Department of Economics
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Item Comparison Of Stochastic Frontier Approaches For Estimating National Efficiency: An Application To Sub-Saharan African Countries(Journal Of Economic Development, 2018) Danquah, M.; Ouattara, B.In this paper, we attempt to estimate pure national (technical) efficiency for 19 SSA countries over the 1960-2010 period. In doing this, we compare conventional stochastic frontier models for panel data with several recently developed models that seek to control for unobserved heterogeneity in the inefficiency component. We find that the ‘true’ random effects model that treats unobserved heterogeneity in our national dataset generates more reasonable efficiency estimates. Moreover, the results confirm that most SSA countries operate far from the efficient frontier.Item Better decisions for food security? Critical reflections on the economics of food choice and decision-making in development economics(Cambridge Journal of Economics, 2020) Stevano, S.; Codjoe, E.; Johnston, D.With malnutrition recognized as a key public health issue, attention has been placed on how individuals can make better decisions to attain food and nutrition security. Nevertheless, food practice entails a complex set of decisions that are not fully understood. This paper interrogates the focus on food choice by investigating how socio-economic relations shape practices of food provisioning. Given the surge of behavioral approaches in development economics and our focus on a middle-income country, we contextualize food choice in the transformations of the conceptualizations of decision-making in development economics. We draw on mixed-method evidence on food consumption practices among schoolchildren in Accra, Ghana. We find that the food decision-making process is complex in that it entails multiple moments and people, and embodies contradictory motivations. Decisions are negotiated outcomes reflecting social relations of power among the actors involved. Socio-economic inequality fragments the urban food environment and material living conditions. Furthermore, the concentration of capital gives the food industry the power to shape material and cultural relations to food in ways that extraordinarily limit the scope for individual choice. This is a critical case study to understand the contemporary dynamics of malnutrition in the urban Global South, with broader relevance for the analysis of food poverty elsewhere.Item Child Disability And Mother’s Labour Force Participation(University Of Ghana, 2021-10) Opoku, M.The world and especially, Sub-Saharan Africa (SSA) continues to experience relatively low female labour force participation rates– a phenomenon mainly attributed to childbirth and childcare, coupled with the primary role of being the caretaker of the home. However, the growing phenomenon of increased female labour force participation in recent times has caught the attention of researchers and development practitioners because of its usefulness in measuring gender inequality. The study draws on the Ghana Living Standards Survey Round Seven (GLSS VII), to investigate the effect of child disability on maternal labour force participation. It applies the probit and multinomial logistic models to estimate the effects that child disability has on maternal employment status and the type of employment chosen after the incidence of child disability. Also, to account for endogeneity bias, differences in a mother’s ability to handle children were considered. The study finds a negative but insignificant correlation between child disability and mother’s employment status which suggests that mothers with children who are disabled are less likely to be employed. Taking the types of disabilities into consideration on mother’s employment status, only sensory disability predicted mother’s employment status. Mothers with children who had a sensory disability are 17.1 percent less likely to be employed. Considering mothers‟ choice of employment, we observe a positive correlation between child disability and no employment and a negative correlation for formal and informal employment. We suggest that policies or programmes that provide childcare centers or services and after school care services in schools can greatly help release mothers for labour market activities.Item Microeconomic Determinants Of Income Inequality In Ghana(University Of Ghana, 2022-07) Adurayi, M.A.The subject of inequality is relevant in economic discussions, considering its impact on development and growth. According to the Ghana Living Standard Survey (GLSS), Ghana's inequality measured by the Gini Coefficient grew from 0.42 in 2012/2013 to 0.45 in 2016/17. This increase in inequality could threaten national growth and poverty reduction initiatives, undermine social stability, and exacerbate political discontent within the nation. Hence, to curtail such events, it is prudent to understand the factors influencing inequality in Ghana. In line with that, this study aimed at investigating the microeconomic drivers of inequality in Ghana. Using data from the sixth and seventh rounds of the GLSS, this study employed the Recentered Influence Function (RIF) model to investigate the factors affecting Ghana's Gini Coefficient. In addition, the study used the RIF -Oaxaca Blinder decomposition technique to determine the impact of household characteristics on inequality over time. The study found that for both rounds of the GLSS, household heads located in the Western, Volta, Brong Ahafo, Central and Upper East regions caused a decline in inequality compared to household heads in the capital region, Greater Accra. Also, a household head with secondary or primary levels of education resulted in a decrease in inequality relative to a household head with no education. In addition, household heads who receive remittances contributed to a reduction in inequality compared to their counterparts who do not receive remittances. The study recommends that tackling the causes of inequality can be achieved through socioeconomic empowerment efforts such as educational policy initiatives. Thus, pursuing educational policies focused on improving the accessibility and quality of education will have a favourable effect on reducing inequality. Furthermore, a framework for accelerating regional development in Ghana should be created to promote growth. Localized growth initiatives should be developed and implemented by MMDAs (Metropolitan, Municipal and District Assemblies). These initiatives would engender growth within the various regions in Ghana and contribute to reducing inequality. Finally, the government should create an enabling environment for robust transfer systems that would facilitate the smooth transfer of remittances.Item The Effect Of Foreign Direct Investment On The Ghanaian Energy Consumption(University of Ghana, 2020-10) Nii Attoh, W.The electricity consumption levels (demand) of the populace in Ghana (especially) have not been met most of the time. FDI is one resource which can be incessantly used to address this situation; so, it ought to be often treated as a pivotal determinant of electricity consumption. However, empirical studies conducted on the relationship between FDI and electricity consumption are generally scanty; they have also produced mixed results. Moreover, the direction of causality between these variables is irresolute. Therefore, using yearly data from 1980 to 2018, and employing the Nonlinear Autoregressive Distributed Lag (NARDL) estimation technique, this thesis endeavours to decompose FDI into its positive and negative shocks whose long-run and short-run effects need to be examined; to justify the overall role of FDI on electricity consumption in Ghana. In this vein, this thesis finds inspiration that; this contemporary technique actually aids in ascertaining any possible presence of asymmetry in the nexus which, when overlooked, renders biased model specification (especially when FDI in the power sector usually experiences cost sensitivities). Finally, this thesis conducts an inquiry into the exact form of causality prevailing between FDI and electricity consumption. It is found that the significant negative effect of the positive shock in FDI dominates (in terms of weight) the distinct effect of the negative shock in FDI when analyzing both long and short runs; and this led to the significant negative effect being found of general FDI on electricity consumption. In fact, as inconspicuous as the relative difference in magnitude of the above effects was, there was symmetry found for FDI effect on electricity consumption in both periods. Also, a unidirectional causality was found to move from FDI to electricity consumption. Generally, this thesis discovered the fulfilment of the Composite Effect Theory which illustrates the precise path to tread on. It is still recommended that more of FDI needs to be encouraged to reverse the abysmal electricity trends; and to industrialize Ghana more.Item Government Expenditure And Private Investment In Ghana(University Of Ghana, 2021-12) Awuni, P.D.The drive to encourage private sector participation in the Ghanaian economy has led to the implementation of some pro-private sector development policies that involved government spending in expanding energy, health, education and road infrastructure. The economic literature however remains inconclusive about the effectiveness of this increase in government expenditure on private investments and whether any potential threshold effects exist. Accordingly, this thesis tests the hypothesis for the case of Ghana by exploring the threshold effect of government expenditure on private investment in Ghana using annual time series data from 1984 to 2018. The study employed the Threshold Autoregressive (TAR) model to ascertain the optimal level of government expenditure that promotes private investment by addressing asymmetric and non-linear deficiencies of the usual linear models applied in previous studies. The main finding of the study revealed that the threshold value of government expenditure is 13.38% of GDP. Below the threshold value, government spending crowds-out private investment while government expenditure above the threshold crowds-in private investment. Hence, the relationship between government expenditure and private investment is non-linear; specifically, it is U-shaped. The causality test conducted reveals a unidirectional causality from government expenditure to private investment. The study recommends more government spending towards increasing social capital while taking steps to minimize spending inefficiencies emanating from abandoning state projects, rent-seeking and, the maximization of personal and political interest. Finally, the study recommends targeted tax incentive policy to productive sectors of the economy.Item Women’s Empowerment And Economic Development: Macro And Micro Evidence From Africa(University Of Ghana, 2023-01) Osarfo, D.The concept of women’s empowerment is very broad, context-specific and multidimensional. However, a substantial portion of the economics literature that examines the welfare effects of women’s empowerment has focussed on improving women’s access to resources. Social institutions are very crucial in determining the agency and bargaining power of women in many regions of the world. In Africa, for instance, the social dimension of female empowerment has received relatively less attention despite its influence on the agency of women. Also, the lack of appropriate micro-level measures for the political empowerment of women has nearly led to the neglect of that dimension. This study constitutes a comprehensive attempt to examine the various dimensions of women’s empowerment and the effect on levels of welfare. Specifically, the study investigates (i) the effect of women’s political empowerment on the income and non-income measures of welfare in Africa, (ii) the effects of women’s empowerment on the cognitive development and academic achievement of children in Ghana as well as (iii) the influence of women’s empowerment on the health or nutrition of children in Ghana. The thesis employs suitable standard approaches such as the two-stage least-squares fixed-effect estimation, the panel Tobit estimation and quantile regression to examine the linkages. The following are the key findings: First, political empowerment of women has a significant positive effect on the non-income measure of welfare. In contrast, the effect on household income is marginal. This finding supports the vast literature that suggests that women are more inclined to opt for or support policies that enhance the health and education of children when in a position of power. Second, there is evidence that women’s economic empowerment and women’s social empowerment improve the learning outcomes of their wards. Finally, the thesis shows that women’s empowerment via either improved access to resources or social norms that enhance women's bargaining power and agency improves their children's health. The critical elements of women’s empowerment that drive this effect are a woman's employment status, land ownership, savings, decision-making participation and unrestricted family contact. The thesis makes valuable contributions to knowledge. Empirically, it provides evidence of how different forms of women’s empowerment influence welfare. It also presents new evidence on the effects of political empowerment on welfare in Africa. This thesis also brought to bear the indirect effect of the various forms of empowerment on the quality of learning. The study focuses on undernutrition and over nutrition, allowing for different impacts on children with varying nutritional statuses. Methodology-wise, this thesis uses improved measures of political empowerment of women, contrary to using the share of women in parliament as has been widely employed in the existing literature. Also, contrary to most existing studies in Ghana, this study benefits from using the GSEPS data to assess how women’s empowerment affects their wards’ quality of learning, benefiting from a more comprehensive array of covariates. As much as practicable, the study aims at providing causal inference, contrary to other existing studies that assessed simple correlations. Based on the findings of the thesis, some key recommendations are suggested for practice and policy. Governments, civil society organisations and other non-governmental organisations must strengthen capacity-building efforts such as education and training to improve the confidence and competence of women. This would make women fit to occupy positions of power in society and arm them with the requisite skills to compete in the job market. Governments must also strengthen the legal frameworks that secure and protect women's rights and use affirmative action policies or quotas to get women involved, where necessary and but at the expense of competence and capability. Lastly, the key elements of women’s empowerment, namely, employment, savings and land ownership, call for support from partners and governments alike. Traditional stipulates that prevent women from owning land and hamper their engagement in gainful employment must be changed. Also, the Intestate Succession Law must be upheld in guaranteeing the right of inheritance for a surviving spouse, children, the customary family and parents and ensuring that a greater portion of the property is shared among the surviving spouse and children. Ultimately, the study recommends conscious social education on the welfare gains that may accrue from modifying some of the restrictive social norms that hinder women’s agency. Social empowerment may complement the positive effect of women’s economic empowerment in welfare enhancement. Women must be included in family decision-making processes and encouraged to maintain meaningful social networks due to their pro-welfare effects.Item Public Debt, Investment And Economic Growth In Ghana(University Of Ghana, 2021-09) Dodoo, A.This thesis was motivated by the persistent growth in Ghana’s debt per GDP above the 60 percent sustainability threshold prescribed by the West African Monetary Zone (WAMZ) coupled with its low performance in terms of debt servicing. These two situations raise more concerns on how the country’s level of public debt can affect both investment and economic growth. Several studies carried out to investigate the relationship between the country’s level of debt and economic growth have yielded many results. This thesis provides an updated debtgrowth nexus, as well as investigating the use of investment as the basic channel through which public debt affects investment. Guided by the neoclassical growth model, the effect of public debt on economic growth is dependent on the effectiveness of investment made with the borrowed funds and the part of investment crowded out due to the macroeconomic effect of high debt on interest rate and investment. Based on the results obtained from the unit root test, the ARDL cointegration method was used to estimate the effect of public debt on both economic growth and investment in Ghana. From the estimated results of the thesis, there was a negative relationship between external debt and economic growth in both the short run and long run growth equations. In these growth equations, no relationship was established between debt servicing and economic growth. In the estimated short and long run investment models, no relationship was found between external debt and investment, as well as debt servicing and investment. These findings imply no “crowding out” effect for Ghana. Rising from the thesis’s results, it is recommended that government channels borrowed funds into productive ventures of the economy as this will help in generating output to finance its debt. In order to control the persistent rise in external debt, structural programs must be implemented to ensure efficient mobilization of domestic funds. It is also recommended that government pays serious attention to revising the export led growth strategy, adheres strictly to macroeconomic policies that ensures a stable and favourable exchange rate in order to propel trade and investment.Item The Effects Of Trade Openness And Foreign Direct Investment On Income Inequality In Sub-Saharan Africa(University Of Ghana, 2023-01) Asante, K.Trade openness and foreign direct investment (FDI) has played a key role in the development and growth of many developing countries in the world. As such, most of the countries in the sub- Saharan Africa (SSA) region has promoted globalisation since the mid-1980s to increase economic growth, income, welfare and decrease inequality. According to the Heckscher-Ohlin- Stolper-Samuelson (HOSS) trade models, developed countries export capital-intensive goods in which they have a comparative advantage while developing countries export labour-intensive products in which they have a comparative advantage; as a result, demand for low-skilled labour increases and decrease income inequality in developing countries and inequality instead increases in the developed countries. While some theoretical and empirical studies agree with the basic HOSS trade model, opponents argue that globalisation deteriorates income inequality in developing countries including those in the SSA region. However, few research has examined the relationship between globalisation (trade openness and FDI) and income inequality in the SSA region. This study therefore sought to examine the effect of trade openness and foreign direct investment on income inequality in some selected countries in SSA. The study used the system generalized methods of moments technique to analyse secondary data for 37 SSA countries from 2000 to 2019. The study revealed that foreign direct investment, education, and GDP per capita have a negative and significant effect on income inequality. However, trade openness and population growth have a positive and significant effect on income inequality. The study recommends the adoption of policies to promote globalisation and investment in high-quality education and training facilities which helps to create more employment opportunities and increase the supply of skilled labour in the SSA region.Item Household Spending And Income Inequality: Examining The Effects Of A Consumption–Based Tax In Ghana(University Of Ghana, 2023-02) Ocran, K.F.Over recent years, consumption taxes have increased government revenue and served as a fiscal stimulus tool in both developed and developing countries. Nevertheless, economic theory suggests that a broad-based consumption tax, such as value-added tax (VAT) is generally considered to be a regressive tax, implicitly affecting the economic welfare and standard of living of households, particularly in developing countries. Therefore, the objective of this study is to analyze the impact of VAT on household spending and income inequality in Ghana by incorporating Zivot–Andrews structural break unit root test in the series based on annual data that span the period 2000–2019. Importantly, the study employed the bootstrap autoregressive distributed lag modelling technique to examine the long-run and short-run relationship between the variables as well as the Toda–Yamamoto causality test is applied to ascertain the causal dynamics in the model. The empirical findings revealed that VAT can reduce household spending in the long-run but leaves no effect in the short-run. The elasticity of consumer spending with respect to VAT rate is inelastic in the long-run. Similarly, the VAT rate tends to be insignificant in the long-run while at the same time VAT rate exhibits a highly significant level and a negative effect on income inequality in the short-run. These results suggest that the impact of a change in VAT rate varies on household spending and income inequality. Based on these observations, the study recommends that fiscal authorities should focus on expanding the VAT base, as VAT tends to be less distortionary on consumer spending (inelastic) in the long-term, to maintain aggregate consumption and strengthen domestic resource mobilisation; on this account, better-targeted cash transfer programs should be financed using VAT revenue accrued.