Boosting quality education with inclusive human development: empirical evidence from sub-Saharan Africa

This study examines the importance of inclusive human development in promoting education quality in a panel of forty-nine Sub-Saharan African countries for the period 2000-2012. The empirical evidence is based on Ordinary Least Squares (OLS), Fixed Effects (FE) and Quantile Regression (QR) estimations. It is apparent from the OLS and FE findings that inclusive human development has a negative effect on the outcome variable. This negative effect implies that inclusive human development improves education quality. This result should be understood in the light of the fact that the adopted education variable is a negative economic signal given that it is computed as the ratio of pupils to teachers. Therefore, a higher ratio reflects diminishing education quality. From QR, with the exception of the highest quantile, the tendency of inclusive human development in reducing poor quality education is consistent throughout the conditional distribution of poor education quality. Policy implications are discussed

The role of the behavior of banks in financial liberalization : the case of Malawi, 1987-1999

Notre étude a été inspirée par l’observation que malgré les efforts considérables en matière de la libéralisation financière au Malawi à partir de la fin des années 1980, les résultats apparents étaient plutôt médiocres, notamment en ce qui concerne la persistance de marges d’intermédiation (spreads) élevés. L’objectif central de notre travail est d’essayer d’élucider pourquoi. Notre hypothèse centrale est que si l’on ne tient pas compte du comportement des banques en matière de leurs réactions vis-à-vis de leurs incitations et leurs contraintes dans la mise en place de la politique de la libéralisation financière, on est voué à la déception en matière des résultats. L’étude montre que dans une situation économique caractérisée par une instabilité macroéconomique, les banques ont moins d’incitations à être plus efficientes du point de vue macroéconomique, c’est à dire en agissant dans la direction de l’approfondissement financier et de l’octroi de crédit au secteur privé. Bien au contraire, tout en agissant de manière rationnelle, elles sont tentées de rechercher des rentes faciles et sûres qui viennent du financement des déficits publics. Ceci leur permet d’accomplir deux objectifs : maximiser leur profit et minimiser leur risque-crédit, notamment en repoussant les « contraintes externes » imposées par les conditions économiques -notamment les taux d’escompte élevées- à leur clients à travers la combinaison d’une augmentation de taux d'intérêt sur les prêts et d’une faible augmentation des taux d'intérêt sur les dépôts.This study was inspired by the observation that despite the considerable efforts in financialliberalization in Malawi from the late 1980s, the apparent results were mediocre, especially with regardto the persistence of high intermediation margins (spreads). The central objective of this study is to tryto investigate why. The key hypothesis is that if one does not take into account of bank behavior interms of how banks react vis-à-vis their incentives and constraints during the process of financialliberalization, the results are likely to be disappointing. The study shows that in an economic situationcharacterized by macroeconomic instability, banks have less incentive to be more efficient from amacroeconomic perspective, i.e., by enhancing financial deepening through higher credit to the privatesector. On the contrary, while acting rationally, they are tempted to look for easy and safe returnscoming from financing government deficits. This allows them to accomplish two objectives: maximizingprofit and minimizing credit risk, notably by pushing the "external constraints" imposed by economicconditions - including high rediscount rates- to their customers through a combination of an increasein interest rates on loans and a smaller increase in interest rates on deposits.Keywords: financial liberalization, bank behavior, intermediation margins, ban

Le rôle du comportement des banques dans la libéralisation financière : le cas du Malawi, 1987-1999

This study was inspired by the observation that despite the considerable efforts in financialliberalization in Malawi from the late 1980s, the apparent results were mediocre, especially with regardto the persistence of high intermediation margins (spreads). The central objective of this study is to tryto investigate why. The key hypothesis is that if one does not take into account of bank behavior interms of how banks react vis-à-vis their incentives and constraints during the process of financialliberalization, the results are likely to be disappointing. The study shows that in an economic situationcharacterized by macroeconomic instability, banks have less incentive to be more efficient from amacroeconomic perspective, i.e., by enhancing financial deepening through higher credit to the privatesector. On the contrary, while acting rationally, they are tempted to look for easy and safe returnscoming from financing government deficits. This allows them to accomplish two objectives: maximizingprofit and minimizing credit risk, notably by pushing the "external constraints" imposed by economicconditions - including high rediscount rates- to their customers through a combination of an increasein interest rates on loans and a smaller increase in interest rates on deposits.Keywords: financial liberalization, bank behavior, intermediation margins, bankNotre étude a été inspirée par l’observation que malgré les efforts considérables en matière de la libéralisation financière au Malawi à partir de la fin des années 1980, les résultats apparents étaient plutôt médiocres, notamment en ce qui concerne la persistance de marges d’intermédiation (spreads) élevés. L’objectif central de notre travail est d’essayer d’élucider pourquoi. Notre hypothèse centrale est que si l’on ne tient pas compte du comportement des banques en matière de leurs réactions vis-à-vis de leurs incitations et leurs contraintes dans la mise en place de la politique de la libéralisation financière, on est voué à la déception en matière des résultats. L’étude montre que dans une situation économique caractérisée par une instabilité macroéconomique, les banques ont moins d’incitations à être plus efficientes du point de vue macroéconomique, c’est à dire en agissant dans la direction de l’approfondissement financier et de l’octroi de crédit au secteur privé. Bien au contraire, tout en agissant de manière rationnelle, elles sont tentées de rechercher des rentes faciles et sûres qui viennent du financement des déficits publics. Ceci leur permet d’accomplir deux objectifs : maximiser leur profit et minimiser leur risque-crédit, notamment en repoussant les « contraintes externes » imposées par les conditions économiques -notamment les taux d’escompte élevées- à leur clients à travers la combinaison d’une augmentation de taux d'intérêt sur les prêts et d’une faible augmentation des taux d'intérêt sur les dépôts

Cataloging-in-Publication Data Joint Bank-Fund Library

p.: ill.; cm. Includes bibliographical references. ISBN: 978-1-48434-453-8 1. Banks and banking – Africa, Sub-Saharan. 2. Economic development – Africa, Sub-Saharan. 3. Financial institutions – Africa, Sub-Saharan. 4. Africa, Sub-Saharan—Economic conditions. 5. Macroeconomics

The End of Textiles Quotas: A Case Study of the Impact on Bangladesh

This paper evaluates the effects on the Bangladeshi economy of phasing out textile and clothing quotas currently maintained by industrial countries. As part of the Uruguay Round WTO Agreements, these quotas will be completely abolished at the beginning of 2005. This will alter the competitiveness of various exporting countries, and those that have been less restricted by the quotas are expected to lose market share to their competitors. Bangladesh relies heavily on textile and clothing exports and is potentially very vulnerable to the abolition of the quotas. Based on assessments of quota restrictiveness and export similarity across countries and Bangladesh’s supply constraints, the paper concludes that Bangladesh could face significant pressure on its balance of payments, output and employment when the quotas are eliminated

FDI from BRICs to LICs

Despite the rapid increase in FDI flows to LICs, there have been relatively few studies that have specifically examined these flows. This paper attempts to partially fill the void by throwing light on one particularly dynamic aspect of global FDI-flows from Brazil, Russia, India and China (BRICs). The paper finds that official data sources undoubtedly underestimate the volume and scope of FDI flows as many small and medium-sized enterprises (SMEs) do not always register their investment. As a result, while it is difficult to estimate accurately the growth impact of BRIC FDI, there is case study evidence that it is increasingly significant. Second, while initial investment, mostly by state-owned companies, has often been destined for natural resource industries, over time, investment has been spreading to agriculture, manufacturing, and service industries (e.g., telecommunications). Third, FDI from BRICs flows into many non resource-rich countries in LICs and plays a significant role in growth in those countries.Foreign investment;Capital inflows;Low-income developing countries;fdi, direct investment, foreign direct investment, investors, investment climate, investment projects, direct investment stocks, joint ventures, foreign investors, economic zone, investment policies, rate of return, foreign companies, special economic zone, foreign exchange, private investment, investment decisions, medium-sized enterprises, investment flows, international trade, development financing, multinational enterprises, industrial countries, foreign investor, investment portfolio, technology transfer, foreign investment advisory service, investment risks, host country, private equity, economic zones, industrial development, foreign investment capital, manufacturing sector

The Quest for Higher Growth in the WAEMU Region

With the exception of Burkina Faso and Mali, the growth experience for WAEMU countries has been disappointing, even when compared to other sub-Saharan African (SSA) countries. The main objective of the paper is to investigate why the quest for a growth takeoff has been more elusive in the WAEMU countries compared to other SSA countries. To do this, the paper focuses on the determinants of growth accelerations and decelerations in SSA and the WAEMU. It finds that the variables most closely associated with growth accelerations and decelerations in SSA are changes in terms of trade, private investment, civil tension, real exchange rates, and inflation. Second, as found elsewhere in the literature, there is a certain asymmetry between accelerations and decelerations, in both frequency and determinants, and that the WAEMU region is quite different from the rest of SSA.West African Economic and Monetary Union;Economic growth;Terms of trade;Real effective exchange rates;Private investment;inflation, monetary fund, macroeconomic stability, monetary union, effective exchange rates

What is Really Good for Long-Term Growth? Lessons from a Binary ClassificationTree (BCT) Approach

Although the economic growth literature has come a long way since the Solow-Swan model of the fifties, there is still considerable debate on the "real'' or "deep" determinants of growth. This paper revisits the question of what is really important for strong long-term growth by using a Binary Classification Tree approach, a nonparametric statistical technique that is not commonly used in the growth literature. A key strength of the method is that it recognizes that a combination of conditions can be instrumental in leading to a particular outcome, in this case strong growth. The paper finds that strong growth is a result of a complex set of interacting factors, rather than a particular set of variables such as institutions or geography, as is often cited in the literature. In particular, geographical luck and a favorable external environment, combined with trade openness and strong human capital are conducive to growth.Economic growth;Trade policy;Human capital;Economic models;population density, terms of trade, trade growth, life expectancy, school enrollment, population growth, trade openness, conditional convergence, per capita income, total population, openness measure, population characteristics, low trade, endogenous growth, mortality rate, high population density, income convergence, human race, endogenous growth theory, trade liberalization, international trade, external shocks, average tariff, open economy, population growth rate, non-tariff barriers, tariff rate, average tariff rate, tariff barriers, external openness, income distribution, process of integration

The End of Textiles Quotas

This paper evaluates the effects on the Bangladeshi economy of phasing out textile and clothing (T&C) quotas currently maintained by industrial countries. The planned abolition of the quotas under the Agreement on Textiles and Clothing in 2005 will alter the competitiveness of various exporting countries. Bangladesh relies heavily on textile and clothing exports and is potentially very vulnerable to this change in competitiveness. Based on assessments of quota restrictiveness and export similarity, and an analysis of its supply constraints, the paper concludes that Bangladesh could face significant pressure on its balance of payments, output, and employment when the quotas are eliminated.Quotas;Import quotas;Multifiber Arrangements;World Trade Organization;Access limits;Export competitiveness;exporters, exporting countries, export performance, clothing exports, total exports, international trade, trade liberalization, export markets, export sector, export tax, export quotas, export value, global trade, balance of payments, country of origin, merchandise exports, export cargo, global trade analysis, value of exports, quota rents, export tax equivalents, export promotion, duty-free access, export expansion, domestic investment, elasticity of substitution, export values, imported inputs, textile imports, rules of origin, quota-free access, exporting country, export growth, export diversification, export prices, developing country exports, importing country, world market, export development, trade preferences, trade policies, export costs, export volume, export market, domestic industry, equilibrium model, world trade, trade facilitation, import tariffs, global exports, domestic producers, export sales, export success, tariff rates, export supply, increasing competition, environmental standards, transition period, aggregate exports, preferential treatment, export-oriented industries, world prices, import price, export industry, trade barriers, unemployment rate, constant elasticity of substitution, increased exports, labor-intensive exports, countries ? exports, export competition, trade expansion, trade surplus, importing countries, duty-free treatment, domestic industries, domestic goods, round agreement, factor price, quantitative restrictions, intensive exports, average tariff, multinational companies, competitive position, developing country exporters, adjustment process, unit labor costs, terms of trade, trade policy review, preferential access, trade-weighted average, tariff equivalent, factor markets, apparel trade, dynamic effects, domestic suppliers, country exporters, world demand, trade union, exporting developing countries, grey market, exporter, imports of textiles, preferential trade agreements, import duties, global market, export production, terms of trade effects, trade agreements, export losses, trade values, competitive advantage, prices of exports, duty drawbacks, unskilled labor, preferential trade, trade patterns, export drive, trading activities, rapid export growth