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No Thumbnail AvailablePublication( 2010) Calderon, Cesar ; Serven, LuisAn adequate supply of infrastructure services has long been viewed by both academics and policy makers as a key ingredient for economic development. Sub-Saharan Africa ranks consistently at the bottom of all developing regions in terms of infrastructure performance, and an increasing number of observers point to deficient infrastructure as a major obstacle for growth and poverty reduction across the region. This paper offers an empirical assessment of the impact of infrastructure development on growth and inequality, with a focus on Sub-Saharan Africa. The paper uses a comparative cross-regional perspective to place Africa's experience in the international context. Drawing from an updated data set of infrastructure quantity and quality indicators covering more than 100 countries and spanning the years 1960-2005, the paper estimates empirical growth and inequality equations including a standard set of control variables augmented by infrastructure quantity and quality measures, and controlling for the potential endogeneity of the latter. The estimates illustrate the potential contribution of infrastructure development to growth and equity across Africa.
No Thumbnail AvailablePublication( 2010) Buys, Piet ; Deichmann, Uwe ; Wheeler, DavidRecent research suggests that poor economic integration and isolation from regional and international markets have contributed significantly to poverty in Sub-Saharan Africa. Poor transport infrastructure and border restrictions are major deterrents to trade expansion which would stimulate economic growth and poverty reduction. Using spatial network analysis techniques and gravity trade model estimations, this paper quantifies the economics of upgrading a primary road network that connects the major urban areas in the region. The results indicate that continental network upgrading is worth serious consideration from an economic perspective. Our simulations suggest that overland trade among Sub-Saharan African countries might expand by about $250 billion over 15 years, with major direct and indirect benefits for the rural poor. Financing the programme would require about $20 billion for initial upgrading and $1 billion annually for maintenance.
No Thumbnail AvailablePublication( 2009) Boccanfuso, Dorothee ; Estache, Antonio ; Savard, LucThis paper uses a computable general equilibrium (CGE) micro-simulation model to explore the distributional and poverty-related effects of price reform in the electricity sector of Mali, a poor country in West Africa. In the first part of the paper we analyse the distribution of electricity in Mali by income deciles, showing that few poor households are connected to the electricity grid. We then apply a sequential CGE micro-simulation model to track the transmission mechanisms between increases in electricity prices and changes in poverty and inequality among different household groups. Our results show that direct price increases have a minimal effect on poverty and inequality, whereas the general equilibrium effects of such increases are quite strong and negative. The compensating policies we tested do not help those who lose from the pricing reform. In fact they amplify the negative effects.
No Thumbnail AvailablePublication( 2008) Buckley, Robert M. ; Mathema, Ashna SinghGhana has been one of the most rapidly growing economies in sub-Saharan Africa. This growth has been aided by Ghana's improving policy environment. In light of this, the paper addresses the question of why, given its higher level of per capita income and relatively strong growth, the housing conditions of the poor in Accra are considerably worse than those in a number of other African cities with lower incomes. There are not many data available to answer this question, so the method is indirect and takes two approaches. First, a variant of the monocentric city model is used to calculate Accra's housing supply elasticity relative to those of other similarly sized African cities. The model suggests that housing supply responsiveness is considerably lower in Accra, a result consistent with the observed higher housing costs. Secondly, a number of traditional housing demand and reduced-form equations are estimated for Accra and the other cities. This allows the formation of a quantitative judgment about Accra's housing supply elasticity. Taken together, the two approaches indicate that lower-income families in Accra have such poor housing conditions because the market is extremely unresponsive to demand. The welfare costs of current housing and land policies are considerable. The results suggest that making Accra's real estate market more responsive would go a long way towards improving the effectiveness of the broader policy environment. It would also no doubt improve the housing conditions of the poor and help to reduce the city's expanding footprint.