Nkamleu, Guy Blaise (2006): On measuring indebtedness of African countries: A stochastic frontier debt production function. Published in: Economic Research Working Paper Series, African Development Bank No. 85 (2006): pp. 1-21.
Download (330kB) | Preview
At least since the early 1990s, the problem of Africa’s debt was a recurring theme in the development debate and many suggestions for debt relief have now been implemented. However, a thorough solution is hampered by the existence of multiple ways of scaling debt. This paper provides a framework for comprehensively measuring indebtedness and gives therefore a basis for setting objective principles for debt reduction measures. The paper uses a stochastic frontier production function approach and the technical efficiency computation procedure to develop an indebtedness index for 46 African countries. The results indicate an indebtedness index across countries ranging from a minimum of 3.6 (South-Africa) to a maximum of 92 (Zambia), with an average of 69. Countries, which have experienced extended civil wars, are generally less indebted, while countries with more corrupt governments have generally contracted more multilateral debt. The paper ends by raising a number of implications for a better approach of debt management in Africa.
|Item Type:||MPRA Paper|
|Original Title:||On measuring indebtedness of African countries: A stochastic frontier debt production function|
|Keywords:||External debt; Stochastic frontier; Indebtedness index; Institutions; African countries|
|Subjects:||F - International Economics > F3 - International Finance > F34 - International Lending and Debt Problems
O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth
O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O57 - Comparative Studies of Countries
|Depositing User:||Guy Blaise Nkamleu|
|Date Deposited:||15. Apr 2009 00:19|
|Last Modified:||11. Feb 2013 16:22|
Aigner, D. J., C. A. K. Lovell and P. Schmidt (1977) “Formulation and estimation of stochastic production function models”, Journal of Econometrics, Vol. 6, pp. 21-37.
Alesina, A. and D. Dollar (2000) “Who gives foreign aid to whom and why?”, Journal of Economic Growth, Vol. 5 (1), pp. 33-63.
Barro, R. J. and J.-W. Lee (2002) “IMF programs: who is chosen and what are the effects”? National Bureau of Economic Research (NBER) Working Paper Series, No. 8951 (May).
Battese, G. E. and T. J. Coelli (1993) “A stochastic frontier production function incorporating a model for technical inefficiency effects”, Working Papers in Econometrics and Applied Statistics, No. 69, Department of Econometrics, University of New England, Armidale, Australia.
Battese, G. E. and T. J. Coelli (1995) “A model of technical inefficiency effects in a stochastic frontier production function for panel data”, Empirical Economics, Vol. 20 (2), pp. 325-332.
Berthelemy, J.-C. (2004) “Bilateral donors’ interest vs recipients’ development motives in aid allocation: do all donors behave the same?”, Paper presented at the HWWA conference on the political economy of aid, Hamburg (9-11 December).
Butkiewicz, J. and H. Yanikkaya (2005) “The effects of IMF and World Bank lending on long-run economic growth: an empirical analysis”, World Development, Vol. 33 (3), pp.371-391.
Coelli, T. (1996) “A guide to Frontier Version 4.1: A computer program for stochastic frontier production and cost function estimation”, CEPA Working Paper, No. 96/07, University of New England, Armidale, Australia.
Gilman, M. and W. Mitchell (2004) “Achievements to date and challenges ahead: a view from the IMF”, in J. J. Teunissen and A. Akkerman (eds.) HIPC Debt Relief: Myths and Reality, The Hague: Forum on Debt and Development (FONDAD), pp. 72-96.
Jondrow, J., C. A. K. Lovell, I. S. Materov and P. Schmidt (1982) “On the estimation of technical inefficiency in the stochastic frontier production function model”, Journal of Econometrics, Vol. 19, pp. 233-238.
Kapijimpanga, O. (1996) The Unresolved and Deepening African Debt Crisis, Harare, Zimbabwe: African Forum and Network on Debt and Development (AFRODAD).
Kapijimpanga, O. (1998) “Solving the African debt crisis”, African Dialogue, Vol. 3.3 (December).
Klein, Thomas (Ed). (1990) Managing external debt in developing countries. Proceedings of a joint seminar, Jeddah, May 1990. World Bank, Washington DC, USA.
Li, X. and X. Liu (2005) “Foreign direct investment and economic growth: an increasingly endogenous relationship”, World Development, Vol. 33 (3), pp. 393-407.
Marijke, T. (1998) “Even with strings attached, debt relief lacks US pull”, Washington, DC: The Development Gap, mimeo.
Meeusen, W. and J. van den Broeck (1977) “Efficiency estimation from Cobb-Douglas production functions with composed error “. International Economic Review, Vol. 18 (2), pp. 435-444.
Njeru, J. (2003) “The impact of foreign aid on public expenditure: the case of Kenya’’. African Economic Research Consortium, Research Paper, No. 135, Nairobi, Kenya.
Nkamleu, G. B. (2004) ‘‘Productivity growth, technical progress and efficiency change in African agriculture”, African Development Review, Vol. 16 (1), pp. 203-222.
Nyemeck J. and G. B. Nkamleu (2006) Potentiel de Productivité et Efficacité Technique du Secteur Agricole en Afrique. Canadian Journal of Agricultural Economic 54 (2006) 361-377.
Svensson, J. (1999) “Aid, growth and democracy”, Economics and Politics, Vol. 11 (3), pp. 275-297.
United Nations (1990) Debt: A crisis for development. New York, USA.
UNDP. (1999) “Debt and sustainable human development”, Technical Advisory Paper, No 4, Management Development and Governance Division, Bureau for Development Policy, New York, USA.
World Bank (2003) African development indicators, World Bank, Washington DC.