Building Capacities In Economic Management And Policy Analysis In Sub Saharan Africa

The objective of the African Capacity Building Initiative is to build and strengthen local capabilities for policy analysis and development management in Sub-Saharan Africa. This report examines the nature and magnitude of the problem, which basically consists of a shortage of development management skills combined with weakness in the area of policy formation in Sub-Saharan Africa. The report describes the African Capacity Building Initiative and presents an action program designed to meet its goals. The management and operational structure of this program, whose ultimate objective is substantially improved indigenous analysis and management of Africa's economic and development processes, is outlined. (DB)

Demand for developing indigenous capability for policy analysis has grown in Asia and Latin America but remains weak and unstable in Africa. Strategies for developing such capability depend on strengths and attitudes of government and private sectors.

This paper studies the role of fiscal policies and institutions in building resilience in sub-Saharan African countries during 1990-2013, with specific emphasis on a group of twenty-six countries that were deemed fragile in the 1990s. As the drivers of fragility and resilience are closely intertwined, we use GMM estimation as well as a probabilistic framework to address endogeneity and reverse causality. We find that fiscal institutions and fiscal space, namely the capacity to raise tax revenue and contain current spending, as well as lower military spending and, to some extent, higher social expenditure, are significantly and fairly robustly associated with building resilience. Similar conclusions arise from a study of the progression of a group of seven out of the twenty-six sub- Saharan African countries that managed to build resilience after years of civil unrest and/or violent conflict. These findings suggest relatively high returns to focusing on building sound fiscal institutions in fragile states. The international community can help this process through policy advice, technical assistance, and training on tax administration and budget reforms.