The results obtained for the nominal values, are presented and dis-cussed below. Unlike the previous results, these latter results will be
~."'
discussed on a country by country basis and all the relative elasticities (between the center and the periphery and within the periphery) will be discussed simultaneously so as to give a complete picture for each country.
BOTSWANA: (i) log M
pc -0.618 + 1. 281 log yb
t-value 5.9333
R2 0.9576 SEE 0. 2129-(ii) log M
cp -1.852
+
0.882 log yct-value 1. 9903
. .., .; -~
R2 0.8629 SEE 0.4131
(i.j.i} log x p -0.991 + 1. 383 log yb
t-value 4. 3779
R2 0.9700.
SEE 0.3830
Botswana' s results seem ta conform ta a··.priori expectations.
as far as the relative elasticities between herself and the center are concerned. However, with respect ta the relative alasticities within '•. Botswana results do not conform ta a priori expectation. Compared ta the
results for real values the R2 for Botswana' s import demand function in these latter results has risen ta 0.9576 from 0.8616, while for the center's import demand function the R2 improved tremendously from a law figure of 0.0534 ta a high figure of 0.8629. This implies that in bath Botswana and the center incarne plays a significant part in explaining the demand for imports. Also the t-value for the center's import demand func-tian improved from 0.7877 ta 1.9903, whereas the t-value for Botswana's
: 'l
import demand function declined from 8.2785 ta 5.9333.
The relative elasticities betw.een Botswana and the center
provide strong evidence for the Prebisch Thesis. An examination of Botswana's internal elasticities presents a different picture. She has a higher export elasticity with. respect ta her incarne than her import elasticity.
s. 6. ' LESOTHO: (i) log .M
pc -0.824 + 3.379 log y c
t-value 10. 2956
R2 0.9924 SEE
=
0.3282(ii) log . .M cy -4.317 t O .. J4.1 log y c t-val ue 1. 2-76.3
SEE 0.5806
(i;i.i) log
x
:3.326 + 3.248 log y1p
t~value 5.504 R2
=
0.8268SEE 0.5504
Lesotho's relative elasticities between herselt and the cente:t .also seem ta indicate sorne evidence of the Prebisch Thesis. Lesotho has a
hi~h import elasticity of 3.379 as oppdsed ta the center's law import elasticity of 0.741 in respect of Lesotho's products. The R2 for bath Lesotho's import function and the center's have improved from 0.3825 and 0.01,39 ta 0.9924 and 0.669 respectively over the results for. real values.
(
Lesotho's incarne has a very strong explanatory power (99.2%) in explaining her demarld for imports. The center's incarne explains its demand for Lesotho's products to the tune of 66.9% only. The t-values have also improved from 2. 605 ta 10. 2956 in respect of Lesotho' s import demand function and from 0.3912 to 1.2763 in respect of the center's import demand function. As regards her export elasticity with respect ta her incarne, there has been comparative improvement in th.e R2 (0.3223 ta 0.8268) and t-value (2.2873 ta 5. 504) .
Lesotho's export elasticity with. respect to her incarne is quite high though slïghtly less than her import elasticity, thus providing
further evidence in support of the Prebisch_Thesis.
1. MALAWI: (i) log M -1.116 + 1.204 log y
pc rn
t-value. 9.052
B2 0.966 SEE 1.330
(ii) log M -3.256 + 1.563 log y
cp c
t-value 8.8134
R2 0.974 SEE 0.1517
-~ ... ~ .. ,
(iii) log ;x p
=
-1.909+
1. 4114 log .y
rn t-value :::: 2.5635.R2 0.976 SEE 0.5633
Malawi's results do not provide evidence in support of the Prebisch Thesis. Her import elasticity relative to the Center's products is less than the center's import elasticity in respect of her products.
Again her export elasticity with respect to her income is;. higher than her import elasticity. However, in comparison with the results for per capita real values there has been an improvement in the
!t
for Malawi's import demand function (0.0695 to 0.9660) ; for the center also there has been an imptovement inthe~
(0.8467 to 0.9740) t-values for Malawi's import demand function also improved from 0.0969 to 9.052 and that of the center improved from 2.5264 to 8.8134.As indicated earlier the high . !incarne elastici ty of demand for Malawi's products reflects an increase in world demand and the world priee for tobacco which is Malawi's chief export commodity during the period under review. The high world demand may have induced Malawi to invest more in experts hence she has a high export elasticity vis-à-vis her import elasticity.
SWAZILAND: (i) log M -0.576 + .1.23.1 log y
pc . ·s
t-value .12.957
R2
o.
90-15SEE 0.0950
(ii) log M -2.381 + 0.598 log y
cp c
t-value 2.4020
R2 0.7010 SEE 0.2490
(iii) log X p -0.957 + 0.889 log ys
t-value 4.7693
,. R2 0.885 SEE 0.1864
Swaziland' s results for the relative elasticities betw..een herself and the center and within Swaziland seem to indicate a strong evi-denee for the Prebisch Thesis. Compared with. the results obtained for real values these results have improved i_n many respects. The center' s i_mport elastici ty for sw.azi.land' s products is no longer negative. The R2 has
improved tremendously (.0 .• 3673 to O. 70.10). Swaziland's import demand function:
R2 improved from 0 • .7153 to 0.9015 and the t-value has risen from 5.8569 to 12.957.
TANZANIA: (i) log M pc = -1.790 + .1.672 log yt
t-value .10.430
_R2 = 0.9450 SEE 0 . .1603
(ii) log .M -2.384
+
0--.7364 log ycp 'C
t-value 2.6080
R2
o.
7378SEE = 0.2822
(iii) log
x
p = -3.059.+
0.-766 log Ytt-value 1.834
R2 0.4279 SEE 0.4175
Tanzaniq's data on experts shoüld be treated with caution.
It appears that the source from which. statïstics on e.xports for Tanzania were obtaine.d understated the volume of Tanzanian· experts of primary products. Coi!. fee., cotton and sisal were said to be the principal experts, yet the three combined do not account for at least 50% of total experts.
Nevertheless her elasticities seem to conform to a priori expectations.
Her import elasticity is higher than eithe+ the center's import elasticity for her products or her export elasticity with respect to her income. Corn-pared with the results for real values, these latter results show marked improvements. The R2 for Tanzania's import demand function has sl~ghtly
· improved from 0.9351 to 0.9450 while the t-value declined slightly from
\12.5955 to 10.430 ; the center's import elasticity assumed a positive sign and the t-value improved from 2.0476 to 2.6080. The R~ in respect of Tanzania's export elasticity rose from 0.0389 to 0.4279 and the t-value from 0.3101 to 1.847. Incarne in Tanzania does not.seem to have a significant influence on the growth of experts.
. ("). ' ZAMBIA: (i) log M -L381 + 0.786 log y
pc z
t-value 5. 8093
R2 0. 7662 SEE 0. 1353
(ii) log M -1.220 + 0.195 log
y
cp c
t-value 0.989
R2 = 0. 1224 SEE = 0.1971
(iii) log X -0.934 + 0.667 log
y
p z.
t-value 3.4.35
R2 0.1729 SEE 0.1942
Zambia's results are in accordance with expectations. 'Her import elasticity· is higher than the 'center's import elasticity for her center. Also her fmport elasticity is higher tpan her exPort elasticity with respect to her incarne. It should, however, be noted that the center's
' '
import elasticity in respect of Zambia's products is the lowest among the six countries. The power of income in the center for explaining the demand for Zambia's products is very low as evidenced by the low R2 of 0.1224.
In Zambia itself the growth of income does not appear to explain the growth in the vol ume of exports ; the R2 is only 0 .. 1 729.
Elasticities for the aggregated data for the periphery were estimated:
The data yielded the following results:
. . Aggregated data for _periphery: (i) log M -1.331 + 1.228 log y
pc p
t-value 5.455
R2 0.9197 SEE 0.2551
(ii) log Mc -0.761 + 0.514 log y
p c
t-value 2.259
R2 0.7534 SEE 0.2395
(iii) log
x
p -1.411 + 0.594 log ypt-val-ue 3.858
R2 0.7919 SEE 0.1569
Taken globally the periphery's results show a strong evidence for the Prebisch Thesis. The import elasticity of the periphery for the ceqteris products is less· than the center's import elasticity for the p·., eriphery' s. products. This import elasticity is also higher than the peri-phery's export elasticity with respect to its own income. ·Income in the periphery seems to explain, to a large extent, the demand for imports
(R2
= O. 9197).
Furthermore the exports of the center were regressed upon the
Botswana ! 1. 281!
o.
882! 1.38310.9576!0.8629~0.9700!5.9333!1.9903!4.3779!!
Malawi 1. 204! 1.563! 1.411410.9660!0.9740!0.9760!9.052 9.8.134!2.5035!
l
Swaziland 1.231! 0.598! 0.889!0.901510.701010.885 !12. 95 7 2.4020 4.7693!
-.! ! ! . !
~ ~
.Tan zani a _, 1. 672! 0. 7364! 0.766!0.9450!0. 7378J0.4279!1Q430 !2.6080 1. 834 7!
-! 1
l 1
Zambia' s 0.786! 0.195! 0.667!0.7662!0.1224!0.1729!5.8093!0.989 3.435
!
P~riphery
, ,
!Aggregated -1. 228! 0.514! 0.594!0.9197!0.7534!0.7919!5.455 !.2. 259 !3.7858!
! data ! 1 1
,. ...
1 ..
All the countries, except Malawi have higher incarne elasticities of demand for the importation of industrial products from th~ center than the incarne elasticity of demand for the imports of primary products by the center.
Botswana, Lesotho and Malawi have higher incarne elasticities of export than incarne elasticities of import. The R2 for the periphery's import demand function is fairly satisfactory for all the countries.
The R2 for the center's import demand function in respect of Zambia is very low (0 . .1224), implying that incarne in the center'is not a major determinant of the demand for Zambia's products ; i t only explains their demand to the tune of 12.2 per cent,
The summary of results demostrates very clearly that there is a strong evidence of the Prebisch Thesis in the six SADCC countries. If the P·rebisch' s explanation of the discrepancy in the center-periphery traqe
.. relations which manifests its.elf in the form of disparitie. s in the incarne
'Il#:
el~sticities of demand is accepted, then we can conclude that the balance
'l'
of payments disequilibrium and the attendant structural problems which are clearly mani.fest in the periphery are explained by th.e discrepancies which are the thrust qf the Prebisch Thesis.