1,721,014 research outputs found
Is Africa's economy at a turning point?
Full text linkIn this paper, Arbache, Go, and Page examine the recent acceleration of growth in Africa. Unlike the past, the performance is now registered broadly across several types of countries-particularly the oil-exporting and resource-intensive countries and, in more recent years, the large- and middle-income economies, as well as coastal and low-income countries. The analysis confirms a trend break in the mid-1990s, identifying a growth acceleration that is due not only to favorable terms of trade and greater aid, but also to better policy. Indeed, the growth diagnostics show that more and more African countries have been able to avoid mistakes with better macropolicy, better governance, and fewer conflicts; as a result, the likelihood of growth decelerations has declined significantly. Nonetheless, the sustainability of that growth is fragile, because economic fundamentals, such as savings, investment, productivity, and export diversification, remain stagnant. The good news in the story is that African economies appear to have learned how to avoid the mistakes that led to the frequent growth collapses between 1975 and 1995. The bad news is that much less is known about the recipes for long-term success in development, such as developing the right institutions and the policies to raise savings and diversify exports, than about how to avoid economic bad times.Economic Conditions and Volatility,Governance Indicators,Achieving Shared Growth,Economic Theory&Research,Emerging Markets
Revenue uncertainty and the choice of tax instrument during the transition in Eastern Europe
Full text linkThe author examines the eroding tax base facing transitional economies by employing a framework that allows risk factors in assessing tax instruments. In an uncertain world, the author asks, which tax instruments should be used? The author examines Eastern Europe's revenue problem, including the implications for public revenue of different causes of uncertainty - and investigates which taxes are"better"at generating revenue. The author defines a"better"tax as one that has greater stability in a risky environment (that is, less variation in generating a target revenue) and has the least adverse impact on the economy (for example, on consumption). The author employs the framework to explain much of the output and revenue fall in transitional economies. The term-or-trade shocks from the collapse of the CMEA trade as well as the rigid but uncertain economic responses in transitional economies are all important factors. The results of the authors modelindicate that import tariffs are more effective than other traditional tax instruments in raising revenue, especially if real revenue is defined in dollar terms (the price anchor). The contraction in domestic output and prices and the devaluation of the real exchange rate needed in the transition are significant reasons that favor imports as a tax base over other revenue sources. To emphasize the transitory nature and reversibility of the policy recommendation, import tariffs should be implemented in the form of a temporary uniform import surcharge. This conclusion seems to hold whether the government formulates tax policy with correct or incorrect expectations. But the choice of revenue target matters. All tax instruments will do almost equally well if the commonly used tax-to-Gross Domestic Product ratio is the target. But it is a misleading measure since the ratio does not reflect the immense erosion of domestic tax bases in the economy and how real revenue in absolute level may actually be decreasing rapidly as a result. The revenue decline and uncertainty can also be viewed as a necessity toward downsizing the large state sector and in redirecting trade away from former nonmarket partners. The results emphasize that restoring revenue should never lead to maintaining subsidies toward nonprofitable state enterprises or other public spending no longer relevant in market system. Doing so will only lead to unreasonably high taxation. No less important is moving assets out of collapsing sectors, privatizing them, and making them productive again.Public Sector Economics&Finance,Banks&Banking Reform,Municipal Financial Management,Environmental Economics&Policies,Economic Theory&Research
External shocks, adjustment policies, and investment : illustrations from a forward-looking CGE model of the Philippines
Full text linkThis paper presents a model that integrates intertemporal and forward-looking behavior in investment and consumption decisions in a multisectoral general equilibrium framework applicable to developing countries. It formulates and uses an infinite-horizon growth model to examine the adjustment, growth, and debt problems of a middle-income country, which the author illustrates using data for the Philippines. The author concludes that the expectation is a key factor. Contrary to the common suggestion that an economy should adjust and contract in response to a permanent import price shock, the behavior suggested in a model with rational expectations in investment decisions is that the opposite can be true. Combined with other policies, tariff reform could rechannel investment and resources toward the more tradable sectors and exports can be emphasized and increased. If domestic resources are also mobilized through increased tax collection, the combined effect will be to reduce or slow the accumulation of foreign debt. In other words, middle-income countries like the Philippines missed a golden opportunity for policy reform in the 1970s and found it harder to implement adjustment policies under less favorable circumstances in the 1980s.Environmental Economics&Policies,Economic Theory&Research,Financial Intermediation,International Terrorism&Counterterrorism,Banks&Banking Reform
Tax policy to reduce carbon emissions in south Africa
Full text linkNoting that South Africa may be one of the few African countries that could contribute to mitigating climate change, the authors explore the impact of a carbon tax relative to alternative energy taxes on economic welfare. Using a disaggregate general-equilibrium model of the South African economy, they capture the structural characteristics of the energy sector, linking a supply mix that is heavily skewed toward coal to energy use by different sectors and hence their carbon content. The authors consider a"pure"carbon tax as well as various proxy taxes such as those on energy or energy-intensive sectors like transport and basic metals, all of which achieve the same level of carbon reduction. In general, the more targeted the tax to carbon emissions, the better the welfare results. If a carbon tax is feasible, it will have the least marginal cost of abatement by a substantial amount when compared to alternative tax instruments. If a carbon tax is not feasible, a sales tax on energy inputs is the next best option. Moreover, labor market distortions such as labor market segmentation or unemployment will likely dominate the welfare and equity implications of a carbon tax for South Africa. This being the case, if South Africa were able to remove some of the distortions in the labor market, the cost of carbon taxation would be negligible. In short, the discussion of carbon taxation in South Africa can focus on considerations other than the economic welfare costs, which are likely to be quite low.Environmental Economics&Policies,Transport Economics Policy&Planning,Taxation&Subsidies,Energy Production and Transportation,Environment and Energy Efficiency
Economy-wide and distributional impacts of an oil price shock on the south African economy
Full text linkAs crude oil prices reach new highs, there is renewed concern about how external shocks will affect growth and poverty in developing countries. This paper describes a macro-micro framework for examining the structural and distributional consequences of a significant external shock-an increase in the world price of oil-on the South African economy. The authors merge results from a highly disaggregative computable general equilibrium model and a micro-simulation analysis of earnings and occupational choice based on socio-demographic characteristics of the household. The model provides changes in employment, wages, and prices that are used in the micro-simulation. The analysis finds that a 125 percent increase in the price of crude oil and refined petroleum reduces employment and GDP by approximately 2 percent, and reduces household consumption by approximately 7 percent. The oil price shock tends to increase the disparity between rich and poor. The adverse impact of the oil price shock is felt by the poorer segment of the formal labor market in the form of declining wages and increased unemployment. Unemployment hits mostly low and medium-skilled workers in the services sector. High-skilled households, on average, gain from the oil price shock. Their income rises and their spending basket is less skewed toward food and other goods that are most affected by changes in oil prices.Economic Theory&Research,,Labor Policies,Markets and Market Access,Access to Finance
Going Beyond Counting First Authors in Author Co-citation Analysis
Full text linkThe present study examines one of the fundamental aspects of author co-citation analysis (ACA) - the way co-citation
counts are defined. Co-citation counting provides the data on which all subsequent statistical analyses and mappings
are based, and we compare ACA results based on two different types of co-citation counting - the traditional type that
only counts the first one among a cited work's authors on the one hand and a non-traditional type that takes into
account the first 5 authors of a cited work on the other hand. Results indicate that the picture produced through this non-traditional author co-citation counting contains more coherent author groups and is therefore considerably clearer. However, this picture represents fewer specialties in the research field being studied than that produced through the traditional first-author co-citation counting when the same number of top-ranked authors is selected and analyzed. Reasons for these effects are discussed
Wage subsidy and labor market flexibility in south Africa
Full text linkIn this paper, the authors use a highly disaggregate general equilibrium model to analyze the feasibility of a wage subsidy to unskilled workers in South Africa, isolating and estimating its potential employment effects and fiscal cost. They capture the structural characteristics of the labor market with several labor categories and substitution possibilities, linking the economy-wide results on relative prices, wages, and employment to a micro-simulation model with occupational choice probabilities in order to investigate the poverty and distributional consequences of the policy. The impact of a wage subsidy on employment, poverty, and inequality in South Africa depends greatly on the elasticities of substitution of factors of production, being very minimal if unskilled and skilled labor are complements in production. The desired results are attainable only if there is sufficient flexibility in the labor market. Although the impact in a low case scenario can be improved by supporting policies that relax the skill constraint and increase the production capacity of the economy especially towards labor-intensive sectors, the gains from a wage subsidy are still modest if the labor market remains very rigid.Labor Markets,Labor Policies,,Economic Theory&Research,Access to Finance
External shocks, adjustment policies and investment in a developing economy: Illustrations from a forward-looking CGE model of the Philippines
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