Advertisement

Africa’s Money in Africa: Human and Physical Capital Dimensions

  • Stephen Evans Osabuohien
  • Rapuluchukwu Uchenna Efobi
Chapter

Abstract

Some studies contest that remittance induces ‘careless spending’; others posit that it can promote economic development particularly through human and physical capital. This study observes that not much empirical work that examines the impact of remittance on human and physical capital in Africa has been carried out. The main objective of the study was achieved by using a sample of African countries. It was found that remittance impacts both human and physical capital positively and significantly, principally when it is complimented with sound institutions. In effect, institutions help to improve the linkage between remittance human and physical capital.

Keywords

Human Capital Gross Domestic Product Financial Institution Political Institution Physical Capital 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Notes

Acknowledgments

Conference grants from Royal Economic Society, UK, and Covenant University, Nigeria, are appreciated. The authors also express gratitude to the organisers of the International Conference on ‘Diaspora and Development: Prospects and Implications for Nation-States’ for covering in-country expenses as well as valuable comments from participants. The helpful assistance from Beecroft Ibukun of Covenant University in the revision process is appreciated. Comments from anonymous reviewers are acknowledged.

References

  1. Acemoglu, D., Johnson, S., & Robinson, J. (2001). The colonial origin of comparative development: An empirical investigation. American Economic Review, 91(5), 1369–1401.CrossRefGoogle Scholar
  2. Adams, R. (2005). Remittances, household expenditure and investment in Guatemala (World Bank policy research working paper) (pp. 1–36).Google Scholar
  3. Adams, R., & Ceucuecha, A. (2010). Remittances, household expenditure and investment in Guatemala. World Development, 20(10), 1–16.Google Scholar
  4. Adams, R., Cuecuecha, A., & Page, J. (2008). Remittances, consumption and investment in Ghana (The World Bank development economics department policy research working paper, no.4515).Google Scholar
  5. Akerlof, G. (1970). The market for lemon: Qualitative uncertainty and the market mechanism. Quarterly Journal of Economics, 84, 488–500.CrossRefGoogle Scholar
  6. Arieff, A., Weiss, M., & Jones, V. (2010). The global financial crisis: Impact on sub-Saharan Africa and global policy responses, Congressional Research Service. Available at http://www.fas.org/sgp/crs/row/R40778.pdf
  7. Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application for employment equations. Review of Economic Studies, 58(2), 277–297.CrossRefGoogle Scholar
  8. Bjuggren, P., Dzansi, J., & Shukur, G. (2010). Remittances and investment. (Centre for Excellence for Science and Innovation Studies (CESIS) working paper, no. 216).Google Scholar
  9. Bourdet, Y., & Falcks, H. (2006). Emigrants’ remittances and Dutch disease in Cape Verde. International Economic Journal, 20(3), 267–284.CrossRefGoogle Scholar
  10. Carling, J. (2005). Migrant remittances and development cooperation. Oslo: International Peace Research Institute (PRIO).Google Scholar
  11. Fosu, A. K. (2003). Political instability and export performance in sub-Saharan Africa. Journal of Development Studies, 39(4), 68–82.CrossRefGoogle Scholar
  12. Fosu, A. K. (2011). Terms of trade and growth of resource economies; A tale of two countries (UNU-WIDER working paper, no.2011/28).Google Scholar
  13. Ghosh, B. (2006). Migrants’ remittances and development: Myths, rhetoric and realities. Geneva/The Hague: International Organization on Migration.Google Scholar
  14. Gupta, S., Pattillo, C., & Wagh, S. (2007). Making remittance work for Africa. Finance and Development, 44(2), 1–8.Google Scholar
  15. International Fund for Agricultural Development-IFAD (2012). Africa. http://www.ifad.org/remittances/maps/africa.htm. Accessed 22 Apr 2012.
  16. International Monetary Fund's-IMF (2011). Balance of payment statistics database. Retrieved from http://elibrary-data.imf.org/FindDataReports.aspx?d=33061&e=170784
  17. International Organization for Migration. (2011). A study on remittances and investment opportunities for Egyptian migrants. Cairo: International Organization for Migration.Google Scholar
  18. Kaufman, D., Kraay, A., & Mastruzzi, M. (2009). Governance matters VII: Aggregate and individual governance indicators 1996–2008 (World Bank policy research working paper, no. 4978).Google Scholar
  19. Levitt, P. and Nyberg-Sorensen, N. (2004). The transnational turn in migration. Global migration perspectives, no. 6, October, Geneva: Global Commission on International Migration (pp. 1–14).Google Scholar
  20. Leyaro, V., & Morrissey, O. (2010). Trade and growth: Is Sub-Saharan Africa different (CREDIT research paper, no.10/04).Google Scholar
  21. McCormick, B., & Wahba, J. (2001). Overseas work experience, savings and entrepreneurship amongst return migrants to LDCs. Scottish Journal of Political Economy, 48(2), 164–178.CrossRefGoogle Scholar
  22. Mehlun, H., & Moene, K. (2006). Institutions and the resource curse. Economic Journal, 116, 1–20.CrossRefGoogle Scholar
  23. North, D. C. (1991). Institutions. The Journal of Economic Perspectives, 5(1), 97–112.CrossRefGoogle Scholar
  24. Olayiwola, K. W., & Osabuohien, E. S. (2010). Evaluation of the role of Fiscal policy in promoting savings, investment and capital formation in Nigeria. The Journal of Banking and Finance, 10(1), 26–45.Google Scholar
  25. Osabuohien, E., & Efobi, U. (2011). Trade outcomes in Africa’s regional economic communities and institutional quality: Some policy prescriptions. Petroleum-Gas University of Ploiesti Economic Sciences Series, LXIII(4), 19–32.Google Scholar
  26. Osabuohien, E. S., & Efobi, U. R. (2013). Africa’s money in Africa. South African Journal of Economics, 81(2), 292–306.CrossRefGoogle Scholar
  27. Ostrom, E. (2005). Understanding institutional diversity. Princeton: Princeton University Press.Google Scholar
  28. Ratha, D., Mohapatra, S., Ozden, C., Plaza, S., Shaw, W., & Shimeles, A. (2011). Leveraging migration for Africa; remittances; skills and investments. Washington, DC: World Bank.Google Scholar
  29. Rodrik, D. (1999). The new global economy and developing countries: Making openness work. London: Overseas Development Institute.Google Scholar
  30. Tasneem, S., & Chowdhury, R. A. (2003). Migrant worker remittances and micro-finance in Bangladesh. Dhaka: Refugee and Migratory Movements Research Unit/International Labour Office.Google Scholar
  31. United Nations Development Programme – UNDP. (1990–2013). Human development reports. New York: UNDP.Google Scholar
  32. Williamson, O. E. (2000). The new institutional economics: Taking stock, looking ahead. Journal of Economic Literature, 38(3), 595–613.CrossRefGoogle Scholar
  33. World Bank. (2011). World development indicators. Washington, DC: World Bank.Google Scholar

Copyright information

© Springer India 2014

Authors and Affiliations

  • Stephen Evans Osabuohien
    • 1
  • Rapuluchukwu Uchenna Efobi
    • 2
  1. 1.Department of Economics & Development StudiesCovenant UniversityLagosNigeria
  2. 2.School of BusinessCovenant UniversityLagosNigeria

Personalised recommendations