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Institutions, trade, and social cohesion in fragile states: Implications for policy conditionality and aid allocation

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  • Baliamoune-Lutz, Mina

Abstract

This paper examines the effects of political institutions, openness to trade, and social cohesion on development in fragile states. The empirical results indicate that beyond a certain level, openness to trade may actually be harmful to income, particularly in countries with high export concentration. Starting from low levels of political institutional quality, small improvements in polity can have adverse effects. On the other hand, social cohesion has a positive effect once a threshold level is reached. The results associated with the influence of political institutions and openness to trade seem to suggest the possibility of a 'catch-22', at least in the short run. If a fragile state tries to improve its political institutions or its openness to trade it may wind up with lower per-capita income. These findings have important policy implications with regard to IDA's policy conditionality and aid allocation.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Policy Modeling.

Volume (Year): 31 (2009)
Issue (Month): 6 (November)
Pages: 877-890

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Handle: RePEc:eee:jpolmo:v:31:y:2009:i:6:p:877-890

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Web page: http://www.elsevier.com/locate/inca/505735

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Keywords: Fragile states Aid effectiveness Policy Political institutions Social cohesion;

References

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Citations

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Cited by:
  1. Oasis, Kodila-Tedika & Remy, Bolito-Losembe, 2013. "Corruption et Etats fragiles africains
    [Corruption and Failed African States]
    ," MPRA Paper 44686, University Library of Munich, Germany.
  2. Graziella Bertocchi & Andrea Guerzoni, 2010. "Growth, History, or Institutions? What Explains State Fragility in Sub-Saharan Africa," Department of Economics 0625, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
  3. Asongu Simplice & Oasis Kodila-Tedika, 2013. "State fragility, rent seeking and lobbying: evidence from African data," Working Papers 13/019, African Governance and Development Institute..
  4. Mina Baliamoune-Lutz, 2011. "Growth by Destination (Where You Export Matters): Trade with China and Growth in African Countries," African Development Review, African Development Bank, vol. 23(2), pages 202-218.
  5. Bertocchi, Graziella, 2011. "Growth, Colonization, and Institutional Development: In and Out of Africa," IZA Discussion Papers 5856, Institute for the Study of Labor (IZA).
  6. Mina Baliamoune-Lutz, 2012. "Do Institutions And Social Cohesion Enhance The Effectiveness Of Aid? New Evidence From Africa," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1240003-1-1.
  7. Baliamoune-Lutz, Mina, 2011. "Trust-based social capital, institutions, and development," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 335-346, August.

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