nep-afr New Economics Papers
on Africa
Issue of 2007‒09‒02
twelve papers chosen by
Suzanne McCoskey
George Washington University

  1. Identifying aggregate supply and demand shocks in South Africa By Stan du Plessis; Ben Smit; Federico Sturzenegger
  2. Malaria: Disease Impacts and Long-Run Income Differences By Douglas Gollin; Christian Zimmermann
  3. The HIV Anticaptory Saving Motive: An Empirical Analysis in South Africa By Kuilen, G. van de; Lammers, J.
  4. (Mudanças nos Padrões dos Rendimentos de Agregados Familiares Rurais em Moçambique de 1996 a 2002 e suas Implicações para a Contribuição da Agricultura para a Redução da Pobreza) Changes in Rural Household Income Patterns in Mozambique, 1996-2002, and Implications for Agriculture’s Contribution to Poverty Reduction. By Duncan Boughton; David Mather; David Tschirley; Tom Walker; Benedito Cunguara; Ellen Payongayong
  5. Health and Civil War in Rural Burundi By Tom Bundervoet; Philip Verwimp; Richard Akresh
  6. Poverty dynamics in Ethiopia: state dependence By Islam, Nizamul; Shimeles, Abebe
  7. Microfinance et réduction de la pauvreté en Afrique Subsaharienne : Quels résultats au Mali ? By Yaya Koloma
  9. Far Above Rubies: The Association Between Bride Price and Extramarital Sexual Relations in Uganda By David Bishai; Shoshana Grossbard
  10. HIV/AIDS Contamination Risk, Savings and the Welfare Effects of Diagnostic Testing By Lammers, J.; Meijdam, A.C.; Verbon, H.A.A.
  11. Social Pricing and Water Provision in Côte d'Ivoire By DIAKITE Daouda; SEMENOV Aggey; THOMAS Alban
  12. Group lending and the role of the group leader:Theory and evidence from Eritrea By Eijkel, Remco van; Hermes, Niels; Lensink, Robert

  1. By: Stan du Plessis (Department of Economics, Stellenbosch University); Ben Smit (Bureau of Economic Research, Stellenbosch University); Federico Sturzenegger (Kennedy School of Government, Harvard University)
    Abstract: This paper uses a structural VAR methodology to identify aggregate demand and supply shocks to real output for the South African economy. Demand shocks, in turn, are separated into fiscal and monetary shocks. The model is estimated with quarterly data over two overlapping samples: 1960Q2-2006Q4 and 1983Q4-2006Q4. The identified (structural) shocks were used in a historical decomposition to split output into a measure of potential output (resulting from the evolution of supply shocks) and a measure of the business cycle (the gap between actual and potential output). This measure of potential output suggests a significant decline relative to trend in the years prior to the political transition of 1994 and a swift reversal thereafter. The paper presents evidence from three sources to support its identification of aggregate supply and demand shocks. These sources are the following: theory consistent impulse response functions; a close match between the implied measure of the business cycle and independent information about the South African business cycle; and a demonstration of the close match between the identified series of aggregate supply shocks and important historical events in the decades prior to and following 1994 that have been identified by economic historians as important shocks to the South African economy.
    Keywords: South Africa, aggregate supply, aggregate demand, monetary policy, fiscal policy, potential output, long-run restrictions
    JEL: C25 C41 E32
    Date: 2007
  2. By: Douglas Gollin (Williams College); Christian Zimmermann (University of Connecticut and IZA)
    Abstract: The World Health Organization (WHO) reports that malaria, a parasitic disease transmitted by mosquitoes, causes over 300 million episodes of "acute illness" and more than one million deaths annually. Most of the deaths occur in poor countries of the tropics, and especially sub- Saharan Africa. Some researchers have suggested that ecological differences associated with malaria prevalence are perhaps the most important reason why some countries today are rich and others poor. This paper explores the question in an explicit dynamic general equilibrium framework, using a calibrated model that incorporates epidemiological features into a standard general equilibrium framework.
    Keywords: malaria, epidemiology, GDP, disease prevention, sub-Saharan Africa
    JEL: I1 O11 E13 E21
    Date: 2007–08
  3. By: Kuilen, G. van de; Lammers, J. (Tilburg University, Center for Economic Research)
    Abstract: This paper studies the effect of the HIV/AIDS epidemic on saving behaviour. Two important characteristics of HIV result in opposing forces on savings: mortality increases, which reduces savings, and long-term illness risk increases, which enhances savings. We use a two period life-cycle model with uncertain lifetime including perceived HIV contamination risk to illustrate both the opposing effects of the HIV epidemic on individual savings and test the predictions of our model with data obtained from an economic experiment with real monetary incentives performed in South Africa. The empirical results show that increased mortality decreases the amount of savings and that having a high perception of HIV contamination risk increases savings. The latter effect confirms the HIV anticipatory saving hypothesis.
    Keywords: HIV/AIDS;saving behavior;illness risk;mortality;life-cycle model;time preferences.
    JEL: D12 D91 E21 I12
    Date: 2007
  4. By: Duncan Boughton (Department of Agricultural Economics, Michigan State University); David Mather; David Tschirley; Tom Walker; Benedito Cunguara; Ellen Payongayong
    Abstract: The challenge that faces Mozambique’s government is to design poverty reduction and rural development strategies that deliver three-dimensional growth: rapid growth to reduce poverty incidence quickly, sustainable growth to ensure that people permanently escape poverty, and broad-based growth to ensure that as many families as possible benefit from it. The specific objectives of this paper are: 1. To compare the level, sources, and distribution of rural household incomes in 1995-96 and 2001-02. To achieve this objective, the paper answers questions such as how have rural incomes changed over the six year period; how much have the poorest of the poor benefited; and have rural incomes grown evenly over the whole country or have some areas grown faster than others? 2. To compare the level and composition of agricultural income in 1995-96 and 2001-02. The paper considers the importance of agriculture relative to non-farm activities as a source of rural income, and the mix of agricultural activities, for different income groups. 3. To identify priorities for enhancing agriculture’s contribution to rural economic growth and poverty reduction in the medium term.
    Keywords: food security, food policy, Mozambique, household, income, poverty
    JEL: Q18
    Date: 2006
  5. By: Tom Bundervoet (Free University of Brussels and HiCN); Philip Verwimp (ECARES, Free University of Brussels and HiCN); Richard Akresh (University of Illinois at Urbana Champaign and IZA)
    Abstract: We combine household survey data with event data on the timing and location of armed conflicts to examine the impact of Burundi’s civil war on children’s health status. The identification strategy exploits exogenous variation in the war’s timing across provinces and the exposure of children’s birth cohorts to the fighting. After controlling for province of residence, birth cohort, individual and household characteristics, and province-specific time trends, we find that children exposed to the war have on average 0.515 standard deviations lower height-for-age z-scores than non-exposed children. This negative effect is robust to specifications exploiting alternative sources of exogenous variation.
    Keywords: child health, economic shocks, stunting, Africa
    JEL: I12 J13 O12
    Date: 2007–07
  6. By: Islam, Nizamul (Department of Economics, School of Business, Economics and Law, Göteborg University); Shimeles, Abebe (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper focuses on the persistency of poverty in rural and urban households in Ethiopia by estimating dynamic probit models. Unobserved heterogeneity, first order state dependence and serially correlated error component are allowed for. The empirical results for both rural and urban areas show that each of these components is statistically significant in characterising the dynamics of poverty in Ethiopia. Furthermore, risk of poverty increases with the number of household’s size. Moreover, land size is highly correlated (negatively) with that risk of poverty and the most important two cash crops (Coffee and Chat) has significant role in the alleviation of poverty in Ethiopia. Finally, the effect of true state dependence and transitory shocks in poverty persistency appears to be stronger among urban households than rural households.<p>
    Keywords: Poverty persistency; State dependence; Unobserved heterogeneity
    JEL: J22
    Date: 2007–08–29
  7. By: Yaya Koloma (GED, Université Montesquieu Bordeaux IV)
    Abstract: Ce papier a pour but de décrire les faits marquants du secteur de la microfinance au Mali : son contexte, ses caractéristiques, et son articulation avec les politiques publiques de réduction de la pauvreté et des inégalités, notamment de genre. Les nouvelles orientations du financement du développement ont conduit le Mali à considérer le secteur de la microfinance comme l’un des outils majeurs des politiques publiques de lutte contre la pauvreté, en instaurant un cadre réglementaire et une politique nationale de microfinance. Elle toucherait 6,5% de la population totale estimée à 11,6 millions en 2005. Ce taux aurait connu un accroissement de 27,7% entre 2003 et 2005. Sur 1,9 millions de familles maliennes en 2005, la proportion de familles touchées par les services microfinanciers s’élèverait à 38,8%. Les femmes représenteraient 40,3% de la clientèle des institutions de microfinance. Les controverses théoriques et empiriques ont conduit à revoir l’espoir tant suscité de l’efficacité des services de la microfinance en termes de lutte contre la pauvreté et les inégalités de genre. L’étude du cas du Mali, à travers les quelques rares évaluations d’impact qui ont été réalisées, permet de constater que, même si une amélioration certaine des conditions de vie de certains clients ou clientes bénéficiaires des services n’est pas à écarter, une réduction certaine de la pauvreté peut paraître difficile. The purpose of this paper is to describe the outstanding facts of the microfinance’s sector in Mali, its context, its characteristics, and its articulation with the public policies of poverty reduction, and in particular the gender inequalities. The new directions of financial development led Mali to consider the microfinance sector as one of the major tools of the public policies to fight against poverty, and also found a coherent lawful framework and a national microfinance policy. The microfinance (credit and/or saving) touched 6.5% of a global population estimated to 11.6 millions persons in 2005. This rate increased by 27.7% from 2003 to 2005, 1.9 million Malians families in 2005, the proportion of family accessing to the microfinance services would be 38.8%. Women would represent 40.3% and they seem to be the privilege target group of microfinance. The theoretical and empirical controversies should permit to re-examine the so high hope raised by microfinance concerning its effectiveness to reduce poverty and gender inequalities. Through the few evaluations of impact, the Mali’s case study, made it possible to note that even if an incontestable improvement of living conditions of some beneficiaries is not to draw aside, a real reduction of poverty could appears difficult. (Full text in french)
    JEL: G21 G39
    Date: 2007–08
  8. By: Pasquale De Muro; Francesco Burchi
    Abstract: In the world there are approximately 800 million people who live in condition of food insecurity and illiteracy. This paper shows that education is a key to food security for rural populations in developing countries. Attention is drawn to rural areas because they are traditionally more disadvantaged by national educational policies. The theoretical foundation of this research is that being educated improves rural people’s capacity to diversify assets and activities, increase productivity and income, foster resilience and competitiveness, access information on health and sanitation, strengthen social cohesion and participation: these are all essential elements to ensure food security in the long run. The main findings of this research are the following: first, the association between food insecurity and primary education is very high, while it decreases progressively with basic, secondary, and tertiary education. Such a two-way relationship is expressed through graphical tools and correlation coefficients. Second, the econometric model shows that primary education is a crucial element to reduce food insecurity in rural areas, even when compared to other factors such as access to water, health, and sanitation. Concluding from this model, an increase of access to primary education by 100% causes a decrease of food insecurity by approximately 20% or 24% depending on the definition of food insecurity and its measurement. Finally, since in most of developing countries the majority of people live in rural areas, and since it is in these areas that the largest proportion of world poverty and hunger exists, we can conclude that education for rural people is a relevant tool for promoting overall national food security.
    Keywords: Education, Food Security, Human Development, Cross-
    JEL: I2 Q18 O15 C31
    Date: 2007–07
  9. By: David Bishai (Johns Hopkins University); Shoshana Grossbard (San Diego State University and IZA)
    Abstract: The custom of bride price involves the payment of goods or cash from the groom’s family to the bride’s family at the time of marriage. We present a theory that views bride price as a payment in hedonic markets for marital fidelity. Data from a household survey in Uganda are used to test the theoretical prediction that payment of bride price will be associated with fewer non-marital sexual relationships for women. The data show a robust association between bride price payment and lower rates of non-marital sexual relationships for women but not for men.
    Keywords: marriage, extra-marital relations, bride price, Uganda
    JEL: D13 I12 J13 O15
    Date: 2007–08
  10. By: Lammers, J.; Meijdam, A.C.; Verbon, H.A.A. (Tilburg University, Center for Economic Research)
    Abstract: This paper models the effect of a HIV/AIDS epidemic on saving behavior and studies the welfare effects of testing for HIV. The model specifies a utility function that includes both regular consumption, and medical expenditures. Medical expenditures generate more utility if individuals are HIV infected, but they are only able to purchase the optimal medical consumption after being tested HIV positive. The paper describes different effects on aggregate savings according to different stages of the epidemic. We show that the HIV epidemic decreases savings if especially young individuals are (perceived to be) affected by the virus, but may increase savings if individuals perceive a sizable probability of getting infected later in life. By the same token, the welfare effects of testing young individuals differs greatly from the welfare effects of testing older individuals, the reason being that the savings responses to testing differ according to whether old or young individuals are tested.
    Keywords: saving behavior;perceived risk;HIV/AIDS;HIV testing;mortality;life-cycle model.
    JEL: D83 D91 I12 E21
    Date: 2007
  11. By: DIAKITE Daouda; SEMENOV Aggey; THOMAS Alban (LERNA, University of Toulouse)
    Date: 2006–08
  12. By: Eijkel, Remco van; Hermes, Niels; Lensink, Robert (Groningen University)
    Abstract: Abstract: This paper investigates the strategic monitoring behaviour within a group lending setting. We develop a theoretical model, showing that monitoring efforts of group members differ from each other in equilibrium, as a result of the asymmetry between these members in terms of the future profits they generate with their project. In particular, we show that the entrepreneur with the project that generates the highest future profits also puts in the highest monitoring effort. Moreover, monitoring efforts differ between group members due to free-riding: one member reduces her level of monitoring if the other increases her monitoring effort. This effect is also at play when we introduce a group leader in the model. The individual who becomes the group leader will supply more monitoring effort than in the benchmark case, because of the reduced per unit monitoring costs related to becoming the leader. We empirically test the model using data from a survey of microfinance in Eritrea and show that the group leader attaches more weight to future periods than non-leaders in group lending and that this may explain why a large part of total monitoring is put in by the leader.
    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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