Fighting Capital Flight in Africa: Evidence from Bundling and Unbundling Governance

This study investigates the effect of governance on capital flight by bundling and unbundling governance. The empirical evidence is based on 37 African countries for the period 1996–2010 and the Generalised Method of Moments. Governance is bundled by principal component analysis, namely: (i) political governance from political stability and ‘voice and accountability’; (ii) economic governance from government effectiveness and regulation quality and (iii) institutional governance from corruption-control and the rule of law. The following findings are established. (i) Political stability and ‘voice and accountability’ reduce capital flight while the collective effect of political governance is not significant. (ii) Economic governance increases capital flight whereas the individual effects of regulation quality and government effectiveness are not significant. (iii) Corruption-control and institutional governance negatively affect capital flight whereas the impact of the rule of law is not significant. (iv) Taken together, Corruption-control is the most effective governance weapon in the fight against capital flight. (v) Priority in the Washington Consensus is more effective at fighting capital flight compared to the Beijing Model. Policy implications are discussed

When to expect a coup d’état? An extreme bounds analysis of coup determinants

Over the last several decades, both economists and political scientists have shown interest in coups d’état. Numerous studies have been dedicated to understanding the causes of coups. However, model uncertainty still looms large. About one hundred potential determinants of coups have been proposed, but no consensus has emerged on an established baseline model for analyzing coups. We address this problem by testing the sensitivity of inferences to over three million model permutations in an extreme bounds analysis. Overall, we test the robustness of 66 factors proposed in the empirical literature based on a monthly sample of 164 countries that covers the years 1952 to 2011. We find that slow economic growth rates, previous coup experiences, and other forms of political violence to be particularly conducive to inciting coups