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1. Macro-financial implications of public debt in South Africa: The role of financial regimes

Author:
Theshne Kisten
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the role of financial frictions in the public debt–growth nexus, documenting that a public debt shock has different macro-financial implications dependent on the state of financial markets in South Africa. A non-linear vector autoregression model is estimated which allows the transmission mechanism to be characterized by two distinct financial regimes: stressful versus normal. The empirical results suggest that a public debt shock has a broadly insignificant impact on economic growth over the full sample, reflecting the ineffectiveness of government borrowing in stimulating the economy, and could suggest that the high and growing debt service costs faced by the government reduces funds available for investment purposes. Debt shocks are found to be deflationary in both regimes, lending support to the precautionary savings effect and the existence of a well-developed financial market, while interest rates decline with the immediate impact being moderately larger in the stress regime, providing evidence of the accommodative stance between fiscal policy and monetary policy. In response to a public debt shock, financial conditions show an immediate and transitory improvement in the high-stress regime; however, in the low-stress regime there is an immediate yet negligible improvement in financial conditions. Lastly, the responses evolve over time, with fiscal policy being less effective in stimulating the economy in the post-crisis period, but it has been effective in reducing financial stress in the high-stress regime.
Topic:
Economics, Finance, Economic Growth, and Public Debt
Political Geography:
Africa and South Africa

2. Revisiting the links between economic inequality and political violence: The role of social mobilization

Author:
Patricia Justino
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The main aim of this paper is to explore theoretically important mechanisms through which economic inequalities may affect the emergence of political violence given the forms of social mobilization they (may) generate. The paper identifies and explores two mechanisms under which social mobilization in unequal societies may result in either non-violent or violent collective action and, ultimately, in violent conflict. The first condition is the level of social cooperation between different social groups that are formed during the process of social mobilization. The second is the efficacy of collective action to drive change, which is in turn shaped by the ability of individuals within groups to coordinate their actions. Forms of social mobilization become violent when antagonism is the dominant form of social interaction between different social groups in unequal societies, and when each of these social groups exhibits high levels of internal coordination.
Topic:
Political Violence, Economics, Social Movement, Inequality, Mobilization, and Collective Action
Political Geography:
Global Focus

3. Unravelling Africa’s raw material footprints and their drivers

Author:
Albert Kwame Osei-Owusu, Michael Danquah, and Edgar Towa
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper applies an environmentally extended input–output analysis, leveraging the Eora database, to estimate the global raw material footprints of 51 African nations from 1995 to 2015. It employs least absolute shrinkage and selection operator and panel regression models to quantify the effects of diverse variables on Africa’s raw material footprints. The findings show that the raw material footprints of Africa’s production and consumption soared by 41 per cent and 38 per cent, respectively, from 1995 to 2015, mainly driven by biomass and construction materials. They show that Africa outsources 25 per cent of its raw material footprints from consumption, while over 60 per cent of its footprints from production arise from its exports. Our findings beckon African governments to reduce the excessive focus on exploitation and concentrate on combatting corruption and extreme rent-seeking while decoupling Africa’s raw material footprints from rising public debt, carbon emissions, income levels, and population.
Topic:
Economics, Carbon Emissions, Public Debt, Income, Raw Materials, and Input-Output Analysis
Political Geography:
Africa

4. Gender preference at birth: A new measure for son preference based on stated preferences and observed measures of parents’ fertility decisions

Author:
Mehwish Ali, Ashton de Silva, Sarah Sinclair, and Ankita Mishra
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Investigating preference for sons is a continuing focal area of development economics and demographic research. Son preference presents a challenge in achieving the United Nations Sustainable Development Goals of ‘no poverty’, ‘good health and wellbeing’, and ‘gender equality’ by 2030. It is thus important to investigate son preference to inform policy-makers of the potential challenges in achieving these goals. Inaccurate interpretation of the mechanisms of son preference could misinform policy analysis and result in unintended consequences. Existing measures including sex ratios and gender composition of children do not reflect the true extent of son preference in high fertility countries such as Pakistan, where the success of policy action is limited and significant barriers to sex-selective technologies exist. Given the likely impact of son preference on fertility behaviour in Pakistan, accurate measurement of the forms this gender bias can take is necessary to appropriately gauge the influence of son preference on the fertility outcomes. The limited capacity of existing measures to accurately depict son preference in countries with high fertility combined with limited demarcation between pre- and post-birth son preference warrants development of a new measure for son preference to evaluate its effects. In this paper, a new measure of son preference called ‘gender preferences at birth’ (GPB) is presented. GPB combines stated fertility preferences and observed fertility outcomes to acknowledge that households in countries with high fertility and low contraception usage have less control over their fertility decisions.
Topic:
Economics, Sustainable Development Goals, Welfare, Family Planning, Fertility, and Gender
Political Geography:
Pakistan, South Asia, and Global Focus

5. Determinants of corporate cash holdings in South Africa

Author:
Ewa Karwowski, Hanna Szymborska, Keagile Lesame, and Tlhologelo Thoka
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Globally, corporate cash holdings have risen since the 1980s. In South Africa, some commentators have accused corporations of engaging in an ‘investment strike’, while others see corporate liquidity as a precaution against systemic uncertainty. We use the unique South African Revenue Service/National Treasury firm-level dataset to scrutinize corporate liquidity, using panel analysis. Relative to GDP, corporate cash and liquidity holdings have not increased between 2010 and 2017. However, corporate cash is high in international comparison and has grown at the firm level. We do not find evidence for the hypothesis that companies are engaging in an investment strike. Cash and liquidity are shaped by idiosyncratic and sectoral risk factors. In the short run, heightened uncertainty might reduce corporate cash and liquidity as firms struggle to adjust to an unexpected economic situation. In the medium run, we find a strong association between political uncertainty and corporate cash and liquidity holdings.
Topic:
Economics, Corporations, Liquidity, and Cash
Political Geography:
Africa, South Africa, and Global Focus

6. Illicit financial flows and country-by-country reporting in extractive industries

Author:
Saila Stausholm, Petr Janský, and Marek Šedivý
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Economic data are important in governing the international political economy. Some of the most widely used macro statistics risk being undermined by systematic misalignment in reporting of economic activity due to illicit financial flows, as well as tax-minimizing financial transactions by multinational corporations. Measuring these misalignments may prove a way to correct old statistical standards, if adequate data can be obtained. We evaluate whether new transparency and reporting regimes that require country-by-country reporting by multinational corporations could prove a feasible way to appropriate the amount of tax avoidance and use these figures to correct macro statistics. We evaluate the existing data for two of the standards through previous literature and provide original analysis of a third standard that is applied to the extractive industries. We find that the standards lack coherence and workability, and that particularly the extractive industry standard falls short of enabling thorough research on profit reporting and taxmotivated misalignments by multinational corporations.
Topic:
Economics, Tax Evasion, Extractive Industries, and Illicit Financial Flows
Political Geography:
Global Focus

7. The impact of the COVID-19 pandemic on the poor: Insights from the Hrishipara diaries

Author:
Risto Rönkkö, Stuart Rutherford, and Kunal Sen
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper, we examine the economic impact of the COVID-19 pandemic on the livelihoods of the poor. We use an unusually rich data set from a ‘financial diaries’ study known as the Hrishipara Daily Diaries Project. The data set tracks the economic and financial transactions of 60 individuals and their families in a semi-rural setting in Bangladesh on a real-time basis from October 2019 to September 2020. We document individual diarists’ behavioural responses to COVID-19, which reveal the varied experiences of the poor during the pandemic. We find that the pandemic and associated government lockdowns had significant negative effects on the livelihoods of the poor in our study, with financial inflows and outflows, incomes, and household expenditures below pre-pandemic levels during the pandemic period. To cope with the pandemic, households drew down on their cash reserves at home, as well as cutting down on non-food expenditures to protect their spending on food.
Topic:
Economics, Government, Finance, Pandemic, and COVID-19
Political Geography:
Bangladesh and South Asia

8. Exploring economic support networks amidst racial inequality in Namibia

Author:
Annalena Oppel
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Community or interpersonal support as a critical source of livelihood sustenance in the Global South can exhibit unequal dynamics. An understanding of these practices is primarily tied to the conceptual space of poverty or small communities. Less is known about how social support systems might respond to structural inequalities. I address this by exploring how support practices might be shaped by inequalities in the Namibian context. I draw on primary network data to assess inequality as a social dynamic within the space of support and evaluate whether providing worse-off others corresponds to former discriminatory practices under the apartheid regime. My results suggest that inequality has normalized a sense of support as necessity for black but not white Namibians. More broadly, by recognizing differences in group practices, I evidence that exploring support practices across structural inequalities can enhance insights on the social replication of inter- and intragroup-based inequalities.
Topic:
Economics, Race, Inequality, and Social Networks
Political Geography:
Africa and Namibia

9. The economic gains of reducing the employment gender gap in Morocco

Author:
Olivier Bargain and Maria C. Lo Bue
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Middle East and North Africa (MENA) countries, including Morocco, currently record the lowest rates of female labour force participation (FLFP) in the world. These rates — between 20-30% in 2019 — appear substantially low in comparison to Western countries, but also compared to low- and middle-income countries that average between 40% (Asia) and 55% (Latin America and sub-Saharan Africa).
Topic:
Economics, Gender Issues, Women, Employment, and Economic Growth
Political Geography:
North Africa and Morocco

10. Resurgent Asia: Diversity in Development

Author:
Deepak Nayyar
Publication Date:
09-2019
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
In 1820, Asia accounted for two-thirds of world population and over half of world income. The subsequent decline of Asia was attributable to its integration with a world economy shaped by colonialism and driven by imperialism. By 1970, Asia was the poorest continent in the world, marginal except for its large population. Its demographic and social indicators, among the worst anywhere, epitomized its underdevelopment. A deep pessimism about Asia’s economic prospects, voiced by Gunnar Myrdal in Asian Drama, was widespread at the time.
Topic:
Economics, History, Economic Growth, and Economic Transformation
Political Geography:
Asia

11. Inequality in India on the rise

Author:
Hai-Anh Dang and Peter Lanjouw
Publication Date:
12-2018
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Following the introduction of economic reforms in the early 1990s, India today is achieving unprecedented per capita growth rates. Poverty reduction has also accelerated and is justly celebrated. There is great concern, however, that this growth is being accompanied by rising inequality.
Topic:
Economics, Reform, Inequality, and Economic Growth
Political Geography:
India and South America

12. Inequality dynamics in China: Income growth for the poor, but more for the rich

Author:
Shi Li and Terry Sicular
Publication Date:
12-2018
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
In the late 1970s, China embarked on a major programme of economic transition and reform. Since then, China’s economy has been transformed from a socialist planned economy to a predominately market economy characterized by a combination of state, private, and mixed forms of ownership. Over the past forty years, household incomes have risen six-fold, poverty has declined dramatically, and in recent years a new class of ultra-rich has emerged. These developments have naturally led to questions about inequality trends in China.
Topic:
Economics, Poverty, Reform, Income Inequality, and Welfare
Political Geography:
China and Asia

13. Development assistance for peacebuilding

Author:
Rachel M. Gisselquist
Publication Date:
02-2017
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Development assistance to fragile states and conflict-affected areas is a core component of peacebuilding. It includes support for the restoration of core government functions, delivery of basic services, the rule of law, and economic revitalization. Yet, while aid has been among the largest financial inflows to fragile states in recent years, its impact has been mixed. Better understanding of what works and why thus remains a core challenge for development researchers and practitioners.
Topic:
Development, Economics, Foreign Aid, Conflict, and Peace
Political Geography:
Global Focus

14. Characteristics of the Vietnamese business environment: Evidence from a SME survey in 2015

Author:
Kasper Brandt, John Rand, Smriti Sharma, Finn Tarp, and Neda Trifković
Publication Date:
11-2016
Content Type:
Special Report
Institution:
United Nations University
Abstract:
This is the sixth time that the collaborative small and medium enterprise (SME) panel survey has been conducted among formal and informal manufacturing firms in Viet Nam. The results of previous survey rounds, those of 2005, 2007, 2009, 2011, and 2013 were a motive for UNU-WIDER to approve and take the lead in collaboration with the Institute of Labour Science and Social Affairs (ILSSA) of the Ministry of Labour, Invalids and Social Affairs (MOLISA), the Department of Economics (DoE) of the University of Copenhagen, and the Central Institute of Economic Management (CIEM), to implement another survey in 2015. The 2015 fieldwork behind this report consisted of face-to-face interviews that were implemented in June, July, and August. Just over 2,600 small and medium-sized non-state enterprises operating in the manufacturing sector were interviewed in ten provinces, namely the cities of Ha Noi, Hai Phong and Ho Chi Minh City (HCMC), and Ha Tay, Phu Tho, Nghe An, Quang Nam, Khanh Hoa, Lam Dong and Long An provinces. The present report is based on the information about enterprises that were interviewed since 2005 and new enterprises that were added as a replacement for those that exited the survey. The SME biannual surveys referred to above are a result of collaborative research efforts on collecting and analysing data representative of the private sector in Viet Nam. This means that not only large or formally registered enterprises are included in the survey. As such, the SME survey builds on the existing databases created through other initiatives in Viet Nam, aiming to collect data and gain an understanding of the SME dynamics in Viet Nam. The present report aims to provide researchers and policy makers with an overview of key facts from the 2015 survey round, comparing as appropriate with data from 2013 and earlier years. The report does not contain a complete description of the full range of information available in the dataset. We encourage readers to explore the questionnaires that were used in the collection of data (available online) to see all the issues addressed. Several in-depth studies of selected issues on the Vietnamese private sector economy, exploiting the database, are underway. Subsequent studies will make use of the fact that a sample of approximately 2,600 SMEs is available, including a representative panel dating back to 2005.
Topic:
Economics, Business, Statistics, and Survey
Political Geography:
Vietnam and Southeast Asia

15. Democratic Trajectories in Africa: Unravelling the Impact of Foreign Aid

Author:
Danielle Resnick
Publication Date:
10-2013
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
When, why and how has foreign aid facilitated, or hindered, democracy in recipient countries? Focusing on sub-Saharan Africa, this policy brief examines the impact of foreign aid on supporting transitions from one-party to multi-party regimes, preventing democratic breakdown and the erosion of civil liberties, enhancing vertical and horizontal accountability, and enabling competitive political party systems. Particular attention is given to the trade-offs and complementarities between different types of foreign aid, namely democracy assistance and economic development aid. Select policy recommendations are offered to improve aid effectiveness at bolstering democratic trajectories within the region.
Topic:
Civil Society, Democratization, Development, Economics, Human Rights, Political Economy, and Foreign Aid
Political Geography:
Africa

16. Business and the Barrel of a Gun: Understanding Entrepreneurship and Violent Conflict in Developing Countries

Author:
Philip Verwimp, Wim Naudé, and Tilman Brück
Publication Date:
04-2013
Content Type:
Policy Brief
Institution:
United Nations University
Abstract:
Although the impacts of violent conflict on investment, production, incomes and inequality have been widely studied on an aggregate level, comparatively less is known about the more diverse impacts of such conflict at the micro (particularly firm) level. Understanding such impacts can improve policies to mitigate the human and financial costs of violent conflict in developing countries. This policy brief discusses lessons from recent studies to address this gap.
Topic:
Conflict Resolution, Political Violence, Economics, International Trade and Finance, and War

17. Development

Author:
David M. Malone and Rohinton P. Medhora
Publication Date:
11-2013
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Notions of development have varied over time, and so an account of the international organizations concerned with its advancement must be accordingly elastic. The roots of international organizations concerned with development lie in two aspects of global inter-connectedness. The first is the propagation and management of a nascent technology for the global good. Thus were born the International Telegraph Union (ITU, now the International Telecommunication Union) in 1865 and the General Postal Union (GPU, now the Universal Postal Union) in 1874.
Topic:
Development, Economics, Emerging Markets, International Cooperation, International Organization, and Post Colonialism

18. Growth, Inequality, and Poverty Reduction in Developing Countries

Author:
Augustin Kwasi Fosu
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The study presents recent global evidence on the transformation of economic growth to poverty reduction in developing countries, with emphasis on the role of income inequality. The focus is on the period since the early/mid-1990s when growth in these countries as a group has been relatively strong, surpassing that of the advanced economies. Both regional and country-specific data are analysed for the US$1.25 andUS$2.50 level poverty headcount ratios using the most recent World Bank data. The study finds that on average income growth has been the major driving force behind both the declines and increases in poverty. The study, however, documents substantial regional and country differences that are masked by this 'average' dominant growth story. While in the majority of countries growth was the major factor behind falling...
Topic:
Development, Economics, Poverty, and Third World
Political Geography:
United States

19. Thailand's Development Strategy and Growth Performance

Author:
Peter Warr
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Thailand's development strategy has been strongly market-oriented and open to trade and investment flows with the rest of the world. Since the late 1950s, its growth performance has been outstanding. Poverty incidence has declined dramatically, but economic inequality has increased. Economic progress has been reflected in very significant improvement in non-economic indicators of well-being such as life expectancy, infant and maternal morality, and literacy. Nevertheless, the performance of the education system is chronically poor. Environmental problems and institutional failures in resource management are ongoing. Reform is needed in several areas, including political and corporate governance, regulation of industry, and in the education and health systems.
Topic:
Development, Economics, Education, Emerging Markets, Poverty, and Foreign Direct Investment
Political Geography:
Asia and Southeast Asia

20. Sensitivity of Loan Size to Lending Rates

Author:
Samuel Kobina Annim
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the combined effect of interest rates and poverty levels of microfinance clients on loan size. Cross section data on 2,691 clients and non-clients households from Ghana is used to test the hypothesis of loan price inelasticity. Quantile regression and variants of least squares methods that explore endogeneity are employed. We find the expected inverse relationship only for the 20th to 40th quantile range. The semi-elasticity of loan amount responsiveness to a unit change in interest rate is more than proportionate and significant for the poorest group only. Market segmentation based on poverty level is suggested in targeting and sustaining microfinance clients.
Topic:
Development, Economics, Markets, Poverty, and Foreign Aid
Political Geography:
Africa