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  3. 2023
  4. Program
  5. Quality Growth? Economics of Conflicts, Disasters, Xenophobia, Depression, and Insurance
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Quality Growth? Economics of Conflicts, Disasters, Xenophobia, Depression, and Insurance

Paper Session

Saturday, Jan. 7, 2023 8:00 AM - 10:00 AM (CST)

Hilton Riverside, Grand Salon B Sec 10
Hosted By: African Finance and Economics Association
  • Chairs:
    Mina Baliamoune-Lutz, University of North Florida
  • Samuel Amponsah, International Strategy Institute and Tokyo International University

Interrupted Innovation and Productivity? Firm-Level Evidence on the Impact of Climate Disasters in Africa

Amira El-Shal
,
Cairo University

Abstract

Despite its low contribution to greenhouse gas emissions, Africa is the most vulnerable region to climate change effects. Evidence on the impact of climate disasters on firm performance in Africa is limited, which hampers the design of disaster risk reduction and climate change adaptation strategies for the business sector. Exploiting a perfectly harmonized dataset of more than 50,000 firms in 48 African economies during 2006-2020, we build on the Crepon, Duguet, and Mairesse (CDM) framework and apply a generalized structural equation model (GSEM) to estimate the knowledge generation, innovation, and productivity causal relationships, while incorporating the effects of both the occurrence and severity of climate disasters. This study contributes to the literature on two fronts. Methodologically, diverging from previous studies, our estimation strategy of the CDM model acknowledges the effects of climate disasters on firm performance. We attenuate endogeneity concerns, especially that arising from omitted-variable bias, by including a “latent” variable to reflect the effect of any unobserved factors presumed to underlie correlations in the knowledge generation-innovation-productivity system of equations. Conceptually, we allow for innovation determinants other than Research and Development (R&D), importantly exposure to climate disasters, to affect the likelihood of a firm introducing innovations. Our preliminary results show that the occurrence and severity of climate disasters have significant, persistent effects on a firm’s decision to invest in R&D, the likelihood of introducing process and product innovations, and firm productivity in Africa.

Development Aid for Health and Conflict Relapse

Carolyn Chisadza
,
University of Pretoria

Abstract

We investigate the effects of development aid for health on conflict relapse. Using four measures of health aid, namely total health, general health, basic health and reproductive health, for 110 countries between 2002 and 2019, we find that aid targeted for improving health systems and infrastructure increases the length of time from previous conflict to the next episode. The results are robust in reducing conflict relapses in small-scale and large-scale internal armed conflicts. The results are also robust to the inclusion of other determinants that may affect conflict relapses, such as national income, peacekeeping officers and democracy. These findings are encouraging as they highlight the potential for health aid as a policy instrument during and in post-conflict settings that can mitigate future renewal of conflicts.

Violent Conflict Exposure in Nigeria and Poverty: What Can We Learn from Panel Data?

Ruth Uwaifo Oyelere
,
Agnes Scott College and IZA
John Chiwuzulum Odozi
,
Ajayi Crowther University

Abstract

Violent conflict has increased significantly over the past 15 years, primarily in Northern Nigeria, due to the 2009 insurgency of Boko Haram, the ongoing conflict between Fulani herders and farmers, and the rise of jihadist bandits. However, since the country’s independence in 1960, violent clashes have occasionally broken out in other communities across the nation. We analyze whether exposure to conflict in Nigeria impacts household welfare using four waves of panel data from 2010 to 2018. We used six welfare measures: wages, HH-Income, PC-Income, poverty incidence, poverty gap, and poverty severity.
Furthermore, we employ a fixed-effect strategy, take advantage of the panel nature of our data, and control for a wide range of variables that could affect a household’s welfare to reduce potential bias in estimated effects. Our results provide strong evidence of a negative association between the level of conflict exposure in the recent past and current household income. We also find that past conflict in Nigeria increases the incidence of poverty, the poverty gap, and poverty severity.

Feeling Blue over the Economy, Will You Pull Down Your Face Mask? Economic and Psychological Well-Being and Preventive Health Behaviour

Amira El-Shal
,
Cairo University
Eman Moustafa
,
Afreximbank

Abstract

This study investigates what predicts the uptake of preventive health behaviour (PHB) during COVID-19, bringing to the fore economic and psychological determinants. We provide novel evidence that through affecting psychological well-being, economic well-being can affect PHB. Exploiting a panel survey dataset of four North African countries for November 2020–August 2021, we construct a psychological well-being index and develop a structural equation model that addresses endogeneity in the PHB, economic and psychological well-being, and COVID-19 risk perception relationships. Our estimates reveal vast heterogeneity in individual responses to different PHB determinants across countries and by behaviour type. Psychological well-being had the strongest positive effect on the likelihood of physical distancing in Egypt and Sudan and of wearing masks in Morocco, Sudan, and Tunisia. Psychological well-being in turn was negatively affected by decreased food consumption and higher economic anxiety in all four countries. Psychological well-being was also lower for unpaid family workers in Egypt and Sudan and the unemployed in Egypt, Morocco, and Tunisia. Handwashing, a less publicly visible practice, was directly related to the perceived risk of COVID-19 and neighbourhood compliance. Gender, age, and education effects varied across countries and by PHB type.

The Lasting Effects of Early Childhood Interventions: The National Vaccination Commando Program in Burkina Faso

Richard Daramola
,
Oklahoma State University
Md Shahadath Hossain
,
SUNY-Binghamton
Harounan Kazianga
,
Oklahoma State University
Abdoul Karim Nchare Fogam
,
Princeton University

Abstract

After being in power in Burkina Faso for about a year, a military regime led by Thomas
Sankara-within weeks, vaccinated 77% of children under age six against measles, meningitis, and
yellow fever. The coverage and the success of this program set it apart from other contemporary
vaccination programs, hence providing a policy experiment to test the effects of large immunization
programs in low-income contexts. Using a difference-in-differences method, we estimate the
impact of increased vaccination on child mortality, primary school completion, adulthood labor
market outcomes, and farm productivity. We find that the vaccination campaign significantly
reduced the child mortality rate. The result also shows an increase in primary school completion.
In adulthood, the vaccinated cohorts are significantly more likely to be employed and earn
higher agricultural yields.

Discussant(s)
Kent Alwaka Mukoya
,
Nairobi City Water and Sewerage Company
Ishmael Obaeko Iwara
,
University of KwaZulu-Natal
David Oladepo
,
University of KwaZulu-Natal
Lucienne Talba
,
University of Toronto
Simon Michael Taylor
,
University of KwaZulu-Natal
JEL Classifications
  • O1 - Economic Development
  • O2 - Development Planning and Policy