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Macroeconomic Impact of Capital Flows in Sub-Saharan Countries, 1980-2008

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  • John Weeks

Abstract

Weeks examines the probable impact of capital flows, including capital flight, on the macroeconomic performance of sub-Saharan countries over several decades leading up to the global financial crisis. He uses empirical evidence from 31 countries (from Ndikumana and Boyce 2010). His analysis strongly suggests that in the absence of effective regulation of the external account, as is the case in most of the sub-Saharan countries, capital flight is quite substantial, absolutely and compared to other types of resource flows. Capital flight plus official debt service outweigh positive flows in many countries, development assistance and direct foreign investment. The evidence suggests that loss of foreign exchange through debt service and capital flight may in part explain the relatively weak growth of the countries of the sub-Saharan region. National measures to limit capital flight would result in further improvement in economic performance.

Suggested Citation

  • John Weeks, 2012. "Macroeconomic Impact of Capital Flows in Sub-Saharan Countries, 1980-2008," Working Papers wp290, Political Economy Research Institute, University of Massachusetts at Amherst.
  • Handle: RePEc:uma:periwp:wp290
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    Cited by:

    1. Simplice Asongu & Mohamed Jellal, 2014. "Foreign aid, investment and fiscal policy behavior: theory and empirical evidence," Working Papers 14/030, African Governance and Development Institute..
    2. Asongu, Simplice A. & Amankwah-Amoah, Joseph, 2018. "Mitigating capital flight through military expenditure: Insight from 37 African countries," Research in International Business and Finance, Elsevier, vol. 45(C), pages 38-53.
    3. Asongu , Simplice A., 2015. "On the dynamic effects of foreign aid on corruption," European Economic Letters, European Economics Letters Group, vol. 4(1), pages 5-10.
    4. Simplice Asongu, 2015. "On Taxation, Political Accountability and Foreign Aid: Empirics to a Celebrated Literature," South African Journal of Economics, Economic Society of South Africa, vol. 83(2), pages 180-198, June.
    5. Simplice Asongu & Mohamed Jellal, 2016. "Foreign Aid Fiscal Policy: Theory and Evidence," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(2), pages 279-314, June.
    6. Efobi, Uchenna & Asongu, Simplice, 2015. "How Terrorism Explains Capital Flight from Africa," MPRA Paper 68662, University Library of Munich, Germany.
    7. Asongu, Simplice A & Jellal, Mohamed, 2014. "International aid, corruption and fiscal policy behavior," MPRA Paper 58750, University Library of Munich, Germany.
    8. repec:spr:jknowl:v:8:y:2017:i:1:d:10.1007_s13132-015-0321-0 is not listed on IDEAS
    9. Simplice A. Asongu, 2014. "Fighting African Capital Flight: Empirics on Benchmarking Policy Harmonization," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 11(1), pages 93-122, June.
    10. Efobi, Uchenna & Asongu, Simplice, 2016. "Terrorism and capital flight from Africa," International Economics, Elsevier, vol. 148(C), pages 81-94.
    11. repec:kap:jincot:v:17:y:2017:i:3:d:10.1007_s10842-016-0240-1 is not listed on IDEAS
    12. Uchenna Efobi & Belmondo Tanankem & Simplice Asongu, 2018. "Female Economic Participation with Information and Communication Technology (ICT) Advancement: Evidence from Sub-Saharan Africa," Working Papers 18/005, African Governance and Development Institute..
    13. Asongu, Simplice A & Nwachukwu, Jacinta C., 2016. "Transfer Mispricing as an Argument for Corporate Social Responsibility," MPRA Paper 75413, University Library of Munich, Germany.
    14. Asongu, Simplice A. & Tchamyou, Vanessa S. & Minkoua N., Jules R. & Asongu, Ndemaze & Tchamyou, Nina P., 2018. "Fighting terrorism in Africa: Benchmarking policy harmonization," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 492(C), pages 1931-1957.
    15. Simplice Asongu & Vanessa Tchamyou & Paul Acha-Anyi, 2017. "Who is Who in Knowledge Economy in Africa?," Working Papers 17/043, African Governance and Development Institute..
    16. Simplice Asongu & Joseph Amankwah-Amoah, 2016. "Military expenditure, terrorism and capital flight: Insights from Africa," Working Papers 16/018, African Governance and Development Institute..
    17. Simplice A. Asongu, 2017. "Knowledge Economy Gaps, Policy Syndromes, and Catch-Up Strategies: Fresh South Korean Lessons to Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(1), pages 211-253, March.
    18. Simplice A. Asongu, 2017. "The Comparative Economics of Knowledge Economy in Africa: Policy Benchmarks, Syndromes, and Implications," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(2), pages 596-637, June.
    19. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Fighting Capital Flight in Africa: Evidence from Bundling and Unbundling Governance," Journal of Industry, Competition and Trade, Springer, vol. 17(3), pages 305-323, September.
    20. Asongu, Simplice & Jellal, Mohamed, 2014. "International aid corruption and fiscal behavior policy," MPRA Paper 57192, University Library of Munich, Germany.
    21. Asongu, Simplice, 2014. "Taxation, foreign aid and political governance: figures to the facts of a celebrated literature," MPRA Paper 63792, University Library of Munich, Germany.

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