Revisiting the Link between Political and Financial Crises in Africa

44 Pages Posted: 5 Feb 2015

See all articles by Sara Bertin

Sara Bertin

AXA Group

Steve Ohana

ESCP Europe

Vanessa Strauss‐Kahn

ESCP Europe; Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Date Written: October 16, 2014

Abstract

There is an important information deficit on political and financial risks in Africa. This paper fills this gap by compiling a unique database of financial (sovereign, banking, currency, expropriation) and political crises (regime changes, ethnic and revolutionary wars, genocides, armed conflicts) covering 53 African countries between 1965 and 2008. We employ a new methodological framework to disentangle cross-crisis from temporal contagion effects. This allows us to extend to Africa a number of insights from the literature on financial crises (e.g., the mutual contagion effects between banking and currency meltdowns). Importantly, and critically for a study devoted to Africa, political upheavals are of modest relevance to predict financial crises. These results may be reconciled with previous literature given our original focus on Africa and our event-based approach of financial and political risks.

Keywords: Political crises, financial crises, contagion, Africa

JEL Classification: F30, F3, G01

Suggested Citation

Bertin, Sara and Ohana, Steve and Strauss‐Kahn, Vanessa, Revisiting the Link between Political and Financial Crises in Africa (October 16, 2014). Available at SSRN: https://ssrn.com/abstract=2557557 or http://dx.doi.org/10.2139/ssrn.2557557

Sara Bertin

AXA Group ( email )

25 avenue Matignon
Paris, 75008
France

Steve Ohana

ESCP Europe ( email )

79 Avenue de la Republique
Paris, 75011
France

Vanessa Strauss‐Kahn (Contact Author)

ESCP Europe ( email )

79 Avenue de la Republique
Paris, 75011
France

HOME PAGE: http://sites.google.com/site/vstrausskahn

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
46
Abstract Views
525
PlumX Metrics