nep-afr New Economics Papers
on Africa
Issue of 2007‒06‒30
twenty-one papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. African Migration to Europe: Obscured Responsibilities and Common Misconceptions By Dirk Kohnert
  2. Have Pro-Poor Health Policies Improved the Targeting of Spending and the Effective Delivery of Health Care in South Africa? By Ronelle Burger; Christelle Grobler
  3. Cultures of Innovation of the African Poor: Common Roots, Shared Traits, Joint Prospects? On the Articulation of Multiple Modernities in African Societies and Black Diasporas in Latin America By Kohnert, Dirk
  4. A regional multiplier approach to estimating the impact of cash transfers: The case of cash aid in rural Malawi By Davies, Simon; Davey, James
  5. Sticking to the Facts: Official and Unofficial Stories about Poverty and Unemployment in South Africa By Charles Meth
  6. Capital Controls and Foreign Investor Subsidies Implicit in South Africa's Dual Exchange Rate System By Huizinga, Harry; Schaling, Eric; van der Windt, Peter C
  7. Climate change impacts on animal husbandry in Africa : a Ricardian analysis By Mendelsohn, Robert; Seo, Sungno Niggol
  8. The Economic Community of West African States : fiscal revenue implications of the prospective economic partnership agreement with the European Union By Nielsen, Lynge; Zouhon-Bi, Simplice G.
  9. HIV/AIDS and social capital in a cross-section of countries By David, Antonio C.
  10. The Impact of Foreign Direct Investment on Agricultural Productivity and Poverty Reduction in Tanzania By Msuya, Elibariki
  11. Nigeria ' s growth record : Dutch disease or debt overhang ? By van Wijnbergen, Sweder; Pang, Gaobo; Budina, Nina
  12. The cost of being landlocked : logistics costs and supply chain reliability By Marteau, Jean-Francois; Raballand, Gael; Arvis, Jean-Francois
  13. Consumption risk, technology adoption, and poverty traps : evidence from Ethiopia By Christiaensen, Luc; Dercon, Stefan
  14. Household Access to Microcredit and Child Work in Rural Malawi By Sudipta Sarangi; Gautam Hararika
  15. The Colonial Origins of Civil War By Simeon Djankov; Marta Reynal-Querol
  16. Power to the people : evidence from a randomized field experiment of a community-based monitoring project in Uganda By Svensson, Jakob; Bjorkman, Martina
  17. Island Status, Country Size and Institutional Quality in Former Colonies By Congdon Fors, Heather
  18. Le concept de rente appliqué aux économies de la région MENA. Pertinence et dérives By Fatiha Talahite
  19. On the Dynamics of Ethnic Fractionalization By Campos, Nauro F; Kuzeyev, Vitaliy
  20. Impact Evaluation for Land Property Rights Reforms By Jonathan Conning; Partha Deb
  21. Women’s status and reproductive preferences in Eritrea By Gebremariam Woldemicael

  1. By: Dirk Kohnert (GIGA Institute of African Affairs)
    Abstract: The number of migrants from conflict regions in Africa has been increasing dramatically. The European Union shares dual responsibility for the continuing migration pressure: First, because it fostered over decades corrupt and autocratic regimes with dire disregard to principles of ‘good governance’. The aftermath of these regimes is still felt today and constitutes one of the underlying factors for politically motivated migration. Second, the EU contributed to Africa’s economic misery due to its selfish external trade policy. Nevertheless, the prevailing perspective of the EU and of its member countries concerning African immigration remains to be focused on security, the foreclosure of its external borders and prevention. Current EU programs and concepts to fight African migration are questionable. Even development-oriented approaches are bound to fail, if not backed by sustainable immigration policies.
    Keywords: Migration; West Africa; Europe; remittances; brain-drain; foreign trade policy; security; circular migration.
    JEL: F22 F35 F42 F53 N17 N37 N44 O15 O2 O52 O55 R23
    Date: 2007–05
  2. By: Ronelle Burger; Christelle Grobler (Stellenbosch University)
    Abstract: Abstract: Since 1994 there have been a number of radical changes in the public health care system in South Africa. Budgets have been reallocated, decision making was decentralised, the clinic network was expanded and user fees for primary health care were abolished. The paper examines how these recent changes have affected the incidence of spending and the accessibility and quality of health care. The paper finds that between 1995 and 2003 there have been advances in the pro-poor spending incidence of both clinics and hospitals. The increased share of the health budget allocated to the more pro-poor clinic services has contributed further to the improvement in the targeting of overall health spending. Also, it appears that the elimination of user fees for clinics and the expansion of the clinic network have helped to make health services more affordable and geographically accessible to the poor and were associated with a notable rise in health service utilisation for individuals in the bottom two expenditure quintiles.
    Keywords: fiscal incidence, South Africa, health
    JEL: H51 I18
    Date: 2007–06
  3. By: Kohnert, Dirk
    Abstract: The globalized Western culture of innovation, as propagated by major aid institutions, does not necessarily lead to empowerment or improvement of the well-being of the stakeholders. On the contrary, it often blocks viable indigenous innovation cultures. In African societies and African Diasporas in Latin America, cultures of innovation largely accrue from the informal, not the formal sector. Crucial for their proper understanding is a threefold structural differentiation: between the formal and informal sector, within the informal sector, according to class, gender or religion, and between different transnational social spaces. Different innovation cultures may be complementary, mutually reinforcing, or conflicting, leading in extreme cases even to a 'clash of cultures' at the local level. The repercussions of competing, even antagonistic agencies of innovative strategic groups are demonstrated, analyzing the case of the African poor in Benin and the African Diasporas of Brazil and Haiti.
    Keywords: economic development; cultural change; innovations; social structure; African Diaspora; Benin; Brazil; Haiti
    JEL: O57 Z1 E26 Z13 Z12 O31
    Date: 2006–07
  4. By: Davies, Simon; Davey, James
    Abstract: This paper analyses the impact on the local economy of an emergency cash transfer programme in rural Malawi. The results are of interest given the growing use of cash transfers as development aid as well as the increasing popularity of such transfers as a form of social protection across Sub-Saharan Africa. Using a form of social accounting matrix, we find that there are widespread benefits for regional economy as a whole (with multiplier estimates of 2.02 to 2.45) and for certain groups in particular. Small farmers and small businesses gain particular advantage as this is where poorer households’ purchases are focused; education and health also benefit. Such payments can also help to support the regional economy during the most “lean” periods of the year.
    Keywords: Rural Economic Development; Cash Transfers; Income Multiplier; Poverty; Malawi; Africa
    JEL: D19 O15 O22 O18
    Date: 2007–06
  5. By: Charles Meth (University if KwaZulu-Natal)
    Abstract: Abstract: The major cause of poverty is unemployment. This paper looks at aspects of the way government responds to claims that are made, chiefly by academics, about poverty and unemployment. Official statistics on poverty and unemployment enjoy little favour among senior politicians and civil servants. ‘Unofficial’ poverty and unemployment statistics, by contrast, are seized upon with enthusiasm if they contradict the gloomy picture created by numbers that suggest (with monotonous regularity) that improvements in the lives of the poor are not happening fast enough. The first part of the paper explores possible explanations of government’s extreme sensitivity to criticism. The second part of the paper looks at an old chestnut, the repeated claim by government that the severity of the unemployment problem has (in part?) to do with the ‘fact’ that the number of economically active people has grown faster than the number of working age people. The third part of the paper looks briefly at the van der Berg et al (2005) poverty reduction estimates for the period 2000-2004 (they have the headcount falling from 18.5 to 15.4 million), before reproducing my estimates for the period 2001-2004 (the headcount falls from about 19.5 to somewhere in the region of 18 million. Suggestions are offered for the proper academic conduct upon releasing contentious results into a highly-charged political debate.
    Keywords: poverty, unemployment, South Africa, statistics
    JEL: A1
    Date: 2007–06
  6. By: Huizinga, Harry; Schaling, Eric; van der Windt, Peter C
    Abstract: Both in theory and practice, capital controls and dual exchange rate systems can be part of a country's optimal tax policy. We first show how a dual exchange rate system can be interpreted as a tax (or subsidy) on international capital income. We show that a dual exchange rate system, with separate commercial and financial exchange rates, drives a wedge between the domestic and foreign returns on comparable assets. As a borrower, the government itself is a direct beneficiary. Secondly, based on data from South Africa, we present empirical evidence of this revenue implicit in a dual exchange rate system; a revenue that amounted to as much as 0.1 percent of GDP for the South African government. However, this paper also shows that both the capital controls and the dual exchange rate system in South Africa gave rise to many perverse unanticipated effects. The latter may render capital controls and dual exchange rate systems unattractive in the end and, thereby, provides a rationale for the recent trend in exchange rate liberalization and unification.
    Keywords: capital controls; Dual exchange rate systems; financial repression
    JEL: H21
    Date: 2007–06
  7. By: Mendelsohn, Robert; Seo, Sungno Niggol
    Abstract: This paper analyzes t he impact of climate change on animal husbandry in Africa. It regresses the net revenue from raising animals in small and large farms across Africa on climate, soil, and other control variables to test the climate sensitivity of livestock. The study is based on a survey of over 9,000 farmers across 11 countries conducted by the World Bank and the Global Environment Facility. From this dataset, 5,400 farms were found to rely on livestock. The paper develops models to test whether the climate coefficients of small and large farms are similar. It turns out that small farms tend to be more labor intensive, rely on native stocks, and have few animals. Large farms tend to be more commercial operations, with much larger stocks and more modern approaches. The analysis finds that warming is good for small farms because they can substitute animals that are heat tolerant. Large farms, by contrast, are more dependent on cattle, which are not heat tolerant. The wetter scenarios are likely to be harmful to grazing animals because greater rainfall implies a shift from grasslands to forests, an increase in harmful disease vectors, and a shift from livestock to crops. Overall, because large farms dominate the sector, African livestock net revenues are expected to fall. However, if future climates turn out to be dry, livestock net revenue will increase. At least against the risk of dryness, livestock offer a good substitute for crops.
    Keywords: Livestock & Animal Husbandry,Rural Development Knowledge & Information Systems,Climate Change,Dairies & Dairying,Wildlife Resources
    Date: 2007–06–01
  8. By: Nielsen, Lynge; Zouhon-Bi, Simplice G.
    Abstract: This paper applies a partial equilibrium model to analyze the fiscal revenue implications of the prospective economic partnership agreement between the Economic Community of West African States (ECOWAS) and the European Union. The authors find that, under standard import price and substitution elasticity assumptions, eliminating tariffs on all imports from the European Union would increase ECOWAS ' imports from the European Union by 10.5-11.5 percent for selected ECOWAS countries, namely Cape Verde, Ghana, Nigeria, and Senegal. This increase in imports would be accompanied by a 2.4-5.6 percent decrease in total government revenues, owing mainly to lower fiscal revenues. Tariff revenue losses should represent 1 percent of GDP in Nigeria, 1.7 percent in Ghana, 2 percent in Senegal, and 3.6 percent in Cape Verde. However, the revenue losses may be manageable because of several mitigating factors, in particular the likelihood of product exclusions, the length of the agreement ' s implementation period, and the scope for reform of exemption regimes. The large country-by-country differences in fiscal revenue loss suggest that domestic tax reforms and fiscal transfers within ECOWAS could be important complements to the agreement ' s implementation.
    Keywords: Free Trade,Economic Theory & Research,Trade Policy,International Trade and Trade Rules,Trade Law
    Date: 2007–06–01
  9. By: David, Antonio C.
    Abstract: This paper attempts to quantify the impact of the HIV/AIDS epidemic on social capital with cross-country data. It estimates reduced-form regressions of the main determinants of social capital controlling for HIV prevalence, institutional quality, social distance, and economic indicators using data from the World Values Survey. The results obtained indicate that HIV prevalence affects social capital negatively. The empirical estimates suggest that a one standard deviation increase in HIV prevalence will lead to a 1 percent decline in trust, controlling for other determinants of social capital. If one moves from a country with a relatively low level of HIV prevalence such as Estonia, to a country with a high level such as Zimbabwe, one would observe an approximate 8 percent decline in social capital. These results are robust in a number of dimensions and highlight the empirical importance of an additional mechanism through which HIV/AIDS hinders the development process.
    Keywords: Social Capital,Population Policies,Inequality,Economic Theory & Research,HIV AIDS
    Date: 2007–06–01
  10. By: Msuya, Elibariki
    Abstract: In this paper, the impact of Foreign Direct Investment (FDI) on agricultural productivity and poverty reduction are examined. Factors that hinder FDI flow to agriculture in Tanzania are assessed. Specifically, the role of FDI in improving an agricultural firm’s efficiency in Tanzania and reforms required for more effective investment promotion in agriculture are examined. The study uses literature review to draw its conclusions and policy recommendations. It is observed that FDI has a positive impact on productivity especially to smallholder farmers who are linked in integrated producer schemes. The study recommends rethinking of the smallholder institutional setup for increasing productivity and FDI flow to the agricultural sector. An important implication of the results is that FDI to Tanzania and specifically to agriculture, has a much more far- reaching economic and social impact than in other sectors.
    Keywords: FDI; Smallholders; Integrated Producer Schemes; Agricultural Productivity; Poverty Reduction; Tanzania
    JEL: Q01 F21 Q13
    Date: 2007
  11. By: van Wijnbergen, Sweder; Pang, Gaobo; Budina, Nina
    Abstract: Nigeria ' s oil boom has not brought an end to pe rennial stagnation in the non-oil economy. Is this the unavoidable consequence of the resource boom or have misguided policies contributed? This paper indicates that the extreme volatility of expenditure rather than Dutch Disease effects are behind the disappointing non-oil growth record. Fiscal policies failed to smooth highly volatile oil income; on the contrary government expenditure was more volatile than oil income. The authors provide econometric evidence showing that volatility of expenditure was increased by debt overhang problems. Moreover, they also find evidence of voracity effects that exacerbated expenditure volatility prior to 1984.
    Keywords: Public Sector Expenditure Analysis & Management,Economic Theory & Research,Public Sector Economics & Finance,Markets and Market Access,Economic Stabilization
    Date: 2007–06–01
  12. By: Marteau, Jean-Francois; Raballand, Gael; Arvis, Jean-Francois
    Abstract: A large proportion of the least developed countries are landlocked and their access to world markets depends on the availability of a trade corridor and transit systems. Based on empirical evidence from World Bank projects and assessments in Africa, Central Asia, and elsewhere, this paper proposes a microeconomic quantitative description of logistics costs. The paper theoretically and empirically highlights that landlocked economies are primarily affected not only by a high cost of freight services but also by the high degree of unpredictability in transportation time. The main sources of costs are not only physical constraints but widespread rent activities and severe flaws in the implementation of the transit systems, which prevent the emergence of reliable logistics services. The business and donor community should push toward implementation of comprehensive facilitation strategies, primarily at the national level, and the design of robust and resilient transport and transit regimes. A better understanding of the political economy of transit and a review of the implementation successes and failures in this area are needed.
    Keywords: Transport Economics Policy & Planning,Transport and Trade Logistics,Common Carriers Industry,Economic Theory & Research,Rural Roads & Transport
    Date: 2007–06–01
  13. By: Christiaensen, Luc; Dercon, Stefan
    Abstract: Much has been written on the determinants of input and technology adoption in agriculture, with issues such as input availability, knowledge and education, risk preferenc es, profitability, and credit constraints receiving much attention. This paper focuses on a factor that has been less well documented-the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests. Building on an explicit model, this is explored in panel data for Ethiopia. Historical rainfall distributions are used to identify the counterfactual consumption risk. Controlling for unobserved household and time-varying village characteristics, it emerges that not just ex-ante credit constraints, but also the possibly low consumption outcomes when harvests fail, discourage the application of fertilizer. The lack of insurance causes inefficiency in production choices.
    Keywords: Economic Theory & Research,Financial Intermediation,Consumption,Insurance & Risk Mitigation,Inequality
    Date: 2007–06–01
  14. By: Sudipta Sarangi; Gautam Hararika
    Abstract: This paper examines the effect of household access to microcredit upon work by seven to eleven year old children in rural Malawi. Given that microcredit organizations foster household enterprises wherein much child labor is engaged, this paper aims to discover whether access to microcredit might increase work by children. It is found that, in the peak harvest season, household access to microcredit, measured in a novel manner as self-assessed credit limits at microcredit organizations, raises the probability of child work in households with sample means of owned land and number of retail sales enterprises. It appears this is due to children having to take up more domestic chores as adults are busied in household enterprises following improved access to microcredit.
  15. By: Simeon Djankov; Marta Reynal-Querol
    Abstract: The dominant hypothesis in the literature that studies conflict is that poverty is the main cause of civil wars. We instead analyze the effect of institutions on civil war, controlling for income per capita. In our set up, institutions are endogenous and colonial origins affect civil wars through their legacy on institutions. Our results indicate that institutions, proxied by the protection of property rights, rule of law and the efficiency of the legal system, are a fundamental cause of civil war. In particular, an improvement in institutions from the median value in the sample to the 75th percentile is associated with a 38 percentage points’ reduction in the incidence of civil wars. Moreover, once institutions are included as explaining civil wars, income does not have any effect on civil war, either directly or indirectly.
    Keywords: Institutions, Civil wars
    Date: 2007–05
  16. By: Svensson, Jakob; Bjorkman, Martina
    Abstract: This paper analyzes the importance of strengthening the relationship of accountability between health service providers and citizens for improving access to and quality of health care. How this is to be achieved, and whether it works, however, remain open questions. The paper presents a randomized field experiment on increasing community-based monitoring. As communities began to more extensively monitor the provider, both the quality and quantity of health service provision improved. One year into the program, there are large increases in utilization, significant weight-for-age z-score gains of infants, and markedly lower deaths among children. The findings on staff behavior suggest that the improvements in quality and quantity of health service delivery resulted from an increased effort by the staff to serve the community. Overall, the results suggest that community monitoring can play an important role in improving service delivery when traditional top-down supervision is ineffective.
    Keywords: Health Monitoring & Evaluation,Hou sing & Human Habitats,Health Economics & Finance,Disease Control & Prevention,Health Systems Development & Reform
    Date: 2007–06–01
  17. By: Congdon Fors, Heather (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The purpose of this paper is to explore the effects of island status and country size on institutional quality, and to determine if these institutional effects can explain the relatively strong economic performance of islands and small countries. One of the main findings of this paper is that the relationship between island status and institutional quality is significantly positive, and that these results are robust to the inclusion of a number of control variables. Further, we find that country size is negatively related to institutional quality, which is in keeping with previous results. Finally, using an instrumental variable method we demonstrate that when Rule of Law is included in regressions on levels of per capita GDP, the positive effects of small country size and island status disappear. These results provide further support for our hypothesis that institutions account for these countries’ relatively better economic performance. <p>
    Keywords: islands; political institutions; economic institutions; rule of law; development
    JEL: N40 O10
    Date: 2007–06–19
  18. By: Fatiha Talahite (CEPN - Centre d'économie de l'Université de Paris Nord - [CNRS : UMR7115] - [Université Paris-Nord - Paris XIII])
    Abstract: Largement répandue dans la littérature sur les pays pétroliers de la région MENA, la notion de rente manque de fondements théoriques. La théorie de l'Etat rentier, considérée comme l'une des contributions majeures des Middle East Studies à la science politique, s'appuie sur un concept importé de l'économie politique. Or la science économique n'a pas réussi à construire une théorie unifiée de la rente et les économistes, lorsqu'ils étudient l'impact de l'exportation d'hydrocarbures sur les économies dites rentières, mobilisent généralement d'autres outils théoriques que celui de rente, exception faite de la théorie de recherche de rentes, laquelle ne concerne justement pas les ressources naturelles.
    Keywords: revenus pétroliers ; Etat rentier ; recherche de rentes ; Moyen Orient et Afrique du Nord.
    Date: 2007–06–24
  19. By: Campos, Nauro F; Kuzeyev, Vitaliy
    Abstract: Does fractionalization change over (short periods of) time? If so, are there any substantial implications for economic performance? To answer such questions, we construct a new panel data set with measures of fractionalization for 26 former communist countries covering the period from 1989 to 2002. Our fractionalization measures show that transition economies became more ethnically homogenous over such a short period of time, although the same did not happen in terms of linguistic and religious fractionalization. In line with the most recent literature, there seems to be no effect of (exogenous) fractionalization on macroeconomic performance (that is, on per capita GDP growth). However, we find that dynamic ethnic fractionalization is negatively related to growth (although this is still not the case for linguistic and religious fractionalization). These findings are robust to different specifications, polarization measures, instrument sets as well as to a composite index of ethnic-linguistic-religious fractionalization.
    Keywords: ethnic fractionalization; growth; polarization; transition economies
    JEL: H1 O11 O55 Z12
    Date: 2007–06
  20. By: Jonathan Conning (Hunter College, Department of Economics); Partha Deb (Hunter College, Department of Economics)
    Abstract: A large number of land property rights reforms, including land formalization and titling projects, are taking place around the world today. The purpose of this paper is to describe some of the expected impacts of such interventions, the challenges and problems that arise in measuring and estimating these impacts, as well as survey designs and methods for purposeful impact evaluation to overcome or ameliorate these concerns. We present a practical approach to evaluation of programs that should be accessible to non-specialists interested in impact evaluation. Using a hypothetical example of a land titling program in an urban setting we illustrate with simple visual examples how the distribution of observable and unobservable characteristics of treatment and comparison group samples might change according to the nature of the program intervention and treatment selection rules ( e.g. how the project targets geographic areas or population groups, whether and how households are allowed to self-select, etc.). This visual approach focuses attention on the key importance of survey design and data collection strategies to avoid confounding effects, and eschews a good deal of the math usually required to present these issues. Most methods for impact evaluation analysis can be explained as strategies to anticipate and adjust to these sample selection issues and as efforts to maintain a balance between observable and unobservable characteristics in treatment and comparison groups.
    Keywords: Property rights, impact evaluation, land titling, land reform, average treatment effects, survey design.
    JEL: O1 O12 O17 C8 C21 P14
    Date: 2007
  21. By: Gebremariam Woldemicael (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: The importance of women’s decision-making autonomy has recently emerged as a key factor in influencing reproductive preferences and demand for family planning in developing countries. In this study, the effect of direct indicators of women’s decision-making autonomy on fertility preferences and ever-use of modern contraception is examined using logistic regression models with and without proxy indicators. The results provide evidence that different dimensions of women’s autonomy influence the outcome variables differently in terms of magnitude and statistical significance. Particularly, women’s final say in decisions regarding day-to-day household purchases and spousal communication about family planning are influential predictors of fertility preferences and ever-use of modern family planning methods. At the same time, results show that the effects of women’s education on fertility preferences are not always significant although it has significant roles in affecting women’s decision-making autonomy. Women’s household economic situation has always significant effects on women’s autonomy as well as on fertility preferences and ever use of contraception. Thus, a complete explanation of the relationship between women’s autonomy and reproductive preferences must recognize the effects of both proxy and direct indicators of women’s autonomy. Interventions are needed to improve women’s decision-making autonomy and strengthen their negotiating capacity for family planning use if an increased desire to limit fertility is to be attained.
    Keywords: Eritrea, family planning, fertility, women's status
    JEL: J1 Z0
    Date: 2007–06

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.