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Research Papers in Economics

AFRICAN DEVELOPMENT REVIEW / REVUE AFRICAINE 
DE DEVELOPPEMENT 
VOL. 21 No. 2 September / September 2009 
 
Introduction  
Léonce Ndikumana and John C. Anyanwu 
pages 209-212
 
Lessons from the MDGs in Africa  
Heba Handoussa 
pages 213-223 
 
Does Gender Inequality Reduce Growth in Sub-Saharan African and 
Arab Countries?  
Mina Baliamoune-Lutz and Mark McGillivray 
pages 224-242 
 
Aid for Trade in Developing Countries: Complex Linkages for Real 
Effectiveness  
Marilyne Huchet-Bourdon, Anna Lipchitz and Audrey Rousson 
pages 243-290 
 
Why Doesn't Regional Integration Improve Income Convergence in 
Africa?  
Hakim Ben Hammouda, Stephen N. Karingi, Angelica E. Njuguna and 
Mustapha Sadni Jallab 
pages 291-330 
 
Rethinking Economic Growth in a Globalizing World: An Economic 
Geography Lens  
Anthony J. Venables pages 331-351 
 
Rethinking Industrial Policy for Low Income Countries 
Robert H. Wade 
pages 352-366 
 
Mesure de l'Efficacité des Banques dans les Pays en Voie de 
Développement: Le Cas de l'Union Economique et Monetaire Ouest 
Africaine (UEMOA)  
Sandrine Kablan 
pages 367-399 
 
Health Expenditures and Health Outcomes in Africa 
John C. Anyanwu and Andrew E.O. Erhijakpor 
pages 400-433 
 
 
 
 
 
 
 
 
 
 
 
 Introduction  
Léonce Ndikumana and John C. Anyanwu 
 
Lessons from the MDGs in Africa  
Heba Handoussa 
 
Does Gender Inequality Reduce Growth in Sub-Saharan African and 
Arab Countries?  
Mina Baliamoune-Lutz and Mark McGillivray 
 
Abstract: This paper uses 1974 to 2001 panel data for 31 sub-Saharan African and 10 
Arab countries and Arellano–Bond estimations to empirically assess the impact on 
growth of an important indicator associated with MDG 3; namely the ratio of 15–24-
year-old literate females to males. Our findings indicate that gender inequalities in 
literacy have a statistically significant negative effect that is robust to changes in the 
specification. In addition, it seems that gender inequality has a stronger effect on growth 
in Arab countries. Interestingly, we find that the interaction between openness to trade 
and gender inequality has a positive impact. This result suggests that trade-induced 
growth may be accompanied by greater gender inequalities. 
 
Aid for Trade in Developing Countries: Complex Linkages for Real 
Effectiveness  
Marilyne Huchet-Bourdon, Anna Lipchitz and Audrey Rousson 
 
Abstract: Aid for trade is intended to support the integration of developing countries into 
the world trading system. Although this form of aid is being hailed as a promising new 
development tool, it lacks the strategic dimension that it needs if it is to be truly effective 
and fulfill donors' policy commitments. From a theoretical perspective, this paper 
presents the various aid-for-trade categories and analyzes the linkages between foreign 
direct investment, aid for trade and development. It also presents a typology of trade-
related needs for a panel of countries, to serve as a guide for donors in formulating their 
aid supply strategies. This typology reveals a number of disparities between countries 
and regions, as well as a low level of regional integration. Trade-related needs are 
particularly significant in West Africa and East Africa, and substantial in the 
infrastructure sector. This paper also stresses the importance of refining the formulation 
of actual demand by beneficiaries, structuring the aid supply in accordance with donors' specific areas of expertise and enhancing coordination among the various stakeholders, 
both public and private. Lastly, further trade liberalization will not by itself suffice to 
generate strong growth and improve the geographical and sectoral distribution of 
foreign direct investment. Factors such as political stability, the business climate, 
physical infrastructure, institutions and human capital also play a fundamental role. Of 
particular importance is the coherence of trade, sectoral, macroeconomic and tax 
policies, not only within each country and region but also between industrialized and 
developing countries. 
 
Résumé: L'aide au commerce, présentée comme un nouvel outil de développement 
prometteur, vise à soutenir l'intégration commerciale des pays en développement. Il 
manque néanmoins à cette aide, pour asseoir son efficacité et respecter les 
engagements politiques des donateurs, une dimension stratégique. D'un point de vue 
théorique, cette étude présente les différentes catégories d'aide au commerce et 
analyse les relations entre IDE, aide au commerce et développement. Elle propose 
également une typologie des besoins liés au commerce pour un panel de pays afin de 
guider les bailleurs de fonds dans la définition de leurs stratégies d'offre. Cette typologie 
met en avant des disparités aux niveaux national et régional, ainsi qu’une faible 
intégration régionale. Les besoins liés au commerce, particulièrement forts pour les 
régions de l'Afrique de l'Ouest et de l'Afrique de l'Est, sont importants dans le secteur 
des infrastructures. Cet article souligne également l'importance d'affiner la formulation 
des demandes réelles du côté des bénéficiaires, de structurer l'offre des bailleurs en 
fonction de leurs propres compétences et d'approfondir la coordination entre les 
différentes parties prenantes, dont acteurs publics et acteurs privés. Enfin, une 
libéralisation plus poussée des échanges ne suffira pas, à elle seule, à enclencher une 
croissance forte et à améliorer la répartition géographique et sectorielle des IDE. Des 
facteurs comme la stabilité politique, l'environnement des entreprises, l'infrastructure 
matérielle, les institutions et le capital humain sont également des dimensions 
fondamentales. En particulier, une cohérence entre politiques commerciales, 
sectorielles, macroéconomiques et fiscales est impérative, pour chaque pays et chaque 
région mais également entre pays industrialisés et PED. 
 
Why Doesn't Regional Integration Improve Income Convergence in 
Africa?  
Hakim Ben Hammouda, Stephen N. Karingi, Angelica E. Njuguna and 
Mustapha Sadni Jallab 
 
Abstract: This paper investigates why regional integration does not improve income 
convergence in Africa, despite the common goal of more open and freer trade. Based on empirical analysis using African countries data, the paper presents the evidence that 
there has been little progress in income convergence in Africa. The paper shows that 
despite the importance of regional integration there has been limited progress and 
prospects of the African integration process are not as promising as would be expected 
for such an important pillar in Africa's development agenda. 
 
Rethinking Economic Growth in a Globalizing World: An Economic 
Geography Lens  
Anthony J. Venables 
 
Abstract: This paper argues that cumulative causation processes are fundamental to 
understanding growth and development. Such processes derive from spatially 
concentrated increasing returns to scale including thick market effects, knowledge 
spillovers, sectoral and urban clustering, and self-reinforcing improvements in physical 
and social infrastructure. These sources of agglomeration have been extensively 
analyzed in the economic geography literature. They imply that spatial unevenness in 
economic activity and incomes is an equilibrium outcome. Growth tends to be ‘lumpy’, 
with some sectors in some countries growing fast while other countries lag. The policy 
challenge is to lift potential new centers of economic activity to the point where they can 
reap the productivity and investment climate advantages of increasing returns and 
cumulative causation. 
 
Rethinking Industrial Policy for Low Income Countries 
Robert H. Wade 
 
Abstract: The governments of low income countries should be giving more attention to 
‘industrial policy’ than they and the aid donors have given in the past quarter century. 
(‘Industrial policy’ means any sectorally or activity-targeted interventions, including in 
agriculture and services.) The first step is to discard the common assumption that 
industrial policy is about ‘picking winners’. The second step is to realize that industrial 
policy can be done ‘big’ or ‘small’, and by ‘leading the market’ or by ‘following the 
market’. It can be tailored to the available resources and state capacity. The third step is 
to see that the key issues of industrial policy are less to do with ‘what activities should 
be encouraged?’, or ‘what sorts of policy instruments are best?’, and more to do with, 
‘how do we organize a process of discovery of sensible objectives and policies?’, and 
‘how do we organize a constant nudging of producers to upgrade, diversify, link up with 
foreign firms?’ (where the nudging effort has to be targeted at some activities and 
sectors more than others). The paper illustrates with East Asian examples. One of the good effects of the current global crisis is that it has shaken confidence in the virtues of 
lightly regulated markets and free capital movements, and opened the way to a less 
ideologically charged debate about the role of the state in development—in which 
thinking is not precluded by easy jeers like ‘governments can't pick winners’ or ‘maybe 
the East Asians can do it but you can’t, so you have nothing to learn about industrial 
policy from them’. 
 
Mesure de l'Efficacité des Banques dans les Pays en Voie de 
Développement: Le Cas de l'Union Economique et Monetaire Ouest 
Africaine (UEMOA)  
Sandrine Kablan 
 
Résumé: Cette étude se propose de mesurer l'efficacité des banques de l'UEMOA et 
ses facteurs déterminants, après les réformes bancaires de 1993 à 1996. La méthode 
de l'enveloppement des données (DEA) a été utilisée pour évaluer l'efficacité technique 
des banques tandis que celle des frontières stochastiques (SFA) a été utilisée pour 
estimer l'efficacité-coût. Les résultats indiquent des évolutions similaires pour les deux 
types d’efficacité pour tous les pays de l'UEMOA, sauf pour la Côte d’Ivoire et le 
Burkina Faso. Une analyse plus détaillée suivant le type de banque (locales privées, 
étrangères ou publiques) révèle que les premières sont les plus efficaces, suivies par 
les secondes, puis des troisièmes. L'indice de Malmquist montre que l'augmentation de 
l'efficacité technique est beaucoup plus le fait d’économie d’échelle que de 
l'incorporation des innovations technologiques. Enfin, l'efficacité des banques de 
l'UEMOA dépend des variables telles que la solidité financière, le ratio de créances 
douteuses par pays, la concentration bancaire et le PIB par habitant. 
 
Health Expenditures and Health Outcomes in Africa 
John C. Anyanwu and Andrew E.O. Erhijakpor 
 
Abstract: This paper provides econometric evidence linking African countries’ per capita 
total as well as government health expenditures and per capita income to two health 
outcomes: infant mortality and under-five mortality. This relationship is examined using 
data from 47 African countries between 1999 and 2004. Health expenditures have a 
statistically significant negative effect on infant and under-five mortality rates. The 
magnitude of our elasticity estimates are in consonance to those reported in the 
literature. For African countries, our results imply that total health expenditures (as well 
as the public component) are certainly important contributors to health outcomes. In 
addition, we find that both infant and under-five mortality are positively and significantly associated with sub-Saharan Africa. The reverse is true for North Africa. While 
ethnolinguistic fractionalization and HIV prevalence positively and significantly affect the 
health outcomes, higher numbers of physicians and female literacy significantly reduce 
these health outcomes. These results have important implications for attaining the 
targets envisioned by the Millennium Development Goals. The data implications are 
also discussed. 
 
 

African Development Review Vol 21 NÂ°2

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African Development Review Vol 21 NÂ°2

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Research Papers in Economics