Economic Growth In Malawi Research Articles

Impact of higher education on economic growth: A vector error correction analysis in malawi

This study examined the impact of higher education on economic growth in Malawi from 1995 to 2021. The study contributes to existing literature by providing more recent evidence and as well contributes to the debate on whether higher education has a positive or negative impact on economic growth in a developing country like Malawi. Empirical studies have so far yielded inconclusive results. The time series variables were tested to find out its order of integration using Dickey Fuller and the series were all non-stationary at level but became stationary after first difference. The study employed cointegration and evidence of cointegration of higher education and economic growth was established. However, Vector Error Correction Model estimates showed that there is negative long run relationship between higher education and economic growth. Thus, the government and other relevant education stakeholders should strive to increase enrollment in tertiary institutions so that it yields significant impact on economic output.

An Examination of the Relationship between Budget Deficit and Economic Growth in Malawi

An Examination of the Relationship between Budget Deficit and Economic Growth in Malawi

Trade liberalization, institutions, and economic growthin Malawi

The study provides an empirical assessment of how institutions and trade liberalization affect Malawi’s economicexpansion. It tackles the absence of empirical research into how institutions affect economic growth and howtrade liberalization policy affects institutions’ influence on growth (interaction effect). The study also seeks tofind out if economic growth, however, affects institutions as theories differ on causality. The study uses a timeseries analysis and autoregressive distribution lag (ARDL) technique to obtain short-run and long-run results. Thestudy was conducted from 1988, the official inception year of trade liberalization in Malawi, to 2014. The empiricalresults show that political and economic institutions, as well as trade liberalization, affect Malawi’s economicgrowth in both the short term and the long term. Trade liberalization and political institutions negatively affecteconomic growth in the short run and long run, whereas economic institutions positively affect economic growthin the short run and long run. The findings also show that when strong economic institutions rather than strongpolitical institutions are present, the effect of trade liberalization on economic development is more prominent(positive). Finally, the study also finds that it is institutions that affect economic growth in Malawi and not the otherway around.

The Environmental Impact of Trade Openness, Energy Consumption and Economic Growth in Malawi

The Environmental Impact of Trade Openness, Energy Consumption and Economic Growth in Malawi

Trade Liberalization, Institutions, and Economic Growth in Malawi

The study provides an empirical assessment of how institutions and trade liberalization affect Malawi’s economic expansion. It tackles the absence of empirical research into how institutions affect economic growth and how trade liberalization policy affects institutions’ influence on growth (interaction effect). The study also seeks to find out if economic growth, however, affects institutions as theories differ on causality. The study uses a time series analysis and autoregressive distribution lag (ARDL) technique to obtain short-run and long-run results. The study was conducted from 1988, the official inception year of trade liberalization in Malawi, to 2014. The empirical results show that political and economic institutions, as well as trade liberalization, affect Malawi’s economic growth in both the short term and the long term. Trade liberalization and political institutions negatively affect economic growth in the short run and long run, whereas economic institutions positively affect economic growth in the short run and long run. The findings also show that when strong economic institutions rather than strong political institutions are present, the effect of trade liberalization on economic development is more prominent (positive). Finally, the study also finds that it is institutions that affect economic growth in Malawi and not the other way around.

Tourism Development and Economic Growth Nexus in Malawi - A Time-Series Data Analysis, 1985 - 2015

Malawi has very few but highly attractive tourist centres and with the concerted efforts of government, tourism is becoming an essential part of the country’s economy. The World Travel and Tourism Council (WTTC) in 2017 envisaged a growth of 4.9 percent per annum for period of ten years for the Malawian tourism industry. In view of this, the study focusses on empirical investigation of the contribution of the fairly developing tourism sector to economic growth in Malawi. The popular time series data for the period spanning from 1985 to 2015 was analysed with econometric STATA package. The findings reveal a no causality and negative long-run relationship between tourism development and economic growth. Meaning that neither the tourism-led economic growth hypothesis (TLEG) nor the Economic driven tourism growth hypothesis (EDTG) is confirmed for Malawi. This study does not provide sound policy recommendations on increasing investment in infrastructure and tourist centres for the sake of boosting tourism activities in the country due to insufficient data leading to econometric omission such as economic freedom index and tourism related investment which were potential variables.

Public and private investment and economic growth in Malawi: an ARDL-bounds testing approach

This paper examines the relative contribution of public and private investment to economic growth in Malawi from 1970 to 2014 – using the recently developed autoregressive distributed lag model (ARDL) bounds testing procedure. The study also examines the crowding-out or crowding-in effect of public investment on private investment. Unlike most previous studies on this subject which are cross-sectional in nature, this study examines the differential impacts of public and private investment on economic growth focusing on Malawi. The main finding of this study is that while private investment contributes more to economic growth than public investment in Malawi, infrastructural public investment tends to crowd-in private investment.

The Impact of Foreign Trade on Malawi Economic Growth

Abstract: The study was conducted with the aim of assessing the impact of foreign trade on economic growth in Malawi from 1961 to 2016. The study has used a neoclassic economic growth model with gross domestic product, exports, imports, capital and labor force as variables of analysis. Using annual time series data on the variables for the period 1961 to 2016 from the World Bank Data Bank, Ordinary Least Squares regression and statistical accuracy of the findings was done at 5 percent level of significance. The four variables which included exports, imports, gross capital formation and labor force were found to have a positive effect on the country’s economic growth. Nevertheless, the study found an existing relationship between the variables. The above results strongly suggest that Malawi should continue with its foreign trade. The study recommends export diversification, investment in technology, increase capital good through imports and labor intensive industrialization.

EVOLUTION OF MONETARY POLICY TRANSMISSION MECHANISM IN MALAWI: A TVP-VAR APPROACH

This paper investigates the evolution of monetary transmission mechanism in Malawi between 1981 and 2010 using a time varying parameter vector autoregressive (TVP-VAR) model with stochastic volatility. We evaluate how the responses of real output and general price level to bank rate, exchange rate and credit shocks have changed over timesince Malawi adopted financial reforms in 1980s. The paper finds that inflation, real output and exchange rate responses to monetary policy shocks changed over the period under review. Importantly, beginning mid-2000, the monetary policy transmission performed consistently with predictions of economic theory and there is no evidence of a price puzzle as found in the previous literature on Malawi. However, the statistical significance of the private credit supply remains weak and this calls for more financial reforms targeting the credit market which can contribute to monetary transmission and promote further economic growth in Malawi. JEL classification: C49 D12 D91 E21 E44

Makroekonomski pokretači privrednog rasta Malava

This paper examines the main macroeconomic drivers of economic growth in Malawi. The drivers are identified by examining the various development plans and reforms that Malawi implemented during the period 1970-2011. The examination concludes that the main macroeconomic drivers of economic growth in Malawi during this period were the accumulation of physical capital, human capital development, international trade, inflation and the real exchange rate. The examination also shows that country-specific development policies and institutions are important in identifying and influencing the macroeconomic factors of growth. Although Malawi has been able to identify the factors that would contribute to sustainable economic growth in its development policies, these factors were influenced by a number of structural challenges, such as low investment rates, inadequate investment in human capital, balance-of-payment problems, macroeconomic instability, and frequent policy reversals in the implementation of macroeconomic reforms.

Macroeconomic Policy Reforms and Economic Performance in Malawi 1960-2013

The paper discusses the role that government policies and macroeconomic reforms have played in influencing economic growth in Malawi during the period 1960-2013. The study identifies a Stateregulated economic system that dominated the Malawian economy, in which economic growth patterns were influenced mainly by activities financed by the State. Two fundamental challenges are identified that have led to a subdued performance of the economy – the crowding-out effect of State-interventionism affecting private sector-led growth; and regulatory arbitrage that has created an environment for rent-seeking behaviour. The study concludes that policy inconsistencies in implementing economic policies and reforms in Malawi have been instrumental in influencing the suboptimal growth patterns of the Malawian economy.

Optimal Inflation Threshold for Economic Growth in Malawi

There is near consensus in the literature that high levels of inflation (above 40%) affect economic growth negatively. The effects of low and moderate inflation, however, are ambiguous. Nonetheless, several studies have found that low levels of inflation are positively correlated with economic growth, which suggests the existence of a curvilinear relationship between inflation and economic growth. This study sets out to find the threshold level of inflation that is consistent with optimal and sustainable economic growth in Malawi. Using annual time series data for the period 1980 to 2013 and the Conditional Least Squares method, the study finds an optimal inflation threshold level of 17 percent for the country. The study results show that gains in real GDP growth below the optimal threshold level are greater than gains above the threshold level, which is consistent with the theoretical expectations of the threshold estimation model and other empirical studies. Unlike similar optimal inflation threshold studies, this study carries out structural change tests (using the Vogelsang approach) prior to estimating the threshold model. The data are also tested for unit roots using the Zivot and Andrews test for unit roots with a single structural break, and the Lumsdaine and Papell test for unit roots with multiple structural breaks.

The Political Economy Determinants of Economic Growth in Malawi

Since independence Malawi has failed to translate initial periods of economic growth (growth acceleration regimes) into sustained long-term growth (growth maintenance). This paper assesses why this has been the case and what feedback loops have existed between growth, the political settlement and institutions. This is done by assessing Malawi’s: (1) deals space – are business-government deals credible and open to many, or not credible and closed? (2) rent space – where do political elites source money for their political objectives? (3) product space – to what extent does Malawi’s product base organically spur economic growth? Malawi’s long-term growth problem is that the rent space for the political elite remains too heavily tied to the 'powerbroker' business elite that have a low propensity to invest and support exported-oriented reforms. There is relatively little alignment of political rents to 'magicians' (value adders and job creators), rentiers (except mining and cotton) and workhorses (the poor). Developmental interest is increasing, though this comes about in dribs and drabs when politicians want growth, so that support is stop-and-go and lacks the continuity necessary to overcome major structural challenges to structural transformation and growth maintenance. This suggests that the nature of growth going forward will be volatile, with a number of booms and crises in short-term growth. While long-term growth is likely to remain positive, driven by improvements in technology, the financial sector, energy and regional integration, it is unlikely to be strong enough in the next eight years to support the welfare requirements of the burgeoning population so as to allow Malawi to maintain high long-term growth. Altering this route would probably involve the disintegration of Malawi’s deeply embedded patronage and clientelist political settlement through the emergence of a developmental dominant party or the easing of political pressures currently caused by a five-year democratic term in which the largest voter group is rural, subsistence farmers, who are too far removed from the government’s policy-making process.

English

Apart from assessing the impact of  financial development on economic growth, economists have also delved to understand the  direction of causality between the two variables. We examine the causal relationship between the two variables in the Granger causality sense and regress economic growth on financial development and a number of control variables. The Augmented –Dickey Fuller unit root test is used to test for non-stationarity of vairables and the Johansen Vector Autoregressive Cointegration test is utilised to explore the existence of a long-run equilibrium relationship among the variables. We find that all variables are integrated of order one and that they converge to a long-run equilibrium. In the light of these results, we employ an error-correction model. Causality and regression results confirm the contention of Robinson (1952) that the relationship between financial development and economic growth is demand following implying that where enterprise leads, finance follows.  Additonally, results of the growth equation show that the population level, inflation, exchange rate, and openness to trade are significant in explaining economic growth in  Malawi. The study suggests policies consistent with economic growth. Key words: Non-stationarity, cointegration, financial development, economic growth. &nbsp

The Impact of Foreign Debt on Economic Growth in Malawi

AbstractThis study analysed the impact of foreign debt on economic growth in Malawi using time series. Data for the period 1975–2003 from the Reserve Bank of Malawi, the IMF and the National Statistical Office was regressed in basic time series analysis. The dependent variable was economic growth and independent variables included level of foreign debt as the main variable. Other variables considered are the inflation rate, exchange rate and the prime lending rate, private and public investment. The results show a statistically insignificant and negative relationship between foreign debt and economic growth for the case of Malawi. The country should strive to provide incentives to local manufacturers who would want to export rather than relying on borrowing for growth inducement. Of interest was the relationship between inflation and economic growth which was positive.

English

Government continuously operates with revenues below expenditures and taxation is increasingly becoming a sensitive political and economic tool to be relied upon as an instrument for revenue generation and economic growth. This study seeks to examine the impact of tax policy and donor inflows on economic growth in Malawi from 1970 to 2010 using data envelope analysis (DEA) and transcendental logarithm (Translog). In doing the Translog, the study employed the Engle and Yoo three step estimation process. Data analyzed shows that consumption taxes have on average contributed 60.0% to total tax revenue while income taxes take up 40.0%. Tax burden has ranged from 11.0% in the 1970s to around 16.0% in 2010. Results of the study show that a 1.0% decrease in tax burden can raise economic growth by 0.8% in Malawi while a similar reduction in collection of taxes through expenditure can raise growth by 0.6%. Another finding is that economic growth rises by 0.3% for a 10.0% rise in foreign grants. The study therefore finds that reduction in tax burden is more potent in influencing economic growth than fine tuning the proportion in which income and consumption taxes are collected in Malawi. Furthermore, a complete reversal in donor funding will reduce economic growth by 3.0%.

Tax policy developments, donor inflows and economic growth in Malawi

In this investigation the friction and wear performance of GUR 1020 medical grade ultra-high molecular weight polyethylene (UHMWPE) polymer under dry sliding, distilled water and egg albumen lubrication conditions were evaluated. The sliding experiments were carried out on a pin-on-disc tribometer. The contact configuration used was a polymer pin on a rotating AISI 304L stainless steel disc. Wear tests were carried out for 30 min duration at room temperature with 50, 100 and 150 N applied load values and at 0.50, 1.0 and 2.0 m/s sliding speeds condition. The results show that the coefficient of friction for GUR 1020 medical grade UHMWPE polymer is more significantly influenced by applied load and sliding speed values under dry sliding condition rather than lubricant media condition. Furthermore, the coefficient of friction and specific wear rate increases with the increase in applied load and speed values. This increase is much pronounced under dry sliding condition. Moreover, for the range of load and speed values of this study the specific wear rate using egg albumen lubricant registered lower values than that of the distilled water lubricant and the dry conditions. Finally, the specific wear rate values for GUR 1020 medical grade UHMWPE polymer under dry, water lubricant and egg albumen lubricant conditions are at the levels of 8x10-14, 1.4x10-14 and 0.5x10-14m2/N respectively. Key words: Medical Grade UHMWPE, tribology, distilled water, wear.

Lisa Arrehag et al. The Impact of HIV/AIDS on Livelihoods, Poverty and the Economy of Malawi. Sida Studies no. 18, 2006. SIDA, SE-105 25 Stockholm, Sweden. 248 pp. Charts. Figures. Notes. References. Appendixes. Acronyms. No price reported. Paper.

Lisa Arrehag et al. The Impact of HIV/AIDS on Livelihoods, Poverty and the Economy of Malawi. Sida Studies no. 18, 2006. SIDA, SE-105 25 Stockholm, Sweden. 248 pp. Charts. Figures. Notes. References. Appendixes. Acronyms. No price reported. Paper. - Volume 50 Issue 3

Dilemmas of development: burley tobacco, the environment and economic growth in Malawi

Efforts to encourage smallholder farmers in Malawi to produce tobacco for export illustrate the dilemmas that developing nations and donor organisations face when their quest for development entails compelling economic incentives but potentially harmful impacts on human health and the environment. In addition to the well‐known impacts on health associated with the use of tobacco, its production can have deleterious effects on the environment, especially when production (and curing) entails substantial use of wood in a country facing high levels of deforestation. This article examines the rationale for choosing tobacco as a vehicle for economic development in Malawi and then addresses the difficulties associated with efforts to monitor and mitigate the environmental impacts of sectoral adjustment programmemes. Although advocates of sustainable development routinely argue that development can occur without damage to the environment, achieving this goal is problematic when poverty and malnutrition are widespread, as is the case in Malawi.