nep-afr New Economics Papers
on Africa
Issue of 2006‒12‒22
three papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. South African Trade Policy Matters: Trade Performance and Trade Policy By Lawrence Edwards; Robert Z. Lawrence
  2. Lowering Child Mortality in Poor Countries: The Power of Knowledgeable Parents By P Boone; Zhaoguo Zhan
  3. Does Trade Liberalisation Lead to Poverty Alleviation? a CGE Microsimulation Approach for Zimbabwe By Margaret Chitiga; Ramos Mabugu

  1. By: Lawrence Edwards; Robert Z. Lawrence
    Abstract: South African trade policy has exerted a major influence on the composition and aggregate growth of trade. In the Apartheid period, trade protection seriously impeded both exports and imports, and the economy depended on favorable global commodity price trends to avoid running into an external constraint. South Africa developed a comparative advantage in capital-intensive primary and manufactured commodities partly because of its natural resource endowments but also because the pattern of protection was particularly detrimental to exports of non-commodity manufactured goods. High and opaque tariffs seriously impeded export growth. When global commodity markets were weak, in combination with declining gold exports, this seriously constrained aggregate growth and dulled the response of exports to the weaker rand in the late 1980s. On the other hand, surcharges were effective in reducing imports. By contrast, trade liberalization in the 1990s not only increased imports but, by reducing both input costs and the relative profitability of domestic sales, also boosted exports. The growth in non-commodity manufactured sectoral exports as a result of liberalization was actually faster than sectoral imports. This evidence suggests that additional trade liberalization could well be part of the strategy to enhance export diversification. It points to the importance of policies that afford South African firms with access to inputs at world prices as well as a competitive real exchange rate.
    JEL: F1 F13
    Date: 2006–12
  2. By: P Boone; Zhaoguo Zhan
    Abstract: Why do over 20% of children die in some poor countries, while in others only 2% die? Weexamine this question using survey data covering 278,000 children in 45 low-income countries.We find that parents' education and a mother's propensity to seek out modern healthcare areempirically important when explaining child survival, while the prevalence of common diseases,along with infrastructure such as improved water and sanitation, are not. Using a GINIcoefficient we construct for treatment services, we find that public and private health systems are"equally unequal", that is, both tend to favor children in relatively well-off households, andneither appears superior at improving outcomes in very poor communities. These facts contrastwith a common view that a much-expanded public health sector is necessary to reduce childmortality. Instead, we believe the empirical evidence points to the essential role of parents asadvocates for their child's health. If we can provide better health knowledge and generaleducation to parents, a private healthcare sector can arise to meet demand. We provide evidencethat this alternative route to low mortality is indeed a reason behind the current success of manycountries with low child mortality, including Vietnam, Indonesia, Egypt, and the Indian state ofKerala. Finally, we calculate a realistic package of interventions that target education, healthknowledge and treatment seeking could reduce child mortality by 32%.
    JEL: I00 I1 I12 I18
    Date: 2006–10
  3. By: Margaret Chitiga; Ramos Mabugu
    Abstract: A CGE microsimulation model is used to study the poverty impacts of trade liberalization in Zimbabwe. A sample of 14006 households from a 1995 household survey is individually modeled in a CGE framework. The experiment performed is a 50 percent reduction in all import tariffs. The sectors with the highest initial tariffs are the non-export agriculture sectors and the most export-intensive sectors are found in agriculture and in mining. The halving of tariffs favors export-oriented sectors, mainly in agriculture, whereas industrial sectors are hardest hit by the increased import competition. As agriculture is intensive in unskilled labor and industry is intensive in skilled labor, unskilled wages rise relative to skilled wages. The consumer prices fall and this, together with increased unskilled wages, leads to a fall in poverty. The fall in the price of manufactured food, which is consumed mainly in urban areas, coupled with the large number of unskilled workers in these urban areas, explains why poverty falls more here than in rural Zimbabwe.
    Keywords: Computable General Equilibrium, Trade Liberalisation, Microsimulation, Poverty
    JEL: C68 D31 D58 I32
    Date: 2006

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