The thesis focuses on four thematic areas on efficiency and productivity growth using a sample of 19 Sub-Saharan African countries from 1960-2002. The study utilises stochastic frontier and panel data techniques to provide estimates of national efficiency scores; explain the variation in national efficiency scores; estimate and decompose total factor productivity growth; and finally, looks at the contribution of human capital to total factor productivity growth and components, as well as its role in the technological 'catch-up' process in SSA.

No description available.

No description available.

The original contribution of this thesis is to provide some empirical evidence to the debate on the investment, trade and growth connections. The thesis as a whole is designed to flow in a deductive manner. It starts by investigating the growth process and the contribution of trade to Sub-Saharan Africa (SSA) economic growth. It is· shown that exports and imports have a significant and positive influence on the growth process. Moving on, it identifies the determinants of the trade performance of SSA benchmarked to a bloc of some well-performing South-East Asian (SEA) economies. The investigation identifies supply side factors, particularly low and declining investment, as the critical constraints of trade in SSA. Then, it focuses on the investment-trade-growth connections and comes out with evidence for a full cycle of positive impact flowing from trade (export-to-import)-to-investment-to-growth and back to-trade (export). However, manufacturing in SSA is not found trade enhancing. Hence, policy to support a manufacturing led-re-industrialization is the proposed future path for SSA growth, involving the promotion of private investment. The thesis, lastly, identifies the main constraints of private investment based on a case study of Ethiopia and recommends a future investment policy. Key elements are enhancing domestic demand and the return to investment, encouraging trade liberalization, improving infrastructure and maintaining macroeconomic and political stability. A similar private investment story can be told about other SSA economies. Furthermore, the operations of the public sector and other institutions will need new thinking.

This thesis is made up of four essays in empirical development economics. The first essay takes a new look, from a macro perspective, at the issue of remittances effectiveness. Using a panel dataset for 41 Sub-Saharan Africa countries over the period 1981-2010 and controlling for endogeneity under instrumental variable estimation, I find that remittances reduce poverty, but the size of the poverty reduction depends on how poverty is being measured. Additionally, remittances have income-equalizing effects. The second essay investigates the effect of gross fixed capital formation on poverty and explores whether the gross fixed capital formation and poverty relationship can be strengthened by institutions in Sub-Saharan Africa. It is found that gross fixed capital formation reduces poverty and institutions reinforce the gross fixed capital formation and poverty link. The third essay uses a nationally representative pseudo-panel dataset of Ghana for 1991/1992, 1998/1999 and 2005/2006 to investigate whether there is a positive relationship between rainfall-driven agricultural income and household per capita expenditure. It is found that a fall in rainfall-driven agricultural income leads to a decrease in per capita expenditure. The results show that female-headed and rural households are more vulnerable to adverse rainfall-driven agricultural income changes. The expenditure disaggregation indicates that female-headed households significantly reduce per capita non-food expenditure in times of rainfall-induced agricultural income decrease whilst the response of male-headed households focuses more on reducing per capita food and remittance expenditures. In the fourth essay, we use a repeated cross-section dataset of Ghana for 1991/1992, 1998/1999, 2005/2006 and 2012/2013 to investigate the effect of agricultural income on remittances. We find that households in Ghana may use remittances to protect themselves from negative agricultural income changes.

This thesis consists of two separate studies as follows. The first study uses macro panel data on US FDI in developed countries during 1982-2010 to empirically investigate the influence of host country characteristics on FDI. Differing from earlier panel data studies on FDI determinants which often impose the (standard) restrictions of the homogeneity of slope coefficients on the observed variables and the homogeneity of the factor loadings on the unobserved common factors in the empirical specification, this study uses the recently-introduced Common Correlated Effects Mean Group estimator to allow the effects of observed variables and unobserved common factors to vary across countries. In this research, the data seem to support the empirical specification allowing for slope heterogeneity across countries rather more than the standard ones imposing the restrictions of slope homogeneity. Empirical results indicate that the stock of US FDI in a given FDI recipient is likely to be significantly determined by market size, the fluctuations of the exchange rate, and risks in terms of the investment climate, corruption and the legal environment of the host country. The second study uses an efficient two-step system GMM estimator with Windmeijer-corrected standard errors to test the human-capital augmented Solow model (HCASM). Empirical results in this study confirm conditional convergence as the HCASM predicts. However, the rate of convergence found ranges from about 0.3 to roughly 1 per cent a year, which is slower than found in previous cross-country research. The effect of the investment rate on the level of the growth path is found to be significant while that of the level of human capital is insignificant. Besides, this study finds that the HCASM seems to be unable to fully account for the contrasting growth of countries in sub- Saharan Africa and East Asia even when country-specific effects and endogeneity are taken into account. Further, the evidence indicates that the rates of technological progress between the two regions are likely to be different and this may help to explain the contrasting growth performance experienced by sub-Saharan African and East Asian countries.

In general, this study examines the Stock Market, Financial Development and Economic Growth in selected sub-Sahara African countries. Empirically, Chapter Two of the study used Generalised Method of Moment (GMM) dynamic instrumental variable approach to investigate financial development and economic growth nexus in the East African countries. Also, the study applied both Fixed Effect Estimation (FEM) techniques and Panel vector autoregressive (PVAR) to analyse the causal effects of equity market development on economic growth in eleven sub-Sahara African countries, in Chapter Three of this study. On the other hand, Chapter Four of this study measures the conditional variance (volatility) of the stock returns of Tanzanian stock market (Dar-es-Salaam Stock Exchange). For modelling stock market return volatility, we use both standard and asymmetric GARCH models to capture the volatility clustering and asymmetric features in the financial data of the companies selected. To attain the objectives of all three empirical chapters highlighted above, this study had to consider various important and necessary tests; such as tests for unit root, to check if the expected variables were stationary, and tests for cointegration to check whether there was a long-run equilibrium relationship between variables under study in Chapter Two and Chapter Three. However, in Chapter Four (modelling volatility) we tested for an additional ARCH effects apart from stationarity (unit root) tests we have had. Specifically, this study found that there is causal relationship between financial development (when presented by indicator domestic credit to private sector) and economic growth in the East African countries (EAC). Also, we found that the domestic credit to private sector as an indicator for financial development has a role to play in economic growth of EAC. Moreover, we find that there is unidirectional Granger causality, which flows from equity market development (using indicator market capitalization rate-MCR) to economic growth of the panel of 11 sub-Sahara African countries. We also declare that stock market development via MCR play a positive role in SSA economic growth. In addition, the study reveals that there is existence of leverage effects in Tanzanian stock market, therefore, the bad news (negative shocks) reflect an increase in the conditional variance (volatility) of DSE stock returns for the next period than the good news. However, we find that the volatility clustering exists in Tanzanian stock market returns.

This thesis contains the findings of an examination of the joint and endogenous evolution of financial development, income inequality and human welfare using data for a sample of 29 Sub-Sahara African countries from 1990 to 2010. Specifically, the study purposed to investigate whether the relationship between human welfare measured by the aggregate Human Development Index and financial sector measured by broad money (M2) is influenced by the level of income inequality in SSA. Unlike previous studies, this study uses the Vector Error Correction Model (VECM) methodology to correct for biases arising from the presence of unit roots, serial correlation and endogeneity. The results suggest that financial sector development measured by its size or broad money as a percentage of GDP (M2/GDP) yields a disproportionately higher and significant robust effect on living standards in SSA when national incomes are highly unequally distributed (GINI > 0.45) both in the long and short run. This finding is strongly causal and irrespective of whether a multidimensional measure of welfare such as the human development index (HDI) or a one-dimensional measure such as the infant mortality rate is employed. Also, the finding that high income inequality is not a fatality in SSA could be taken as evidence in support of the Kuznets (1955) hypothesis. In addition, the results suggest that the disproportionate impact of financial sector deepening (credit to the private sector) on human welfare in the highly unequal countries only occurs in the long run. Contrary to Beck et al. (2007), the liquidity, savings and transactions functions offered by a more developed financial sector in terms of broad money (M2) provides a higher economic wellbeing for the residents of our highly unequal SSA sub-sample than credit issued to private individuals and businesses. Again, this study found that the disproportionate impact of financial sector development in the highly unequal countries is related to an average ratio to GDP of broad money (M2) of 25 percent and credit to the private sector of 18 percent calculated independently of the VECM model. The implication is that these average ratios could be important thresholds for which the impact of financial development on human welfare becomes vital. This is consistent with theories that suggest that there is increasing returns to scale as the financial sector develops from a lower level. Consequently, and because of the finding that there is strong causality between M2 and human welfare in the highly unequal SSA countries in our sample, any policy designs to combat poverty and enhance living standards in such countries must have a strong financial sector development component. Then too, the findings suggest that low income SSA countries must enact adequate policies to increase the size and depth of their financial sectors to reach at least, a long term average ratio to GDP of 25 percent for M2 and 18 percent for credit to the private sector.

Government debt management, as a distinct policy, with a clear objective of managing risks and cost minimisation first started among the industrialised economies in the late 1980s. The need to improve government debt management arose with rising debt levels, caused by macro-economic imbalances especially in the mid-1970s and 1980s. In sub-Saharan Africa however, debt management as a strategy was undeveloped or lacking completely. A research in the area of debt management is significant to the economic growth and development of the sub – Saharan Africa. The significance of debt management is supported by empirical studies showing that effective public debt management could go a long way in protecting both low and middle income countries against the negative impact of the financial crisis. This research focus specifically on the choice between short and long term, domestic and external debts and how the process affects the economy as measured by per capita income and debt ratio or level of indebtedness. The work also looked at the extent of implementation of debt management among the SSAs especially as contained in the World Bank and IMF debt management performance guidelines. The research adopted the quantitative approach to answer questions raised in relation to the effect of government borrowing; the choice of debt maturity, and how sovereign debt and its management affect economic growth. It was found that debt is related negatively to economic growth; and the phenomenon of debt overhang actually exists. Debt management however was found to be relevant; where it was observed that the entire process of debt management is vital to economic growth and the development of a country. In particular, countries in sub-Saharan Africa need to put in place an effective and sound debt management strategy that would aid in promoting the needed stability, reduce risks in borrowing and guide in the prudent management of borrowed resources. The work contribute to both theoretical and empirical aspects of debt and its management.

This thesis consists of a brief introduction, which situates the work within in the intellectual history of development theory, and three papers that address important gaps in our understanding about the dynamics of urbanisation and urban development in sub-Saharan Africa. The first provides an interdisciplinary, historical perspective on the dynamics of urbanisation and urban growth in the region from the colonial era to the present day. I argue that these processes are fundamentally driven by mortality decline set in motion by improvements in disease control and food security. Viewed through this lens, the widely noted phenomena of ‘urbanisation without growth’ and very rapid urban population growth in the late 20th century are not as unusual as they have often been portrayed by development economists and policymakers. The second addresses the question of why sub-Saharan Africa has the highest rate of slum incidence of any major world region. I argue that slums can be interpreted as a consequence of ‘disjointed modernization’ in which urban population growth outpaces economic and institutional development. I trace the origins of disjointed modernization in sub-Saharan Africa back to the colonial period and show that colonial era investments and institutions are reflected in contemporary variation in slum incidence. I argue that ‘status quo interests’ and the rise of an anti-urbanisation bias in development discourse have inhibited investment and reform in the post-colonial era. The final paper presents and tests an empirical model designed to account for variation in urban protest activity across countries in the region. The model is comprised of basic demographic, political and economic factors that theoretically influence the motives, means and opportunities of potential protestors. The results of a panel data analysis are consistent with the core hypotheses, but several unexpected results emerge. More research is required to confirm these results, clarify mechanisms and account for broader trends in contentious collective action in the region.