nep-afr New Economics Papers
on Africa
Issue of 2006‒04‒08
five papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. Trade Technology and Employment: A case Study of South Africa By J. Paul Dunne; Lawrence Edwards
  2. Cross-Racial Envy and Underinvestment in South Africa By Daniel Haile; Abdolkarim Sadrieh; Harrie A. A Verbon
  3. The Elimination of Madagascar's Vanilla Marketing Board, Ten Years On By Cadot, Olivier; de Melo, Jaime; Dutoit, Laure
  4. PRATIQUES FINANCIERES DECENTRALISEES ET<br />RECOMPOSITION DES SYSTEMES FINANCIERS AFRICAINS<br /><br />L'évolution de la finance informelle et ses conséquences sur l'évolution des systèmes financiers By Michel Lelart
  5. On the Theory of Ethnic Conflict By Francesco Caselli; Wilbur John Coleman II

  1. By: J. Paul Dunne (School of Economics, University of the West of England); Lawrence Edwards (School of Economics, University of Cape Town)
    Abstract: This paper provides a comprehensive analysis of the impact of trade on employment in South Africa. Firstly, it considers the correlation between trade liberalisation and factor demand in South African manufacturing during the 1990s. Secondly, it investigates the impact of trade on labour using a Chenery (1979) style decomposition technique, following Edwards (2001a, 2001b, 2005b) and Jenkins (2002). It develops the earlier work by exploring both the indirect and the indirect effects and investigating variations in the regional impact of trade on factor demand during the 1990s. This suggests that technological change accounts for the bulk of jobs lost in manufacturing during the 1990s. To investigate, whether this reflects exogenous technological change or trade-induced technological change requires undertaking an econometric analysis and this explores the impact of trade on technological change through an induced labour demand model. This finds a strong effect of exogenous technological progress but only limited evidence that increased trade flows and trade liberalisation induced improvements in labour productivity.
    Keywords: Trade; technology; employment; industrial panel
    Date: 2006–03
  2. By: Daniel Haile; Abdolkarim Sadrieh; Harrie A. A Verbon
    Abstract: Trust games are employed to investigate the effect of heterogeneity in income and race on cooperation in South Africa. The amount of socio-economic information available to the subjects about their counterparts is varied. No significant behavioural differences are observed, when no such information is provided. However, when the information is available, it significantly affects individual trust behaviour. The low income subjects from both racial groups invest significantly less in partnerships with the high income subjects of the other racial group than in any other partnership. We attribute this behaviour to cross-racial envy, which on aggregate may lead to substantial underinvestment in the economy.
    Keywords: trust game, ethnic diversity, income inequality, cooperation
    JEL: C91 J15
    Date: 2006
  3. By: Cadot, Olivier; de Melo, Jaime; Dutoit, Laure
    Abstract: Commodity prices are usually very slow to recover from adverse shocks. This is one of the reasons why it has proven so difficult either to smooth their effect or to stabilize them, and why it is sometimes argued that they should behave as if shocks were permanent. There is no reason however why countries should not find ways to protect themselves. This paper develops one practical idea on how this could be done. Our goal is not to stabilize prices, but to smooth the income of the producers. Countries, we assume, should get protection against deviation of commodity prices from a moving average of past prices. This avoids the pitfalls of past stabilization that attempted to stabilize around a single price and yet our scheme gives countries time to adjust to permanent shocks. Over a period of a 50 years time horizon, we simulate that the median cost would be worth about six months of exports.
    Keywords: Madagascar; marketing board; poverty; vanilla
    JEL: F14 O11 O12
    Date: 2006–03
  4. By: Michel Lelart (LEO - Laboratoire d'économie d'Orleans - - [CNRS : UMR6221] - [Université d'Orléans] - [])
    Abstract: Les années 80 ont été marquées par l'émergence de la finance informelle. Depuis quelques années c'est la microfinance que l'on voit apparaître et progresser dans la plupart des pays en voie de développement, en Afrique, en Asie, en Amérique latine... <br /><br />Cet article s'interroge sur les raisons de cette évolution et de la montée en puissance des institutions de microfinance. Il analyse quelques-uns des problèmes posés par les nouvelles institutions : quelle réglementation leur appliquer, quelles peuvent être leurs relations avec les banques et leur place au sein des systèmes financiers...?
    Keywords: Finance informelle ; micro-finance ; micro-crédit
    Date: 2006–03–30
  5. By: Francesco Caselli; Wilbur John Coleman II
    Abstract: We present a theory of ethnic conflict in which coalitions formed along ethnic lines compete for the economy’s resources. The role of ethnicity is to enforce coalition membership: in ethnically homogeneous societies members of the losing coalition can defect to the winners at low cost, and this rules out conflict as an equilibrium outcome. We derive a number of implications of the model relating social, political, and economic indicators such as the incidence of conflict, the distance among ethnic groups, group sizes, income inequality, and expropriable resources.
    JEL: Z13
    Date: 2006–03

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