Question 1

2. Echoes Across Borders: Macroeconomic Spillover Effects of Conflict in Sub-Saharan Africa

Accepted Answer

This paper quantifies the macroeconomic spillover effects of conflict within sub-Saharan African (SSA) countries using a new Conflict Spillover Index (CSI), which accounts for conflict intensity and distance from conflict-affected countries. Our findings reveal an escalation in conflict spillovers across SSA since 2011, marked by considerable cross-country heterogeneity. Impulse responses show that conflict spillovers shocks significantly and persistently hinder economic growth, while concurrently elevating inflation in the “home” country. Conflict spillover shocks are also associated with increases in (current) government spending and government debt. Furthermore, the international trade transmission channel of spillovers operates mostly through increased imports, while negative effects on FDI winddown over time. Moreover, state-dependent impulse responses underscore the importance of good governance, fiscal space, and foreign aid in attenuating the adverse macroeconomic spillover effects of conflict. The detrimental impact of conflict on output is more severe in environments with weaker governance and limited fiscal space. Government expenditures tend to rise following a spillover shock in contexts of high governmental effectiveness, possibly reflecting the use of policy buffers to respond to shocks. In that context, the papers shed light on important factors to promote resilience in SSA economies.

Full Text(https://www.imf.org/en/Publications/WP/Issues/2024/05/17/Echoes-Across-Borders-Macroeconomic-Spillover-Effects-of-Conflict-in-Sub-Saharan-Africa-549159)

https://static.wixstatic.com/media/fc04c6_92dd5ed59abd4facb55257f7f0fc9872~mv2.png

Question 2

1. Fraying Threads: Exclusion and Conflict in Sub-Saharan Africa

Accepted Answer

This study investigates the factors leading to exclusion and their detrimental impacts in sub-Saharan Africa (SSA). It employs two-levels of analysis: a macro-level estimation of the influence of exclusion and marginalization on violent conflict, and a micro-level investigation identifying the triggers of exclusion sentiments. We construct statistical summaries from multiple measures of exclusion, producing an overall exclusion index as well as social, economic, and political exclusion sub-indices. Our results show the importance of mitigating exclusion and marginalization within SSA nations, and pinpoint the most effective policy levers that governments may use to minimize destabilizing feelings of exclusion.

Full Text(https://www.imf.org/en/Publications/WP/Issues/2024/01/12/Fraying-Threads-Exclusion-and-Conflict-in-Sub-Saharan-Africa-543721)

https://static.wixstatic.com/media/fc04c6_570e0e3a4cfc44ca9ce448faf18341fe~mv2.jpg

Hanomics

Working Papers