nep-afr New Economics Papers
on Africa
Issue of 2005‒02‒13
25 papers chosen by
Suzanne McCoskey
US Naval Academy

  1. GM Food Crop Technology: Implications For Sub-Saharan Africa By Anderson, Kym; Jackson, Lee Ann
  2. Growth Accelerations By Hausmann, Ricardo; Pritchett, Lant; Rodrik, Dani
  3. Estimates of Personal Sector Wealth for South Africa By Aron, Janine; Muellbauer, John
  4. Who Runs the IFIs? By Faini, Riccardo; Grilli, Enzo
  5. Diamonds are Forever, Wars are Not: Is Conflict Bad for Private Firms? By Guidolin, Massimo; La Ferrara, Eliana
  6. The Politics Of Debt Crises By Van Rijckeghem, Caroline; Weder, Beatrice
  7. On Dictatorship, Economic Development and Stability By Lionel, ARTIGE
  8. Bridging research, policy, and practice in African agriculture By Omamo, Steven Were
  9. Prospects for growth and poverty reduction i n Zambia, 2001-2015 By Lofgren, Hans; Thurlow, James; Robinson, Sherman
  10. The road to pro-poor growth in Zambia By Thurlow, James; Wobst, Peter
  11. Cross-country typologies and development strategies to end hunger in Africa By Zhang, Xiaobo; Johnson, Michael; Resnick, Danielle; Robinson, Sherman
  12. Smallholder African agriculture By Resnick, Danielle
  13. Spatial analysis of sustainable livelihood enterprises of Uganda cotton production By You, Liangzhi; Chamberlin, Jordan
  14. Linkages between poverty and land management in rural Uganda By Pender, John; Ssewanyana, Sarah; Edward, Kato; Nkonya, Ephraim
  15. Dairy development in Ethiopia By Mohamed A. M. Ahmed; Ehui, Simeon; Yemesrach, Assefa
  16. Race, equity, and public schools in post-apartheid South Africa By Yamauchi, Futoshi
  17. Poverty in Malawi, 1998 By Benson, Todd; Machinjili, Charles; Kachikopa, Lawrence
  18. Assets at marriage in rural Ethiopia By Fafchamps, Marcel; Quisumbing, Agnes R.
  19. Are wealth transfers biased against girls? By Quisumbing, Agnes R.; Payongayong, Ellen M.; Otsuka, Keijiro
  20. Evidence and implications of non-tradability of food staples in Tanzania 1983-1998 By Delgado, Christopher; Minot, Nicholas; Tiongco, Marites
  21. Are horticultural exports a replicable success story? By Minot, Nicholas; Ngigi, Margaret
  22. Productive Benefits of Health: Evidence from Low-Income Countries By Schultz, T. Paul
  23. World Bank Lending and Regulation By Kilby, Christopher
  24. Trade Liberalization and the Politics of Financial Development By Matias Braun; Claudio Raddatz
  25. Export Processing Zone Expansion in an African Country: What are the Labor Market and Gender Impacts? By Peter Glick; François Roubaud

  1. By: Anderson, Kym; Jackson, Lee Ann
    Abstract: The first generation of genetically modified (GM) crop varieties sought to increase farmer profitability through cost reductions or higher yields. The next generation of GM food research is focusing also on breeding for attributes of interest to consumers, beginning with ‘golden rice’, which has been genetically engineered to contain a higher level of vitamin A and thereby boost the health of unskilled labourers in developing countries. This Paper analyses empirically the potential economic effects of adopting both types of innovation in Sub-Saharan Africa (SSA). It does so using the global economy-wide computable general equilibrium model known as GTAP. The results suggest the welfare gains are potentially very large, especially from golden rice, and that those benefits are diminished only slightly by the presence of the European Union’s current ban on imports of GM foods. In particular, if SSA countries impose bans on GM crop imports in an attempt to maintain access to EU markets for non-GM products, the loss to domestic consumers due to that protectionism boost to SSA farmers is far more than the small gain in terms of greater market access to the EU.
    Keywords: biotechnology; computable general equilibrium; GMOs; regulation; sub-saharan africa; trade policy
    JEL: C68 D58 F13 O30 Q17 Q18
    Date: 2004–07
  2. By: Hausmann, Ricardo; Pritchett, Lant; Rodrik, Dani
    Abstract: Unlike most cross-country growth analyses, we focus on turning points in growth performance. We look for instances of rapid acceleration in economic growth that are sustained for at least eight years and identify more than 80 such episodes since the 1950s. Growth accelerations tend to be correlated with increases in investment and trade, and with real exchange rate depreciations. Political-regime changes are statistically significant predictors of growth accelerations. External shocks tend to produce growth accelerations that eventually fizzle out, while economic reform is a statistically significant predictor of growth accelerations that are sustained. Growth accelerations tend to be highly upredictable: the vast majority of growth accelerations are unrelated to standard determinants and most instances of economic reform do not produce growth accelerations.
    Keywords: economic growth; economic reform
    JEL: O0 O50
    Date: 2004–08
  3. By: Aron, Janine; Muellbauer, John
    Abstract: In common with many emerging market countries, South Africa’s government does not publish balance sheet wealth estimates on a market value basis, as produced in the US, UK, Japan, and elsewhere. Yet without information on the market values of liquid and illiquid personal sector wealth, it is difficult to explain aggregate consumer spending and saving, consumers’ demand for credit, and the broad money holdings of households. Behavioural equations for these variables are key components of central banks’ macro-econometric models, used in forecasting and policy-making. Understanding the domestic asset value channel of the monetary policy transmission mechanism is especially important for inflation targeting countries. We construct the first coherent set of aggregate, personal sector wealth estimates at market value for South Africa. Our quarterly estimates derive from published data on financial flows, and various other capital market data, often at book value. Our methods rely, where relevant, on accumulating flow of funds data using appropriate benchmarks, and, where necessary, converting book to market values using appropriate asset price indices. Relating asset to income ratios for various asset classes to asset price movements and rates of return, throws light on the changing composition of personal sector wealth. Most striking are the rise in pension wealth - overtaking gross housing assets in the late 1980s; the rise in household debt; and the relative decline of liquid and housing assets, from the early and mid-1980s, respectively.
    Keywords: C84; national balance sheets; personal sector wealth; saving
    JEL: E44 G11
    Date: 2004–09
  4. By: Faini, Riccardo; Grilli, Enzo
    Abstract: The World Bank and the International Monetary Fund play a key role in the international economic architecture. Yet, they are also ‘political’ institutions and their activities inevitably respond to the national interest of one or a group of shareholders. Assessing the role of ‘influential’ shareholders is, however, made difficult by the fact that votes in the Boards of either institution are rarely recorded and at any rate are not made public. We take a different route and look at the pattern of lending of both institutions as a function of their institutional mission and the commercial and financial interests of their main shareholders. We find that the Bank and especially the Fund are quick to respond to the borrowing needs of their members, particularly during a balance of payments crisis. Apart from that, however, the lending pattern of the two institutions is influenced by the commercial and the financial interests of the US and, to a lesser extent, of the EU. European countries in particular seem to be much more concerned by their commercial interests. The role of Japan is even smaller and more regional, being largely confined to decisions concerning Asia.
    Keywords: influential shareholders; international monetary fund; world bank
    JEL: F02 F34
    Date: 2004–10
  5. By: Guidolin, Massimo; La Ferrara, Eliana
    Abstract: This Paper studies the relationship between civil war and private investment in a poor, resource abundant country using microeconomic data for Angola. We focus on diamond mining firms and conduct an event study on the sudden end of the conflict, marked by the death of the rebel movement leader in 2002. We find that the stock market perceived this event as ‘bad news’ rather than ‘good news’ for companies holding concessions in Angola, as their abnormal returns declined by 4 percentage points. The event had no effect on a control portfolio of otherwise similar diamond mining companies. This finding is corroborated by other events and by the adoption of alternative methodologies. We also use nonparametric techniques with daily data on the intensity of conflict, and find that moderate levels of violence increased the abnormal returns of the ‘Angolan’ portfolio. We interpret our results in the light of the widespread rent seeking in the Angolan mineral industry.
    Keywords: Angola; civil war; event studies; rent-seeking
    JEL: G14 O12 O16
    Date: 2004–10
  6. By: Van Rijckeghem, Caroline; Weder, Beatrice
    Abstract: This paper shows that politics matter in explaining defaults on external and domestic debt obligations. We explore a large number of political and macroeconomic variables using a nonparametric technique to predict safety from default. The advantage of this technique is that it is able to identify complementarities that are not captured in standard probit analysis. We find that political factors matter, and do so in different ways for democratic and non-democratic regimes, and for domestic and external debt. Moreover we find that there is an important complementarity between political and economic conditions, which is essential in explaining the incidence of default.
    Keywords: early warning systems; political institutions; sovereign debt crises
    JEL: F30 F34
    Date: 2004–10
  7. By: Lionel, ARTIGE (Universitat Autonoma de Barcelona (Spain))
    Abstract: This paper aims to account for varying economic performances and political stability under dictatorship. We argue that economic welfare and social order are the contemporary relevant factors of political regimes’ stability. Societies with low natural level of social order tend to tolerate predatory behavior from dictators in exchange of a provision of civil peace. The fear of anarchy may explain why populations are locked in the worst dictotorship. In contrast, in societies enjoying a relative natural civil peace, dictatorship is less likely to be predatory because low economic welfare may destabilize it.
    Keywords: Anarchy; dictatorship; economic development; predation; social order
    JEL: H1 H5 O1 P16
    Date: 2004–10–14
  8. By: Omamo, Steven Were
    Abstract: "Policy research on African agriculture is long on prescriptions for what needs to be done to spur agricultural growth but short on how such prescriptions might be implemented in practice. What explains this state of affairs? What might be done to correct it, and, most important, how? This paper addresses these questions via a comprehensive review and assessment of the literature on the role and impact of research in policy processes. Six major schools of thought are identified: the rational model; pragmatism under bounded rationality; innovation diffusion; knowledge management; impact assessment; and evidence-based-practice. The rational model with its underlying metaphor of a 'policy cycle' comprising problem definition and agenda setting, formal decision making, policy implementation, evaluation, and then back to problem definition and agenda setting, and so on has been criticized as too simplistic and unrealistic. Yet it remains the dominant framework guiding attempts to bridge gaps between researchers and policy makers. Each of the other five schools relaxes certain assumptions embedded within the rational model e.g., wholly rational policy makers, procedural certainty, well-defined research questions, well-defined user groups, welldefined channels of communication. In so doing, they achieve greater realism but at the cost of clarity and tractability. A unified portable framework representing all policy processes and capturing all possible choices and tradeoffs faced in bridging research, policy, and practice does not currently exist and is unlikely ever to emerge. Its absence is a logical outcome of the context-specificity and social embeddedness of knowledge. A fundamental shift in focus from a 'researcher-as-disseminator' paradigm to a 'practitioner-as-learner' paradigm is suggested by the literature, featuring contingent approaches that recognize and respond to context-specificity and social embeddedness. At bottom, the issue is how to promote 'evidence-readiness' among inherently conservative and pragmatic policy makers and practitioners and 'user-readiness' among inherently abstraction-oriented researchers." Author's Abstract
    Keywords: Policy research ,Agriculture Africa ,Agricultural growth ,Research Methodology ,Knowledge management ,evaluation ,
    Date: 2004
  9. By: Lofgren, Hans; Thurlow, James; Robinson, Sherman
    Abstract: "Zambia is one of the poorest countries in Africa. Despite substantial reform during the 1990s, the economy has remained heavily dependent on urban-based mining. Copper's long-standing dominance led to a strong bias against agriculture, which undermined the sector's growth and export potential. Consequently poverty has remained concentrated within marginalized rural areas. Recent volatility in copper exports and growing foreign debt indicate the need for further economic diversification and pro-poor growth. These needs have been clearly identified in the country's Poverty Reduction Strategy Paper (PRSP), which outlines a series of policy objectives aimed at combating HIV/AIDS, reversing the deterioration of education and rural infrastructure, and accelerating agricultural growth. This paper uses a computable general equilibrium (CGE) model to assess the potential impact on inequality and poverty of the key PRSP policies, as well as the effects of foreign debt forgiveness and changes in the copper sector. The findings suggest that, in the absence of very rapid growth, the pro-poor policies outlined in the PRSP will not enable Zambia to reach its Millennium Development Goal (MDG) of halving poverty by 2015. Achieving this goal will require gross domestic product (GDP) to grow at an annual rate of over ten percent. Reduction in poverty can however be achieved by addressing HIV/AIDS, which currently reduces annual GDP growth by one percent. Furthermore, substantial poverty-reduction can occur through the acceleration of agricultural growth, although limited market opportunities necessitates supporting investment in rural infrastructure. Overall, the potential of the agricultural sector depends on the government's commitment to reforms and the continued removal of the antiagricultural bias created by the dominant copper sector." Authors' Abstract
    Keywords: Copper mines and mining ,Computable general equilibrium (CGE) ,HIV/AIDS Economic aspects ,agricultural sector ,
    Date: 2004
  10. By: Thurlow, James; Wobst, Peter
    Abstract: "Zambia is one of the poorest countries in Sub-Saharan Africa. Almost three-quarters of the population were considered poor at the start of the 1990s, with a vast majority of these people concentrated in rural and remote areas. This extreme poverty arose in spite of Zambia's seemingly promising prospects following independence. To better understand the failure of growth and poverty-reduction this paper first considers the relationship between the structure of growth and Zambia's evolving political economy. A strong urban-bias has shaped the country's growth path leading to an economy both artificially and unsustainably distorted in favor of manufacturing and mining at the expense of rural areas. For agriculture it was the maize-bias of public policies that undermined export and growth potential within this sector....Sustained investment and economic growth during recent years suggest a possible change of fortune for Zambia. In light of this renewed growth, the paper uses a dynamic and spatially-disaggregated economy-wide model linked to a household survey to examine the potential for future poverty-reduction....Although agricultural growth is essential for substantial poverty-reduction, the country's large poor urban population necessitates growth in non-agriculture. The findings suggest that returning to a copper-led growth path is not pro-poor and that non-mining urban growth, although undermined by foreign exchange shortages and inadequate private investment, is likely to be preferable for reducing poverty." Authors' Abstract
    Keywords: Copper mines and mining ,Poverty alleviation Africa Zambia ,Manufacturing industries ,Spatial analysis (Statistics) ,Household surveys ,
    Date: 2004
  11. By: Zhang, Xiaobo; Johnson, Michael; Resnick, Danielle; Robinson, Sherman
    Abstract: The key motivation behind this study is to explore the many patterns of interactions between economic and non-economic factors in sub-Saharan Africa (hereafter referred to as Africa) in order to map out a typology of different types of country situations and thus, corresponding future options to develop strategies to end hunger and poverty in the region. The study builds on the earlier work of Irma Adelman and Cynthia Morris who argued that economic development is a dynamic, multi-faceted, nonlinear, and malleable process, a process explained by the many complex interactions between social, economic, political and institutional changes. As in Adelman and Morris, we use factor analysis to reduce a large number of variables into a manageable set of key factors. Next, using the newly developed classification and regression tree technique (CART), we link the outcome variables, such as per capital GDP and the prevalence of child malnutrition, with this smaller set of factors. This overcomes the limitations of Adelman and Morris. work that mixed the outcome and explanatory variables in their analysis. The analysis helps identify the most important factors for each outcome indicator, which provides guidance for defining the development of a typology and exploring future strategy options associated with each country type.
    Date: 2004
  12. By: Resnick, Danielle
    Abstract: In contrast to uniformly pessimistic assessments about Sub-Saharan Africa's (hereafter Africa) ability to meet the Millennium Development Goals (MDGs), this paper examines recent trends in poverty, malnutrition, and growth to delineate where the challenges are the greatest within the entire region and sub-region and to highlight informative cases of success in specific countries. The performance of agriculture, especially smallholder agriculture, receives particular attention due to its role in sustaining the livelihoods of a majority of Africa's poor. In recent years, the importance of smallholder agriculture has been greatly recognized, demonstrated by both African governments and the donor community pledging to engage in the requisite interventions for generating agricultural growth. By seizing on this new enthusiasm and learning from case studies of smallholder successes, agriculture could significantly contribute to Africa's ability to meet the MDGs.
    Keywords: Millenium Development goal ,
    Date: 2004
  13. By: You, Liangzhi; Chamberlin, Jordan
    Abstract: "Because the conditions for agricultural development vary considerably across space, we need to develop methods that allow us to take such variability into account when evaluating development strategies for particular crops or farming systems. This paper addresses spatially varying characteristics in an evaluation of the potential economic benefits of three cotton development strategies for Uganda: area expansion, productivity improvement, and domestic consumption increase. We begin with a historical review of cotton production in Uganda. We then described the major challenges and opportunities for Ugandan cotton production, including farm-level production constraints. Household-level production data from the 2000 Uganda National Household Survey (UNHS) are used to estimate the current spatial distribution of cotton production (called the cotton production area, or CPA), based on the association of household cotton production with ranges in mapped variables (altitude, length of growing period, and population density), district cotton production statistics and expert knowledge of local production patterns. Cotton development domains (CDDs) are then defined by agroclimatic suitability, market/ginnery access, and inclusion in the CPA. We use the UNHS data to evaluate the importance of cotton as a livelihood enterprise and its role in rural livelihood strategies. Key ecosystems and protected areas are considered in conjunction with the CDDs in defining feasible areas for expansion of production. Finally, the Dynamic Research Evaluation for Management (DREAM) model is used to estimate benefits that accrue from the three development strategies considered." Authors' Abstract
    Keywords: DREAM ,Spatial analysis (Statistics) ,
    Date: 2004
  14. By: Pender, John; Ssewanyana, Sarah; Edward, Kato; Nkonya, Ephraim
    Abstract: "This study investigates the impacts of rural poverty on farmers' land management decisions, crop production and incomes, based upon analysis of data from the 1999/2000 Uganda National Household Survey. We find that the impacts of rural poverty on land management, crop production and income depend upon the type of poverty (i.e., what asset or access factor is constrained) and the type of land management considered... Our results suggest that improvement in smallholders' access to land, other assets, education, extension, market information, credit, roads, and off-farm opportunities can help to break the downward cycle of poverty and land degradation, and put farmers on a more sustainable development pathway. Access to land (area and quality), other assets, education and off-farm opportunities appear to be particularly important in addressing poverty directly, while other interventions are likely to have more indirect impacts, as they influence land management, crop choice, and other livelihood decisions. Given the importance of land as the major asset owned by poor rural households in Uganda, investing in land quality maintenance and improvement is a critical need. However, we found low marginal returns to investments in organic or inorganic fertilizer and other land management practices, suggesting that it will be difficult to get farmers to make such investments in the present environment. Improvements in the market environment as well as development of more profitable land management technologies appears essential to address this need." from Authors' Abstract
    Date: 2004
  15. By: Mohamed A. M. Ahmed; Ehui, Simeon; Yemesrach, Assefa
    Abstract: Ethiopia holds large potential for dairy development due to its large livestock population, the favorable climate for improved, high-yielding animal breeds, and the relatively disease-free environment for livestock. Given the considerable potential for smallholder income and employment generation from high-value dairy products, development of the dairy sector in Ethiopia can contribute significantly to poverty alleviation and nutrition in the country. Like other sectors of the economy, the dairy sector in Ethiopia has passed through three phases or turning points, following the economic and political policy in the country. In the most recent phase, characterized by the transition towards market-oriented economy, the dairy sector appears to be moving towards a takeoff stage. Liberalized markets and private sector investment and promotion of smallholder dairy are the main features of this phase. Milk production during the 1990s expanded at an annual rate of 3.0 percent compared to 1.63-1.66 percent during the preceding three decades. Review of the development of dairy sector in Ethiopia indicates that there is a need to focus interventions more coherently. Development interventions should be aimed at addressing both technological gaps and marketing problems. Integration of crossbred cattle to the sector is imperative for dairy development in the country. This can be achieved either through promotion of large private investment to introduce new technology in the sector such as improved genotypes, feed and processing, and promotion of integration of crossbred cattle into the smallholder sector through improving their access to improved cattle breeds, AI service, veterinary service, and credit. Similarly, government should also take the lead in building infrastructure and providing technical service to smallholders. Severe shortages, low quality and seasonal unavailability of feed likewise remain as major constraints to livestock production in Ethiopia. These constraints need to be addressed and technological change be promoted to increase milk production.
    Keywords: Ethiopia ,Dairy products industry ,Livestock productivity Ethiopia ,Africa sub-Saharan ,East Africa ,
    Date: 2004
  16. By: Yamauchi, Futoshi
    Abstract: "This paper examines dynamic changes in educational quality and equity differences in the public school system between Black and other racial groups in post-apartheid South Africa, using the ratio of learners to educators in each school, available from the School Register of Needs, 1996 and 2000. The analysis incorporates school- and community-level unobservables and the endogenous movement of learners. This paper shows that (1) the learner-educator ratios significantly differ between formerly Black and White primary and secondary schools in 1996 and 2000, and (2) in the adjustment of educators in response to changes in the number of learners in this period, there are significant differences between formerly Black and non-Black (White, Coloured, and Indian) primary schools. The opportunities for education in public schools are still unequal between Black and White children, even after apartheid. Given that school quality affects returns to schooling and earning opportunities in labor markets, the inequality causes income inequality between Black and White. The empirical result calls for stronger policy intervention to support Black schools and children in South Africa. Author's Abstract
    Keywords: quality of education ,race ,apartheid ,
    Date: 2004
  17. By: Benson, Todd; Machinjili, Charles; Kachikopa, Lawrence
    Abstract: "This paper presents the poverty analysis of the 1997 98 Malawi Integrated Household Survey. The analysis developed basic needs poverty lines, using consumption-based measures of welfare to classify households and individuals as poor and nonpoor. Because consumption data were not of uniform quality across sample households, the analysis made adjustments to derive a more accurate assessment of the incidence of poverty across the country. The analysis provides poverty and inequality estimates for Malawi's population. About 65 percent were unable to meet their basic needs, and poverty was deep and pervasive. The distribution of household welfare was loosely examined within the context of the Malawi Poverty Reduction Strategy to guide government action in helping poor households improve their own well-being." Authors' Abstract
    Keywords: Poverty ,poverty analysis ,Malawi ,
    Date: 2004
  18. By: Fafchamps, Marcel; Quisumbing, Agnes R.
    Abstract: "This paper contributes to the economic analysis of marriage and the family by examining and analyzing the relative importance of potential determinants of assets brought to marriages in rural Ethiopia. One potential determinant is assortative matching, whereby the rich marry the rich and the poor marry the poor, generating a positive correlation between assets brought to marriage by both spouses. Another determinant explored is compensating parental transfers at marriage, whereby parents reduce assets transferred to their marrying children if their spouses bring more. The third determinant analyzed is parents' strategic behavior to improve the marriage-market ranking of their children by transferring more assets to them at the time of marriage." from Text
    Keywords: Intrahousehold allocation ,Intergenerational transfers ,Marriage market ,Inheritance ,
    Date: 2004
  19. By: Quisumbing, Agnes R.; Payongayong, Ellen M.; Otsuka, Keijiro
    Abstract: "This study attempts to analyze changing patterns of land transfers and schooling investments by gender over three generations in customary land areas of Ghana's Western Region. Although traditional matrilineal inheritance rules deny landownership rights to women, women have increasingly acquired land through gifts and other means, thereby reducing the gender gap in landownership. The gender gap in schooling has also declined significantly, though it persists. We attribute such changes to the increase in women's bargaining power due to an agricultural technology that increased the demand for women's labor, contributing to the reduction of "social" discrimination as well as weak "parental" discrimination." Authors' Abstract
    Keywords: Wealth transfers ,Gender ,Ghana ,
    Date: 2004
  20. By: Delgado, Christopher; Minot, Nicholas; Tiongco, Marites
    Abstract: "Economic reform programs assume that major goods are tradable, such that depreciation of the real exchange rate raises the value of output compared to factor costs in domestic currency. In Tanzania, major food staples that account for most real income are non-tradables in at least one-quarter of the country. This is demonstrated and implications assessed for the constraints imposed on macroeconomic-led adjustment strategies." Author's Abstract
    Keywords: Food staples ,Food prices ,Tradable goods ,Non-tradable goods ,
    Date: 2004
  21. By: Minot, Nicholas; Ngigi, Margaret
    Abstract: Kenyan horticultural exports are often cited as a success story in African agriculture. Fruit and vegetable exports from Côte 'Ivoire have received less attention, but the export value is similar to that of Kenya. This paper focuses on three questions. First, do the horticultural sectors of Kenya and Côte d'Ivoire constitute valid success stories? Second, what factors have contributed to the success (or lack thereof)? And third, to what degree can the success be replicated in other African countries? The paper finds that Kenyan horticultural exports are indeed a success story: horticulture has become the third largest earner of foreign exchange, more than half the exports are produced by smallholders, and smallholders gain from producing for the export market. At the same time, the total number of smallholders producing for export is relatively small, and trends in European retailing may shift the advantage to larger producers. Côte d'Ivoire is not as clearly a success story because the most of the exports are produced on large industrial estates and because growth has been uneven. Ivorian exports rely on preferential access to European markets relative to Latin American exporters, raising doubts about sustainability. Factors in the growth and success of horticultural exports include a realistic exchange rate, stable policies, a good investment climate, competitive international transport connections, institutional, and social links with markets in Europe, and continual experimentation with the market institutions to link farmers and exporters. Smallholder participation is encouraged by farmer training and extension schemes, investment in small-scale irrigation, and assistance in establishing links with exporters. Many of the lessons of Kenyan horticulture can be applied elsewhere in Africa. Indeed, Kenya faces increasing competition from neighboring countries trying to replicate its success. At the same time, market institutions take time to develop, and demand constraints probably prevent other African countries from achieving the same level of success as Kenya.
    Date: 2004
  22. By: Schultz, T. Paul (Yale University and IZA Bonn)
    Abstract: Various household survey indicators of adult nutrition and health status are analyzed as determinants of individual wages. However, survey indicators of health status may be heterogeneous, or a combination of health human capital formed by investment behavior and variation due to genotype, random shocks, and measurement error, which are uncontrolled by behavior. Although there are no definitive methods for distinguishing between human capital and genetic variation in health outcomes, alternative mappings of health status, such as height, on community health services, parent socioeconomic characteristics, and ethnic categories may be suggestive. Instrumental variable estimates of health human capital and residual sources of variation in measured health status are included in wage functions to assess empirically whether the productivity of both components of health are equal. Evidence from Ghana, Cote d’Ivoire and Brazil suggest that the health human capital effect on wages is substantially larger than that associated with residual health variation.
    Keywords: health human capital, wage productivity, Brazil-Ghana-Cote D’Ivoire
    JEL: I12 J24 O12
    Date: 2005–01
  23. By: Kilby, Christopher (Vassar College Department of Economics)
    Abstract: One of the policy reforms promoted by the World Bank in recent decades is to reduce the often burdensome level of regulation by developing country governments and thus promote a reorientation from highly regulated and centrally controlled to deregulated and market-based economies. Indeed, poor growth performance and balance of payments problems on their own might well necessitate this transformation. Does World Bank lending promote deregulation with stronger incentives and critical resources (finance and advice) or slow the process by blunting the impact of crises and indirectly promoting state control via development planning and government sponsored projects? This paper analyzes empirical links between aid flows and regulatory burden. Econometric estimates based on panel data for 83 aid receiving countries from 1970 to 2000 find that World Bank lending, while not specifically targeting high or low regulatory states, is linked to lower subsequent regulation. This link holds for multilateral donors more broadly while bilateral donor funds apparently fail to influence the level of regulation.
    Date: 2005–02
  24. By: Matias Braun; Claudio Raddatz
    Abstract: A well developed financial system enhances competition in the industrial sector by allowing easier entry. The impact varies across industries, however. For some, small changes in financial development quickly induce entry and dissipate incumbents’ rents, generating strong incentives to oppose improvement of the financial system. In other sectors incumbents may even benefit from increased availability of external funds. The relative strength of promoters and opponents determines the political equilibrium level of financial system development. This may be perturbed by the effect of trade liberalization in the strength of each group. Using a sample of 41 trade liberalizers Braun and Raddatz conduct an event study and show that the change in the strength of promoters vis-à-vis opponents is a very good predictor of subsequent financial development. The result is not driven by changes in demand for external funds, or by the success of the trade policy. The relationship is mediated by policy reforms, the kind that induces competition in the financial sector, in particular. Real effects follow not so much from capital deepening but mainly through improved allocation. The effect is stronger in countries with high levels of governance, suggesting that incumbents resort to this costly but more subtle way of restricting entry where it is difficult to obtain more blatant forms of anti-competitive measures from politicians. This paper—a product of the Investment and Growth Team, Development Research Group—is part of a larger effort in the group to understand the relation between finance and the macroeconomy.
    Keywords: Domestic Finance; International Economics; Macroecon & Growth
    Date: 2005–02–08
  25. By: Peter Glick (Cornell University); François Roubaud (DIAL (Développement, Institutions & Analyses de Long terme))
    Abstract: Whether EPZs are beneficial for development remains a subject to controversy. This paper analyzes part of the question, the labor market impacts, using unique time-series labor force survey data from a unique (for Africa) environment: urban Madagascar, in which EPZs grew very rapidly during the 1990s. Employment in the EPZs exhibits some basic patterns seen elsewhere in export processing industries of the developing world (predominance of young, semi-skilled female workforce). Taking advantage of microdata availability, we estimate earnings regressions to establish the sector wage premia. According to our estimates (which confirm results of other studies based on aggregate data), employment in EPZs represents a significant step up in pay for women who would otherwise be found in very poorly remunerated informal sector work. EPZs may have significant impacts on poverty because they provide relatively high wage opportunities for those with relatively low levels of schooling. Further, by disproportionately drawing women from the low wage sector informal sector (where the gender pay gap is very large) to the relatively well paid export processing jobs (where pay is not only higher but also similar for men and women with similar qualifications), EPZs have the potential to contribute substantially to improved overall gender equity in earnings in the urban economy. Finally, along many dimensions, jobs in the export processing zone are ‘high quality’ jobs, comparable to or even superior to other parts of the formal sector. Le rôle des zones franches d’exportation comme facteur de développement reste un sujet largement controversé. Cette étude tente de répondre à certains aspects de cette question liés au marché du travail à partir d’une série d’enquêtes emploi sans équivalent en Afrique dans un environnement tout aussi exceptionnel : les zones urbaines malgaches qui ont connu une croissance accélérée des entreprises franches au cours des années 1990. L’emploi en zone franche présente de nombreuses similitudes avec ce qui a pu être observé dans d’autres pays en développement (présence massive d’une main-d’oeuvre féminine et peu qualifiée). La mobilisation de données individuelles permet de conforter certains résultats obtenus par la plupart des études antérieures à partir de données agrégées. L’estimation de fonctions de gain montre que les entreprises franches procurent des emplois féminins mieux rémunérés que ceux qui auraient pu être obtenus dans le secteur informel, avec pour conséquence un impact substantiel sur la réduction de la pauvreté. De plus, en bénéficiant massivement à des femmes qui autrement auraient dû se contenter d’emplois dans le secteur informel, où les écarts de revenus entre hommes et femmes sont très importants, alors qu’ils ne sont pas significativement différents en zone franche, cette dernière contribue à réduire le gap de rémunération suivant le genre. Enfin, dans de nombreux domaines, la zone franche procure des emplois de qualité, comparables, sinon meilleurs, que ceux que fournissent les autres segments du secteur formel.
    Keywords: Madagascar, Zone Franche, discrimination salariale, genre,Export Processing Zone, Wage gap, Gender
    Date: 2004–12

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