Research

Published Papers

Transmission Channels of the Resource Curse in Africa: A Time Perspective.

Economic Modelling - June 2019 (pdf)

Most sub-Saharan African countries share the following characteristics: a strong dependence on natural resources, weak institutions, and relatively low growth levels preventing them to catch up with the rest of the developing world. This paper aims to unfold the natural resource curse by introducing a time perspective: long-term versus short-term effects. Following the two-step Engle and Granger procedure, an error-correction model is performed after a cointegration estimation. In addition, the paper clusters the countries to differentiate the natural resource curse mechanisms by level of institutional quality. Results are three-fold. On the long run, the negative impact of the dependence is confirmed for all categories. Countries with weak institutions are more vulnerable to the curse because the resource dependence not only negatively impacts long-term growth but also adversely impacts the recovery process. Finally, in a strong institutional environment, results point towards a potential positive impact of natural resources during recovery process.

Monetary Union, Competitiveness and Raw Commodity Dependence. Insights from Africa

Comparative Economic Studies - December 2018 (pdf)

This paper investigates macroeconomic interactions in Sub-Saharan African (SSA) countries, and more specifically, in the franc CFA zone. The CFA monetary zone is a unique case study because it is the only one that uses a common currency pegged to another currency, namely the euro. Additionally, the SSA region is heavily dependent on raw commodities. Hence, the following question arises: how do these attributes affect growth, trade and competitiveness within the CFA zone? We run a Panel Vector Auto-Regressive model using four key macroeconomic variables: growth, current account, real exchange rate, foreign direct investment and the terms of trade. The analysis relies on a sample of 25 SSA countries including 14 belonging to the CFA zone. Two main key learnings stand out from our analysis. First, the results show that foreign investments in CFA countries fail to generate the same positive spillover effects in the extra-CFA countries, highlighting the adverse effect of capital flight. Secondly, this paper shows that the Marshall-Lerner condition is not verified in the CFA context. As a consequence, nominal devaluation could not be used to stimulate the CFA trade balance. In terms of public policy, a close monitoring of foreign inbound investments as well as complimentary domestic investments dedicated to sectors contributing to diversification and long-term growth, are the most efficient ways to address the challenges generated by raw commodity dependence.

Working Papers

Financing Public Investment with Natural Resource Revenue Windfall. A good idea?

World Bank Working Paper Series

Fiscal management of natural resource revenue is a recurrent debate over academics and policy makers in countries vulnerable to commodity shocks. Moreover, in public capital scarce economies, achieving sustainable growth is very sensitive to the share of revenue allocated between public investment and savings. This paper contributes to the social planner problem of revenue allocation, especially during a commodity windfall by exploring the existence of a public capital threshold under which resources should be allocated to public investment in priority. Threshold regressions are performed on a panel of 18 commodity dependent economies over the period 1980-2015 using alternatively public capital stock and public debt as threshold variables. The results show that extremely under-capitalized countries should engage in policy mix strategy to allocate revenue windfall to both public investment and savings. Nonetheless, savings should be the priority in the case of high level of public debt. Additionally, revenue windfall derived from agricultural commodity generates more positive spillover effects than the one derived from minerals or hydrocarbons.

Work in Progress

The future of work in the Mining Industry. Evidence from Africa

World Bank Working Paper Series.

Financial Development and Inequality in Africa

World Bank Working Paper Series.