3. Electronic Theses and Dissertations (ETDs) - All submissions
Permanent URI for this communityhttps://wiredspace.wits.ac.za/handle/10539/45
Browse
Search Results
Item The politics and economics of regional integration in Africa: a comparative study of COMESA and SADC, 1980-2015(2016) Nagar, Dawn IsabelThis thesis examines the efforts of the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC) to promote regional integration between 1980 and 2015 in the areas of trade and security. The conceptual framework provides a focused review of general and specific literature on two key concepts of regional integration: divergence, and convergence. Throughout the thesis, the core focus is on the divergence and convergence of COMESA and SADC. The thesis articulates two analytical frameworks: the neoclassical economics approach, and the neoclassical realist approach. A historical account focuses on the history of the Preferential Trade Agreement (PTA) of 1981 that evolved into COMESA by 1993. A history of Southern Africa’s Frontline States (FLS), which evolved into the Southern African Development Coordination Conference (SADCC) in 1980, and later into SADC in 1992, is then provided. The thesis discusses apartheid South Africa’s involvement in the Eastern and Southern African regions. The thesis provides a discussion on the debate on the rationalisation processes of these two organisations: COMESA and SADC, between 1991 and 1997. The thesis next expands on the regionalisation processes of COMESA and SADC between 2008 and 2015. The main actors and factors assessed involve South Africa’s market-led regional approach, its regional developmental role and its economic impact on both regions since it joined SADC in 1994. The thesis expands on the two main regional integration approaches adopted by the COMESA–EAC (East African Community)–SADC Tripartite bloc (created in 2008) of variable geometry and trade liberalisation, as it moved towards its Tripartite Free Trade Area that was signed in June 2015. The thesis also provides definitions and assumptions of two new theories deployed to strengthen the research: i) neoclassical economic regional integration, and ii) neorealist security convergence, which are applied in the thesis. The thesis thus expands on how COMESA and SADC (as both institution and member states) manage multiple memberships. A central argument of the thesis is that multiple memberships have become a stumbling block for convergence. In furtherance of this argument, the thesis explains the benefits of regional integration schemes. Therefore assessed, is how developing countries are likely to be better served by “North–South” than by “South–South” free trade agreements. The analysis is expanded by a discussion of economic convergence in the neoclassical economic approach of open trade in regional trade agreements within the Southern African Customs Union (SACU) – whose five members all belong to SADC - with the presence of a regional hegemonic state: South Africa. To further expand the concept of regionalism to encompass security cooperation, the thesis finally assesses COMESA and SADC’s managing of regional security since the 2008 Tripartite Agreement, by employing the concept of regional security complexes.Item Essays on sectoral growth composition, foreign debt and social welfare in selected African economies(2016) Chukwu, Anayochukwu BasilThis thesis focuses on sectoral growth composition, foreign debt and social welfare in selected African economies. Data for the study were obtained from International Financial Statistics (IFS), the World Bank (WB), United Nations Conference on Trade and Development (UNCTAD), United Nations Development Programme (UNDP) annual reports, and the Penn World Table (PWT). The thesis has 5 chapters. Chapter 1 is the general introduction. Chapters 2, 3, and 4 are stand-alone related papers on social welfare, external debt, and real exchange rate. Chapter 5 is the conclusion of the study. Chapter 1 presents the background to the study, the motivating problems, the research objectives and questions, the significance of the study, the literature gaps, and contributions. The chapter ends with an outline on the organization of the study. Chapter 2 examines the impact of the composition of growth on poverty and inequality in 36 African countries. Specifically, the study demonstrates how changes in the composition of growth can affect the welfare of the segments of the population that are socially and economically deprived. While previous studies have presented different results for different continents, much of the findings show that in Africa, the primary sector is the most effective sector that improves the levels of poverty and inequality. This study re-examines this claim based on the belief that previous findings suffer from measurement bias in the estimation of parameters. This study employed a measurement approach that corrected for the observed differences. The generalized method of moments (GMM) estimation technique was adopted, and the findings were robust, showing that rather than the much-touted primary sector, the secondary and tertiary sectors are actually the main drivers of welfare improvement in the African continent. It is therefore recommended that for a sustained welfare improvement strategy, policy-making institutions in Africa should as a matter of urgency adopt appropriate industrial policy targets on the secondary and tertiary sectors with specific focus on the construction, manufacturing, mining, wholesale, retail, and hotel sectors. vii Chapter 3 investigates the impact of growth composition on external debt (ED) in selected African countries. Precisely, the study examines how each of the three productive sectors (agriculture, industry, and services) impacts on the level of ED in Africa. While many development studies have relied on aggregate output growth to investigate debt-growth dynamics, received literature shows that studies which examine the impact of growth on ED are scarce. Relying on two frameworks – “perfect capital mobility” of the Neoclassicals, and the “Dualism” theory, this study investigates the composition of the growth-debt relationship in Africa. The study applies the dynamic generalized method of moments (GMM) estimation technique to conduct its analysis. The results show that the composition of growth has significant effect on the levels of ED a country can maintain. Although, the results were lagged at different periods, the outcome suggests that the industrial (construction and manufacturing) and services sectors (wholesale, retail, and hotels ‒ WRH) are the leading sectors that drive the growth-ED relationship. The result shows more robustness when a country’s institutional quality, real interest rate, and current account balance were controlled for. Chapter 4 examines the effectiveness of real exchange rate (RER) as a policy tool for industrial diversification. Economic experts have emphasized the need for industrial diversification, especially for developing countries. However, in spite of the numerous socio-economic gains associated with industrial diversification, little effort has been made in Africa to identify and develop the sectors that achieve higher output growth for the region. The effective management of real exchange rate (RER) has provided economies with the needed tool for achieving these growth objectives. Recent empirical literature finds that undervalued RERs help countries to achieve faster economic growth, while overvaluation of the RER slows economic growth. Furthermore, recent growth studies have shown that different sectors respond differently to changes in RER. This study shows that even though many of the previous works have drawn up policy recommendations from these researches, the findings may be driven by inappropriate estimation assumptions, which inevitably results in biased findings. When these assumptions are re-specified, the empirical findings for a sample of 36 countries suggest that in Africa, sectors such as agriculture, construction, mining and utility lead to appreciation of the RER, while the manufacturing, transport and communications, “WRH” sectors, and “other” lead to depreciation of RER among countries. Although the coefficients for manufacturing, and transport and communications are not significant, this is probably due to the levels of development of the sectors within the African continent. Improving the level of development in these sectors therefore through appropriate economic policy framework will certainly impact on the strength of the coefficients of the three sectors, thereby leading to industrial revolution. Chapter 5 concludes the study with a summary of the key findings from Chapters 2, 3, and 4 with highlights of the policy implications of the findings. The highlights include: (1) the need for policy frameworks that discourage continual channelling of resources into sectors other than the industrial and services sectors. (2) A policy thrust in favour of improving domestic sources of revenue through targeting specific subsectors of the industrial and services sectors with appropriate policy instruments. This will provide the needed resources that will reduce the high debt stock per aggregate national income of African countries. (3) A policy thrust that reverses the undermining of development in the manufacturing, and transport and communications sectors. The reversal will stimulate exports and aggregate economic growth through the policy of undervaluation of the RER. Concluding the chapter, the study suggests areas for further research.Item Essays on the impact of foreign direct investment in African economies(2016) Chitambara, ProsperThis thesis focusses on the impact of Foreign Direct Investment (FDI) on economic performance in selected African countries over the period 1980-2012. The thesis is divided into five chapters and three of them are empirical. Chapter 1 is the introduction. Chapters 2, 3 and 4 are empirical chapters examining the impact of FDI on various indicators of economic performance. Chapter 5 concludes by giving policy recommendations. In chapter 1 we provide a background, motivation, objectives, hypothesis to be tested, gaps in the literature, contributions of the study and the main findings. Chapter 2 examines the link between FDI and domestic investment and the role of host country factors namely financial development, institutional development and trade openness. We use the ordinary least squares, random effects, fixed effects and the system GMM methodologies on a panel of 48 African countries over the period 1980 to 2012. The results show that FDI has a crowding out effect on domestic investment and that improved institutions and trade openness do mitigate the substitutionary effect of FDI on domestic investment. This implies a need to come up with policies to improve local conditions by strengthening institutional quality and enhancing trade openness. Chapter 3 investigates the impact of FDI on productivity growth and the role of relative backwardness (the technology gap) on a panel of 45 African countries over the period 1980-2012. We use two measures of relative backwardness namely: the distance from technological frontier and the income gap. We apply the fixed effects, random effects and system GMM method to account for the issues of endogeneity. The results show a general insignificant effect of FDI on TFP growth. This suggests that FDI has a limited effect on productivity growth. The analysis of the advantage of relative backwardness does not support the convergence theory of Findlay (1978) and Wang and Blomstrom (1992). The large technology gaps in African countries hinder their ability to absorb foreign technologies from advanced countries. Chapter 4 analyses the long run dynamic relationship between FDI, exports, imports and profit outflows in 47 African countries over the period 1980-2012 by means of panel cointegration techniques. The results from the panel cointegration tests show that a long run relationship exists between the variables. Our findings provide evidence on the adverse long run effects of FDI on the current account in African economies. In particular, the results show that, FDI inflows lead to a decrease in exports and an increase in both imports and profit remittances. These findings confirm that indeed profit outflows by multinational companies are one of the main factors driving current account deficits in African countries. Chapter 5 is the conclusion. We provide a key summary of the key issues covered, the main findings, the key contributions of the study and the policy recommendations. We also suggest areas for further research in the future.