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The aim of this paper is to investigate policy instruments by which the persistence of inequality is affected through financial development channels in 48 African countries for the period 1996 - 2014. Financial dynamic channels of depth (money supply and liquid liabilities), efficiency (at banking and financial system levels), activity (from banking and financial system perspectives) and stability are used. Political ("voice and accountability" and political stability), economic (government effectiveness and regulation quality) and institutional (rule of law and corruption-control) governance policy instruments are also involved. The empirical evidence is based on the Generalised Method of Moments (GMM). The results show that financial depth and financial stability are the best channels of reducing inequality. Moreover, the relevance of these financial channels is significantly apparent when policy instruments are exclusively governance variables. The comparative relevance of governance dynamics in the persistence of inequality is discussed. The study responds to two recent policy and scholarly challenges, notably: the persistence of inequality in Africa and the relevance of governance in addressing income inequality by means of financial access.

The aim of this paper is to investigate policy instruments by which the persistence of inequality is affected by financial development channels in 48 African countries for the period of 1996–2014. Financial dynamic channels of depth, efficiency, activity and stability are used. Political, economic and institutional governance policy instruments are also involved. The empirical evidence is based on the generalised method of moments. The results show that financial depth and financial stability are the best channels of reducing inequality. Moreover, the relevance of these financial channels is significantly apparent when policy instruments are exclusively governance variables. The comparative relevance of governance dynamics in the persistence of inequality is discussed. The study responds to two recent policy and scholarly challenges, notably: the persistence of inequality in Africa and the relevance of governance in addressing income inequality by means of financial access.

This study evaluates the economic impact of severe natural disasters in Africa using the generalized synthetic control method. In other words, it assesses how gross domestic product (GDP) would have been affected if severe natural disasters did not occur. Moreover, it explores the determinants of the destructiveness of the impact, focusing on the role played by capital. We find that severe natural disasters induce a significant and continuous reduction of GDP many years after the event. Indeed, economic losses caused by disasters depend on the level of capital (human capital, employment and capital stock) and aspects of governance quality (political stability and absence of violence). In other words, negative synergies are apparent because while capital stock, employment and human capital unconditionally reduce the macroeconomic impact of natural disasters, the corresponding conditional or interactive effects with political stability are also negative. Policy implications are discussed.

This paper measures the macroeconomic impact of recent political crisis, protest and uprisings in Africa with the generalized synthetic control method and evaluates the role played by natural resource dependence on the modulation of the impact. We find that political crisis, protests and uprisings have a significant and negative impact on economic growth while the impact is positive on investment and price level. For economic growth, the deviation of the actual series from the counterfactual is negative, instantaneous, persistent and highly significant; indicating non-negligible costs of the shock. Indeed, dependence on natural resources amplifies the negative effect of political crisis, protests and uprisings on GDP. Finally, the more the treated country depends on natural resources, the more it becomes resilient from the investment losses caused by political crisis.

The study extends the debate on finance versus institutions and measurement of property rights institutions. We assess the relationships between various components of property rights institutions and private investment, notably: political, economic and institutional governances. Comparative concurrent relationships of financial dynamics of depth, efficiency, activity and size are also investigated. The findings provide support for the quality of institutions as a better positive correlate of private investment than financial intermediary development. The interaction of finance and governance is not significant in potentially promoting private investment, perhaps due to substantially documented surplus liquidity issues in African financial institutions. The empirical evidence is based on 53 African countries for the period 1996-2010. Policy measures are discussed for reducing financial deposits, increasing financial activity and hence, improving financial efficiency.

PurposeThe purpose of this paper is to examine how linkages between information and communication technology (ICT) and remittances affect the doing of business.Design/methodology/approachThe focus is on a panel of 49 Sub-Saharan African (SSA) countries for the period 2000–2012. The empirical evidence is based on the generalized method of moments.FindingsWhile the authors establish some appealing results in terms of net negative effects on constraints to the doing of business (i.e. time to start a business and time to pay taxes), some positive net effects are also apparent (i.e. number of start-up procedures, time to build a warehouse and time to register a property). The authors also establish ICT penetration thresholds at which the unconditional effect of remittances can be changed from positive to negative, notably: for the number of start-up procedures, an internet level of 9.00 penetration per 100 people is required, while for the time to build a warehouse, a mobile phone penetration level of 32.33 penetration per 100 people is essential. Practical and theoretical implications are discussed.Originality/valueTo the best of the authors' knowledge, this is the first study to assess linkages between ICT, remittances and doing business in SSA.

Purpose – The study extends the debate on finance versus institutions in the promotion of investment documented by Acemoglu and Johnson (2005), Ali (2013) and Asongu (2014). We assess the effects of various components of governance on private investment, notably: political, economic and institutional governances. Financial indicators of depth, allocation efficiency, activity and size are used. Design/methodology/approach – An endogeneity robust dynamic system GMM estimation technique is employed. Principal component analysis is also employed to reduce the dimensions of governance variables. The empirical evidence is based on 53 African countries for the period 1996-2010. Findings – The findings provide support for the quality of governance as a better determinant of private investment than financial intermediary development. Moreover, the evidence of finance and governance as substitutes in their impact on investment implies that good governance fuels private investment and this positive impact is stronger in nations with less developed financial systems. This finding is consistent with Ali (2013) and contrary to the results of Asongu (2014c). Practical implication – Policy measures for fighting involuntary and voluntary surplus liquidities are discussed. The paper provides additional support for the need of strengthening governance institutions to promote investment on the one hand and fighting financial allocation inefficiency by mitigating surplus liquidity issues on the other hand. Originality/value – The paper extends the debate on the substitution of finance and institutions in the promotion of private investment.