Steve Onyeiwu

Determinants of Foreign Direct Investment in Africa

Despite economic and institutional reform in Africa during the past decade, the flow of Foreign Direct Investment (FDI) to the region continues to be disappointing and uneven. In this study we use the fixed and random effects models to explore whether the stylized determinants of FDI affect FDI flows to Africa in conventional ways. Based on a panel dataset for 29 African countries over the period 1975 to 1999, the paper identifies the following factors as significant for FDI flows to Africa: economic growth, inflation, openness of the economy, international reserves, and natural resource availability. Contrary to conventional wisdom, political rights and infrastructures were found to be unimportant for FDI flows to Africa. The significance of a variable for FDI flows to Africa was found to be dependent on whether country- and time-specific effects are fixed or stochastic.

An institutionalist perception of cooperative behavior

Abstract While there is incontrovertible evidence that agents are imbued with cooperative values, considerable ambivalence exists about the rationale for cooperation. Some analysts contend that cooperative behavior is well within the realm of the Benthamite quest for utility maximization, but others perceive cooperation as driven by complex socio-cultural and psychological phenomena. In this paper, we propose an evolutionary-based explanatory framework that uses both insights to explain how cooperative behaviors are formed, as well as how they might change over time. On the basis of evidence from a traditional African society, we show how tension between utility maximization and cultural norms could shape cooperative behaviors in ways that are not easily deciphered by standard economic theory.

Structural Adjustment Intensity, Vulnerability and Poverty in Africa

Nigeria has implemented structural adjustment policies for the past twenty years, with the intensity of reforms increasing each year. However, there is an ongoing debate as to whether strong adjustment is more effective than weak reforms in alleviating poverty in African economies. In this article, we use primary socio-economic data collected from two surveys, one conducted in 2001 and the other in 2007, of residents in the village of Umulwe in Southeastern Nigeria, to examine whether the intensity of structural adjustment policies has led to poverty reduction in the village. Specifically, we use changes in the poverty headcount index and the poverty gap index, as well as non-income measures to analyze the dynamics of poverty in the village. A cross-sectional OLS regression on the survey data does not indicate a direct link between structural adjustment and the poverty reduction observed in the village over time. By linking structural adjustment to changes in household behaviour, the article provides a micro-foundation for the analysis of the impact of structural adjustment on poverty.