Corinne Deléchat

International Migration Dynamics: The Role of Experience and Social Networks

This paper tests the dynamic implications of cumulative causation and network theory on the selfdsustaining nature of the migration process. A sequential migration model is derived and estimated with a panel of Mexican household heads for the years 1980-89. Consistently with cumulative causation and network theory, the empirical results show that, after controlling for unobserved heterogeneity, previous migration experience and migrationdrelated variables are the strongest predictors of current migration decisions. This persistence in migration patterns implies that immigration policies inducing small changes in expected costs and benefits of US work fail to prevent entry into, or encourage exit from, the US labor market by experienced migrants. However, large temporary disruptions such as the 1994 Mexican peso devaluation may permanently increase migratory flows by inducing new migrants to enter the US labor market. Copyright Fondazione Giacomo Brodolini and Blackwell Publishers Ltd 2001.

The Determinants of Banks’ Liquidity Buffers in Central America

Banks’ liquidity holdings are comfortably above legal or prudential requirements in most Central American countries. While good for financial stability, high liquidity may nonetheless hinder financial market development and monetary policy transmission. Using a panel of 96 commercial banks from Central America, Panama and the Dominican Republic for 2006-2010, we find that the demand for precautionary liquidity buffers is associated with measures of bank’s size, profitability, capitalization, and financial development. Higher liquidity is also associated with deposit dollarization, reinforcing the monetary policy and market development challenges in highly dollarized economies. This is one of the first empirical studies to investigate the relation between degrees of dollarization and bank liquidity holdings. Its findings suggest that improvements in supervision and measures to promote dedollarization, including developing local currency capital markets, would help enhance financial systems’ efficiency and promote intermediation in the region.

Sub-Saharan Africa's Integration in the Global Financial Markets

The paper uses a unique database covering 44 countries in sub-Saharan Africa (SSA) countries between 2000 and 2007 to study the determinants of the allocation and composition of flows across countries, as well as channels through which private capital flows could affect growth. In our sample, the degree of financial market development is an important determinant of the distribution of capital flows across countries as opposed to property rights institutions. The fairly consistent positive association between net capital flows and growth for SSA countries contrasts with the more pessimistic results of recent studies, though our data do not allow us to make conclusive inferences about a causality relationship.

Building Resilience in Sub-Saharan Africa's Fragile States

This paper analyzes the persistence of fragility in some sub-Saharan African states and the multiple dimensions of state weakness that are simultaneously at play. This study also provides an overview of the analytics of fragility, conflict, and international engagement with fragile states before turning to an assessment of the current state of affairs and the areas in which there has been progress in building resilience. The paper also looks at the role of fiscal policies and institutions and analyzes growth accelerations and decelerations. Seven country case studies help identify more concretely some key factors at play, and the diversity of paths followed, with an emphasis on the sequencing of reforms. The paper concludes with a summary of the main findings and policy implications.

Harnessing Resource Wealth for Inclusive Growth in Fragile States

Like other fragile sub-Saharan African countries, Cote d’Ivoire, Guinea, Liberia, and Sierra Leone are seeking to harness their natural resource potential in the context of ambitious development strategies. This study investigates options for scaling up public investment and expanding social safety nets in a general equilibrium setting. First, it assesses the macro-fiscal implications of alternative fiscal rules for public investment, and, second, it explicitly accounts for redistribution through direct cash transfers. Results show that a sustainable non-resource deficit target is robust to the high uncertainty of resources output and prices, while delivering growth benefits through higher public investment. The scaling-up magnitudes, however, depend on the size of projected resource revenue and absorptive capacity. Adding a social transfer raises private consumption, suggesting that a fraction of the resource revenue could be used to expand safety nets.

Exiting from Fragility in Sub-Saharan Africa: The Role of Fiscal Policies and Fiscal Institutions

This paper studies the role of fiscal policies and institutions in building resilience in sub-Saharan African countries during 1990-2013, with specific emphasis on a group of twenty-six countries that were deemed fragile in the 1990s. As the drivers of fragility and resilience are closely intertwined, we use GMM estimation as well as a probabilistic framework to address endogeneity and reverse causality. We find that fiscal institutions and fiscal space, namely the capacity to raise tax revenue and contain current spending, as well as lower military spending and, to some extent, higher social expenditure, are significantly and fairly robustly associated with building resilience. Similar conclusions arise from a study of the progression of a group of seven out of the twenty-six sub- Saharan African countries that managed to build resilience after years of civil unrest and/or violent conflict. These findings suggest relatively high returns to focusing on building sound fiscal institutions in fragile states. The international community can help this process through policy advice, technical assistance, and training on tax administration and budget reforms.