Papers by Johannes Fedderke
Journal of Infrastructure Systems, 2013
This paper explores the impact of some key infrastructure measures in transportation, telecommuni... more This paper explores the impact of some key infrastructure measures in transportation, telecommunication and electricity production sectors on labor productivity, using data on two-digit sectors for the Turkish economy for the years 1987 to 2006. We find both statistical and economic significance of infrastructure on productivity growth, for road, port and air transport, telecommunications and electricity production. In the railway sector, only measures of actual freight carried are consistently statistically significanctly associated with productivity growth, while other measures of infrastructure are insignificantly or perversely associated with productivity growth. Given that the railway transport sector is the only infrastructure sector that remains closed to competition and private participation, this raises the issue of the significance of private sector involvement in infrastructure provision.
Journal of Infrastructure Systems, 2013
This paper explores the impact of some key infrastructure measures in transportation, telecommuni... more This paper explores the impact of some key infrastructure measures in transportation, telecommunication and electricity production sectors on labor productivity, using data on two-digit sectors for the Turkish economy for the years 1987 to 2006. We find both statistical and economic significance of infrastructure on productivity growth, for road, port and air transport, telecommunications and electricity production. In the railway sector, only measures of actual freight carried are consistently statistically significanctly associated with productivity growth, while other measures of infrastructure are insignificantly or perversely associated with productivity growth. Given that the railway transport sector is the only infrastructure sector that remains closed to competition and private participation, this raises the issue of the significance of private sector involvement in infrastructure provision.
This paper presents a diagnostic of the source of financial shocks (idionsyncratic country specif... more This paper presents a diagnostic of the source of financial shocks (idionsyncratic country specific versus common fundamental), which is robust to a range of forms of crisis propagation across markets. Size and power characteristics of the test appear strong. An application of the proposed test statistic to the Asian financial crisis of 1997-98 confi rms the tests empirical tractability.
Working Papers, 2010
This paper aims to construct a new set of institutional indicators for Malawi. Our political free... more This paper aims to construct a new set of institutional indicators for Malawi. Our political freedom index correlates strongly with the Freedom House political rights and civil liberties indices, but consists of a far longer time series, which can be used to examine long-run issues with greater e¢ cacy. The high correlations between the political freedoms index and the various property rights indices suggests that, in the Malawian case, lack of political freedom is associated with lack of economic freedom and security. However, our property rights indices correlate poorly with an index based on de facto property rights. This suggests that despite the government's legal power to abrogate property rights, these rights were generally respected. Cross-country comparisons suggest that political freedoms follow broadly similar patterns, particularly in Zimbabwe and Malawi. There is less of a match between countries on property rights issues, however.
Price discovery in South African financial markets : investigating the relationship between South Africa's stock index futures market and the underlying market
Abstract: This paper investigates price discovery in the association between the South African st... more Abstract: This paper investigates price discovery in the association between the South African stock index futures market and the underlying market. Employing an unstructured VAR on intraday data at the 2, 6, and 10 minute frequency for 1998, and end-of-day data for 1996-98, we find that futures markets lead spot markets. While precluding Fama informational efficiency, this does not preclude zero-arbitrage efficiency.
Working Papers, May 1, 2008
This paper presents a model in which two groups in society are engaged in strategic interaction. ... more This paper presents a model in which two groups in society are engaged in strategic interaction. Privileged members of society have the opportunity to allocate resources either to their own productive capacity, or to enhance the productive capacity of the disadvantaged. Redistribution to the disadvantaged can increase the productive capacity of society, but comes at the cost of rising political aspirations of the poor, which erodes the power of the rich. Results in the paper derive conditions under which the rich will redistribute to the point of equality with the poor; conditions under which the disadvantaged face genocide; as well as the range of intermediate redistributive activity likely to be employed by the privileged. Examination of empirical evidence suggests that the model generalizes across the experience of a panel of up to 204 countries, over the 1960-2000 period.
Indicators of Political and Economic Institutions in Tanzania: 1884 - 2008
This paper is part of series of studies focusing on the measurement and definition of institution... more This paper is part of series of studies focusing on the measurement and definition of institutions. This paper presents a database on institutional measures for Tanzania for the period 1884 to 2008. These indicators are used to assess the nature of political and economic institutional transformation from the colonial legacy to the modern outcome, using Tanzania as a natural experiment. The paper argues that despite changes in colonial regimes, the broader framework of institutions remained partly the same. This is reflected ...
High-Performance Government
This paper provides a broad overview of the relationship between infrastructure and growth, focus... more This paper provides a broad overview of the relationship between infrastructure and growth, focusing on the South African case. The paper develops an intuitive theoretical framework in which to analyse this relationship, identifying …ve speci…c channels through which infrastructure may e¤ect growth: as a factor of production, a complement to other factors of production, a stimulus to factor accumulation, a stimulus to aggregate demand and a tool of industrial policy. A framework is developed for evaluating empirical analyses of this relationship, which explores the implications of di¤erent de…nitions and measures of infrastructure and of potential data and estimation challenges. The empirical literature on South Africa is then assessed against this framework.
Heterogeneity Happens: How Rights Matter in Economic Development
Answering this question confronts four methodological challenges. First, since growth equations a... more Answering this question confronts four methodological challenges. First, since growth equations are likely to be underspecified, unobserved effects are likely to render standard estimators biased and inconsistent. Second, measurement error, time-varying unobserved effects, and possible feedback from growth into governance will violate the exogeneity assumptions of many estimators. Bias and inconsistency is again the consequence. Third, use of cross-country evidence opens the possibility that the interaction between governance and growth shows ...
The structure of growth in the Westen Cape manufacturing sector, 1970-1996
Promotion and Relegation between Country Risk Classes as Maintained by Country Risk Rating Agencies
Working Papers, 2007
While economic theory assumes that risk is of central importance in financial decision making, it... more While economic theory assumes that risk is of central importance in financial decision making, it is difficult to measure the uncertainty faced by investors. Commonly used empirical proxies for risk (such as the moving standard deviation of the returns on an asset) are not firmly grounded in economic theory. Risk measures have been developed by other studies, but these are generally based on subjective weights attaching to a range of objective component indicators and are difficult to replicate. The contribution of this paper is to develop a methodology to construct theory-defensible empirical risk measures. It has the advantages of being explicitly consistent with economic theory and easily replicable. We illustrate this methodology by specific application to the South African context. The time-varying risk measure developed in this paper is consistent with the expectations hypothesis and captures the asymmetric nature of shocks. This measure reflects investors' risk perceptions and accords with the literature on risk in South Africa. JEL: G32, E43 KEYWORDS: Risk measures, expectations hypothesis, South Africa.
What Price the Court of St. James? Political Influences on Ambassadorial Postings of the United States of America
Working Papers, 2011
This paper explores the appointment of career diplomats and political appointments to ambassadori... more This paper explores the appointment of career diplomats and political appointments to ambassadorial positions, across a range of characteristics that serve to indicate the attractiveness of the posting. The results of the paper suggest that political appointees are more likely to become ambassadors in high income OECD countries, that are strong tourist destinations, are located in Western Europe, and that carry lower hardship allowances, than are career diplomats. We also show that the greater the personal or bundled campaign ...
Working Papers, 2008
The current, persistent growth problem in Zimbabwe is often attributed to poor economic and polit... more The current, persistent growth problem in Zimbabwe is often attributed to poor economic and political institutional frameworks characterised by insecure property rights and an unreliable rule of law. An empirical test of this hypothesis presents some methodological di¢ culties. Although political scientists have been constructing measures of social and political dimensions of societies for some time, such measures are not available over su¢ ciently long time runs to inspire con…dence in their usefulness in being able to address the long-run and dynamic questions that arise when linking economic performance and institutions. The aim of the paper is to assemble a new set of political and economic institutional indicators for Zimbabwe covering the period 1946 to 2005. While the new indices span for a signi…cantly long time period, they are highly correlated with existing, widely used institutional indices produced by the Freedom House, the Heritage Foundation and the Fraiser Institute. The new data set will contribute towards understanding the institutional dimension of Zimbabwe's persistent economic decline. resulted in a contraction of the agricultural sector with negative implications for the overall economic performance.
Economies of Scale and Pension Fund Plans: Evidence from South Africa
Working Papers, 2011
The focus of this paper is on the presence of economies of scale in administering pension funds. ... more The focus of this paper is on the presence of economies of scale in administering pension funds. We make use of a unique dataset with extensive information on South African retirement funds from 1996 to 2006. For almost fifty years now, South Africa has operated under a system with small social security beneÂ… ts but with considerable options and freedom to long-term savers. The dataset contains aggregate information for various fund types, fund classes, as well as different benefit structures. Estimates of a translog cost ...
Econ Transit, 2008
This special issue on South Africa presents a selection of papers produced by a panel of experts ... more This special issue on South Africa presents a selection of papers produced by a panel of experts over the past 3 years. This panel was convened by the Center for International Development at Harvard University at the initiative of Dani Rodrik and Ricardo Hausmann, upon a request by the National Treasury of the Republic of South Africa as part of the so-called 'Accelerated and Shared Growth Initiative' (ASGI-SA). The purpose of this initiative was to identify the main constraints to growth in South Africa, and to make growth policy recommendations.
Testing Creative Destruction in an Open Economy: The Case of South African Manufacturing
Working Papers, 2005
Economic theory in the context of floating exchange rates has focussed on underlying medium and l... more Economic theory in the context of floating exchange rates has focussed on underlying medium and long term direction of exchange rate movements. Daily volatility is less well understood. One theory that offers an explanation for short term exchange rate movements is that of the efficient market hypothesis or EMH. Its application to the forex market allows exchange rate movements to be understood as the reaction of traders to relevant news. In an efficient market traders react to news and specifically to surprise news events which necessitate a re-evaluation of the currency value. We test for the validity of this hypothesis in the context of the daily rand/dollar forex market over a three year period, adding an emerging market case to the literature. We test the significance of macroeconomic news surprises -measured by the difference between actual and forecast data -in driving daily exchange rates. We find that surprises in both real and nominal variables cause a statistically significant reaction in the exchange rate. The results support an asymmetry between news of different origin as only surprises that originate in the U.S. prove significant. Good news also seems to receive greater attention from traders than bad news in our sample. Finally, we find that the statistical significance of variables is time-varying.
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Papers by Johannes Fedderke