Sandile Hlatshwayo's Books

The Measurement and Macro-Relevance of Corruption: A Big Data Approach

By: Sandile Hlatshwayo,Anne Oeking,Mr.Manuk Ghazanchyan,David Corvino,Ananya Shukla,Mr.Lamin Y Leigh

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The Measurement and Macro-Relevance of Corruption: A Big Data Approach

By: Sandile Hlatshwayo,Anne Oeking,Mr.Manuk Ghazanchyan,David Corvino,Ananya Shukla,Mr.Lamin Y Leigh

Corruption is macro-relevant for many countries, but is often hidden, making measurement of it—and its effects—inherently difficult. Existing indicators suffer from several weaknesses, including a lack of time variation due to the sticky nature of perception-based measures, reliance on a limited pool of experts, and an inability to distinguish between corruption and institutional capacity gaps. This paper attempts to address these limitations by leveraging news media coverage of corruption. We contribute to the literature by constructing the first big data, cross-country news flow indices of corruption (NIC) and anti-corruption (anti-NIC) by running country-specific search algorithms over more than 665 million international news articles. These indices correlate well with existing measures of corruption but offer additional richness in their time-series variation. Drawing on theory from the corporate finance and behavioral economics literature, we also test to what extent news about corruption and anti-corruption efforts affects economic agents’ assessments of corruption and, in turn, economic outcomes. We find that NIC shocks appear to negatively impact both financial (e.g., stock market returns and yield spreads) and real variables (e.g., growth), albeit with some country heterogeneity. On average, NIC shocks lower real per capita GDP growth by 3 percentage points over a two-year period, illustrating persistence in the effect of such shocks. Conversely, there is suggestive evidence that anti-NIC efforts appear to have a sustained positive macro impact only when paired with meaningful institutional strengthening, proxied by capacity development efforts.

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International Monetary Fund

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ISBN 10

1484375114

ISBN 13

9781484375112

Strategic Foresight at the International Monetary Fund

By: Mr. Alberto Behar,Sandile Hlatshwayo

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Strategic Foresight at the International Monetary Fund

By: Mr. Alberto Behar,Sandile Hlatshwayo

This note explains the value of strategic foresight and provides implementation advice based on the IMF’s experience with scenario planning and policy gaming. Section II provides an overview of strategic foresight and some of its tools. Scenario planning and policy gaming have been the Fund’s main foresight techniques so far, though other tools have been complementary. Accordingly, section III focuses on the scenario planning by illustrating applications before detailing the methods we have been using, while section IV describes policy gaming including the matrix policy gaming approach with which we have experimented so far. Section V summarizes the key points. In so doing, the note extends an invitation to those in the economics and finance fields (e.g., researchers, policymakers) to incorporate strategic foresight in their analysis and decision making.

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International Monetary Fund

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ISBN 10

1513593862

ISBN 13

9781513593869

The Consequences of Policy Uncertainty

Disconnects and Dilutions in the South African Real Effective Exchange Rate-Export Relationship

By: Sandile Hlatshwayo,Mr.Magnus Saxegaard

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The Consequences of Policy Uncertainty

Disconnects and Dilutions in the South African Real Effective Exchange Rate-Export Relationship

By: Sandile Hlatshwayo,Mr.Magnus Saxegaard

In recent years, the link between the real effective exchange rate (REER) and exports in South Africa has weakened. While exports still rise in response to REER depreciations, the REER-export elasticity is below historical estimates. The literature has put forward a number of possible explanations, from multi-national supply-chains to muted exchange rate pass-through. This research explores the role of policy uncertainty in reducing the responsiveness of exports to relative price changes. We construct a novel “news chatter” measure of policy uncertainty and examine how it, paired with other supply-side constraints, can improve our understanding of export performance. We find that increased policy uncertainty diminishes the responsiveness of exports to the REER and has short and long-run level effects on export performance. Finally, we show that a measure of competitiveness that adjusts for uncertainty and supply-side constraints greatly outperforms the REER in tracking exports performance.

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International Monetary Fund

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ISBN 10

1484383494

ISBN 13

9781484383490

A Sentiment-Enhanced Corruption Perception Index

By: Yongquan Cao,Ms. Yingjie Fan,Sandile Hlatshwayo,Monica Petrescu,Zaijin Zhan

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A Sentiment-Enhanced Corruption Perception Index

By: Yongquan Cao,Ms. Yingjie Fan,Sandile Hlatshwayo,Monica Petrescu,Zaijin Zhan

Direct measurement of corruption is difficult due to its hidden nature, and measuring the perceptions of corruption via survey-based methods is often used as an alternative. This paper constructs a new non-survey based perceptions index for 111 countries by applying sentiment analysis to Financial Times articles over 2005–18. This sentiment-enhanced corruption perception index (SECPI) captures not only the frequncy of corruption related articles, but also the articles’ sentiment towards corruption. This index, while correlated with existing corruption perception indexes, offers some distinct advantages, including heightened sensitivity to current events (e.g., corruption investigations and elections), availability at a higher frequency, and lower costs to update. The SECPI is negatively correlated with business environment and institutional quality. Increases in the perceived incidence or scope of corruption influences economic agents’ behaviors, and thus economic dynamics. We found that when the SECPI is at least one standard deviation above the mean, the growth per capita falls by 0.65 percentage point on average, with more pronounced impacts for emerging market and low income countries.

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