Structural Vulnerability and Excessive Public Indebtedness in CFA Franc Zone Countries
This paper relies on the 'institutional debt rule' implemented in Franc Zone countries to assess whether the structural vulnerability of these countries matter for their probability to enter into excessive indebtedness. This structural vulnerability is measured by retrospective 'Economic Vulnerability Index' (EVI) recently computed jointly by the United Nations and Guillaumont et al., (2011). We observe evidence that the impact of 'EVI' is non-linear with respect to the probability of these countries to engage into excessive indebtedness and that, this effect appears to be the same for the two monetary areas belonging to the CFA Franc Zone countries: a rise of EVI induces a higher probability of excessive debt and for higher EVI, this probability declines. Consequently, international development institutions such as the Bretton Woods should take into account such vulnerability in their assessment of the adequate development policies and recommendations to these countries.
|Date of creation:||07 Nov 2012|
|Date of revision:|
|Note:||View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00749470|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barro, Robert J, 1979.
"On the Determination of the Public Debt,"
Journal of Political Economy,
University of Chicago Press, vol. 87(5), pages 940-71, October.
- Michel Galy & Michael T. Hadjimichael, 1997. "The CFA Franc Zone and the EMU," IMF Working Papers 97/156, International Monetary Fund.
- Henning Bohn, 1998. "The Behavior Of U.S. Public Debt And Deficits," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 949-963, August.
- Oral Williams & Olumuyiwa Adedeji, 2007. "Fiscal Reaction Functions in the CFA Zone; An Analytical Perspective," IMF Working Papers 07/232, International Monetary Fund.
- Briguglio, Lino & Cordina, Gordon & Farrugia, Nadia & Vella, Stephanie, 2008.
"Economic Vulnerability and Resilience: Concepts and Measurements,"
Working Paper Series
RP2008/55, World Institute for Development Economic Research (UNU-WIDER).
- Lino Briguglio & Gordon Cordina & Nadia Farrugia & Stephanie Vella, 2009. "Economic Vulnerability and Resilience: Concepts and Measurements," Oxford Development Studies, Taylor & Francis Journals, vol. 37(3), pages 229-247.
- Joseph G. Altonji & Lewis M. Segal, 1994.
"Small Sample Bias in GMM Estimation of Covariance Structures,"
NBER Technical Working Papers
0156, National Bureau of Economic Research, Inc.
- Altonji, Joseph G & Segal, Lewis M, 1996. "Small-Sample Bias in GMM Estimation of Covariance Structures," Journal of Business & Economic Statistics, American Statistical Association, vol. 14(3), pages 353-66, July.
- Joseph G. Altonji & Lewis M. Segal, 1994. "Small sample bias in GMM estimation of covariance structures," Working Paper Series, Macroeconomic Issues 94-8, Federal Reserve Bank of Chicago.
- Briguglio, Lino, 1995. "Small island developing states and their economic vulnerabilities," World Development, Elsevier, vol. 23(9), pages 1615-1632, September.
- Naude, Wim & Santos-Paulino, Amelia U. & McGillivray, Mark, 2009.
"Vulnerability in Developing Countries,"
Working Paper Series
rb02-08, World Institute for Development Economic Research (UNU-WIDER).
- Naude, Wim & Santos-Paulino, Amelia U. & McGillivray, Mark, 2008. "Vulnerability in Developing Countries," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Naude, Wim & Amelia U. Santos-Paulino & Mark McGillivray, 2009. "Vulnerability in Developing Countries," Working Paper Series WIDER Angle September 200, World Institute for Development Economic Research (UNU-WIDER).
- John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
- J. de Ree & E. Nillesen, 2006.
"Aiding Violence or Peace? The Impact of Foreign Aid on the Risk of Civil Conflict in Sub-Saharan Africa,"
06-09, Utrecht School of Economics.
- de Ree, Joppe & Nillesen, Eleonora, 2009. "Aiding violence or peace? The impact of foreign aid on the risk of civil conflict in sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 88(2), pages 301-313, March.
- S. Tolga Tiryaki, 2008. "Has the Stability and Growth Pact Changed the Likelihood of Excessive Deficits in the European Union?," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 8(1), pages 65-83.
- Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
- Benno Ferrarini, 2009. "Policy, vulnerability and the new debt sustainability framework," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(7), pages 895-914.
- Edward C. Norton & Hua Wang & Chunrong Ai, 2004. "Computing interaction effects and standard errors in logit and probit models," Stata Journal, StataCorp LP, vol. 4(2), pages 154-167, June.
- Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Oxford Development Studies, Taylor & Francis Journals, vol. 37(3), pages 193-228.
- Gordon Cordina, 2004. "Economic Vulnerability And Economic Growth: Some Results From A Neo-Classical Growth Modelling Approach," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 29(2), pages 21-39, December.
- Joël CARIOLLE, 2011. "The Economic Vulnerability Index - 2010 Update," Working Papers I09, FERDI.
- Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
- Greenidge, Kevin & Drakes, Lisa & Craigwell, Roland, 2010. "The external public debt in the Caribbean Community," Journal of Policy Modeling, Elsevier, vol. 32(3), pages 418-431, May.
When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:halshs-00749470. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.