External Debt and Capital Flight in Sub-Saharan Africa: The Role of Institutions, Economics Bulletin, 43 (4), 1642-1655, Hcéres Rang B.
This paper aims to study the impact of external debt on capital flight conditional on the institutional quality of host countries. Three major contributions emerge. First, the role of external debt in capital flight is clarified. Econometric results based on 26 sub-Saharan African countries over the period 1970-2015 show a positive relationship between external debt and capital flight. Second, high quality institutions weaken the link between debt and capital flight somewhat, although they do not eliminate it completely. The results suggest that improving the quality of institutions in sub-Saharan African countries could help minimise the contribution of external debt to capital flight. Third, the analysis takes into account panel data, the persistence of capital flight and the potential endogeneity of the regressors.
Keywords: Capital flight, Africa, External debt, Institutional quality
JEL Classification: F3, O16, O55
South Africa’s Public Debt: Long-term Dependence, Structural Breaks and Multifractality, Journal of Economic Integration, 38(4), 670-697, Hcéres Rang B.
This paper aims to analyse the evolution of public debt in South Africa using new and original methods. The case of South Africa has been little studied in the literature on debt because the level of debt in this country remains reasonable. Moreover, the use of non-standard methods allows for a fine-grained analysis of the public debt time series and, consequently, to draw unprecedented conclusions. Using the Multifractal Detrended Fluctuation Analysis (MF-DFA) method borrowed from solid-state physics and medicine, we conclude that South Africa’s debt has a multi-fractal character, which originates from the long memory effect. Thus, South Africa’s public debt is unsustainable. The inefficiency of this market has been particularly ex-acerbated by the various shocks throughout the sample period.
Keywords: Public debt, Long memory effect, Multifractality, South Africa, MF-DFA, ARFIMA
JEL Classification: C12, C22, C65, F34, H63, N17
Export Restriction and Covid-19, Journal of Economic Integration, 36 (4), 519-548, Hcéres Rang B.
As a result of COVID-19, the export of medical goods has been subject to various global restrictions. Consequently, several countries have increased the supply of medical goods to alleviate the effects of this health crisis. This study entails a theoretical and empirical analysis of the effects of such remedial measures. To this end, we have utilized a consistent conjectural variation in a three-country model entailing firms competing in two reciprocal markets in Cournot. When the restrictions are unilateral, the number of medical goods available in the exporting country tends to increase, culminating in better management of the pandemic. In contrast, bilateral restrictions typically reduce the total output of medical goods; therefore, they are inappropriate in a pandemic situation.
Keywords: Conjectural variation, COVID-19, Export restriction, Spatial model, Weight matrix
JEL Classification: C1, C3, F1, F12, F13, F14
Harmonization of public debts and convergence clubs creation, Revision at Economic Systems, Hcéres Rang B
This article explores how fiscal convergence clubs can be used to enhance debt management and advance economic stability in African countries. Instead of focusing solely on geographical criteria, these clubs prioritize fiscal rules and debt limitation, offering a promising strategy to tackle the challenges associated with debt sustainability in the region. The article explores the potential benefits, obstacles, and policy implications of such convergence clubs, stressing the importance of forming robust and stable groupings. Through a thorough examination of existing literature and empirical evidence, this study provides valuable insights into designing and implementing effective fiscal convergence mechanisms for African nations. While no evidence of global convergence around debt was found, the existence of convergence clubs suggests a tendency for countries to share similar debt profiles, rather than being bound by geographical, political, or ideological similarities. The research also highlights that the Stability and Growth Pact has not resulted in global convergence, but rather in the formation of convergence clubs.
Keywords: Convergence clubs, Public debt, Economic aggregation
JEL Classification: C33, C19, H63, N17, R10