Globalization and Africa: implications for human development
Simplice Asongu
MPRA Paper from University Library of Munich, Germany
Abstract:
Purpose – The purpose of this paper is to assess the effects of trade and financial globalization on human development in 52 African countries using updated data(1996-2010) and a new indicator of human development(adjusted for inequality). Design/methodology/approach – The estimation technique used is a Two-Stage-Least Squares Instrumental Variable methodology. Instruments include: income-levels, legal-origins and religious-dominations. The first-step consists of justifying the choice of the estimation technique with a Hausman-test for endogeneity. In the second-step, we verify that the instrumental variables are exogenous to the endogenous components of explaining variables(globalization dynamic channels) conditional on other covariates(control variables). In the third-step, the strength and validity of the instruments are assessed with the Cragg-Donald and Sargan overidentifying restrictions tests respectively. Robustness checks are ensured by: (1) use of alternative globalization indicators; (2) endogeneity based estimation ; and (3) adoption of two interchangeable sets of instruments. Findings – Findings broadly indicate that while trade globalization improves human development(consistent with the neoliberal theory), financial globalization has the opposite effect(in line with the hegemony thesis). Social implications – Capital accounts should be opened in tandem with financial and institutional development. The investment atmosphere needs improvement to curtail capital flight(about 39%). Other policy implications include: adoption of openness options in a selective and gradual manner, development of some industrial backbone for an import-substitution or export-led industry, emphasis on regional trade and building capacity, development of the agricultural sector with continuous government assistance, building of rural infrastructure, increasing adult literacy rate and developing human resources, fighting corruption and mitigating wastages in government expenditure. Originality/value – These findings are based on very recent data. Usage of the inequality adjusted human development index first published in 2010, corrects past works of the bulk of criticisms inherent in the first index.
Keywords: Globalization; Human development; Africa (search for similar items in EconPapers)
JEL-codes: F10 F30 I10 I30 O55 (search for similar items in EconPapers)
Date: 2012-02-09
New Economics Papers: this item is included in nep-afr
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/36541/2/MPRA_paper_36541.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/36546/1/MPRA_paper_36546.pdf revised version (application/pdf)
Related works:
Journal Article: Globalization and Africa: implications for human development (2013) 
Working Paper: Globalization and Africa: implications for human development (2012) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:36541
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().