nep-afr New Economics Papers
on Africa
Issue of 2007‒04‒14
eight papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. ‘Two Million Net New Jobs’: A Reconsideration of the Rise in Employment in South Africa, 1995-2003 By Daniela Casale; Colette Muller; Dorrit Posel
  2. Does Oil Corrupt? Evidence from a Natural Experiment in West Africa By Pedro C. Vicente
  3. Smallholder Household Maize Production and Marketing Behavior in Zambia: Implications for Policy By Ballard Zulu; T.S. Jayne; Margaret Beaver
  4. Market Failure, Human Capital, and Job Search Dynamics in South Africa: The Case of Duncan Village By Patrick Duff; David Fryer
  5. The Effect of Minimum Wages on the Employment and Earnings of South Africa’s Domestic Service Workers By Tom Hertz
  6. Is Vote Buying Effective? Evidence from a Randomized Experiment in West Africa By Pedro C. Vicente
  8. Why Isn’t the Doha Development Agenda More Poverty Friendly? By Hertel, Thomas; Keeney, Roman; Ivanic, Maros; Winters, Alan

  1. By: Daniela Casale; Colette Muller; Dorrit Posel (Division of Economics,University of Kwa-Zulu Natal)
    Abstract: Abstract: In this paper we investigate labour market trends in South Africa between October 1995 and March 2003. In particular, we evaluate the South African governments claim that over this period, the economy created two million net new jobs. Using the same household survey data as that used to generate official employment estimates, we also find an almost two million net increase in employment. However, we show that this increase is likely to have been inflated by changes in data capture and definitions of employment over the years, and that the real increase may be considerably less, with a lower bound of approximately 1.4 million jobs. We argue further that the rise in employment over the period must be evaluated in the context of a dramatically larger growth in labour supply and therefore rising rates of unemployment, declining real earnings, and an increase in the number of the working poor, particularly among Africans.
    Keywords: labour market trends, rising rates of unemployment, declining real earnings, working poor
    JEL: A1
    Date: 2005–08
  2. By: Pedro C. Vicente
    Abstract: This paper explores an oil discovery natural experiment to assess the role of natural resources in determining corruption. We argue that an anticipated oil boom may increase corruption by boosting the value attributed by an elite to being in power when the actual oil exploration begins. We test this proposition by analyzing the impact of the oil discovery announcements that took place in 1997-99 in Sao Tome and Principe (West Africa). For this objective we conducted purposedly-designed household surveys on perceived corruption in the public services/sector. These were carried out in Sao Tome and Principe and in Cape Verde, a control West African country sharing strong cultural ties and important contemporary economic/political shocks. The unique survey instrument was retrospective and used personal histories to elicit memories from the respondents. Urban subjects, public officials, and respondents with higher reported experience with the services/issues at stake are used as internal treatment groups. Comparisons are also made with corresponding groups in Cape Verde. In addition, the regressions control for well-known `good old times` bias: this is done by using data from direct questions on optimism and from the inclusion of a `placebo` period (when no major occurrence had arisen). We conclude that a clear increase in perceived corruption has occurred in Sao Tome and Principe in recent years, ranging from 21 to 38% of the subjective scale. Consistently with our theoretical mechanism, which underlines the importance of being in power when the oil boom occurs, these effects are most robust in vote buying, education, and state jobs.
    Keywords: Corruption, Influence, Political Economy, Natural Resources, Oil, West Africa
    JEL: D73 O13 O55 P16
    Date: 2007
  3. By: Ballard Zulu (Department of Agricultural Economics, Michigan State University); T.S. Jayne (Department of Agricultural Economics, Michigan State University); Margaret Beaver (Department of Agricultural Economics, Michigan State University)
    Abstract: CSO/MACO nationally-representative rural surveys provide important insights on smallholder crop marketing behavior from the 2001 and 2004 harvests. Only about 25 percent of smallholder farmers in Zambia sold maize in both seasons, and about 15-20 percent of smallholders sold fresh horticulture as well as groundnuts, with 11-13 percent selling cassava. From 6-10 percent of farmers produced and sold cotton. Overall, Zambian smallholder agriculture has become more diversified over the past decade, with maize, cassava, groundnuts, cotton, horticultural crops, and animal products all becoming important sources of cash revenue as well as production for home consumption (except, of course, cotton). Importantly in both seasons studied, horticulture crop sales are roughly equivalent to the value of maize sales nationwide There is substantial variation in farm income and off-farm income across small farm households, owing to disparities in landholding size, other productive assets, and variables affecting access to markets. Two percent of all smallholder farms nationwide accounted for over 40% of all the maize sold by smallholder households in Zambia in 2000/01 and 2003/04. This same two percent of smallholder households also accounted for about 17% and 20% of the total value of all crop sales of the smallholder sector. Poverty reduction policy options are severely constrained by these production and marketing patterns especially if operating though programs that raise market prices for sellers and buyers.
    Keywords: food security, food policy, Zambia, maize, production, marketing
    JEL: Q20
    Date: 2007
  4. By: Patrick Duff; David Fryer (Department of Economics and Economic History, Rhodes University)
    Abstract: Abstract: This paper argues that the economic literature on unemployment and poverty in South Africa has under-explored potentially important feedback mechanisms which, because they serve to change the structure of labour markets and affect human capital trajectories, serve to endogenise labour market exclusion. Using a tailor-made database from Duncan Village, East London, this paper probes such processes, focussing around the question of job search. The evidence presented suggests that endogenous factors generating labour market exclusion are important in locking-in exclusion, and suggests that macro-micro linkages need to be further considered.
    Keywords: macro-micro linkages, unemployment and poverty
    JEL: A1
    Date: 2005–09
  5. By: Tom Hertz (Department of Economics,American University)
    Abstract: Abstract: Minimum wages have been in place for South Africa’s one million domestic service workers since November of 2002. Using data from seven waves of the Labour Force Survey, this paper documents that the real hourly wages, average monthly earnings, and total earnings of all employed domestic workers have risen since the regulations came into effect, while hours of work per week and employment have fallen. Each of these outcomes can be linked econometrically to the arrival of the minimum wage regulations. The overall estimated elasticities suggest that the regulations should have reduced poverty somewhat for domestic workers, although this last conclusion is the least robust.
    Keywords: Minimum wages, domestic service workers, real hourly wage, average monthly earning
    JEL: A1
    Date: 2005–10
  6. By: Pedro C. Vicente
    Abstract: Vote buying is a frequent practice during election time in many parts of the world. But no research has been done to quantify its effects on voters` electoral behavior. To address this challenge, we have designed and conducted a randomized experiment during the presidential elections of July 2006 in Sao Tome and Principe. This is a newly found oil-rich West African country that has been facing an increase in `retail` vote buying. Our research design included a randomized campaign against vote buying sponsored by the Electoral Commission of the country, and pre-electoral campaign/post-election panel surveys in treatment (exposed to the campaign) and control locations, including 1034 subjects across 50 different areas. We observe a significant effect of the campaign on perceptions of vote buying, which constitutes the exogenous variation we use to identify effects on voting behavior. We characterize determinants of vote buying (more frequent in swing and rural locations), and find that vote buying energizes the electorate by increasing turnout. Crucially, we capture real effects on candidates` relative performance, by identifying the challenger to be driving more votes through vote buying (after the treatment), which is consistent with the timeline of events (late challenger candidacy). This result controls for changes in information about the candidates (e.g. policy platforms) and location-specific minutes spent by international electoral observers.
    Keywords: Vote Buying, Electoral Politics, Political Economy, Randomized Experiment, West Africa
    JEL: D72 O55 P16
    Date: 2007
  7. By: Yusuf, Adesina Sulaiman; Edom, Cyprian .O
    Abstract: Abstract This study analyzed the factors influencing the exports of timber in Nigeria with the aid of Error Correction Model (ECM) representation procedures. The analysis was carried out with the data collected on roundwood and sawnwood over 33 years (1970 – 2003) using the long run restricted ECM. The statistical significance of the ECM terms for roundwood (-1.110) and sawnwood (-1.772) validates the existence of relationship among the variables. This suggests the short run dynamic effect of the changes in export quantities of roundwood are determined by one-year lagged export quantity of roundwood & domestic output-consumption ratio of roundwood, domestic output-consumption ratio of roundwood and domestic-international price ratio of roundwood, while that of sawnwood is determined by lagged values of the official exchange rate, domestic consumption-output, domestic consumption-output and world export-output ratios of the sawnwood. Efforts to boost timber export from Nigeria needs to incorporate policy measures that will improve the quantity and quality of timber products in order to meet the local and foreign demands.
    Keywords: Roundwood; Sawnwood; Nigeria; Exports; Co-integration and Error-correction model
    JEL: F4
    Date: 2007–04–01
  8. By: Hertel, Thomas; Keeney, Roman; Ivanic, Maros; Winters, Alan
    Abstract: The breakdown of the WTO negotiations under the Doha Development Agenda has inspired critics to highlight the lack of effort on the part of rich countries to reform their agricultural policies. In this paper, we focus instead the poverty impacts of developing country tariff cuts - particularly those in agriculture. We argue that the Doha Development Agenda is fundamentally less poverty-friendly than it could be -- in large part due to the absence of tariff cuts on staple food products in developing countries. Such cuts would give the poor access to food at world prices, thereby reducing the cost of living at the poverty line. We also explore the contention that such tariff cuts will hurt the poor working in agriculture. Based on our analysis of the impacts of multilateral trade policy reforms on a sample of fifteen developing countries, we find there is some evidence of poverty increases in agriculture. However, such effects are minimized by ensuring that agricultural tariffs are cut in all developing countries. Overall, the poverty-reducing impact of lower food prices dominates; we conclude that the Doha Development Agenda would be more poverty friendly if it were to include deeper cuts in developing country agricultural tariffs. This contrasts sharply with calls for special products exemptions by many developing country advocates.
    Date: 2007

This nep-afr issue is ©2007 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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