nep-afr New Economics Papers
on Africa
Issue of 2005‒02‒01
five papers chosen by
Suzanne McCoskey
US Naval Academy

  1. Risk, Network Quality, and Family Structure: Child Fostering Decisions in Burkina Faso By Akresh, Richard
  2. Why are the Critics so Convinced that Globalization is Bad for the Poor? By Emma Aisbett
  3. Revenue and the Fiscal Impact of Trade Liberalization: The Case of Niger By Ali Zafar
  4. Designing the Financial Tools to Promote Universal Free-Access to AIDS Care By Patrick Leoni; Stéphane Luchini
  5. Does less inequality among households mean less inequality among individuals? By Eugenio Peluso; Alain Trannoy

  1. By: Akresh, Richard (University of Illinois at Urbana-Champaign and IZA Bonn)
    Abstract: Researchers often assume household structure is exogenous, but child fostering, the institution in which parents send their biological children to live with another family, is widespread in sub-Saharan Africa and provides evidence against this assumption. Using data I collected in Burkina Faso, I analyze a household's decision to adjust its size and composition through fostering. A household fosters children as a risk-coping mechanism in response to exogenous income shocks, if it has a good social network, and to satisfy labor demands within the household. Increases of one standard deviation in a household's agricultural shock, percentage of good network members, or number of older girls increase the probability of sending a child above the current fostering level by 29.1, 30.0, and 34.5 percent, respectively. Testing whether factors influencing the sending decision have an opposite impact on the receiving decision leads to a rejection of the symmetric, theoretical model for child fostering.
    Keywords: child fostering, risk-coping, social networks, household structure
    JEL: O15 J12 D10
    Date: 2005–01
  2. By: Emma Aisbett
    Abstract: Proponents of globalization often conclude that its critics are ignorant or self-motivated. In doing so, they have missed a valuable opportunity to discover both how best to communicate the benefits of globalization, and how to improve on the current model of globalization. This paper examines the values, beliefs and facts that lead critics to the view that globalization is bad for the poor. We find that critics of globalization tend to be concerned about non-monetary as well as monetary dimensions of poverty, and more concerned about the total number of poor than the incidence of poverty. In regard to inequality, critics tend to refer more to changes in absolute inequality, and income polarization, rather than the inequality measures preferred by economists. It is particularly important to them that no group of poor people is made worse off by globalization. Finally, we argue that the perceived concentration of political and economic power that accompanies globalization causes many people to presume that globalization is bad for the poor, and the continued ambiguities in the empirical findings mean that this presumption can be readily supported with evidence.
    JEL: F0
    Date: 2005–01
  3. By: Ali Zafar
    Abstract: Using data collected during several missions, Zafar finds that the principal reasons for low revenue mobilization are (1) the adverse fiscal impact of trade liberalization, (2) the defiscalization of agriculture in the 1970s, (3) the collapse of the uranium boom in the 1980s, and (4) the poor record of the VAT in mobilizing revenue. The large reduction in tariffs during the 1980s and 1990s in the context of structural adjustment programs and West African regional integration initiatives had adverse effects on trade tax revenue during the period 1980–2003. But higher import levels after 1994 succeeded in partially mitigating the revenue losses. The experience of Niger shows that without accompanying macroeconomic policies, parallel improvements in tax and customs administration, and success in mobilizing domestic taxes, most notably the VAT, trade reform can have adverse fiscal consequences. Using a SMART model partial equilibrium analysis developed by UNCTAD for researchers and negotiators at multilateral trade rounds, the author simulated three different tariff shocks to test the fiscal and trade implications of additional trade liberalization in Niger. First, the preferred tariff regime in terms of overall fiscal and job creation impact was the harmonized Swiss formula in contrast to a 10 and 15 percent uniform tariff. Second, a possible Regional Economic Partnership Agreement (REPA) between the European Union and l’Union Économique et Monétaire Ouest-Africaine (UEMOA) by 2015 that would abolish duties on EU imports to the UEMOA countries would have negative fiscal effects on Niger of more than 1 percent of GDP, positive effects on trade creation of about 1.5 percent of GDP, and ambiguous effects on local industry. While there will be some welfare gains for consumers and importers from lower import tariffs and the possibility of trade creation, the fiscal losses and adjustment costs would be significant, particularly in the machinery and transport sectors. Third, there are asymmetric gains and losses from regional integration and tariff changes, and a 10 percent uniform tariff would have the greatest impact on Benin and Senegal and some impact on Niger and Togo. In sum, further trade liberalization in Niger will have significant fiscal costs, partially offset by trade creation through increased imports. This paper—a product of Poverty Reduction and Economic Management 3, Africa Technical Families—is part of a larger effort in the region to understand the reasons for low resource mobilization.
    Keywords: International Economics; Macroecon & Growth; Globalization
    Date: 2005–01–26
  4. By: Patrick Leoni; Stéphane Luchini
    Abstract: Typical of the AIDS epidemics is that governments in developing countries under-invest in drugs production because of the possible appearance of a curative vaccine. We design a set of financial tools allowing to hedge against this event and achieving full risk-sharing. We show that the introduction of those assets increase social welfare in developing countries, as well as the number of treated patients and the provision of public good.
    Keywords: financial tools, AIDS, free-access
    JEL: G13 I12
  5. By: Eugenio Peluso (THEMA, Université de Cergy-Pontoise); Alain Trannoy (EHESS, GREQAM-IDEP)
    Abstract: Consider an income distribution among households of the same size in which individuals, equally needy from the point of view of an ethical observer, are treated unfairly. Individuals are split into two types, the dominant and the dominated. We look for conditions under which welfare and inequality quasi-orders established at the household level still hold at the individual one. A necessary and sufficient condition for the Generalized Lorenz test is that the income of dominated individuals is a concave function of the household income: individuals of poor households have to stand more together than individuals of rich households. This property also proves to be crucial for the preservation of the Relative and Absolute Lorenz criteria, when the more egalitarian distribution is the poorest. Extensions to individuals heterogeneous in needs and more than two types are also provided.
    Keywords: Lorenz dominance, Intra-household inequality, concavity, sharing rule.
    JEL: D13 D63 D31
    Date: 2004–04

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