nep-afr New Economics Papers
on Africa
Issue of 2006‒01‒29
seven papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. Forecasting investment needs in South Africa ' s electricity and telecommunications sectors By Fedderke, Johannes W.; Bogetic, Zeljko
  2. International benchmarking of South Africa ' s infrastructure performance By Fedderke, Johannes W.; Bogetic, Zeljko
  3. Clientelism and Aid By Casamatta, Georges; Vellutini, Charles
  4. Exploring the linkages between poverty, marine protected area management, and the use of destructive fishing gear in Tanzania By Silva, Patricia
  5. Impact analysis of cotton subsidies on poverty: A CGE macro-accounting approach applied to Mali By Dorothée Boccanfuso; Luc Savard
  6. Does the group leader matter? The impact of monitoring activities and social ties of group leaders on the repayment performance of groupbased lending Eritrea By Hermes, Niels; Lensink, Robert; Mehrteab, Habteab T.
  7. Understanding the microenterprise sector to design a tailor-made microfinance policy for Cape Verde By José A. G. Baptista; Jacinto Vidigal da Silva; Joaquim J.S. Ramalho

  1. By: Fedderke, Johannes W.; Bogetic, Zeljko
    Abstract: The authors use a panel-data set for the period 1980-2002 to estimate demand for electricity and telecommunications services and project investment needs in South Africa through 2010 for two growth scenarios. Projections of average annual investment needs in electricity and telecommunications for the current growth scenario (3.6 percent a year) are of the order of 0.2 percent and 0.75 percent of GDP, respectively. An alternative, accelerated growth scenario (6 percent a year) implies approximate doubling of investment needs in these sectors.
    Keywords: Economic Theory & Research,Investment and Investment Climate,Banks & Banking Reform,Pro-Poor Growth and Inequality,ICT Policy and Strategies
    Date: 2006–02–01
  2. By: Fedderke, Johannes W.; Bogetic, Zeljko
    Abstract: The paper provides a first systematic, comprehensive benchmarking of South Africa ' s infrastructure performance in four major sectors--electricity, water and sanitation, information and communication technology, and transportation--against the relevant group of comparator countries using a new World Bank international data base with objective and perception-based indicators of infrastructure performance from over 200 countries. Specifically, the paper seeks to answer a number of relevant questions: How does South Africa compare on major indicators of infrastructure sector performance against the relevant country groups? What do outcome indicators tell us about the relative strengths and weaknesses of South Africa ' s infrastructure compared with various income and geographical comparator groups of countries? Where are the largest deviations-positive and negative-from the benchmarks and other comparators? And how does one interpret some of these comparisons to be useful for policy purposes?
    Keywords: Infrastructure Regulation,Economic Theory & Research,Income,Poverty Monitoring & Analysis,Economic Conditions and Volatility
    Date: 2006–02–01
  3. By: Casamatta, Georges; Vellutini, Charles
    Abstract: Using a model of probabilistic voting, we analyse the impact of aid on the political equilibrium in the recipient country or region. We consider two kinds of politicians: the benevolent one is interested in promoting social welfare whereas the other one is clientelistic, his only goal being to maximize his chances of being elected. We find that the impact of aid on the political equilibrium and therefore on the quality of the policy (using the utilitarian social welfare as a benchmark) in the recipient country ultimately depends on the value of the elasticity of marginal consumption, which governs how the sensitivity of voters to a clientelistic allocation of resources (over a socially optimal one) varies with the level of consumption. When the elasticity is low, the probability that the clientelistic politician be elected increases and the expected policy outcome gets further away from the socially desirable policy set. This case of substitution of policy quality by aid can help to explain the poor performance of conditionality in improving policy. Perhaps more surprising is the opposite case, which arises for high values of the elasticity of marginal utility: an increase in aid worsens the clientelistic candidate’s election prospects and thus improves the expected policy set.
    Keywords: aid; clientelism; voting
    JEL: D72 H23 H41 H71
    Date: 2006–01
  4. By: Silva, Patricia
    Abstract: Coastal resources in Tanzania have come under increasing pressure over the past three decades, which has led to a significant decline in the biodiversity and productivity of coastal ecosystems. The livelihoods of coastal communities that directly depend on these resources are consequently under increasing threat and vulnerability. Marine protected areas (MPAs) are one tool for managing coastal and marine resources that have been increasingly used in Tanzania. Promotion of alternative income generating activities (AIGAs) is often a component of MPA management strategies to reduce fishing pressure and address poverty concerns. However, empirical evidence on whether these AIGAs are successful in reducing pressure on fisheries, or their impact on poverty, is scarce and inconclusive. This paper seeks to contribute to this debate by investigating the linkages between household characteristics, MPA activities, and household choice of fishing gear. The empirical analysis is based on household survey data from a sample of villages located along the coast of mainland Tanzania and Zanzibar. The author finds that some aspects of poverty increase the likelihood of using destructive fishing gear. MPAs do not directly affect household choice of fishing gear. However, households participating in AIGAs are less likely to use destructive fishing gear, suggesting that MPA support to these activities in Tanzania has a positive influence on household choice of fishing gear. The author also finds the use of destructive fishing gear is associated with higher consumption levels, whereas participation in AIGAs does not significantly affect household consumption levels.
    Keywords: Water Conservation,Environmental Economics & Policies,Fishing Industry,Wildlife Resources,Coastal and Marine Resources
    Date: 2006–02–01
  5. By: Dorothée Boccanfuso (GREDI, Faculte d'administration, Université de Sherbrooke); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke)
    Abstract: In this paper, we construct the first country specific CGE model for Mali with a micro-simulation component to analyze the poverty and inequality changes of removing cotton subsidies in developed countries. We used the macro-accounting approach proposed by Chen and Ravallion (2004). This issue has attracted significant attention as is has contributed to stall the broader trade agenda. Research on the issue has been mainly done with partial equilibrium analysis with a few exceptions. We use the first CGE-micro-simulation model to investigate. A 17 sectors CGE model with almost 5000 households is used to demonstrate that removal of subsidies on cotton will contribute to significant decrease in poverty in Mali. Our results show that combining the cotton subsidies removal to other agricultural subsidies does not attenuate the positive effects observed. We also show that the subsidies removal would marginally contribute to decrease inequality in Mali.
    Keywords: computable general equilibrium model, micro-simulation, poverty analysis, income distribution, agricultural subsidies
    JEL: D58 D31 I32 Q17
    Date: 2006
  6. By: Hermes, Niels; Lensink, Robert; Mehrteab, Habteab T. (Groningen University)
    Abstract: This paper analyzes whether the effects of monitoring and social ties of the group leader and other group members on repayment performance of groups differ, using data from an extensive questionnaire held in Eritrea among participants of 102 groups. We hypothesize that the monitoring activities and social ties of the group leader have a stronger positive impact on the repayment performance of groups. The results show that social ties of the group leader do have a positive effect on repayment performance of groups, whereas this is not true for social ties of other group members. We do not find evidence for the hypothesis that monitoring activities of the group leader have a stronger positive impact on group repayment performance. All variables measuring monitoring activities, either of the group leader or the other group members, are found to be statistically insignificant.
    Date: 2005
  7. By: José A. G. Baptista (Banco de Cabo Verde); Jacinto Vidigal da Silva (Department of Mangment, University of Évora); Joaquim J.S. Ramalho (Department of Economics, University of Évora)
    Abstract: Two of the central challenges faced by Cape Verde at the present are the high level of unemployment and the increasing proportion of the population that lives below the poverty line. Microenterprise development can be an effective means of addressing both problems in a developing country like Cape Verde, where microenterprises account for about 50% of employment. In this paper we provide a detailed profile of micro firms’ owners and investigate the relationship between their characteristics and the resort to outside seed capital. We find a cluster of factors - the microentrepreneur’s age, gender, level of education and reason for being self-employed - which influence significantly the probability of being in need for external startup capital. The policy implications of these findings for the design of a specific microfinance program for Cape Verde are discussed.
    Keywords: Cape Verde; Microfinance; Microenterprise; Microcredit; Poverty
    JEL: O18 G32
    Date: 2006

This nep-afr issue is ©2006 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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