This paper asks whether corruption might be the outcome of a lack of outside options for public officials or civil servants. We propose an occupational choice model embedded in an agency framework to address the issue. We show that technology-induced private sector expansion leads to a decline...

This paper explores income and consumption smoothing patterns among the member countries of each of the CFA zones the CEMAC and the WAEMU during the period 1980-2000.I find that for the CEMAC only about 15 percent of shocks to GDP are smoothed through the standard channels (that is capital...

This paper develops a model that highlights the importance of clusters for attracting foreign direct investment. It shows from a game theoretical perspective how the combination of setting up a cluster and implementing policy reforms will be a key engine for attracting FDI. Based on...

We combine some newly developed panel co-integration techniques and common factor analysis to analyze the behavior of the real exchange rate (RER) in a sample of 64 developing countries. We study the dynamic of the RER with its economic fundamentals: productivity, the terms of trade, openness,...

The recent experience of the European Economic and Monetary Union (EMU) has stimulated the debate over currency union and reinforced the incentive for the emergence of currency blocs in other regions of the world. This paper builds a dynamic stochastic model - based on network externalities...

This paper seeks to elucidate the debate over currency union in Africa. The paper examines whether natural currency blocs gradually emerge from an empirical investigation. Based on the historical data on inflation, trade, and the comovements of prices and outputs, I argue that the emergence of...

Islamic finance is a fast growing activity in world markets. This paper provides a survey on Islamic Finance in SSA. Ongoing activities include Islamic banking, sukuk issuances (to finance infrastructure projects), Takaful (insurance), and microfinance. While not yet significant in most...