Title: Export Oriented Growth and Poverty Alleviation: Understanding theeffects of aid, economic policy and liberalization reforms on the Africaneconomy
Abstract: This thesis investigates factors that can affect export oriented growth and reduce
poverty in some African countries. The reason for this is that if exports usher in a period
of mild prosperity and effective and consistent economic policy implemented through
institutions which is capable of improving life expectancy in developing countries are
given adequate attention, this can have a positive impact on the general economic
outlook of many of these developing countries. Aid-trade dynamics is studied
extensively in the first paper in the thesis, and it was found that aid has the capacity to
increase exporting in the African countries in our sample. The theory relied on is that
aid which is initially altruistic allows for the development of a close connection between
developing countries and developed donor countries, which eventually leads to trade.
Secondly certain types of aid were particularly useful in promoting exports. These
included aid to sectors that are likely to boost trade, these sectors are the educational,
banking and financial services, agricultural and infrastructural and services sectors.
Donors who pay attention to promoting good economic policies and institutional quality
are likely to have aid improve trade in a more significant manner since weak policies
and institutions can reduce aid effectiveness, while the presence of natural resources
affects aid effectiveness in promoting trade negatively.
The relationship between economic policy and life expectancy in some African
countries is studied in the second paper. An index for economic policy was developed
using two methods (i.e. principal component analysis and regression component
analysis previously used by Burnside and Dollar). The results in the second paper show
that economic policy has a negative effect on life expectancy. However after interacting
economic policy with institutions, this interactive variable had a positive effect on life
expectancy. The implications of this result are that implementing economic policy
through institutions is likely to improve economic policy effectiveness in improving life
expectancy. Improving life expectancy also means that poverty in general can be
reduced in an effective manner in many developing countries through effective
economic policy, therefore sound and consistent economic policy is a likely factor that
has the capability of reducing poverty in developing countries.
The third paper in this thesis studies the impact of economic liberalization
reforms on exports in some African countries from the early 1980s when such reforms
began. This paper also explores the effect of growth strategies such as trade openness
policy and technology transfer policies on exports in general. The results show that
economic liberalization has probably been promoting exporting, while countries that
implemented the policy of trade openness are likely to have such growth strategies
promote exports but the effect of their liberalization reforms on exporting were
significantly weaker than those that pursued the policy to transfer technology through
training human capital. The implication of these results is that implementing the
strategy of opening up ones domestic economic in return for exports concession slots is
likely to promote exporting on the short run but do not make liberalization reforms very
successful. While countries that pursue the policy of allowing the influx of foreign
enterprises on the condition of hiring, training its indigenous manpower and sharing
technical know are likely to have economic liberalization reforms have a more effective
effect on exports even though manpower training has little or no effect on exports on the
short run.
Publication Year: 2013
Publication Date: 2013-01-25
Language: en
Type: article
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