Uchenna Efobi

Beyond the Environmental Kuznets Curve in Africa: Evidence from Panel Cointegration

Abstract The main objective of this study is to establish the applicability of the environmental Kuznets curve (EKC) hypothesis in explaining the relationship between environmental pollution and development in Africa. The EKC has been used to explain such relationships in a variety of contexts, yet rarely applied in Africa, despite it hosting both the poorest countries in the world, 60% of those with extreme environmental pollution vulnerability and having a distinct socio-economic and institutional profile that tests the validity of such a model. This paper describes an empirical model that applies the EKC hypothesis and its modifications to 50 African countries, using data from 1995–2010. The empirical analysis suggests that there is a long-term relationship between CO2 and particulate matter emissions with per capita income and other variables, including institutional factors and trade, leading to specific recommendations on future strategies for sustainable development in an African context.

Inclusive Human Development in Pre-Crisis Times of Globalisation-Driven Debts

The paper verifies the Azzimonti et al. (2014) conclusions on a sample of 53 African countries for the period 1996-2008. Authors of the underlying study have established theoretical underpinnings for a negative nexus between rising public debt and inequality in OECD nations. We assess the effects of four debt dynamics on inequality adjusted human development. Instrumental variable and interactive regressions were employed as empirical strategies. Two main findings were established which depend on whether debt is endogenous to or interactive with globalisation. First, when external debt is endogenous to globalisation, the effect on inclusive human development is negative, whereas when it is interactive with globalisation, the effect is positive. This may reflect the false economics of pre-conditions. The magnitudes of negative estimates from endogenous related effects were higher than the positive marginal interactive effects. Policy implications were discussed.

Politicians’ Attributes and Institutional Quality in Africa: A Focus on Corruption

I examine the linkage between politicians’ attributes (socio-demographic features, educational attainment, experience, and political ideology) and the control of corruption in Africa. I collected sample data of political leaders from 39 African countries for the period from 1996 to 2010, and estimated a base line model — including covariates, such as size of government, economic development, legal origin, and level of democracy — using the Fixed Effect model. The result indicates that the politicians’ attributes matter significantly in explaining the extent of control of corruption in African countries. This result is robust when considering alternative specifications.

Trade Outcomes in Africa's Regional Economic Communities and Institutional Quality: Some Policy Prescriptions

The global economic crisis of 2007/2008 that threatened the economic/financial fabrics of most countries has brought again the essence of strong institutional quality to the fore. This is particularly interesting as it impacted on trade outcomes in many countries including those in Africa. For instance, merchandize exports as a percentage of GDP for SSA reduced by 17.9% in 2007. Thus, this paper examines the effectiveness of RECs in Africa with respect to trade outcomes using some indicators, which was achieved using data from African Development Indicators, inter alia (1996-2008). Analyzing the data with descriptive and statistical techniques established, among others, that the respective indicators of trade outcomes, institutional quality were rather low and differed markedly across RECs in Africa. The study recommends that improvement of institutional quality in tandem with enhanced infrastructural facilities will play crucial roles in promoting trade outcomes in Africa’s RECs.

External Intrusion, Internal Tragedy: Environmental Pollution and Multinational Corporations in Sub-Saharan Africa

Purpose – This study provides insight on how Sub-Sahara African (SSA) countries can ameliorate the impact of environmental pollution in the face of increasing inflow of multinational corporations (MNCs).Design/methodology/approach – An analytical model describing the role of institutions in reducing the environmental impact of MNCs was formulated and analysed for a sample of 43 SSA countries (1996–2010) using descriptive and the System Generalised Method of Moments techniques.Findings – It was found that the ‘tragedy’ of environmental pollution can be ‘managed’ if there are strong institutional framework especially regulatory quality and government effectiveness that will drive environmental policies and make MNCs to comply to the tenets of corporate social responsibility (CSR) in host countries. The study also established that the environmental hazards in the previous year will occur in the current year, but with strong institutions in place, it will be at a decreasing rate. How increase in trade, inflow of MNCs and population growth affect the current extent of environmental pollution was underscored.Research limitation – Aggregated data on the variables were utilised, and thus the results were dependent on the reliability of the data. Examining how MNCs respond to CSR with respect to environmental issues in SSA can be taken up in future studies using micro-data. This will complement this study and further establish the impact of MNCs activities on the environment in SSA.Originality/value of chapter – The relevance of institutions in regulating the behaviours of MNCs with regards to environmental pollution in SSA was emphasised.

FDI, Aid, Terrorism: Conditional Threshold Evidence from Developing Countries

We investigate how foreign aid dampens the effects of terrorism on FDI using interactive quantile regressions. The empirical evidence is based on 78 developing countries for the period 1984-2008. Bilateral and multilateral aid variables are used, while terrorism dynamics entail: domestic, unclear, transnational and total number of terrorist attacks. The following findings are established. First, while the effects of multilateral aid are consistently significant with positive threshold evidence, bilateral aid is only positively significant in bottom quantiles. Second, with the slight exception of transnational terrorism in bilateral aid regressions, the impacts of terrorism dynamics are unexpectedly positive, in: (i) bottoms quantiles with domestic terrorism and the 0.25th quantile with total terrorism, for bilateral aid regressions, and (ii) the 0.25th quantile with domestic terrorism and bottom quantiles of transnational terrorism, for multilateral aid regressions. Third, interactions between terrorism and foreign aid dynamics unexpectedly yield negative effects in: (i) bilateral aid and domestic terrorism in bottom quantiles and (ii) multilateral aid and domestic (transnational) terrorism in the 0.25th(bottom) quantile(s). The modifying threshold value of bilateral aid is higher than that of multilateral aid. Fourth, there is positive threshold evidence from GDP growth, infrastructural development and trade openness. Policy implications are discussed.

Foreign Aid and Corruption: Clarifying Murky Empirical Conclusions

This note reconciles an on-going debate on the effect of foreign aid on corruption by introducing a previously missing heterogeneity dimension of aid. The relationship was estimated using dynamic system GMM and quantile regressions (QR). Results show that both narratives in the debate are correct, contingent on the type of development assistance. The QR results are robust to endogeneity when the independent variables of interest are instrumented with their first-lags.

Foreign Direct Investment, Aid and Terrorism: Empirical Insight Conditioned on Corruption Control

This study checks the effect of foreign aid on terrorism and FDI, conditioned on domestic levels of corruption-control (CC). The empirical evidence is based on a sample of 78 countries for the period 1984-2008. The following findings are established: the negative effect of terrorism on FDI is apparent only in higher levels of CC; foreign aid dampens the negative effect of terrorism on FDI only in higher levels of CC; when foreign aid is subdivided into its bilateral and multilateral components, the result is mixed. While our findings are in accordance with the stance that bilateral aid is effective in reducing the adverse impact of transnational terrorism, the position that only multilateral aid is effective at mitigating the adverse impact of domestic terrorism on FDI is not confirmed because multilateral aid also curbs the adverse effect of transnational terrorism on FDI. Moreover, multilateral aid also decreases the adverse effect of unclear and total terrorisms on FDI. Policy implications are discussed.

Planning to Fail or Failing to Plan: Institutional Response to Nigeria's Development Question

Despite recent interest in the interplay between institutions and growth, country studies in developing countries particularly relating to planning has not been given considerable attention. This forms the main motivation for this study, which evaluates the economic planning in Nigeria and discusses how institutions play influential roles on the kind of economic outcomes emanating from planning. It draws comparative evidences from Botswana and South Korea based on the fact that Nigeria had similar planning trajectory with them as they all had regular fixed-term development plans in the 1960s and 1970s. Nigeria had her five-year development plans the same time with South Korea starting with the 1st phase (1962-1966). Whereas South Korea’s five-year plans continued that of Nigeria was truncated in 1985 with the advent of Structural Adjustment Programme (SAP). Institutions in Botswana and South Korea have also been noted as key for their economic development. The study underscores the need for Nigeria to pursue the improvement her institutions that will provide supportive role to planning as any planning void of adequate institutional ‘pillars’ will not deliver the expected development outcomes irrespective of the coverage and how well nuanced. Thus, it is not that Nigeria planned to fail nor failed to plan but the critical factor associated with the planning models is weak institutions, among others.

Timeliness of Financial Reporting in Nigeria

Abstract This study explored the factors that can influence the timeliness of financial reporting in Nigeria using a sample of 33 financial institutions (2005–2008). The Generalized Least Square (GLS) regression method was used for the estimation and the results reveal that on the average, the sampled companies used 122 days after the year end for the release of their financial reports. The size, leverage and performance of the companies have a negative significant relationship with the timeliness of their financial reports while the age of the company has a positive significant impact. Corporate governance plays a complementary role with some of the explanatory variables to explain financial reporting timeliness in Nigeria.