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Begin New Search Topic International Political Economy Political Geography France Content Type Research Paper Publication Year within 25 Years

1. Towards a Political Economy of Monetary Dependency: The Case of the CFA Franc in West Africa

Author:
Kai Koddenbrock and Ndongo Samba Sylla
Publication Date:
06-2019
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
This paper focuses on the most neglected case of monetary dependency: the CFA franc. This currency arrangement was born in 1945, during the colonial era, but it still operates in the same ways more than 70 years later in fourteen countries in Africa, mostly former French colonies. Engaging with the seminal African scholarship by Joseph Pouemi on internal and external monetary repression and the emergent literature on “financial subordination,” we introduce the notion of the “chain of monetary dependency,” consisting of an external and an internal part. We argue that the CFA franc provides an extreme but paradigmatic example of this chain. The CFA franc is paradigmatic because of the very strong external repression of monetary and financial policy through US dollar and euro dependence. Internally, the CFA franc arrangement radicalizes the constraints imposed on all central bank policies and bank-firm relations in the Global South and makes it more difficult to pursue growth strategies geared towards the well-being of the broader population.
Topic:
Economics, International Political Economy, Monetary Policy, and Currency
Political Geography:
France

2. How to Make a Deal: The Role of Rankings and Personal Ties in Creating Trust in the M&A Market

Author:
Valérie Boussard, Olivier Godechot, and Nicolas Woloszko
Publication Date:
06-2016
Content Type:
Research Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
This paper examines the selection of intermediaries in the French mergers and acquisitions (M&A) market, which is an opaque environment. Buyers and sellers cope with uncertainty as to the value of exchanged assets. They thus rely on the help of experts in order to secure deals. But as the valuators might be prone to opportunism, firms need to find a way to trust them. We identify two trust devices: social ties and public rankings. We explore whether these personal and impersonal devices are substitutes, independent or complementary. We study the French M&A market through a mixed-method approach, with both an ethnographic study (76 interviews) and the statistical analysis of 694 M&A deals in France in 2010. We show that both previous contacts and league table rankings of firms contribute to trust and to dealmaking. These trust devices are all the more likely to be used if the deal is risky, especially within the sell side (more at risk). We also find that firms tend to make deals only with other firms at the same level in the league tables: high-status firms tend to make deals together. Finally, we find some evidence of substitution between rankings and personal ties, especially for low-value deals.
Topic:
Economics, International Political Economy, Macroeconomics, and Corporations
Political Geography:
France