato di studi ha tentato di analizzare il legame tra debito e crescita in paesi a basso reddito. Questa raccolta di ricerche tenta di colmare questa lacuna, esaminando l'applicabilità del quadro concettuale che collega volatilita', debito e crescita ai paesi a basso reddito. In particolare, le ricerche si concentrano sul ruolo della politica fiscale in paesi a basso reddito, la sua pertinenza per raggiungere e mantenere la sostenibilità del debito ed evitare crisi con conseguenze negative protratte sulla crescita economica. I risultati indicano che le politiche fiscali nei paesi a basso reddito non hanno necessariamente un ruolo chiave nel garantire il rispetto del vincolo di bilancio intertemporale di governo e nel mantenere la sostenibilità del debito. Questo risultato è in netto contrasto con l'attuale ricerca economica sulla sostenibilità fiscale nei PRM e porta a diverse implicazioni per la condotta della politica economica in paesi a basso reddito.Research on the negative effect of debt on economic growth has mainly focused on middle income countries (MICs) and market access countries (MACs), the latter a group of MICs with unconstrained access to international capital markets. Literature on the effects of macroeconomic volatility on growth focusing on MICs was developed in the 1990’s. Few studies have attempted to analyze the nexus between debt and growth in low income countries (LICs). This collection of papers attempts to fill this gap, by examining the applicability of the conceptual framework linking volatility, debt and growth to LICs. Specifically, the papers focus on the role of fiscal policy in LICs, its relevance for achieving and maintaining debt sustainability deterring economic crisis and excessive growth slumps. Results indicate that LICs fiscal policies do not necessarily play a key role in ensuring respect of the government intertemporal budget constraint and debt sustainability. This result is in stark contrast with existing economic research on fiscal sustainability in MICs leading to different implications for policy conducts in LICs

External Debt Sustainability: Theory and Empirical Evidence

This paper is a review of the different approaches on external debt sustainability. The Heavily Indebted Poor Country (HIPC) Initiative was launched to assure a permanent exit from debt dependence. However, the IMF-World Bank program is not without faults, in particular for what concerns debt sustainability analysis. The aim of this work is to present the IMF-World Bank approach to debt sustainability, together with the other approaches in the literature. We show that a new and broader framework is emerging to address the main shortcomings of the standard analysis, namely, the effects that large external debts and deficits have on growth and the macroeconomic environment.HIPC Initiative, Debt Sustainability, Debt Relief, External Debt.

Unpleasant Surprises: Sovereign Default Determinants and Prospects, Policy Research Working Papers, 5401

This paper uses model averaging techniques to identify robust predictors of sovereign default episodes on a pooled database for 46 emerging economies over the period 1980-2004. Sovereign default episodes are defined according to Standard & Poor s or by non-concessional International Monetary Fund loans in excess of 100 percent of the country s quota. The authors find that, in addition to the level of indebtedness, the quality of policies and institutions is the best predictor of default episodes in emerging market countries with relatively low levels of external debt. For emerging market countries with a higher level of debt, macroeconomic stability plays a robust role in explaining differences in default probabilities. The paper provides evidence that model averaging can improve out-of-sample prediction of sovereign defaults, and draws policy conclusions for the current crisis based on the results

On the magnetohydrodynamic modelling of the Crab nebula radio emission

In recent years, it has become a well-established paradigm that many aspects of the physics of Pulsar Wind Nebulae (PWNe) can be fully accounted for within a relativistic MHD description. Numerical simulations have proven extremely successful in reproducing the X-ray morphology of the Crab Nebula, down to very fine detail. Radio emission, instead, is currently one of the most obscure aspects of the physics of these objects, and one that holds important information about pulsar properties and their role as antimatter factories. Here we address the question of radio emission morphology and integrated spectrum from the Crab Nebula, by using for the first time an axisymmetric dynamical model with parameters chosen to best reproduce its X-ray morphology. Based on our findings we discuss constraints on the origin of the radio emitting particles.Comment: 8 pages, 5 figures, 1 tabl

A particular anatomic variation of the course of the left pulmonary artery

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The nature of the X-ray halo of the plerion G21.5-0.9 unveiled by XMM-Newton and Chandra

The nature of the radio-quiet X-ray halo around the plerionic SNR G21.5-0.9 is under debate. On the basis of spatial and spectral analysis of a large Chandra and XMM-Newton dataset of this source, we have developed a self-consistent scenario which explains all the observational features. We found that the halo is composed by diffuse extended emission due to dust scattering of X-rays from the plerion, by a bright limb which traces particle acceleration in the fast forward shock of the remnant, and by a bright spot (the ``North Spur'') which may be a knot of ejecta in adiabatic expansion. By applying a model of interaction between the PWN, the SNR and supernova environment, we argue that G21.5-0.9 progenitor may be of Type IIP or Ib/Ic, and that the remnant may be young (200-1000 yr).Comment: 11 pages, 10 figures, accepted by A&A, also avalaible at http://www.astropa.unipa.it/Library/OAPA_preprints/fb2870.ps.g

RNA Nanotherapeutics for the Amelioration of Astroglial Reactivity.

In response to injuries to the CNS, astrocytes enter a reactive state known as astrogliosis, which is believed to be deleterious in some contexts. Activated astrocytes overexpress intermediate filaments including glial fibrillary acidic protein (GFAP) and vimentin (Vim), resulting in entangled cells that inhibit neurite growth and functional recovery. Reactive astrocytes also secrete inflammatory molecules such as Lipocalin 2 (Lcn2), which perpetuate reactivity and adversely affect other cells of the CNS. Herein, we report proof-of-concept use of the packaging RNA (pRNA)-derived three-way junction (3WJ) motif as a platform for the delivery of siRNAs to downregulate such reactivity-associated genes. In vitro, siRNA-3WJs induced a significant knockdown of Gfap, Vim, and Lcn2 in a model of astroglial activation, with a concomitant reduction in protein expression. Knockdown of Lcn2 also led to reduced protein secretion from reactive astroglial cells, significantly impeding the perpetuation of inflammation in otherwise quiescent astrocytes. Intralesional injection of anti-Lcn2-3WJs in mice with contusion spinal cord injury led to knockdown of Lcn2 at mRNA and protein levels in vivo. Our results provide evidence for siRNA-3WJs as a promising platform for ameliorating astroglial reactivity, with significant potential for further functionalization and adaptation for therapeutic applications in the CNS.The authors wish to acknowledge J. Bernstock and G. Pluchino for their critical insights throughout the execution of the study. This work was funded by the European Research Council (ERC) under the ERC-2010-StG grant agreement n° 260511-SEM_SEM, the Bascule Charitable Trust (RG 75149 to SP), the International Foundation for Research in Paraplegia (RG 69318 to S.P.), Wings for Life (RG 82921 to S.P.) and a core support grant from the Wellcome Trust and Medical Research Council to the Wellcome Trust – MRC Cambridge Stem Cell Institute. LPJ was supported by a research training fellowship from the Wellcome Trust (RRZA/057 RG79423)