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On the political economy of nonlinear income taxation
No full textThe literatures dealing with voting, optimal income taxation, implementation, and pure public goods are drawn on here to address the problem of voting over income taxes to finance a public good. In contrast with previous articles, general nonlinear income taxes that affect the labor-leisure decisions of consumers who work and vote are allowed. Uncertainty plays an important role in that the government does not know the true realizations of the abilities of consumers drawn from a known distribution, but must meet the realization-dependent budget; the tax system must be robust. Even though the space of alternatives is infinite dimensional, conditions on primitives are found to assure existence of a majority rule equilibrium
Управление на снабдяването със земя и води в българските ферми
No full textThe study identifies dominant modes, factors, and efficiency of land and water supply in Bulgarian farms. It incorporates the New Institutional Economics methodology and new representative data collected through a survey of farm managers of different types and location
Proximité spatiale, mimétisme et développement entrepreneurial endogène en Afrique : un modèle théorique
No full textThis article analyzes the conditions for endogenous entrepreneurial development, understood as the transition from entrepreneurship by necessity to local entrepreneurship by opportunity. The theoretical model that we develop shows that the presence of foreign-owned companies does not hinder local entrepreneurship by opportunity, but rather stimulates it through mimicry, thus triggering a cumulative dynamic of endogenous entrepreneurial development. The spatial proximity linking potential local entrepreneurs and foreign companies produces a cognitive proximity that allows the former to switch to entrepreneurship by opportunity by imitating the latter. The State can support this dynamic through better coordination of reforms: macroeconomic measures (improvement of the business climate, promotion of foreign direct investment, minimum infrastructure) must precede microeconomic measures (strengthening entrepreneurial capacities, financial support)
Coûts de la Covid-19, Tropicalisation de modèle épidémiologique et Arbitrage santé-économie en Afrique
No full textWe model the optimal behavior of the public decision-maker of an African country plagued by covid-19, with little fiscal room for maneuver and facing a health-economy dilemma. The model shows that a substantial part of the economic costs of covid-19 is due to a deficit in tropicalization of the epidemiological model. A comparative static analysis of the optimal equilibrium shows that the public decision-maker can reduce the economic costs of covid-19 in two ways: either he relaxes the barrier measures at the cost of an increase in human costs (health-economy trade-off); or he tropicalizes the epidemiological model as best he can, without increasing health costs (no health-economy trade-off). This last strategy is an alternative that can allow African countries to face a pandemic crisis economically, without sacrificing health while minimizing the systematic recourse to debt and aid
Public goods, trust, and tax policy: shaping economic formalization
No full textThis paper develops a general equilibrium framework that integrates heterogeneous firms with both idiosyncratic productivity and subjective beliefs about public goods provision—specifically, confidence in institutional quality—alongside endogenous informality. We examine the impact of tax policy on the formalization process and highlight the crucial role of firms' trust in public institutions. Our findings reveal that when firms perceive the government as credible, an increase in both tax rates and tax revenues enhances public goods provision, fostering greater formalization. However, in environments with weak institutional trust, formalization policies may yield suboptimal economic outcomes—potentially even worsening conditions compared to scenarios with higher trust levels. This underscores how institutional confidence influences the productivity of formal firms and facilitates their transition into the formal sector. In the long run, effective tax policy can improve overall welfare, but its success is contingent on government credibility. Our research contributes to the literature on informality by providing novel insights for policymakers seeking to enhance formalization and economic welfare, particularly in settings where skepticism about government commitment and institutional capacity prevails
Exchange Rate Variability in Nigeria: Drivers and Remedial Monetary Policy
No full textIn this study, we examine the drivers of persistent exchange rate depreciation in Nigeria and suggest remedial monetary policy actions based on inference from the results. Using time series data from January 2008 to June 2023, the following potential drivers were examined: price level differential, interest rate differential, terms of trade, stock market performance, oil price and central bank forex supply to the FX market. While the Naira/USD exchange rate is a daily observation data, potential drivers are majorly available on a monthly basis. On this note, we employ the GARCH variant of the Mixed Data Sampling (GARCH-MIDAS) technique. For robustness purposes, we employ conduct modelling with fixed window and rolling window data sampling techniques. Notable model selection criteria such as the Akaike Information Criterion (AIC), Bayesian Information Criterion (BIC) and Logarithmic Likelihood (LogL) are utilized to determine the optimal model. Our results reveal that foreign exchange market inefficiency, high inflation, low interest rate, dwindling oil price, adverse stock market performance, and low CBN FX supply to the forex market are major drivers of exchange rate variability in Nigeria. The results are robust to alternative data sampling techniques. Additional results of this study suggest that improvement in macroeconomic performance and adverse
financial market performance can reduce the long-term volatility persistence of the exchange rate in Nigeria. Based on intuition from these findings, remedial monetary policy actions proposed by this study include improvement in forex market efficiency, promotion of productivity and export of tradeable goods and services, reduction in macroeconomic uncertainties, and policy consistency in exchange rate and
macroeconomic management. In addition, we conclude that monetary authorities need not introduce hostile financial market policies to reduce exchange rate variability; rather, they should embark on policies to enhance macroeconomic performance
Développement financier et réduction des inégalités de revenus en Côte d’Ivoire : une approche par la régression quantile
No full textThis study assesses the effect of financial development on income inequality in Côte d'Ivoire, using a multidimensional indicator of financial development that incorporates financial inclusion. We use ARDL and quantile regression methods to regress income inequality (measured by the Gini index) on the indicator of financial development and various control variables over the period 1986-2018. The results show that the financial development indicator only reduces income inequality in the short term. In the long term, it increases them at all quantiles, with a more accentuated effect in the upper quantiles than in the lower quantiles. This counter-intuitive result is explained by the lesser orientation of financial inclusion towards income-generating activities. The study recommends the following measures: link financial inclusion and income-generating activities and strengthen platforms aimed at reducing information asymmetry between borrowers and lenders
Migration, Remittances, and the Financing of Development
No full textThis paper examines the essential role of migration and remittances in development across sub-Saharan Africa, with a particular focus on Côte d’Ivoire. It demonstrates that these financial flows help alleviate poverty and stabilise the economy in the short term while fostering long-term development through investments in human capital, entrepreneurship, and social protection. However, several challenges persist: excessive reliance on remittances may hinder local productivity, weaken exports, and increase import dependency. The paper recommends policies aimed at economic diversification, enhanced financial inclusion, reduced transfer costs, and better-coordinated migration policies to maximise the developmental benefits of remittances
Impact de Trump 2.0 sur l'Afrique subsaharienne
No full textAs Trump takes aim at global norms and institutions, the question of what parts of the post-Cold War order can be saved, and for whom, needs urgent attention. Moving away from these positions will require major changes. Trump 2.0 has generated optimism in Africa. South Africa, in particular, was initially optimistic. But later, bilateral relations with South Africa deteriorated as the Trump administration, including his economic advisor, South African-born Elon Musk, openly sided with the white SA establishment, at least for the next four years. Prospects for democratic transitions were also dashed, as Trump did not care about democratising sub-Saharan Africa (SSA), but rather supported African autocracies, such as in Biya's Cameroon, Gnassingbé's Togo, and the Central African Republic and Ivory Coast. Trump's intention to dismantle USAid threw all its contractors into disarray. Fear, pain and hunger were the terrible consequences of US funding cuts, for example in Kenya and war-torn Sudan. The US was the largest ODA donor in SSA. In fiscal year 2023/2024, the US had donated nearly $3.7 billion. Jihadism in the Sahel, the Horn of Africa and beyond is likely to intensify and spread. The isolationist US Africa policy under Trump could further reduce Western influence. Trump's trade policies, particularly the imposition of tariffs and withdrawal from multilateral agreements such as the Trans-Pacific Partnership (TPP), have affected developing countries' access to the US market. This is particularly true in SSA, which relies heavily on exports of commodities, textiles and manufactured goods to the US market. The imposition of tariffs on steel, aluminium and other manufactured goods further increased the cost of exports from these countries, leading to reduced competitiveness and a decline in trade volumes. African countries benefiting from the African Growth and Opportunity Act (AGOA) have seen their benefits diminish, as the Trump administration has de-prioritised AGOA
Foreign exchange intervention and exchange rate exposure: evidence from South Africa and Japan
No full textForeign exchange (forex) interventions by central banks have become increasingly frequent in emerging markets. While the effects of these interventions on exchange rate volatility are well-documented, their implications for broader country-level outcomes remain underexplored. This study posits that forex interventions should affect a country’s sensitivity to currency movements, particularly influencing its cash flows. It examines this hypothesis by analysing the impact of forex interventions on exchange rate exposure in South Africa, an emerging market, and Japan, a developed economy, using quarterly data from January 1996 to December 2023.The study utilizes the Kalman filter to estimate time-varying exchange rate exposure and applies quantile regression to explore the relationship between forex interventions and exchange rate exposure. The findings reveal that interventions generally have a negative effect on the absolute values of exchange rate exposure. Specifically, in South Africa, negative central bank interventions show a significant negative effect at the 50th quantile. In Japan, however, these interventions exhibit a positive effect from the 50th to the 90th quantile. Additionally, the study examines the effect of currency depreciation during periods of negative intervention but does not find statistically significant results. The research underscores the importance of credible communication from policymakers regarding the objectives of central bank interventions, as this could help firms better manage potential currency risks