Raphael Franck

Does the Leader’s Ethnicity Matter? Ethnic Favoritism, Education and Health in Sub-Saharan Africa

In this article we reassess the role of ethnic favoritism in sub-Saharan Africa. Using data from 18 African countries, we study how the primary education and infant mortality of ethnic groups were affected by changes in the ethnicity of the countries’ leaders during the last 50 years. Our results indicate that the effects of ethnic favoritism are large and widespread, thus providing support for ethnicity-based explanations of Africas underdevelopment. We also conduct a cross-country analysis of ethnic favoritism in Africa. We find that ethnic favoritism is less prevalent in countries with one dominant religion. In addition, our evidence suggests that stronger fiscal capacity may have enabled African leaders to provide more ethnic favors in education but not in infant mortality. Finally, political factors, linguistic differences, and patterns of ethnic segregation are found to be poor predictors of ethnic favoritism.

Predicting Currency Crisis Contagion from East Asia to Russia and Brazil: An Artificial Neural Network Approach

Studies dealing with currency crisis prediction are often vulnerable to data mining and perform poorly when tested on out-of-sample data. This paper suggests an artificial neural network approach to predicting speculative attacks. The properties of the multilayer perceptron are used to develop a method for predicting currency crises. It is then tested whether the speculative attacks in Russia in 1998 and Brazil in 1999 were predictable, given the then recent turmoil in East Asian countries. Overall, it appears that the multilayer perceptron does a better job at predicting currency crises than a logit model.

PUBLIC SAFETY AND THE MORAL DILEMMA IN THE DEFENSE AGAINST TERROR

The economic theory of defense has traditionally described public safety as achieved through investments that deter adversaries. Deterrence is, however, ineffective and pre‐emptive defense is required when a population of intended victims confronts supreme‐value suicide terror. A moral dilemma then arises, since pre‐emption may impose collective punishment, while in the absence of pre‐emption the population of intended victims is exposed to acts of terror. We consider how a population of intended terror victims confronts the moral dilemma, and compare the threatened populations response with the public‐safety recommendations of external judges who are not personally affected by the threat of terror.

ECONOMIC GROWTH AND THE SEPARATION OF CHURCH AND STATE: THE FRENCH CASE

This article provides a test of the secularization hypothesis, which argues that economic growth, industrialization, increased literacy, and low fertility decrease religiosity. It focuses on the elections of the secular politicians who voted in favor of the separation between Church and State in the French Parliament in 1905. If the secularization hypothesis is correct, these secular politicians should have been elected in the most developed areas of France at the turn of the twentieth century. Contrary to the predictions of the secularization hypothesis, we find that the support for secular politicians originated in the rural areas of France. (JEL Z12, D72, N43) Copyright (c) 2009 Western Economic Association International.

From internal taxes to national regulation: Evidence from a French wine tax reform at the turn of the twentieth century

The growth of the modern regulatory state is often explained in terms of an unambiguous increase in regulation driven by the actions of central governments. Contrary to this traditional narrative, we argue that as governments increased state capacity, they often strove to weaken the autarkic tendencies of regional laws, thereby promoting greater trade and a more integrated market. To show this, we exploit a quasi-natural experiment generated in the French wine industry by a law implemented on 1 January 1901 which lowered and harmonized various local tax rates.

Can public policies lower religiosity? Evidence from school choice in France, 1878–1902†

This study analyses the effects of public policies on religiosity by focusing on the enrolment of pupils in French Catholic primary schools between 1878 and 1902. During this period, the government increased public spending and made school attendance free and mandatory until the age of 13. The empirical analysis presented here suggests that greater public spending had no substantial effect on the enrolment in Catholic schools. By contrast, mandatory schooling laws had a negative, but quantitatively limited, impact. The overall resilience of Catholic schooling is traced to the political divide created by the 1789 French Revolution.

What do macroeconomic and political-economy data tell us about economic freedom?

We use OLS cross-country regressions and a competitive neural network approach to evaluate the performance of macroeconomic and political-economy data in assessing economic freedom. Our results point to a reasonable performance of the cross-sectional approach in explaining economic freedom scores but to a poor performance of the neural network approach in replicating country rankings provided by the Index of Economic Freedom. Our results thus justify the use of qualitative elements but at the same time call in question the relevance of macroeconomic data in the construction of economic freedom rankings

The Effects of Land Redistribution: Evidence from the French Revolution

This study exploits the confiscation and auctioning off of Church property that occurred during the French Revolution to assess the role played by transaction costs in delaying the reallocation of property rights in the aftermath of fundamental institutional reform. French districts with a greater proportion of land redistributed during the Revolution experienced higher levels of agricultural productivity in 1841 and 1852 as well as more investment in irrigation and more efficient land use. We trace these increases in productivity to an increase in land inequality associated with the Revolutionary auction process. We also show how the benefits associated with the head-start given to districts with more Church land initially, and thus greater land redistribution by auction during the Revolution, dissipated over the course of the nineteenth century as other districts gradually overcame the transaction costs associated with reallocating the property rights associated with the feudal system.

Using neural networks to assess the impact of institutional arrangements on economic outcomes: inflation and the separation of monetary policy from banking supervision

This paper uses a competitive neural network model to examine whether the separation of monetary policy and banking supervision has an impact on inflation. Our results show that countries with similar organizations of banking supervision and monetary policy indeed have similar levels of inflation. In addition we find that both the average rate and volatility of inflation are lower in countries where the Central Bank, which conducts monetary policy, does not supervise the stability of the banking system.

A Lender of Last Resort or a Securities Market as a Basis for Financial Development: The Case of the Anglo-Palestine Bank

Under a stylized model, this paper investigates the relationships between commercial banks asset management and the financial institutional structure. More specifically, we compare the effects of the existence of a market for short-term securities with those of a lender of last resort on the structure of banks assets. We use historical data of the Anglo-Palestine Bank to simulate the results of our model. The conclusion is that the development of a financial market matters more for emerging economies than a lender of last resort since it eases the issuance of long-term loans that are necessary for economic growth.