nep-afr New Economics Papers
on Africa
Issue of 2006‒07‒15
eleven papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. FDI, AGOA And Manufactured Exports From A Land-Locked, Least-Developed African Economy: Lesotho By Sanjaya Lall (QEH)
  2. Is African Industry Competing? By Sanjaya Lall (QEH)
  3. Educational attainment and intergenerational social mobility in South Africa By Megan Louw; Servaas van der Berg; Derek Yu
  4. Membership Based Indigenous Insurance Associationsin Ethiopia and Tanzania By Stefan Dercon (QEH), Joachim De Weerdt, Tessa Bold, Alula Pankhurst
  5. State Dependence and Causal Feedback of Poverty and Fertility in Ethiopia By Arnstein Aassve; Abbi M. Kedir; Habtu Tadesse Woldegebriel
  6. Income diversification in Zimbabwe : welfare implications from urban and rural areas By Ersado, Lire
  7. Livelihood Networks and Decision-making Among Congolese Young People in Formal and Informal Refugee Contexts in Uganda By Christina Clark
  8. Global redistribution of income By Rosenblatt, David; Levin, Victoria; Bourguignon, Francois
  9. Non-protected Labour in one West African Capital: Characteristics of Jobs and Occupational Mobility in Abidjan, Cote d'Ivoire By Yvan Guichaoua (CRISE/QEH)
  10. Causes of conflict in Sudan: Testing the Black Book By Alex Cobham (QEH)
  11. Counting the Deaths in Darfur: Estimating Mortality from Multiple Survey Data By Debarati Guha-Sapir; Olivier Degomme

  1. By: Sanjaya Lall (QEH)
    Abstract: Lesotho, a small, mountainous and resource poor country inside South Africa, has emerged as the largest and fastest growing exporter of apparel from Sub-Saharan Africa to the US. Its rapid manufacturing growth has been driven by inflows of export-oriented foreign direct investment. This paper explores this unusual experience against the setting of the dismal record of industrial growth and competitiveness in Sub-Saharan Africa. It traces the origins of apparel-based FDI in Lesotho and the critical role of trade preferences in stimulating its exports and notes the limited integration of foreign affiliates into the local economy. The recent export spurt reflects first mover advantages in apparel manufacture, but long-term prospects, after trade preferences, remain dubious unless there is a significant improvement in skills and productivity. The experience has important policy lessons for the Lesotho government, foreign investors and international community in terms of stimulating competitive industrial development in Africa.
  2. By: Sanjaya Lall (QEH)
    Abstract: Africa's industrial performance has been poor and its ability to industrialize successfully is under increasing question. This paper argues that industrialization remains vital to African development. It describes the current global industrial setting and analyses the recent performance of African manufacturing relative to that of other developing regions. It finds that Africa is becoming increasingly marginal to the technological dynamics of global economy. It shows few signs of a responding to the competitive stimulus of liberalization or of attracting more mobile foreign productive factors. It analyses the reasons for this performance and argues that the basic problem of African industry lies not in the investment climate (which can certainly be improved) or in gaining market access to rich countries (which is already very good for manufactures, and has improved with initiatives like AGOA) but in the low level of its industrial capabilities. The paper concludes with the need to reconsider current African industrial strategy and to evolve a new strategy focused on building capabilities.
  3. By: Megan Louw (Department of Economics, Stellenbosch University); Servaas van der Berg (Department of Economics, Stellenbosch University); Derek Yu (Department of Economics, Stellenbosch University)
    Abstract: To a large degree, the notoriously high levels of income inequality in South Africa have their roots in differential access to wage-earning opportunities in the labour market, which in turn are influenced by family background. This paper therefore investigates the role that parents’ education plays in children’s human capital accumulation. The study analyses patterns of educational attainment in South Africa during the period 1970-2001, asking whether intergenerational social mobility has improved. It tackles the issue in two ways, combining extensive descriptive analysis of progress in educational attainment with more a formal evaluation of intergenerational social mobility using indices constructed by Dahan and Gaviria (2001) and Behrman, Birdsall and Szekely (1998). Both types of analysis indicate that intergenerational social mobility within race groups improved over the period, with the indices suggesting that South African children are currently better able to take advantage of educational opportunities than the bulk of their peers in comparable countries. However, significant racial barriers remain in the quest to equalise educational opportunities across the board for South African children.
    Keywords: Analysis of education, intergenerational mobility
    JEL: I21
    Date: 2006
  4. By: Stefan Dercon (QEH), Joachim De Weerdt, Tessa Bold, Alula Pankhurst
    Abstract: Indigenous insurance associations are a prevalent form of membership based organisations of the poor, at least in the rural areas in Ethiopia and Tanzania surveyed by the authors. Results show how villagers with few links to any formal kind of insurance market have established membership-based indigenous insurance associations to protect themselves against unexpected expenditures, mainly for funerals and hospitalisation. Many of these institutions tend to co-exist within the same community and are based on well-defined rules and regulations, well beyond informal reciprocal relations. They tend to offer premium-based insurance for funeral expenses, as well as, in many cases, other forms of insurance and credit to help address hardship. These groups are completely owned and managed by their members. They were locally initiated and have been continually developing through the actions of their own members, without involvement from the government or donors. Using detailed group membership data linked to household survey data we show that (i) these institutions are widely prevalent in the surveyed areas, (ii) households typically belong to several groups at the same time, (iii) they display a large degree of inclusiveness and (iv) they insure an important part of some shocks, but still leave households prone to the effects of risk
  5. By: Arnstein Aassve; Abbi M. Kedir; Habtu Tadesse Woldegebriel
    Abstract: The paper implements simultaneous random effect models as a means to analyse causality issues related to poverty and fertility in Ethiopia, a country which is plagued by high and persistent poverty and very high fertility rates in rural areas. Using longitudinal data from both urban and rural areas of Ethiopia, we analyse the relationship between childbearing and poverty. In addition to identifying state dependence in poverty and fertility, we investigate to what extent fertility act as a feedback mechanism leading to higher poverty and vice versa. We find that poverty itself has little effect on fertility, whereas there is evidence of state dependence in poverty and important feedback from fertility on future poverty. Not unexpected, we find substantial differences between rural and urban areas.
    Date: 2006–06
  6. By: Ersado, Lire
    Abstract: The author examines, taking into account the urban-rural divides, the changes and welfare implications of income diversification in Zimbabwe following macroeconomic policy changes and droughts of the early 1990s. Data from two comparable national income, consumption and expenditure surveys in 1990-91 and 1995-96, which straddled a period of economic volatility and natural disasters, show that the percentage of households earning income from private and informal sources grew considerably, while that from government and formal sources declined in the aftermath of the drought and policy changes. The author finds that, in general, rural households tend to have a more diversified portfolio of income compared with their urban counterparts, and the degree of diversification decreases with the level of urbanization. However, there are important differences in the level of diversification within the rural and urban areas depending on wealth: While the relatively better-off households have a more diversified income base in rural areas, it is the poor who pursue multiple income sources in urban areas. A decomposition of changes in welfare indicates that the total contribution of income diversification is large and increased between 1990-91 and 1995-96 in both urban and rural areas. On the other hand, there were significant declines in returns to human and physical capital assets during the same period. The findings suggest that households with a more diversified income base are better able to withstand the unfavorable impacts of the policy and weather shocks. The fact that relatively better-off households have a more diversified income base following the shocks implies that the poor are more vulnerable to economic changes unaccompanied by well-designed safety nets.
    Keywords: Rural Poverty Reduction,Inequality,Poverty Diagnostics,Economic Theory & Research
    Date: 2006–07–01
  7. By: Christina Clark (Queen Elizabeth House, University of Oxford)
    Abstract: Refugee young people who are without their biological parents are often assumed to be among the most disempowered members of displaced populations. This paper interrogates this assumption by exploring Congolese young people’s access to decision-making in a variety of household contexts in Kampala and Kyaka II refugee settlement, western Uganda. Using a network approach to household and family, research findings reveal shrinking networks, increasing delinkage between household and family, and a greater importance of households in the refugee context. These changes have resulted in the advent of households headed by young people and composed of young peers, as well as an increasing number of young people who are members of households outside of traditional family networks. Contrary to assumptions in much of the refugee literature, policy and programming, young people in these situations have greater access to decision-making at household, community and policy levels, thus showing that conflict-induced displacement has created opportunities as well as challenges for some refugee young people.
    Date: 2006–02
  8. By: Rosenblatt, David; Levin, Victoria; Bourguignon, Francois
    Abstract: The actual distribution of world income across countries is extremely unequal, much higher than the within country inequality faced by most countries. The question studied in this paper is: How do international policies on aid, trade, and factor movements affect the international distribution of income? To begin to answer this question, the authors calculate the impact by decile of the actual level of aid flows and the effect on potential income of merchandise trade restrictions by high-income countries. They find that aid ' s distributional impact is equality enhancing. While it is extremely small in terms of changes in standard inequality measures, it is of some importance for the lowest decile of the world ' s income distribution. The authors also find that some of this impact is counteracted by lost potential income in the lower deciles from merchandise trade barriers imposed by high-income countries. In brief, there is a contradiction in international policies where aid ' s equality-enhancing effect is somewhat offset by protectionism. They also discuss some of the analytical difficulties with extending this analysis of redistribution to other forms of international factor flows-more specifically, migrant worker and profit remittances. The analysis presented is partial and static and ignores within country distribution. As such, the authors suggest that future research should explore the distributional consequences of the broader general equilibrium effects, dynamic effects, and externalities associated with aid, trade, and factor flows. Future research should also analyze the within country distributional impacts of international policies.
    Keywords: Economic Theory & Research,Inequality,Country Strategy & Performance,Poverty Impact Evaluation,Population Policies
    Date: 2006–07–01
  9. By: Yvan Guichaoua (CRISE/QEH)
    Abstract: The microeconomic analysis of labour mobilisation and labour relationships in developing countries, though diverse in its hypotheses, methods and results, still nurtures the idea of dualistically segmented labour markets. This binary rural/urban segmentation leaves in the dark an important stratum of developing countries' labour markets, namely the urban informal sector. How does this huge group of unprotected workers gain access to jobs? Do labour relations comprise a social security dimension? We focus on the contractual forms that unregistered employment relationships take. We successively explore the content of employment relationships and compare it to existing classifications. We also assess the role of friends and families in accessing jobs and the changing social embeddedness over time of labour arrangements to highlight the crucial importance of interpersonal ties for informal work trajectories.
  10. By: Alex Cobham (QEH)
    Abstract: The Black Book of Sudan claims to identify a pattern of political control - by people of its northern regions - which is unbroken during the post-independence period. This is the basis for the view of many of the rebels in the south and west of the country that the conflicts are the result not of racial or religious discrimination but rather of regional marginalisation. This paper uses the available data to evaluate the extent to which differences in regional access to power have resulted in differential human development progress. Indicators ranging from infant mortality to adult literacy, coupled with data on regional expenditure allocations, offer substantial support to the idea that policy has discriminated against the population of the southern and western regions, not least Darfur. The danger is that development community efforts that do not recognise the basis for the conflict may facilitate a continuation of the same distortions and sow the seeds for future conflict even before peace is achieved.
  11. By: Debarati Guha-Sapir (WHO Collaborating Centre for Research on Disaster Epidemiology (CRED), School of Public Health, Université Catholique de Louvain); Olivier Degomme (WHO Collaborating Centre for Research on Disaster Epidemiology (CRED), School of Public Health, Université Catholique de Louvain)
    Date: 2006–04

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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