In this sophisticated yet accessible analysis of the open economies of Sub-Saharan Africa, Jean-Paul Azam analyses international trade, exchange rate issues, and longer-term growth, taking due account of the distinctive features of African economies. In particular, he examines the informal as well as the formal institutional frameworks which prevail in different African countries and which affect their macroeconomic behaviour. Key issues explored include tariffs and quotas, membership of the CFA Zone, and currency convertibility or inconvertibility, as well as smuggling, corruption, parallel markets in goods and currencies, ethnic diversity and redistribution. Case studies of important macroeconomic events are used to establish basic stylized facts from which the theory emerges, and special attention is paid to the consequences of macroeconomic events for the poor, via the food market or traditional redistribution mechanisms.
• Describes and analyses a realistic picture of economic behaviour in Africa, including the large but under-reported informal sector • Case studies are drawn from across West, South and East Africa, based on the author's extensive fieldwork • Theoretical innovations and original models help to explore problems specific to Africa
Preface; Figures; Tables; 1. Introduction and overview; Part I. Unrecorded Trade in Goods and Currencies: 2. The welfare implications of unrecorded cross-border trade; 3. Parallel trade and currency convertibility; Part II. Foreign Exchange Constraints: 4. Dollars for sale: inflation and the black market premium; 5. The public debt constraint in the CFA zone; 6. Currency crises, food, and the cola nut effect; Part III. Longer-term Growth in African Countries: 7. Exchange rate, growth and poverty; 8. Export crops, human capital and endogenous growth; 9. Ethnic rents and the politics of redistribution; Conclusion; References; Index.
'Jean-Paul Azam provides a refreshingly different and credible approach to analysing macroeconomic policy outcomes, one in which the roles of individuals and institutions receive serious attention in explaining policy outcomes. He shows that case studies can be a powerful tool for making rigorous analysis interesting. The discussions of currency convertibility, exchange rates, inflation, public debt, currency crises, growth, poverty, human capital, ethnicity and the politics of redistribution are all done in relation to the actions or inactions of clearly identifiable economic agents in countries that the author has, sometimes, personally observed. This is certainly a most welcome contribution to the analysis of African economies.' Ernest Aryeetey, Professor of Economics and Director of the Institute of Statistical, Social and Economic Research (ISSER), University of Ghana
'Very few command the substance and technique of modern economics and a deep knowledge of the developing world. Jean-Paul Azam is one of them. While other development economists may preach, Azam teaches. He instructs economists about Africa and scholars in Africa about economics. A wonderful book!' Robert H. Bates, Eaton Professor of the Science of Government, Harvard University
'Jean-Paul Azam is one of the most creative development economists working today. This book is a joy to read: it addresses a set of well-known macro policy puzzles and consistently delivers new insights that are both unconventional and convincing. The net effect is to expose the simple mindset that international financial institutions brought to the trade and macroeconomic policy reform debates of the 1980s and 1990s, and that still lies at the core of contemporary policy analysis. He does this not by adopting different analytical methods, but by accommodating the structural realities of African economies, including the dominance of the informal sector. This is applied macroeconomics at its best. The book should be required reading for all development macroeconomists and Africa specialists. It will be an excellent classroom resource for upper-level and graduate students in development economics.' Stephen A. O'Connell, Professor of Economics, Swarthmore College