nep-afr New Economics Papers
on Africa
Issue of 2005‒08‒13
ten papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. Aid and Growth: What Does the Cross-Country Evidence Really Show? By Raghuram G. Rajan; Arvind Subramanian
  2. Price Liberalization and Farmer Welfare Under Risk Aversion: Cotton in Benin and Ivory Coast By Paul MAKDISSI; Quentin WODON
  3. Farm Productivity and Market Structure. Evidence From Cotton Reforms in Zambia By Irene Brambilla; Guido G. Porto
  5. When is Economic Growth Pro-Poor? Evidence from Tunisia By Sami Bibi
  6. Determinants of Agricultural and Non-Agricultural Livelihood Strategies in Rural Communities: Evidence from Eastern Nigeria By A. Bongo Adi
  7. EXTENSIONS OF DAGUM’S GINI DECOMPOSITION By Stéphane Mussard; Pi Alperin María Noel; Françoise Seyte; Michel Terraza
  8. Extending Insurance? Funeral Associations in Ethiopia and Tanzania By Tessa Bold; Joachim De Weerdt; Stefan Dercon; Alula Pankhurst
  9. Globalization and Domestic Conflict By Michelle R. Garfinkel; Stergios Skaperdas; Constantinos Syropoulos
  10. ODA and Investment for Development: What Guidance Can Be Drawn from Investment Climate Scoreboards? By Hans Christiansen

  1. By: Raghuram G. Rajan; Arvind Subramanian
    Abstract: We examine the effects of aid on growth--in cross-sectional and panel data--after correcting for the bias that aid typically goes to poorer countries, or to countries after poor performance. Even after this correction, we find little robust evidence of a positive (or negative) relationship between aid inflows into a country and its economic growth. We also find no evidence that aid works better in better policy or geographical environments, or that certain forms of aid work better than others. Our findings, which relate to the past, do not imply that aid cannot be beneficial in the future. But they do suggest that for aid to be effective in the future, the aid apparatus will have to be rethought. Our findings raise the question: what aspects of aid offset what ought to be the indisputable growth enhancing effects of resource transfers? Thus, our findings support efforts under way at national and international levels to understand and improve aid effectiveness.
    Date: 2005–08
  2. By: Paul MAKDISSI (D´epartement d’´economique and CEREF, Universit´e de Sherbrooke, 2550 boulevard de l’Universit´e, Sherbrooke, Québec, Canada, J1K 2R1); Quentin WODON (LCSPR, World Bank, 1818 H Street, NW, Washington, DC 20433, USA)
    Abstract: Commodity producers in Africa often bene?t from guaranteed and relatively stable prices for their crops. This paper shows how to estimate the required increase in crop price necessary to o¤set the higher risk for farmers that price liberalization would entail due to large variations over time in world commodity prices.
    Keywords: Cotton, Price liberalization, Risk Aversion, Poverty, Benin, Ivory Coast.
    JEL: D81 D63 I30 O13
    Date: 2004
  3. By: Irene Brambilla (Economic Growth Center, Yale University); Guido G. Porto (The World Bank)
    Abstract: This paper investigates the impacts of cotton marketing reforms on farm productivity, a key element for poverty alleviation, in rural Zambia. The reforms comprised the elimination of the Zambian cotton marketing board that was in place since 1977. Following liberalization, the sector adopted an outgrower scheme, whereby firms provided extension services to farmers and sold inputs on loans that were repaid at the time of harvest. There are two distinctive phases of the reforms: a failure of the outgrower scheme, and a subsequent period of success of the scheme. Our findings indicate that the reforms led to interesting dynamics in cotton farming. During the phase of failure, farmers were pushed back into subsistence and productivity in cotton declined. With the improvement of the outgrower scheme of later years, farmers devoted larger shares of land to cash crops, and farm productivity significantly increased.
    Keywords: cotton marketing reforms, farm productivity
    JEL: O12 O13 Q12 Q18
  4. By: Dorothée BOCCANFUSO (Université de Sherbrooke, Département d’économique – Faculté d’administration); Tambi Samuel KABORE (CEDRES, UFR-SEG-Université de Ouagadougou, 01 BP 6693 Ouaga 01)
    Abstract: Economic growth generally refers to GDP growth. The studies on the link between growth and poverty dynamic (Datt and Ravallion, 1992; Kakwani, 1997; Shorrocks, 1999) measure growth by mean household per capita expenditures. Furthermore, many countries experience at the same time economic growth and growing poverty. It is therefore important to establish a link between these two types of growth. This key link allows a formal shift from macroeconomic growth (GDP growth) to mean per capita household expenditure growth. The purpose of this paper is to discuss the link between macroeconomic growth and mean per capita household expenditure growth with the evidence drawn from Burkina Faso data. The paper also analyzes the impact of sectoral growth on poverty using Shapley value-based decomposition approach. National Accounts consumption - which is smaller - gives greater poverty incidences for 1994 and 1998 compared to the incidence from the surveys’ consumption. An annual 3.99% increase in real per capita consumption based on the survey gives a 13.37% decrease in poverty incidence, while a 6.59% annual growth in GDP yields only 6.59% decrease in poverty incidence. Agricultural sector growth accounts for at least 80% of the decline in poverty incidence, gap and severity.
    Keywords: Growth, Poverty decomposition, Shapley Value, Burkina Faso
    Date: 2004
  5. By: Sami Bibi
    Abstract: Many empirical studies have shown that economic growth generally leads to a drop in poverty. These studies have also pointed out that a given growth rate is compatible with a large range of outcomes in terms of poverty reduction. This means that growth is more pro-poor in certain cases than in others. Using complete and partial poverty orderings, this paper suggests a measure which captures the extent to which economic growth is pro-poor. This measure decomposes poverty changes into two components: the relative variation in the average income of the poor and the relative variation in the overall inequality within the poor. Evidence from Tunisia shows that economic growth was to a large extent pro-poor during the last two decades.
    Keywords: Poverty measurement, robustness analysis, economic growth, Tunisia
    JEL: D31 D63 I32 O40
    Date: 2005
  6. By: A. Bongo Adi (Regional Economic Development, Appropriate Technology & Sciences for Sustainable Development, University of Tsukuba, Japan)
    Abstract: Using primary survey data from two agro-ecologically distinct rural communities in eastern Nigeria, this paper examines the determinants of livelihood diversification away from agriculture as well as the manner in which different agro-ecological determinants affect such diversification. The probability of participating in non-agricultural activities was estimated in an endogeneity-controlled, two-step probit model employing data on household assets, demographics, human capital, as well as a proxy for differences in agro-ecology. Results show that not many households remain undiversified as they combine activities within farming, commerce, skilled non-farm and low skilled non-farm sectors. Both human capital and the agro-climactic variables were found to determine the nature of diversification. Against the backdrop of the recent deagrarianisation thesis, the study found that despite high incidence of diversification, agriculture is not in any significant decline. Policies thus should be aimed at both agricultural and non- agricultural activities. Policies based on the assumption that agriculture is no longer relevant will hurt farming and retard development.
    Keywords: Diversification, Livelihood strategies, subsistence agriculture, agro-ecology, south-eastern Nigeria.
    JEL: D1 D2 D3 D4
    Date: 2005–08–02
  7. By: Stéphane Mussard (GREDI, Université de Sherbrooke and Université de Perpignan); Pi Alperin María Noel (LAMETA, Université Montpellier I); Françoise Seyte (LAMETA, Université Montpellier I); Michel Terraza (LAMETA, Université Montpellier I)
    Abstract: The purpose of this paper is to extend Dagum’s Gini decomposition (“A New Approach to the Decomposition of the Gini Income Inequality Ratio”, Empirical Economics 22(4), 515-531, 1997a) following three types of theoretical modelisation. The first one deals with a “poor/non-poor” decomposition within a sub-group multilevel framework. The second one exhibits the multi-decomposition technique, that is, the combination of the sub-group and the income source decomposition. Finally, we provide a parametric multi-decomposition in order to capture different dimensions of income inequality within groups and between groups.
    Keywords: Gini, Income Source Decomposition, Multi-decomposition, Poverty, Sub-group Decomposition.
    JEL: D63 D31
    Date: 2005
  8. By: Tessa Bold; Joachim De Weerdt; Stefan Dercon; Alula Pankhurst
    Abstract: <P>This paper studies the development of indigenous insurance institutions set up to help cover the high costs of funerals, using evidence from rural areas in Tanzania and Ethiopia. Many of these institutions tend to co-exist within the same community and are based on well-defined rules and regulations, often offering premium-based insurance for funeral expenses, as well as, in many cases, other forms of insurance and credit to help address hardship. The paper argues that the characteristics and inclusiveness of these institutions make them well placed as models to broaden insurance provision and other development activities in these communities. In Ethiopia, there is some encouraging experience with using these institutions, as reviewed in this paper. However, the paper argues that their fragility as institutions is well illustrated by current pressures related to HIV/AIDS, as well as by their apparent resistance to engage more broadly with NGOs and government agencies. As a ...</P> <P>A partir de données recueillies dans des zones rurales d’Éthiopie et de Tanzanie, ce document s’intéresse aux organismes locaux d’assurance qui ont fait leur apparition pour aider les familles à assumer les frais d’obsèques, souvent très lourds. Reposant sur une réglementation bien établie, la plupart d’entre eux coexistent au sein d’une même communauté. Ils proposent souvent une assurance « frais d’obsèques » fondée sur les primes ainsi que, dans de nombreux cas, d’autres produits d’assurance et de crédit permettant de faire face à d’éventuels revers. Les caractéristiques et l’ouverture totale de ces établissements en font des modèles intéressants pour la mise en place, dans ces communautés, d’autres services d’assurance ou d’autres activités de développement. En Éthiopie, leur utilisation a donné lieu à plusieurs expériences prometteuses dont ce document rend compte. Pour autant, les pressions exercées aujourd’hui par l’épidémie de sida et l’apparente réticence de ces ...</P>
    Date: 2004–12
  9. By: Michelle R. Garfinkel (University of California-Irvine); Stergios Skaperdas (University of California-Irvine); Constantinos Syropoulos (Florida International University)
    Abstract: We examine how globalization affects trade patterns and welfare when conflict prevails domestically. We do so in a simple model of trade, in which a natural resource like oil is contested by competing groups using real resources ('guns'). Thus, conflict is viewed as ultimately stemming from imperfect property-rights enforcement. When comparing autarky with free trade in such a setting, the gains from trade have to be weighed against the possibly higher resource costs of conflict. We find that importers of the contested resource gain unambiguously. By contrast, exporters of the contested resource lose under free trade, unless the world price of the resource is sufficiently high. Regardless of what price obtains in the world market, countries tend to over-export the contested resource relative to what we would observe if there were no conflict; for some range of prices,the presence of conflict even reverses the country's comparative advantage. For an even wider range of prices, an increase in the international price of the contested resource reduces welfare, an instance of the 'natural resource curse.'
    Keywords: globalization, trade openness,property rights, enforcement, insecurity, civil war
    JEL: D30 D70 D72 D74 F10
    Date: 2005–07–28
  10. By: Hans Christiansen
    Abstract: <P>The present paper was prepared in the context of a joint project between the OECD Investment Committee (IC) and Development Assistance Committee (DAC) on Official Development Assistance and Investment for Development. It responds to discussions at the IC-DAC Workshop on Synergies between ODA and Foreign Direct Investment on 11 March 2004, during which participants opined that development agencies lack information about the quality of the investment climate in developing countries and the likely repercussions for direct investment.</P><P>The purpose of the present paper is threefold. First, it provides an overview of a variety of scoreboards for the investment climate that have been established by a number of actors, including the World Bank, UNCTAD and several private “think tanks”. Second, it documents their similarities and discrepancies in assessing the investment climates of developing, emerging and transition economies (henceforth jointly referred to as “developing countries”) ...</P>
    Date: 2004–11

This nep-afr issue is ©2005 by Suzanne McCoskey. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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