Exiting From Fragility in sub-Saharan Africa

Exiting From Fragility in sub-Saharan Africa

Author: Corinne Deléchat

Publisher: International Monetary Fund

Published: 2015-12-22

Total Pages: 46

ISBN-13: 1513591312

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This paper studies the role of fiscal policies and institutions in building resilience in sub-Saharan African countries during 1990-2013, with specific emphasis on a group of twenty-six countries that were deemed fragile in the 1990s. As the drivers of fragility and resilience are closely intertwined, we use GMM estimation as well as a probabilistic framework to address endogeneity and reverse causality. We find that fiscal institutions and fiscal space, namely the capacity to raise tax revenue and contain current spending, as well as lower military spending and, to some extent, higher social expenditure, are significantly and fairly robustly associated with building resilience. Similar conclusions arise from a study of the progression of a group of seven out of the twenty-six sub- Saharan African countries that managed to build resilience after years of civil unrest and/or violent conflict. These findings suggest relatively high returns to focusing on building sound fiscal institutions in fragile states. The international community can help this process through policy advice, technical assistance, and training on tax administration and budget reforms.


Exiting From Fragility in sub-Saharan Africa

Exiting From Fragility in sub-Saharan Africa

Author: Corinne Deléchat

Publisher: International Monetary Fund

Published: 2015-12-22

Total Pages: 46

ISBN-13: 1513521810

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This paper studies the role of fiscal policies and institutions in building resilience in sub-Saharan African countries during 1990-2013, with specific emphasis on a group of twenty-six countries that were deemed fragile in the 1990s. As the drivers of fragility and resilience are closely intertwined, we use GMM estimation as well as a probabilistic framework to address endogeneity and reverse causality. We find that fiscal institutions and fiscal space, namely the capacity to raise tax revenue and contain current spending, as well as lower military spending and, to some extent, higher social expenditure, are significantly and fairly robustly associated with building resilience. Similar conclusions arise from a study of the progression of a group of seven out of the twenty-six sub- Saharan African countries that managed to build resilience after years of civil unrest and/or violent conflict. These findings suggest relatively high returns to focusing on building sound fiscal institutions in fragile states. The international community can help this process through policy advice, technical assistance, and training on tax administration and budget reforms.


Exiting the Fragility Trap

Exiting the Fragility Trap

Author: David Carment

Publisher: Ohio University Press

Published: 2019-10-15

Total Pages: 247

ISBN-13: 082144686X

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State fragility is a much-debated yet underinvestigated concept in the development and international security worlds. Based on years of research as part of the Country Indicators for Foreign Policy project at Carleton University, Exiting the Fragility Trap marks a major step toward remedying the lack of research into the so-called fragility trap. In examining the nature and dynamics of state transitions in fragile contexts, with a special emphasis on states that are trapped in fragility, David Carment and Yiagadeesen Samy ask three questions: Why do some states remain stuck in a fragility trap? What lessons can we learn from those states that have successfully transitioned from fragility to stability and resilience? And how can third-party interventions support fragile state transitions toward resilience? Carment and Samy consider fragility’s evolution in three state types: countries that are trapped, countries that move in and out of fragility, and countries that have exited fragility. Large-sample empirical analysis and six comparative case studies—Pakistan and Yemen (trapped countries), Mali and Laos (in-and-out countries), and Bangladesh and Mozambique (exited countries)—drive their investigation, which breaks ground toward a new understanding of why some countries fail to see sustained progress over time.


Exiting From Fragility in Sub-Saharan Africa

Exiting From Fragility in Sub-Saharan Africa

Author: Corinne Del?echat

Publisher:

Published: 2015

Total Pages:

ISBN-13: 9781513569123

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This paper studies the role of fiscal policies and institutions in building resilience in sub-SaharanAfrican countries during 1990-2013, with specific emphasis on a group of twenty-six countries thatwere deemed fragile in the 1990s. As the drivers of fragility and resilience are closely intertwined, weuse GMM estimation as well as a probabilistic framework to address endogeneity and reversecausality. We find that fiscal institutions and fiscal space, namely the capacity to raise tax revenueand contain current spending, as well as lower military spending and, to some extent, higher socialexpend.


Avoid a Fall Or Fly Again: Turning Points of State Fragility

Avoid a Fall Or Fly Again: Turning Points of State Fragility

Author: Olusegun Ayodele Akanbi

Publisher: International Monetary Fund

Published: 2021-05-06

Total Pages: 48

ISBN-13: 1513573683

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High persistence of state fragility (a fragility trap) suggests the presence of substantial benefits from avoiding a fall into fragility and considerable hurdles to successful exit from fragility. This paper empirically examines the factors that affect the turning points of entering and exiting from state fragility by employing three different approaches: an event study, the synthetic control method, and a logit model. We find that avoiding economic contraction is critical to prevent a country on the brink of fragility from falling into fragility (e.g., among near fragile countries, the probability of entering fragility would rise by 40 percentage points should real GDP per capita growth decline from +2.5 percent to -2.5 percent). Also, strengthening government effectiveness together with increasing political inclusion and maintaining robust economic activity should help make exit from fragility more successful and sustainable. In the current environment (the COVID-19 crisis and its aftermath), the findings suggest the importance of providing well-directed fiscal stimulus with sufficient financing, (subject to appropriate governance safeguards and well-designed policies), and protecting critical socio-economic spending to keep vulnerable countries away from being caught in a fragility trap.


The Economic Consequences of Conflict in Sub-Saharan Africa

The Economic Consequences of Conflict in Sub-Saharan Africa

Author: Xiangming Fang

Publisher: INTERNATIONAL MONETARY FUND

Published: 2020-10-30

Total Pages: 29

ISBN-13: 9781513559667

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Sub-Saharan Africa has been marred by conflicts during the past several decades. While the intensity of conflicts in recent years is lower than that observed in the 1990s, the region remains prone to conflicts, with around 30 percent of the countries affected in 2019. In addition to immeasurable human suffering, conflicts impose large economic costs. On average, annual growth in countries in intense conflicts is about 2.5 percentage points lower, and the cumulative impact on per capita GDP increases over time. Furthermore, conflicts pose significant strains on countries’ public finances, lowering revenue, raising military spending, and shifting resources away from development and social spending.


Macroeconomic Policy in Fragile States

Macroeconomic Policy in Fragile States

Author: Ralph Chami

Publisher: Oxford University Press, USA

Published: 2021-01-26

Total Pages: 689

ISBN-13: 0198853092

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Setting macroeconomic policy is especially difficult in fragile states. Macroeconomic Policy in Fragile States addresses the many issues involved and considers ways to improve the effectiveness of macroeconomic management in the face of these constraints.


States of Fragility 2018

States of Fragility 2018

Author: OECD

Publisher: OECD Publishing

Published: 2018-07-17

Total Pages: 284

ISBN-13: 9264302077

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Three years into the 2030 Agenda it is already apparent that those living in fragile contexts are the furthest behind. Not all forms of fragility make it to the public’s eye: fragility is an intricate beast, sometimes exposed, often lurking underneath, but always holding progress back. Conflict ...


Central African Republic

Central African Republic

Author: International Monetary Fund. African Dept.

Publisher: International Monetary Fund

Published: 2016-08-10

Total Pages: 118

ISBN-13: 1475523718

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This 2016 Article IV Consultation highlights that economic growth in the Central African Republic has remained anemic since 2013 owing to structural rigidities, poor infrastructure, and limited energy supply. Inflation reached 11.6 percent in 2014 and receded to 4.5 percent in 2015 thanks to improved supply conditions and a fall in the prices of basic imports. Corrective measures implemented in 2015 allowed revenue to reach 7.1 percent. IMF Executive Directors have commended the authorities for the progress achieved under their economic program supported by the Rapid Credit Facility, which has helped stabilize the economy, rebuild core administrative capacity, and improve the management of public resources.


How to Design Tax Policy in Fragile States

How to Design Tax Policy in Fragile States

Author: Mario Mansour

Publisher: International Monetary Fund

Published: 2019-09-26

Total Pages: 29

ISBN-13: 1513515489

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The purpose of this note is to provide a framework for improving tax policy design in fragile and conflict-affected states, which face political and institutional constraints. This note begins with an overview of experiences in revenue mobilization in fragile states, including relative to other country groups—in particular, nonfragile states and formerly fragile states; that is, countries that exited fragility during the period under study. A discussion follows of how the principles of tax policy design should be applied in fragile states, particularly the relative importance of the revenue objective vis-à-vis other objectives, such as equity and efficiency. The two sections that follow provide guidance on tax policy design in the emergency and consolidation phases, respectively, and discuss how governments can use tax policy to transition from one phase to another, eventually overcoming fragility. The note concludes with key lessons and a set of guiding principles for tax reform in fragile states.