2018 ASSA Annual Meeting

The 2018 Annual Meeting will be held in Philadelphia, PA on January 5-7, 2018 (Friday, Saturday, Sunday). The Philadelphia Marriott is the headquarters hotel and the Loews Philadelphia is the co-headquarters hotel. Below are AFEA Sessions and Events

January 5-7, 2018 – Philadelphia, Pennsylvania

Friday, January 05, 2018

2:30 PM – 4:30 PM
Marriott Philadelphia Downtown, Meeting Room 406

Issues on African Development I

Hosted By: African Finance and Economics Association
Paper Session
Chair: Willene A. Johnson, Komaza, Inc

Does Targeting Aid to Health Sector Work? The Impact of Aid on Child Mortality From Diarrhea in Sub-Saharan Africa

Leonce Ndikumana, University of Massachusetts
Lynda Pickbourn, Hampshire College

View Paper 1 Abstract (click to show/hide)

Although developing countries as a whole have made impressive strides towards reducing child mortality, achieving sustained improvements in health outcomes remains a challenge for sub-Saharan Africa, where diarrhea remains a leading cause of death in children under the age of five. In this paper, we examine the impact of foreign aid to the health sector on death rates from diarrhea in children under five in 47 sub-Saharan African countries, using panel data from the OECD-CRS database on the sectoral allocation of development aid, in conjunction with country-level data on health outcomes. After controlling for country-specific effects and the potential endogeneity of regressors, we find that health aid is associated with a decrease in death rates from diarrhea in children under five. In addition, health aid also exerts an indirect positive impact on health outcomes by increasing government spending on health, suggesting that the overall impact on diarrheal death rates may be greater than the direct effect. Furthermore, access to water and sanitation remain important in reducing child mortality from diarrhea.

The Effect of Women’s Representation in Parliament and the Passing of Gender Sensitive Policies

Elizabeth Asiedu, University of Kansa
Claire Branstette, American Institute for Research
Neepa Gaekwad Babulal, State University of New York-Fredonia
Nanivazo Malokele, University of Kansas

View Paper 2 Abstract (click to show/hide)

This paper employs data from 159 developing countries to examine whether countries that have a higher share of women in parliament are more likely to pass gender sensitive laws. We find that all else equal, developing countries that have a higher share of women parliamentarians are more likely to pass comprehensive laws on sexual harassment, rape, divorce and domestic violence. The results are robust. They holds for Ordered Probit, Ordered Logit as well as ordinary least squares (OLS). The results also holds for 4 sample groups: 159 developing countries, 48 African countries, 43 countries in Sub-Saharan Africa (SSA) and 111 developing countries outside SSA.

Optimal Taxation, Social Protection and Informality: Theory and Evidence From Sub-Saharan Africa

Theophile Azomahou, Maastricht University, UNU-MERIT, University of Clermont Auvergne and CERDI
Mbaye Diene, University Cheikh Anta Diop and CRES
Bity Diene, University of Clermont Auvergne and CERDI

View Paper 3 Abstract (click to show/hide)

Social protection has emerged as a key policy instrument to alleviate poverty and vulnerability in many developing countries. It has evolved into different forms of mechanisms in terms of focus and targeting population, coverage and scope, and ways of mobilization and utilization of resources. The main mechanism of social protection relies on the redistribution and the use of social services and assets. However, the financing of social protection remains a key constraint in developing countries. Efforts to improve revenue mobilization (e.g. tax capacity) face the informal sector which drives a large part of the economy and which escapes taxation.

We develop a life-cycle model to relate optimal taxation and social protection in the context of informality. Individuals consume a good and offer jobs either in the formal or in the informal sector, and face idiosyncratic shocks that characterize their types. The payoffs from arbitrage between public and private social protections are evaluated and the optimal contribution is derived accounting for moral hazard. We derive two main theoretical results: i) Welfare gain from taxation is obtained using the ousting of private contributions (elasticity of public taxation with respect to private contribution) and the covariance between marginal utility and wage. Therefore, the government should take on any social protection, both formal and informal, and this involves formalizing fully the informal sector. ii) Next, we consider the situation of adverse selection, i.e. there are private information about individuals’ abilities and public information on these skills. Optimal taxation is given in terms of transition probabilities and the aforementioned variables. We show that, even without government intervention, the informal sector can ensure optimal protection. These findings offer rich policy strategies regarding taxation and redistribution in developing countries.

International Ownership and Firm Performance in Africa

Mina Baliamoune-Lutz, University of North Florida
Stefan Lutz, European Management School

View Paper 4 Abstract (click to show/hide)

Issues of economic development and the interaction of multinational enterprise (MNE) presence and formation and success of small and medium-sized enterprises (SMEs) in developing countries have dominated the research agenda at various policy levels. One major element of successful economic transformation is the formation of a viable local industry and in particular small and medium-sized enterprises. Empirical evidence suggests that local SMEs may lack access to a variety of vital resources. Hence, international ownership participation – or interaction with MNEs – may provide access to financing, technology, and global upstream and downstream markets. Firm performance and its relationship to international supply chains has been well explored for firms in developed economies but this is not the case for firms in developing economies, where studies generally contain either macroeconomic research on FDI, export-led development or present survey-based evidence on firm performance. This paper aims at filling this gap. We identify internationally-owned firms in Africa and examine the impact of ownership structure on firm performance. Our results reveal a clear ownership-specific pattern. Furthermore, in Africa, international connections may often take a "French" or an "English" route to internationalization. We investigate whether it makes a difference for individual firm performance which route is taken.

Gender Disparities in Employment and Earning in Africa: Evidence From Swaziland

Zuzana Brixiova, University of Cape Town, Thierry Kangoye, African Development Bank

View Paper 5 Abstract (click to show/hide)

In this paper we provide first systematic evidence on the gender disparities in the labor market in Swaziland, drawing on the country’s first two (2007 and 2010) Labor Force Surveys. We find that even though the global financial crisis had a less severe effect on the labor market outcomes of women than those of men, women continue to have lower employment and labor force participation rates. Utilizing the Heckman probit selection model shows that while women account for a disproportionate share of the self-employed, they are more often than men involved in low-productivity activities and rely less on formal finance. We conclude with policies that could help Swaziland – and other middle income countries in Sub-Saharan Africa – narrow these disparities and embark on a more inclusive growth path.

Inclusive Finance for SMEs in South Africa and Its Impact on Growth and Inequality

Elizabeth Lwanga Nanziri, University of Oxford

View Paper 6 Abstract (click to show/hide)

Quantifying the effect of constraints to firms is essential in our understanding of firms’ economic contribution. Using a micro-founded general equilibrium model and firm-level data from the World Bank Enterprise Surveys, this paper analyses the effect of relaxing financial constraints for investment in entrepreneurial talent, on macro-economic variables like GDP, TFP and inequality. We focus on three dimensions of financial inclusion: access, depth and intermediation efficiency to calibrate the model to South Africa. We find that relaxing participation and collateral constraints increases GDP by up to 3 percentage points and TFP by up to 2 percent. Inequality declines by 1– 3 percentage points, driven by both the extensive and intensive margins. In a regime of initially low intermediation costs, this policy stance might lead to an increase in monitoring costs due an influx of high risk talented but constrained entrepreneurs. Conversely, constrained entrepreneurs might refrain from borrowing and maintain a low leverage ratio to avoid being monitored, if intermediation costs are initially high. Overall welfare gains are attributed to an increase in the proportion of talented but constrained entrepreneurs, who take advantage of the relaxed financial constraints.


Nanuvazo Malokele, University of Kansas
Akwasi Nti-Addae, Kansas Department of Commerce
Roland Pongou, University of Ottawa and Harvard University
Soumahoro Souleymane, World Bank
Ikechukwu D. Nwake, Girne American University

JEL Classifications:

O1 – Economic Development
D1 – Household Behavior and Family Economics

Friday, January 05, 2018

AFEA Presidential Address

7:00 PM – 8:00 PM
Marriott Philadelphia Downtown, Meeting Room 404

Hosted By: African Finance and Economics Association
Professor Edward Ghartey, University of West Indies

AFEA Board Meeting

8:00 PM – 9:00 PM
Marriott Philadelphia Downtown, Meeting Room 403

Hosted By: African Finance and Economics Association
Event (Invitation Only)

Saturday, January 06, 2018

8:00 AM – 10:00 AM
Marriott Philadelphia Downtown, Meeting Room 415

African Economic Development: Regional Economic Integration

Hosted By: National Economic Association & African Finance and Economics Association
Paper Session
Chair: Oladele Omosegbon, Indiana Wesleyan University

Gender and Microcredit in Sub-Saharan Africa

Juliet Elu, Morehouse College

View Paper 7 Abstract (click to show/hide)

As access to credit can be important determinant of inequality, this paper considers if gender matters for the use of microcredit and social lending in Sub-Saharan Africa. Even though there are mixed result on the impact of microcredit on economic growth and poverty reduction, many see Microcredit as a mechanism to alleviate poverty and promote economic growth in SSA. With household level diaries data on financial activities in Mozambique and Tanzania, we estimate latent variable specifications of proxies for microcredit as a function of gender. Our estimates will inform the extent to which access to microcredit is conditioned on gender, and a potential driver of gender inequality in Sub-Saharan Africa.

Foreign Direct Investment and Economic Size as Drivers of Intra-regional Exports of Manufactured Goods in West Africa: The Case of West African Economic and Monetary Union

Toussaint Houeninvo, African Development Bank
Philippe Sèdédji, Ministry of State-Republic of Benin

View Paper 8 Abstract (click to show/hide)

Africa exports mainly crude product to its main partner countries outside the continent, a trade pattern that exacerbates the vulnerability of its economies as shown by the recent sharp decline in commodity price and how it has strongly weakened growth and jeopardized jobs, fiscal balance and current balances on the continent. This underlines how developing value chains that promote intra-regional export of manufactured goods can be external shocks absorber and develop resilience of African Economies.

Given the low domestic investment rate, the continent in general and in West Africa in particular, relies on Foreign Direct Investment for regional value chain development. Beside investment, another constraint to trade on the continent is poor transport logistics quality.

The paper investigates on the role of Foreign Direct Investment and Economic size of West African Economic and Monetary Union member countries on intra exports of manufactured goods. The econometric analysis uses panel data for the period 1996-2012 covering height (8) West African Countries. The results of random effects indicate that level of development measured by GDP as well as FDI have the positive expected sign and significant at 1% while population has a negative impact at 1% (Lindert Hypothesis).

The Economic Value of Regional Integration in Africa

Diery Seck, Center for Research on Political Economy (CREPOL)

View Paper 9 Abstract (click to show/hide)

The study examines the economic gains that accrued to African countries that are members of regional integration arrangements over the last 40 years. Economic gains are assessed from three perspectives: enhanced trade, real convergence and welfare gains. Gains from increased trade are measured by way of estimates of trade creation and trade diversion that benefit member countries. The approach of export enhancement through regional integration is compared to the strategy of single country promotion of global exports aimed at achieving higher levels of economic growth as opposed to regional integration strategies. The second value criterion of regional integration aims to examine the extent to which members have levels of income that tend to converge towards the country with the highest per capita income thus giving rise to more income uniformity across the region. The first measure is the evolution over time of the average difference of incomes between the country with the highest income and the incomes of the other members. The second measure is the evolution over time of the standard deviation of rates of growth of the per capita GDP of all member countries.

The hypothesized contribution of regional integration to the welfare of its members is measured with three approaches. First, the rise in per capita income as a result of membership is examined over time and as the integration process deepens. Second, considering that countries prefer lower volatility of their key economic variables, the evolution of the standard deviation of exports of member countries is computed considering that stable export markets and lower volatility of nominal exchange rates could be benefits of regional integration. Finally, the general welfare of residents of member states is assessed over time through the evolution of countries’ respective Human Development Index (HDI) computed.

Regional Economic Integration in West Africa: Unsettled Issues?

Akpan Ekpo, West African Institute for Financial and Economic Management
Douglason Omotor, West African Institute for Economic and Financial Management

View Paper 10 Abstract (click to show/hide)

The Economic Commission of West African States (ECOWAS) was established in 1975 with the goal of working towards a monetary union. In spite of some achievements particularly in the area of travel protocols, it appears progress on the economic front seems sluggish. Policy-makers seem to emphasize the need to meet both the primary and secondary criteria for currency convergence. However, citizens in the region have integrated informally as evidenced by the movement of goods and services within the region as well as the exchange of local currencies among the countries. The economies of the member countries are similar – all are exporters of primary commodities. Trade among countries in the region is negligible.

The Franco-phone countries have a common currency (CFA) while the Anglo-phone countries including Guinea have been working towards a common currency since 2002 with the eventual convergence with CFA. The deadline for achieving convergence has been shifted several times within the West African Monetary Zone (WAMZ). The ECOWAS Commission recently set the year 2020 as the deadline for convergence and economic integration.

This paper using a political economy approach examines the journey so far and addresses the question whether there are unsettled issues preventing progress towards economic integration in the West African sub-region. It is expected that the analysis in the paper would provide suggestions on how best to realize and optimize the benefits of economic integration in the region.

Limited Liquidity in Ghana

Miesha Williams, Morehouse College

View Paper 11 Abstract (click to show/hide)

The relationship between economic activity and money in Ghana has, for the most part, displayed diminishing growth. Together, however, the residual between the two is no longer constant but has begun to turn negative. This study hypothesizes optimized economic activity in Ghana, promotes diminishing returns in the money market. The result from diminishing returns in the money market gives rise to liquidity constraints that have spanned the gamut of monetary policy ranging from 2001 to 2016. This is important because under these circumstances monetary policy tools are virtually useless. Using the Taylor rule and accounting for exchange rates, as in Taylor’s international extension of the Taylor rule (2001), as well as incorporating data from the Central Bank of Ghana and the Federal Reserve Bank of Saint Louis, this study finds evidence the volume of money has little to no impact on the monetary policy instrument. This study implies economic activity directly impacts the monetary policy rate twice as much as the indirect impact from the volume of money. The direct impact from the volume of money is insignificant.

The Significance of Common Currency to the Success of Economic Integration

Oladele Omosegbon, Indiana Wesleyan University

View Paper 12 Abstract (click to show/hide)

The Economic Community of West African States as one of the regional economic communities in Africa has been struggling with the creation of a common currency since 2003, when the Eco was scheduled to circulate. We have witnessed several postponements since then, the latest being from 2015 to 2020. All agents desire a united West Africa, just like the African Union and its members states desire a developed and united Africa. But if asked about using a common currency, many decision makers run into uncertainties and ambiguities. For many policy makers, the decision of whether to accept a common currency is a big irritation and an embarrassing nuisance. But common currency is a necessary condition for an economic community to exist but not sufficient. After all, without economic union, Africans have been in currency unions before. This fact alone, we show, allows some flexibility for ECOWAS, as indeed other regional economic communities in Africa, to establish a functional common currency that will kick start a rather uninspiring, invariant economic fortune since the colonizing countries of Europe left Africa more than fifty years ago. The ascendancy of ECOWAS countries in the world stage is going to depend on the size of its economy and in the use of its currency as an intervention and an anchor money. This is only possible if ECOWAS, as an economic community, comes to full fruition with a flourishing common money, commanding a widely acceptable internal purchasing power.


Theresa Mannah-Blankson, Messiah College
Kodjovi Mawuliplimi Eklou, University of Sherbrooke
Kidaya Didier Ntoko, Orange County Community College
Chinonso Etumnu, Purdue University
Elizabeth Lwanga Nanziri, University of Oxford
Léleng Kebalo, University of Lomé

JEL Classifications:

O1 – Economic Development

Saturday, January 06, 2018 (cont.)

10:15 AM – 12:15 PM
Marriott Philadelphia Downtown, Meeting Room 404

Issues on African Development II

Hosted By: African Finance and Economics Association
Paper Session
Chair: Rhonda Sharpe, Women’s Institute for Science, Equity and Race

Recognizing the Importance of Health Insurance in Mitigating Hazardous Child Labor in Ghana

Samuel Amponash, Tokyo International University

View Paper 13 Abstract (click to show/hide)

This paper provides evidence on health insurance impacts on child labor. Findings from this study suggest that insured poor families with children in school are less likely to allow their children to enter the labor market. Students in insured households reduce hours of paid employment by 58 percent and hours of unpaid economic activities by 176 percent. Health insurance uptake had negative impact on both earnings from paid employment and overall time spent working, as earnings from paid employment and total hours of work declined by GHS12 and 234 percent, respectively.

Does Human Capital Matter in Manufacturing Value Added Development in Africa?

John C. Anyanwu, African Development Bank

View Paper 14 Abstract (click to show/hide)

Very few countries have been able to grow and accumulate wealth without investing in their manufacturing industries. Also, a strong and thriving manufacturing sector precipitates industrialization. Unfortunately, manufacturing value added (MVA) development in Africa has been low and declining over time. This paper empirically assesses the role of human capital in MVA (% of GDP) in Africa and the two key sub-regions for the period, 1990-2011, using the IV-SLS technique with year and sub-regional fixed effects. Our results indicate that not all human capital indicators are “born” equal with respect to MVA: Primary education has an inverted U-shaped relationship with MVA in Africa as a whole, SSA and North Africa; secondary education has a negative significant relationship with MVA in the whole of the continent and SSA but the reverse is true for North Africa; and tertiary education has a significant positive relationship with MVA in all three estimations - tertiary education is good for increasing MVA in Africa. The other drivers differ substantially across the sub-regions. For example, economic development significantly affects MVA to the third degree polynomial, with negative leading coefficients in the all-Africa estimation and SSA but not so in North Africa. We conclude with policy recommendations.

The African Growth Experience and Tourism Receipts: A Threshold Analysis and Quantile Regression Approach

Bichaka Fayissa, Middle Tennessee State University
Christian Nsiah, Baldwin Wallace University

View Paper 15 Abstract (click to show/hide)

Many African countries experience vicious cycles of poverty, high public debt, serious balance of payments problems in international transactions, and a woeful reserve imbalance which exacerbate the economic crisis that households and businesses face in the continent. One of the ways that African countries can alleviate the foreign currency deficits and reserve account constraints, create jobs, and increase incomes for the locals and by extension promote overall economic growth is by strategically investing in the tourism industry. Using panel data for a cross-section of 50 African countries from the 1995 to 2015 period, this study investigates the impact of tourism receipts on economic growth in the continent. Specifically, we employ panel threshold analysis to investigate whether the impact of tourism receipts on economic growth is dependent on the level of per capita income. We also use quantile regression to investigate whether the impact differs by income quantiles of countries in study sample. Our preliminary results support our hypothesis that tourism receipts do positively and significantly contribute to the economic growth of African countries.

Information Contents of Term Structure of Interest Rates and Inflation Rates in a Developing Country

Edward Ghartey, University of West Indies

View Paper 16 Abstract (click to show/hide)

The term structure of interest rates, inflation rates and their information contents are investigated in a developing country by using different measures of inflation rates and default-free Treasury instruments of different maturities. Results from high frequency monthly data from the inception of monetary policy committee, when the Bank of Ghana adopted inflation targeting as its policy goal to date, show that the country’s yield curve is asymmetrical. Error-correction adjustments of discrepancies from the long-run equilibrium or attractor are slow at low and high rates, and faster at intermediate rates. Short-term interest rates, monetary policy rates, expected forward rates, interest rates spread and risk premium explain the country’s long-term rates. Only short term 91-Day rates and monetary policy rates contain the information required to predict the country’s inflation rates, with the latter being more effective. Consequently, monetary authorities can effectively use those rates to curb the country’s inflation rates.

Revisting Marcoeconomic Comovement between China and Africa: A Threshold-cointegration approach

Jean-Claude Maswana, University of Tsukuba

View Paper 17 Abstract (click to show/hide)

Since the early 2000s China actually increased its contribution to the growth of sub-Saharan African exports, allowing most of sub-Saharan Africa to sustain robust economic growth. Now that China’s growth is slowing and the drivers of its growth are shifting from investment and exports to domestic consumption, this shift is having a particularly large impact on commodity exporters in Africa. This observation has led to increased interest in the nature of the output co-movement between China and African economies. To date, scholarship on Sino-African economic ties has failed to fully address this issue, due in part to econometrics assumptions such as linearity in cointegration. This study contributes to this debate by assessing the extent to which aggregate outputs of China affects those of selected African economies (Botswana, Nigerian, Mauritius, and South Africa). The methodological framework follows the workforce international real business cycle (IRBC) as in Kose and Yi (2006) while the econometrics estimation resorts to the threshold co-integration and ECM (Ender and Siklos, 2001).

We found that indeed China and African economies are nonlinearly cointegrated. Moreover, the dynamic response of African GDP to a shock differ if one or both economies are in recession or in a different stage of the business cycle. Interestingly, African output’s adjustment responses to downturns far outweighing those to upturns. For instance, Nigerian output adjusts relatively quickly to offset lower levels with respect to its long-run trend with both China’s GDP and their bilateral trade balance. Taken together these findings suggest that the predictors of economic growth are the measures of Sino-African bilateral trade and the stage of the business cycle.

Are Female Headed Households More Food Secured? Evidence from Nigeria and Ethiopia

Ikechukwu D. Nwake, Girne American University
Seyi Akadiri, Eastern Mediterranean University
Glen P. Jenkins, Eastern Mediterranean University

View Paper 18 Abstract (click to show/hide)

Household headships and food security—access to sufficient, affordable and nutritious food at all times—have presented very important policy concerns in the drive towards achieving the first two of the Sustainable Development Goals (SDGs). This study, therefore, examines the determinants of food security amongst male and female-headed families in Ethiopia and Nigeria—and whether female-headed households are more food secured. Using the Ethiopia Socioeconomic Survey for 2011/2012 and 2013/2014 and the General Household Survey (GHS) cross-sectional panel data – 2010/2011 and 2012/2013 for Nigeria Ta, we found significant differences in the determinants of food security between male and female-headed households and with significant differences across regions in both countries. The empirical findings further shows that there are common determinants of food security between the two-pan el countries, other than the gender of the family heads. The increase in per-capita food consumption and educational attainment increases the likelihood of food security for the male households than their female counterpart. Hence, educational attainment, high per capita food consumption, proximity to market, resident in the urban and household assets have a significant varying impact on household’s food security. The general findings, however, show that female-headed families are poorer and indeed less food secure than the male headed households. This study, therefore, suggests improvement in income earning measure, educational level, aggressively addressing the issue of poverty, and improving the agricultural productivity with a view of producing sufficient food that can guarantee all-time food security among female household in a typical developing countries of Ethiopia and Nigeria respectively.


Alice K. Ndikumana, Harvard University
Jane Karonga, Economic Commission for Africa
Mercy Palamuleni, McNeese State University
John Nana Francois, West Texas A&M University
Stephen Armah, Ashesi University College
Belinda Archibong, Barnard College

JEL Classifications:

O1 – Economic Development
F2 – International Factor Movements and International Business

Saturday, January 06, 2018

AFEA/AFDB Joint Luncheon and Keynote Address

1:00 PM – 3:00 PM
Marriott Philadelphia Downtown, Independence Ballroom III

Hosted By: African Finance and Economics Association/African Development Bank
Event (Invitation Only)

AFEA/AFDB Joint Luncheon and Keynote Address RSVP

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