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Securities Markets And Social Capital Integration In Africa: Risks And Policy Options

Author

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  • GODWIN NWAOBI

    (QUANTITATIVE ECONOMIC RESEARCH BUREAU,NIGERIA)

Abstract

The need to develop securities market has, following the recent international financial crises, increasingly attracted the attention of national and international policy makers. Never before have developed and developing countries shared such a strong interest in ensuring the stable growth of the international capital flows. And yet, the question for policymakers is how to channel these gains into investments that promote development, sustainable poverty reduction and social equity. Using the African scenario, this paper argued that although many of the institutions needed for strong income growth and asset accumulation are equally important in fostering social assets, the institutional underpinnings of sustainable development are somewhat broader. They rest on greater access to information and knowledge and the ability to form broader partnerships. Without these additional institutional elements, society risks fragmentation that imperil both income growth and wellbeing. Nothing that market exchange plays a larger role in africa, we also argued that the presence of transactions costs naturally leads market participants to enter in long-term trading relationships(and these relationships form business networks that shape market outcomes) with minimum risks. However,when societies become more equitable in ways that lead to greater opportunites for all,the poor stand to benefit from a 'double dividend'.

Suggested Citation

  • Godwin Nwaobi, 2005. "Securities Markets And Social Capital Integration In Africa: Risks And Policy Options," Finance 0512019, EconWPA.
  • Handle: RePEc:wpa:wuwpfi:0512019
    Note: Type of Document - pdf; pages: 49. THIS IS A RESEARCH PAPER FOR EXPERTISE COMMENTS
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    File URL: http://econwpa.repec.org/eps/fin/papers/0512/0512019.pdf
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    References listed on IDEAS

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    1. Mark Gertler, 1988. "Financial structure and aggregate economic activity: an overview," Proceedings, Federal Reserve Bank of Cleveland, pages 559-596.
    2. Jan Willem Gunning & Paul Collier, 1999. "Explaining African Economic Performance," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 64-111, March.
    3. Claessens, S., 1993. "Risk Management in Developing Countries," Papers 235, World Bank - Technical Papers.
    4. Winter, Sidney G., 1995. "Small and medium-size enterprises in economic development : possiblities for research and policy," Policy Research Working Paper Series 1508, The World Bank.
    5. Frankel, Jeffrey A., 1979. "The diversifiability of exchange risk," Journal of International Economics, Elsevier, vol. 9(3), pages 379-393, August.
    6. Frankel, Jeffrey A, 1992. "Measuring International Capital Mobility: A Review," American Economic Review, American Economic Association, vol. 82(2), pages 197-202, May.
    7. Claessens, S. & Gooptu, S., 1993. "Portfolio Investment in Developing Countries," World Bank - Discussion Papers 228, World Bank.
    8. Otani, Ichiro & Villanueva, Delano, 1990. "Long-term growth in developing countries and its determinants: An empirical analysis," World Development, Elsevier, vol. 18(6), pages 769-783, June.
    9. Gallant, A. Ronald & Hansen, Lars Peter & Tauchen, George, 1990. "Using conditional moments of asset payoffs to infer the volatility of intertemporal marginal rates of substitution," Journal of Econometrics, Elsevier, vol. 45(1-2), pages 141-179.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    SECURITIES; SOCIAL CAPITAL; MARKETS; PORTFOLIO; AFRICAN ECONOMY; INSTITUTIONS; RISKS; BONDS; TREASURY BILLS; STOCKS; DEBENTURES; STOCKEXHANGE; AUCTIONS INVESTMENTS; DEBT; MICROFINANCE; SOCIALSECURITY;

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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