James Temitope Dada

Anchored in the sustainable development goals, this study examines the impact of foreign aid (SDG‐17) and gender equality (SDG‐5) on environmental sustainability (SDG‐13) across 28 African countries during 2000–2023. In addition, it explores the moderating role of foreign aid in the linkages between gender equality and sustainable environments. The empirical findings are based on Driscoll–Kraay with fixed effects, augmented mean‐group, two‐step system generalised method of moments and method‐of‐moments quantile regression. The results show that foreign aid and gender equality reduce the ecological footprint, thereby strengthening ecological quality. Furthermore, the result from the moderating model reveals that foreign aid and gender equality complement each other to achieve environmental sustainability. The study highlights the role of gender equality and foreign aid in improving Africa's environmental quality.

Purpose: The standard Keynesian theory predicts that government spending can stimulate the official economy through aggregate demand. However, the relationship seems to be nonlinear, as predicted empirically in accordance with the Armey curve hypothesis. Furthermore, recent events such as asymmetric information, transaction costs, regime shifts, and data-generating processes, among others, could cause government expenditure to exhibit nonlinear and asymmetric behavior. Thus, this study extends the literature to investigate the nonlinear nexus between government spending and the shadow economy in Africa. Design/methodology/approach: The study draw data from 30 African countries spanning 1996–2020. The two-step system generalized method of moments (2SGMM), fully modified ordinary least squares augmented mean group and dynamic common correlated effect mean group (DCCEMG) are used as the estimation techniques. Findings: We demonstrate an inverted U-shaped relationship between the shadow economy and government spending using advanced panel econometric techniques that account for the econometric pitfalls of reverse causality, endogeneity, heterogeneity, and cross-sectional dependence. The study further obtained a threshold value of 36.146% of GDP for government expenditure. Research limitations/implications: The implication of the study suggests that government spending may serve as a fiscal tool for downgrading the extent of shadow economy after a certain threshold. Originality/value: This study provides fresh insights into the nexus between government expenditure and shadow economy, and also tested the Armey hypothesis in the linkages.

In this study, we investigate the impact of terrorism on the shadow economy. The study uses panel data from 53 African economies spanning 1996 to 2020. Using an array of heterogeneous panel data estimators, including the augmented mean‐group estimator that corrects for intertemporal correlations and endogeneity, our results challenge existing knowledge. First, in a situation where the institutional and security architecture is relatively weak, terrorism reduces the shadow economy. Second, the impact of terrorism on the shadow economy varies among countries, as revealed in the heterogeneous analysis. Further analysis shows that strong elected local government can serve as a veritable tool for downsizing informality. Local government autonomy reduces informality by enhancing effective public service delivery and boosting tax morale. These findings are robust to alternative estimations. The implications of these findings are discussed. Related Articles: Iheonu, C. O. 2025. “Terror, Output, and Institutions in Africa.” Politics & Policy 53, no. 5: e70067. https://doi.org/10.1111/polp.70067 . Iheonu, Chimere O., Princewill U. Okwoche, and Shedrach A. Agbutun. 2024. “The Impact of Democracy on Peace in Africa: Empirical Evidence.” Politics & Policy 52, no. 5: 1038–1058. https://doi.org/10.1111/polp.12632 . Antwi‐Boateng, Osman. 2017. “The Rise of Pan‐Islamic Terrorism in Africa: A Global Security Challenge.” Politics & Policy 45, no. 2: 253–284. https://doi.org/10.1111/polp.12195 .

Recent literature reveals that economic complexity (EC) has important implications for shadow economy and has generated mixed empirical conclusions. This paper contributes to this debate by investigating the nonlinear and asymmetric effects of EC on shadow economy in 28 Africa countries between 1995 and 2020. Granger and Yoon’s (2002) approach is used to decompose the EC into positive and negative components, while the dynamic panel threshold regression, two-step system generalised method of moments, pooled mean group, augmented mean group, and common correlated mean group are employed as the estimation techniques. The results indicate that positive EC shocks reduce the size of the shadow economy, whereas negative shocks contribute to the growth of informality, thus suggesting the presence of asymmetry. The threshold of economic complexity was found to be 0.41.

Diaspora remittance either smooths consumption, boosts welfare among recipients, or enhances the balance of payment in economies such as developing nations. Nonetheless, institutions that support its usefulness for financing business are always a concern, as they may not encourage interest in self-employment. The study investigates the linkages between diaspora remittances, institutions, and self-employed business activities. The integration is essential for promoting entrepreneurship while solving the unemployment problem. Annual time series data sets covering the period from 1991 to 2020. were used in Nigeria. The autoregressive distributed lag (ARDL) is used as the baseline. Three long-run estimate techniques are used for sensitivity analysis. The short-run coefficient of diaspora remittance on self-employment is positive and significant. In the long run, the effect of diaspora remittance on self-employment is significantly negative. It shows that diaspora remittances are used for immediate consumption, rather than translating into long-term employment generation in Nigeria. However, the impact of institutions on self-employment, in the short and long run, is significantly negative revealing poor institutions that are inadequate for employment creation. Due to poor institutional quality, diaspora remittances do not translate to long-run self-employment creation. Policymakers must strengthen the institutional environment to incentivize diasporans to remit.

In this study, we investigate the effect of women's empowerment on the informal economy in Africa. It also examines the role of financial inclusion in the nexus between women's empowerment and the informal economy. The study is based on a panel data estimation of 39 African nations between 2004 and 2020. These data were analyzed via the panel estimation based on Driscoll and Kraay's robust standard error and Instrumental Variable generalized method of moment (IV‐GMM). The results reveal that gender political inclusion reduces participation in the informal economy. In contrast, gender economic inclusion promotes participation. However, financial inclusion moderates the relationship, implying that women's empowerment through financial inclusion decreases the size of the informal sector. The results from the regional analysis show that the direct effect of financial inclusion is not significant in West Africa, but its interactive effect on women's empowerment reduces the informal economy. Financial inclusion complements women's empowerment in reducing the size of the informal economy in North Africa, Central Africa, and Southern Africa. The study highlights that the interactive effects of financial inclusion and women's empowerment on the informal economy are heterogeneous across the income and regional levels and robust enough to carry out sensitivity checks.

Moved by the growing size of the shadow economy and ecological degradation in developing nations, this study scrutinizes the moderating effect of information and communication technology (ICT) on the shadow economy‐environmental sustainability relationship in 31 African countries between 2000 and 2020. Fully modified ordinary least squares and dynamic ordinary least squares are applied to achieve this objective. The robust estimation of the long‐run dynamic effect is confirmed using the augmented mean group technique. The findings suggest that the shadow economy harms the ecosystem. However, the interactive regression results indicate that ICT tools moderate the negative influence of the shadow economy on the environment, thereby mitigating environmental degradation. The study establishes the threshold values at which ICT will effectively moderate the negative impact of the shadow economy, specifically for fixed telephone lines (2 per 100 persons), internet penetration (19% of the total population), and mobile cellular subscriptions (23 per 100 persons). Finally, the study offers some policy implications for enhancing a sustainable environment.

This research assesses the impact of remittances and financial development on the size of shadow economy in Africa. Furthermore, the study examines the moderating effect of financial development on the linkages between remittances and the shadow economy. The data set for the study comprises 29 African countries between 2000 and 2020, while Driscoll and Kraay’s non-parametric standard error, fully modified ordinary least squares, augmented mean group, and method of moment quantile regression are used as estimation techniques. The study documents that remittances and financial development lessen the size of shadow economy in Africa. Additionally, the study found no substitute or complementary role of financial development and remittances in influencing the size of the shadow economy. This suggests that financial development and remittances can have separate effects on the size of the shadow economy. The results of other control variables also indicate that economic growth and foreign direct investment reduce the size of the shadow economy while population and institutional quality increase its size. The results of this study are robust to different estimation techniques.