Archive for August 27th, 2009

Africa’s financial system post crisis

August 27, 2009

Here is an excellent paper by Thorsten Beck et al revewing Africa’s Financial System. The abstract says:

In spite of shallow financial markets, Sub-Saharan Africa will not escape the repercussions of the global financial crisis. The global turmoil threatens the progress Sub-Saharan Africa has made in financial sector deepening and broadening over the recent years and underlines the importance of continuing and deepening the necessary institutional reforms. In this context it is important to define the role of government in expanding financial sectors in a sustainable and market-friendly manner.

Foreign banks have brought more benefits than risks for their host economies in Sub-Saharan Africa, but are certainly not a panacea and not a substitute for institutional and policy reform. The profile of foreign banks, however, has changed, with more and more regional banks emerging. This trend toward regional integration is promising as it might allow the small African financial system to reap benefits from scale economies, but it also requires regulatory and supervisory improvements and coordination across the region.

(Emphasis is mine)

Voxeu has a short write-up as well.

Marshall Plan – a lesson for Aid donors?

August 27, 2009

I discovered this excellent paper by Barry Eichengreen and Brad Delong (Thanks a ton to Chris Blattman for the pointer). Blattman calls it his one of the favorite papers and it clearly breaks in my list of favorite papers as well. The paper is quite old was written in 1991. 

In the paper, the authors discuss about Marshall Plan and why was it successful?

The Marshall Plan (from its enactment, officially the European Recovery Program, ERP) was the primary plan of the United States for rebuilding and creating a stronger foundation for the countries of Western Europe, and repelling communism after World War II.

The reconstruction plan, developed at a meeting of the participating European states, was established on June 5, 1947. It offered the same aid to the USSR and its allies, but they did not accept it.The plan was in operation for four years beginning in April 1948. During that period some USD 13 billion in economic and technical assistance were given to help the recovery of the European countries that had joined in the Organization for European Economic Co-operation.

By the time the plan had come to completion, the economyof every participant state, with the exception of Germany, had grown well past pre-war levels. Over the next two decades, many regions of Western Europe would enjoy unprecedented growth and prosperity. The Marshall Plan has also long been seen as one of the first elements of European integration, as it erased tariff trade barriers and set up institutions to coordinate the economy on a continental level.

(more…)


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