Open Access
Fragile Countries and the 2008-2009 Crisis
Loading...
License
Access Rights
Cadmus Permanent Link
Full-text via DOI
ISBN
ISSN
1028-3625
Issue Date
Type of Publication
LC Subject Heading
Other Topic(s)
EUI Research Cluster(s)
Initial version
Published version
Succeeding version
Preceding version
Published version part
Earlier different version
Initial format
Author(s)
Citation
EUI RSCAS; 2010/13; European Report on Development
Cite
ALLEN, Franklin, GIOVANNETTI, Giorgia, Fragile Countries and the 2008-2009 Crisis, EUI RSCAS, 2010/13, European Report on Development - https://hdl.handle.net/1814/13536
Abstract
This paper analyses the channels through which the economic and financial crisis of 2008-2009 is
transmitted to fragile countries in Sub-Saharan Africa. Trade stands out as the main direct channel,
even though intra-Africa remittances play a relevant role, given that most migrants in Sub-Saharan
Africa fragile countries cannot afford the cost of migrating to Europe or to the United States and stay
close, remaining in the continent. Whether reduced aid flows also act as a crisis transmission channel
remains an open question, even though preliminary estimates suggest that, at least in the medium run,
OECD countries are likely to lower aid, with potentially very damaging effects on fragile countries.
The paper also shows that fragile countries are characterised by very low resilience and capacity to
cope with shocks. It concludes, by highlighting how Sub-Saharan Africa fragile countries’
policymakers’ room for manoeuver is limited in periods of crisis because of low fiscal space and
limited institutional capacity. It advocates that the right response to the crisis would be to mobilise
domestic resources, although this will require functional institutions able to offset the potential tradeoffs
between adverse short-term shocks and a long-term perspective.
Table of Contents
Additional Information
European Report on Development