Samuel Adams

Privatization, Governance and Economic Development in Developing Countries

The study examined the impact of privatization on economic growth and income inequality in 82 developing countries between 1991 and 2002. Using the least squares dummy variable (LSDV) approach, we found that privatization did not have a significant impact on both economic growth and income inequality. However, good governance had a positive impact on economic growth and a negative impact on income inequality, while foreign direct investment (FDI) had a negligible impact on economic growth but a positive effect on income inequality. The findings of the study suggest that country-specific characteristics may be more important in promoting growth and reducing income inequality than any economic policy per se.

Urbanization, regime type and durability, and environmental degradation in Ghana

This study examines the effect of urbanization, income, trade openness, and institutional quality (i.e., regime type and durability) on environmental degradation in Ghana over the period 1965–2011. Using the bounds test approach to cointegration and the Fully Modified Phillip-Hansen (FMPH) technique, the findings show that urbanization, income, trade openness, and institutional quality have long-run cointegration with environmental degradation. Further, the results show that income, trade openness, and institutional quality are negatively associated with environmental degradation. This suggests that income, trade openness, and institutional quality enhance environmental performance. Urbanization, however, is positively related to environmental degradation. Additionally, long-run estimates conditioned on institutional quality reveal that the extent to which trade openness and urbanization enhance environmental performance is largely due to the presence of quality institutions (or democratic institutions). Finally, controlling for structural breaks, we find that trade openness, urbanization, and regime type (i.e., democracy) improve environmental performance significantly after the 1970s except for income.

Capital Flows and Economic Growth in Ghana

ABSTRACT The study examines the differential effects of capital flows on economic growth in Ghana over the period 1970–2014 using autoregressive distributed lag (ARDL). Breakpoint unit root tests are employed to cater for structural change and breaks in time series. Afterwards, these break dates are fed into the ADRL model as dummy variables to allow for the computation of a more robust cointegrating vector. The findings indicate that in both the short and long run capital flows (i.e. FDI, aid, and external debt) have negative effects on economic growth. However, remittances exhibit positive insignificant elasticity in all the regressions. Further, the empirical results show that while the impact of trade, gross capital formation and population growth on growth are mixed, that of inflation is negative. The results of the study are consistent with the idea that the impact of capital flows in Africa has been exaggerated.

Democracy, Government Spending and Economic Growth: The Case of Ghana, 1960–2008

Economic theory predicts a growth enhancing activities of various core functions of government. Nonetheless, government spending in non-democratic countries often goes beyond these core functions, namely into rent-seeking and non-productive activities. This paper employs the Autoregressive Distributed Lag bounds testing approach to cointegration to investigate the extent to which democracy and government spending have had an impact on economic growth in Ghana over the period 1960–2008. The empirical results obtained are encouraging, revealing support for the high effi ciency of government spending in democracies’ hypothesis. The paper demonstrates that democracy and government spending go hand in hand to have a positive impact on economic growth in Ghana in both the long and short run. The fi ndings and policy recommendations of the paper provide vital information relevant for developing countries involved in the democratisation process. JEL Classification: C22, H50, O40

Capital Inflows and Domestic Investment in Sub-Saharan Africa Evidence from Pooled Mean Group (PMG) Estimation Approach

The issue of whether capital inflows promote domestic investment has been of major concern especially in developing countries considering their massive dependence on these inflows. To this end, we make a case for 25 sub-Saharan African countries, using foreign direct investment and external debt as proxies for capital inflows, and the pooled mean group estimator over the period 1981–2010. The results reveal that foreign direct investment positively impacts domestic investment, but external debt has a negative impact on domestic investment in the long run. This implies that increase in foreign direct investment and/or reduction in external debt will promote domestic investment in sub-Saharan Africa. Therefore measures have to be put in place to attract more foreign direct investment and reduce the inflow of external debt in the region.

Democratic politics and voting behaviour in Ghana

What determines the vote choice in Ghana? This paper examines this question using a data set on voting behaviour generated from a nationwide survey of 2042 voters from the ten regions of Ghana based on six national elections held between 1992 and 2012. The results based on descriptive analyses and logistic regressions indicate that political parties tackle substantive issues during African elections, but generally voice them through valence appeals rather than by staking out distinct positions. Further, the results show that campaign message and the ethnicity of the presidential candidate matter in the vote choice. It is worth noting, however, that of the seventeen factors identified by respondents as most important, ethnicity ranked only 14th. This finding suggests that the declarative information of respondents is not consistent with their real intentions. Overall, the findings of the study show that both patronage politics and programmatic policies matter in winning elections. Accordingly, politicians need to focus on enhancing the credentials they bring to the political arena and improve their image in terms of how best they are able to achieve the public good.

Renewable energy, nuclear energy, and environmental pollution: accounting for political institutional quality in South Africa

This study examined the impact of disaggregate and aggregate energy, economic development, urbanization and political institutional quality on environmental pollution using a time series data spanning from 1971 to 2017. The study employed response surface regressions, structural break cumulative sum (CUSUM) test based on recursive residuals and ordinary least squares (OLS) residuals for parameter stability en route to estimating the autoregressive distributed lag (ARDL) regression. The environmental Kuznets curve (EKC) hypothesis is valid in South Africa with an extreme point of ZAR 56,114 which occurred in 2011. Evidence from the study reveals that political institutional quality plays a huge role in the social, governance and economic readiness to mitigate climate change and its impact. Structural adjustment in disaggregate and aggregate energy consumption, economic growth, and political institutional quality play a critical role in environmental quality. Fossil-fuel rich countries require diversification of the energy portfolio by incorporating renewable energy sources which will promote environmental sustainability and improve air quality while reducing their economys vulnerability to price volatility. A paradigm shift from energy and carbon-intensive industries to a service-oriented economy will cause a structural economic change thus, aiding in the mitigation of climate change and its impacts.

The Effects of Capital Flows on Economic Growth in Senegal

This article examines the effects of capital flows on economic growth in Senegal using autoregressive distributed lag (ARDL) over the period 1970–2014. Overall, our results show that remittances cause economic growth in Senegal in the long run. In contrast, external debt has a negative impact on economic growth. The ARDL results, however, show no cointegration between aid and growth or between foreign direct investment (FDI) and growth. The Quandt–Andrews breakpoint test selects year 1991 as the most likely breakpoint location for the remittances–growth equation. Finally, time-varying parameter analyses using the year 1991 as a slope dummy reveal that remittances have been growth-enhancing post-1991. Therefore, government and policy makers in Senegal must create a favourable atmosphere for attracting more remittances to promote economic development. JEL: F21, F24, F35, F34, O10

Financial development, control of corruption and income inequality

Abstract This paper examines the effect of financial development and control of corruption on income inequality in 21 Sub-Saharan African (SSA) countries over the period 1985–2011 using the pooled mean group (PMG) estimator. The empirical results show that financial development measures have positive impact on income inequality, which suggest that financial development increases income inequality. On the other hand, the coefficients of control of corruption are negative and significantly related to income inequality which implies that corruption control reduces income inequality. Further, the interaction of the financial development and the control of corruption is found to be negatively and significantly related to income inequality. Equally the interaction of the financial development and transparency index (an alternate measure of corruptibility) is found to be negatively and significantly related to income inequality. These findings suggest that the control of corruption and transparency in governance are crucial in reducing income inequality in SSA.

Globalization, Democracy, and Government Spending in Sub-Saharan Africa: Evidence from Panel Data

Globalization represents one of the most influential forces determining the future of countries. The increasing integration of the world economy has led to a growing interest in its effect on national economies. With extraordinary global interdependence, increased financial liberalization, investment flows and international trade, it is obvious that we live in a global village. Accordingly, it can be said that not only can globalization be described as one of the most dominant forces in the present day world economy, but also that no nation can exist in isolation in today’s world (Zhuang & Koo, 2007).