Exploring the effect of hydroclimate variability on economic growth in Sub-Saharan Africa: A water security index

Casey Brown; Daniela Domeisen; Robyn Meeks; Kenneth Hunu; Winston Yu

Exploring the effect of hydroclimate variability on economic growth in Sub-Saharan Africa: A water security index
Brown, Casey
Domeisen, Daniela
Meeks, Robyn
Hunu, Kenneth
Yu, Winston
Technical reports
International Research Institute for Climate and Society
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IRI Technical Report
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Recent econometric studies provide evidence that climate variability in general, and rainfall variability in particular, has a negative effect on economic growth in the countries of Sub-Saharan Africa. In this study, we explore the factors that may explain why some countries are more resilient to climate variability than others. We use a range of data that is representative of the possible sources of resilience that are commonly hypothesized in the literature, including the state of water resources and water use, the inventory of infrastructure and the quality of institutions. Two analyses are undertaken. In the first, cross country regressions are used to explore aggregate associations of climate and resilience variables with economic growth. In the second, panel regressions for individual countries are performed with drought and flood indices. The results of these regressions are used to specify a water security index. The water security index is then analyzed through the prism of the resilience variables to draw inferences in regard to the sources of resilience that contribute to more water security. The results of these analyses are informative. Cross country regressions confirm the negative association between rainfall variability and economic growth within Sub-Saharan Africa. They also revealed strong associations between Foreign Direct Investment (FDI) and infrastructure inventory and economic growth. An index that accounts for climate variability and water storage (Seasonal Storage Index) is also strongly associated with both FDI and economic growth. The analysis of the Water Security Index revealed that more internal renewable water resources and irrigated agriculture as a percent of agricultural area were associated with more resilience to hydroclimate variability. Water storage was not a strong indicator of resilience, although when controlling for hydrologic variability with the SSI, it does become more important. There were no strong associations with institutions and weak positive associations with road density and phones.
Environmental studies
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