Effects of globalization on peace and stability: Implications for governance and the knowledge economy of African countries

Amavilah, Voxi and Asongu, Simplice and Andrés, Antonio (2017): Effects of globalization on peace and stability: Implications for governance and the knowledge economy of African countries. Published in: Technological Forecasting and Social Change , Vol. 122, No. September (September 2017): pp. 91-103.

Abstract

We argue that there exists an indirect link between globalization and the knowledge economy of African countries in which globalization influences ‘peace and stability’ and peace and stability affects governance, and through governance the knowledge economy. We model the link as a three-stage process in four testable hypotheses, which permits an empirical analysis without sacrificing economic relevance for statistical significance. The results indicate that the impacts on governance of peace and stability from globalization defined as trade are stronger than those of peace and stability resulting from globalization taken to be foreign direct investment. We conclude that foreign direct investment is not a powerful mechanism for stimulating and sustaining the African knowledge. However, since the effects of globalization on peace and stability can influence governance both positively and negatively, we also conclude that the prospect for the knowledge economy in African countries may be realistic and attainable, as long as these countries continue to engage in the kind of globalization that enhances peace and stability.

• Item Type: MPRA Paper
• Language: English
• Keywords: Globalization; peace and stability; Governance; knowledge economy, African countries
• Subjects: I - Health, Education, and Welfare > I2 - Education and Research Institutions > I20 - General; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I28 - Government Policy; K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

References

Acemoglu, D., Johnson, S., Robinson, J., 2001.Colonial origins of comparative development: An empirical investigation. J. Econ. Lit. 91(5), 1369-1401.

Alesina, A., Spolaore, E., Wacziarg, R., 2000. Economic integration and political disintegration. Am. Econ. Rev., 90(5), 1276-1296.

Al-Sadie, A., 2013.The effects of foreign direct investment on private domestic investment: Evidence from developing countries. Emp.Econ., 44(3), 1267-1275.

Amavilah, V. H., 2009a.Knowledge of African countries: Production and value of doctoral dissertations. Appl. Econ, 41(7-9), 977-989.

Amavilah, V. H., 2009b. National symbols, globalization, and the well-being of nations.MPRA Working Paper No. 14882, Munich (accessed on 20/09/2016).

Amavilah, V. H., 2009c. National identity, globalization, and the well-being of nations. MPRA Working Paper No. 14848, Munich (accessed on 20/09/2016).

Amavilah, V. H.,2009d.Globalization, governance, and the economic performance of Sub Saharan African countries.MPRA Working Paper No. 15600, Munich (accessed on 20/09/2016).

Amavilah, V. H.2008.Domestic, resources, governance, global links, and the economic performance of Sub-Saharan Africa. MPRA Working Paper No. 11193, Munich (accessed on20/09/2016).

Andrés, A. R., Asongu, S. A., 2013. Fighting software piracy: Which governance tools matter in Africa? J. Bus. Ethics118 (3), 667-682.

Andrés, A. R.,Asongu, S. A.,Amavilah, V. H. S., 2015. The impact of formal institutions on knowledge economy.J. Knowl.Econ.6 (4), 1034–1062.

Anyanwu, J. C., 2012. Developing knowledge for the economic advancement of Africa. Int. J. Acad. Res. Econ. Manage.Sci. 1(2),73-111.

Asongu, S. A., 2013a. Modeling the future of knowledge economy: Evidence from SSA and MENA countries. Econ. Bullet. 33(1), 612-624.

Asongu, S. A., 2013b. The ‘knowledge economy’- finance nexus: How do IPRs matter in SSA and MENA countries?Econ. Bullet. 33(1), 78-94.

Asongu, S. A., 2014a. Globalization, (fighting) corruption and development: How are these phenomena linearly and nonlinearly related in wealth effect? J. Econ. Stud. 41(3), 346-369.

Asongu, S. A., 2014b. Correcting inflation with financial dynamic fundamentals: Which adjustments matter in Africa.J. Afr. Bus. 15(1), 64-73.

Asongu, S. A., 2014c. On the substitution of institutions and finance in investment. Econ. Bullet. 34(3), 1557-1574.

Asongu, S. A., 2015. Financial sector competition and knowledge economy: Evidence from SSA and MENA countries. J. Knowl. Econ.,6(4), 717-748.

Asongu, S. A., & Le Roux, S., 2017. Enhancing ICT for inclusive human development in Sub-Saharan Africa. Tech. For. Soc. Chge. DOI: 10.1016/j.techfore.2017.01.026.

Asongu, S.A., Nwachukwu, J. C., 2016a.The mobile phone in the diffusion of knowledge for institutional quality in Sub Saharan Africa. World Dev., 86(October), 133-147.

Asongu, S. A., Nwachukwu, J. C., 2016b. The role of governance in mobile phones for inclusive human development in Sub-Saharan Africa. Technov. 55-56(September– October), 1-13.

Asongu, S. A., Efobi, U., Tchamyou, V. S., 2016a. Globalization and Governance: A Critical Contribution to the Empirics. African Governance and Development Institute Working Paper No. 16/017, Yaoundé.

Asongu, S. A., Nwachukwu, J. C., Tchamyou, V. S., 2016b. Information asymmetry and financial development dynamics in Africa. Rev. Dev. Fin. 6(2), 126-138.

Barro, R.J., 1996. Democracy and growth. J. Econ. Growth 1(1), 17-36.

Beck, T., Demirgüç-Kunt, A., Levine, R., 2003. Law and finance: Why does legal origin matter?.J. Comp. Econ.31, 653-675.

Bidwell, N. J., Winschiers-Theophilus, H., Kapuire, G. K., Rehm, M., 2011. Pushing personhood into place: Situating media in rural knowledge in Africa. .Int. J. Hum-Comput. Stud. 69 (10), 618-631.

Bigsten, A., Durevall, D. 2002. Is globalization good for Africa?Working Papers in Economics No. 67. Göteborg University. School of Business, Economics and Law.

Bonaglia, F., Braga de Macedo, J.,Bussolo M., 2001.How globalization improves governance. Working Paper No. 181. OECD Development Centre. November.

Butcher, N., 2011. ICT in Africa: A few key Challenges, in: ICT, Education, Development, and the Knowledge Society, Thematic Paper prepared for GeSCI African Leadership in ICT Program, December 2011, pp. 33-39.

Carisle, S., Kunc, M., Jones, E., Tiffin, S., (2013). Supporting innovation for tourism development through multi-stakeholder approaches: Experiences from Africa.Tourism Manage. 35(April), 59-69.

Choong, C-K., 2012. Does Financial Development Enhance the Linkages between Foreign Direct Investment and Economic Growth?Emp. Econ. 42(3), 819-834.

Cogburn, D., 2003.Governing global information and communications policy: Emergent regime formation and the impact on Africa. Telecommun. Policy 27(1-2), 135-153.

Dreher, A., 2003. Does Globalization Affect Growth?LehrstuhlfürVolkswirtschaftslehre, Mannheim (Germany): University of Mannheim.

Dreher, A., 2006. Does globalization affect growth? Empirical evidence from a new index. Appl. Econ. 38(10), 1091-1110.

Elani, S., De Beer, J., Kawooya, D., Oguamanam, C., Rizk, N, the OPEN Air Network, 2013. Knowledge & Innovation in Africa: Scenarios for the Future”, The OPEN Air Network http://www.openair.org.za/images/Knowledge-Innovation-Africa-Scenarios-for-Future.pdf (Accessed: 23/02/2017).

Fayissa, B., Nsiah, C., 2010. The impact of governance on economic growth: Further evidence for Africa. Department of Economics and Finance Working Paper Series, Middle Tennessee State University, December.

Ford, D. M., 2007. Technologizing Africa: On the bumpy information highway, Comput. Compos. 24(3), 302-316.

Goklany, I.M., 2002. The globalization of human well-being. Policy analysis, No. 19447 (August 22). http://www.cato.org/pubs/pas/pa447.pdf (accessed 10/12/2013).

Hsiang, S.M., Burke, M., Miguel, E., 2013. Quantifying the influence of climate on human conflict. Science 341(6151), September 13.

Hsiang, S. M.,Meng, K. C.,Cane, M. A.2011. Civil conflicts are associated with global climate.Nature 476, 438-441. (August 25).

Jaunky, V.C., 2013. Democracy and economic growth in Sub-Saharan Africa: A panel data approach.Emp. Econ., 45(2), 987-1008.

Jolliffe, I. T., 2002.Principal Component Analysis (2ndEd.). New York: Springer.

Judge, G.G., Griffiths, W.E., Hill. R.C., Lütkepohl, H., Lee, T.C., 1985.TheTheory and Practice of Econometrics, Second Edition. New York: John Wiley.

Kaiser, H. F., 1974. An index of factorial simplicity. Psychometrika 39, 31–36.

Khan, M.H., 2007. Governance, economic growth and development since 1960s. DESA Working Paper No. 54. UN Economic and Social Affairs.

Khan, M.H., 2010. Governance, growth and development. Elcano Royal Institute for Strategic and International Studies. http://www.realinstitutoelcano.org/ (accessed 25 June 2014).

Kaufmann, D., Kraay, A., 2003. Governance and growth: causality:Which way? – Evidence for the world, in Brief. (February). http://web.worldbank.org/archive/website00818/WEB/PDF/GROWTH-3.PDF (accessed 20 May 2014).

Kaufmann, D., Kraay, A.,Zoido-Lobaton, P., 1999a. Aggregating governance indicators. World Bank Policy Research Department Working Paper No. 2195. Washington DC.

Kaufmann, D., Kraay, A., Zoido-Lobaton, P., 1999b. Governance matters.World Bank Policy Research Department Working Paper No. 2196. Washington DC.

Kaufmann, D., Kraay, A., Zoido-Lobaton, P., 2002a. Governance matters II – Updated indicators for 2000/01. World Bank Policy Research Department Working Paper No. 2772. Washington DC.

Kaufmann, D.,Kraay, A., 2002b. Growth without governance. World Bank Policy Research Working Paper No. 2928, Washington DC.

Kremer, M., Maskin, E., 2007. Globalization and inequality. http://www.hse.ru/data/624/768/1238/Maskin.pdf (accessed 11 September 2014).

Lalountas, D.A., Manolas, G.A., Vavouras, I. S., 2011. Corruption, globalization and development: How are these three phenomena related? J. Policy Model 33, 636-648.

Letiche, J. M., 2006. ‘Positive economic incentives. New behavioral economics and successful economic transitions.Journal of Asian Economics 17(5), 775-796.

Lin, B., 2006. A sustainable perspective on the knowledge economy: A critique of Austrian and mainstream view. Ecol. Econ. 60(1), 324-332.

Messer, E., Cohen, M. J., 2006.Conflict, food insecurity and globalization. International Food Policy Research Working Paper No. 206, Washington.

Moahi, K., H., 2007. Globalization, knowledge economy and the implications for indigenous knowledge. Int. Rev. Inform. Ethics, 07/09/2007),1-8.

Olzak, S., 2011. Does globalization breed ethnic discontent? J. Conflict Resolut 55(1), 3-32.

Oyelaran-Oyeyinka, B., Sampath, P. G., 2007. Innovation in African development: Case studies of Uganda, Tanzania and Kenya. A World Bank Study. http://info.worldbank.org/etools/docs/library/239730/InnovationInAfricaFinalPaper.pdf(Accessed22/03/2014).

Oxley L, McAleer, M., 1993. Econometric issues in macroeconomic models with generated regressors. J. Econ. Surveys740 (1), 1-40.

Pagan, A., 1984. Econometric issues in the analysis of regressions with generated regressors. Int. Econ. Rev 25(1), 221-247.

Pesaran, M. H., 2006. Estimation and inference in large heterogeneous panels with a multifactor error structure.Econometrica 74(4), 967-1012.

Quibria, M., G., 2006.Does governance matter? Yes, no or maybe: Some evidence from developing Asia.KyklosInt. Rev. Soc.Sci 59(1),99-114.

Rodrik, D., 1997. Globalization, social conflict and economic growth. United Nations Conference on Trade and Development (24th October 1997). http://unctad.org/en/docs/prebisch8th.en.pdf (Accessed: 20/05/2014).

Rodrik, D., Subramanian, A., 2009. Why didfinancial globalization disappoint?’ Int. Monet. Fund S Pap. 56(1), 112-138.

Rooney, D., 2005. Knowledge, economy, technology and society: The politics of discourse.Telemat. Inform. 22(4), 405-422.

Saxegaard, M.,2006. Excess liquidity and effectiveness of monetary policy: Evidence from Sub-Saharan Africa.IMF Working Paper No. 06/115, Washington DC.

Solow, R.M., 1957. Technical change and the aggregate production. Rev. Econ. Stat. 39(3), 312-320.

Strulik, H., Prettner, K.,Prskawetz, A., 2013. The past and future of knowledge-based growth. J. Econ. Growth, 18(4),411-437.

Tchamyou, S. V., 2016. The role of knowledge economy in African business. J. Know. Econ. DOI: 10.1007/s13132-016-0417-1.

Tchamyou, V. S., Asongu, S. A., 2016. Information Sharing and Financial Sector Development in Africa. J. Afr. Bus. 17(1), 24-49.

Tidwell, A., Lerche, C., 2004. Globalization and conflict. Int.J. Peace Stud. 9(1), 47-59.

Tsai, M-C., 2007. Does globalization affect human well-being? Soc. Indic. Res. 18(1), 103-126.

Wantchekon, L., Klasnja, M., Novta, N., 2015. Education and human capital externalities: Evidence from colonial Benin. Q.J.Econ130(2), 703-757.

Weber, A. S., 2011. The role of education in knowledge economies in developing countries.Procedia Soc. Behav. Sci., 15, 2589-2594.

White, H., 1980. A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroscedasticity. Econometrica48(4), 817-838.

White, H., 1980.Using least squares to approximate unknown regression functions. Int. Econ. Rev. 21(1), 149-170.