nep-afr New Economics Papers
on Africa
Issue of 2007‒12‒01
seventeen papers chosen by
Suzanne McCoskey
George Washington University

  1. Japan’s foreign aid sanctions policy toward African countries By Furuoka, Fumitaka
  2. Routes of Infection: Exports and HIV Incidence in Sub-Saharan Africa By Emily Oster
  3. Boda-bodas1 Rule: Non-agricultural Activities and Their Inequality Implications in Western Kenya By Lay, Jann; M'Mukaria, George Michuki; Mahmoud, Toman Omar
  4. Bank privatization in Sub-Saharan Africa : the case of Uganda commercial bank By Fuchs, Michael; Cull, Robert; Clarke, George R.G.
  5. Les effets de la migration sur le chômage marocain : une analyse en équilibre général calculable statique. By Fida Karam; Bernard Decaluwé
  6. Could payments for environmental services improve rangeland management in Central Asia, West Asia and North Africa?: By Dutilly-Diane, Celine; McCarthy, Nancy; Turkelboom, Francis; Bruggeman, Adriana; Tiedemann, James; Street, Kenneth; Serra, Gianluca
  7. Farmer groups enterprises and the marketing of staple food commodities in Africa: By Coulter, Jonathan
  8. Migration, Self-selection and Returns to Education in the WAEMU By Philippe De Vreyer; Flore Gubert; François Roubaud
  9. The role of public-private partnerships and collective action in ensuring smallholder participation in high value fruit and vegetable supply chains: By Narrod, Clare; Roy, Devesh; Okello, Julius; Avendaño, Belem; Rich, Karl
  10. Gender, Wealth, and Participation in Community Groups in Meru Central District, Kenya: By Kristin E. Davis; Martha Negash
  11. Forced to Freedom? Empirical relations between aid and economic freedom By Knedlik, Tobias; Kronthaler, Franz
  12. Le commerce international comme stratégie d'adaptation à la rareté des ressources hydriques ? Utilité et application du concept de " commerce d'eau virtuelle " en Afrique du Nord. By Nathalie Rousset
  13. Gauging the welfare effects of shocks in rural Tanzania By Sarris, Alexander; Hoffmann, Vivian; Christiaensen, Luc
  14. Do women with higher autonomy seek more maternal and child health-care? Evidence from Ethiopia and Eritrea By Gebremariam Woldemicael
  15. Le sorgho de décrue dans la vallée du Sénégal By Xavier Le Roy
  16. Is Tax Policy Retarding Growth in Morocco? By Tatom, John
  17. Reducing the transaction costs of development assistance Ghana ' s multi-donor budget support (MDBS) experience from 2003 to 2007 By Cavalcanti, Carlos

  1. By: Furuoka, Fumitaka
    Abstract: This paper examines Japan’s aid sanctions policy toward African countries since new guidelines for Japanese ODA were introduced. There were three cases of positive reinforcement in Africa, i.e. in Madagascar, Zambia) and Guinea. Also, the Japanese government implemented nine negative reinforcements in the region, i.e. in Kenya, Zaire, Malawi, Sudan, Sierra Leone, Zambia, Togo, Nigeria and Gambia. Although Japan applied positive reinforcement and provided additional foreign aid to assist the political and economic reforms in three African countries, it would be an oversimplification to say that these “positive reinforcement” methods have effectively contributed to the improvement of the political situations in these countries. On the other hand, whether Japan’s and other aid donors’ measures of the “negative reinforcement” have effectively contributed to the improvement of the political situation in African countries remains as a contentious issue.
    JEL: F35 O55
    Date: 2007–11–26
  2. By: Emily Oster
    Abstract: I generate new data on HIV incidence and prevalence in Africa based on inference from mortality rates. I use these data to relate economic activity (specifically, exports) to new HIV infections in Africa and argue there is a significant and large positive relationship between the two: a doubling of exports leads to as much as a quadrupling in new HIV infections. This relationship is consistent with a model of the epidemic in which truckers and other migrants have higher rates of risky behavior, and their numbers increase in periods with greater exports. I present evidence suggesting that the relationship between exports and HIV is causal and works, at least in part, through increased transit. The result has important policy implications, suggesting (for example) that there is significant value in prevention focused on these transit oriented groups. I apply this result to study the case of Uganda, and argue that a decline in exports in the early 1990s in that country appears to explain between 30% and 60% of the decline in HIV infections. This suggests that the success of the Ugandan anti-HIV education campaign, which encouraged changes in sexual behavior, has been overstated.
    JEL: F13 I12 J1 O24
    Date: 2007–11
  3. By: Lay, Jann; M'Mukaria, George Michuki; Mahmoud, Toman Omar
    Abstract: Diversification into non-agricultural activities in rural areas can be broadly classified as either survival-led or opportunity-led. The existence of these two types of non-agricultural activities implies a U-shaped relationship between the share of income derived from non-agricultural activities and household wealth as well as total household income. Survival-led engagement in non-agricultural activities would be inequality-decreasing through increasing the incomes of the poorer parts of the population and would reduce poverty. Opportunity-led diversification, by contrast, would increase inequality and have a minor effect on poverty, as it tends to be confined to non-poor households. Using data from a household survey conducted by ourselves in Western Kenya, we find the overall share of non-agricultural income in this very poor region to be important, but below the sub-Saharan African average. Multivariate analyses confirm the existence of both survival-led and opportunity-led diversification. Yet, the poverty and inequality implications of the differently motivated diversification strategies differ somewhat from our expectations. As expected, we find high-return activities to be confined to richer households, while both rich and poor households are engaged in low-return activities. Very poor households even appear to be excluded from the latter. Simple simulation exercises illustrate the inequality-increasing and very limited poverty effects of increases in high-return income, whereas increased low-return income shows substantial poverty reduction leverage. Our findings indicate that rural households do not only face asset constraints, but also very limited or relatively risky high-return opportunities outside agriculture.
    Keywords: Income diversification, non-agricultural activities, inequality, poverty, sub-Saharan Africa, Kenya
    JEL: I31 O17 Q12
    Date: 2007
  4. By: Fuchs, Michael; Cull, Robert; Clarke, George R.G.
    Abstract: Previous empirical analyses have found that bank privatizations are more successful when the government fully relinquishes control, when the bank is privatized to a strategic investor, and when foreign-owned banks are allowed to participate in the bidding. The privatization of Uganda Commercial Bank (UCB) to the South African bank Stanbic met all these criteria, suggesting that it is a likely candidate for success. But other fe atures suggest reasons for caution: UCB dominated the Ugandan banking sector prior to privatization and the institutional environment in Uganda was less favorable than in many of the middle-income countries looked at in earlier empirical studies. Despite these concerns, the privatization appears to have been relatively successful. The portfolio of the privatized bank, which was cleaned prior to sale, remains relatively strong and profitability and credit growth are now on par with other Ugandan banks. Though market segmentation remains a concern since Stanbic faces little or no direct competition in many remote areas, some early results suggest that access to credit has improved for some hard-to-serve groups.
    Keywords: Banks & Banking Reform,Access to Finance,,Debt Markets,Emerging Markets
    Date: 2007–11–01
  5. By: Fida Karam (Centre d'Economie de la Sorbonne); Bernard Decaluwé (Université de Laval - Département d'Economie)
    Abstract: Recent economic literature on the impact of migration on the country of origin has not successfully analyzed the effect of migration on unemployment and wage rate especially in urban area. Using a detailed CGE model applied to the moroccan economy, we are able to show that if we take into account simultaneously moroccan emigration to European Union, immigration from Sub-Saharan Africa into Morocco and rural-urban migration, the impact on wage rate and unemployment is ambiguous.
    Keywords: Imperfect labor market, migration, computable general equilibrium model.
    JEL: C68 F22 J44 J61 J64
    Date: 2007–03
  6. By: Dutilly-Diane, Celine; McCarthy, Nancy; Turkelboom, Francis; Bruggeman, Adriana; Tiedemann, James; Street, Kenneth; Serra, Gianluca
    Abstract: "Although several institutional and management approaches that address the degradation of the rangelands have been tested in the dry areas of Central and West Asia and North Africa (CWANA), impact has been limited. Nonetheless, the development of National Action Plans to combat desertification highlights the interest of governments to tackle this issue. Payment for Environmental Services (PES) may be a viable policy option, though, to date, most PES programs have focused on the management of different resources (forests, watersheds). The purpose of this paper is to examine whether PES could be a viable option to promote sustainable rangelands management in the dry rangelands of CWANA. Specifically, it focuses on the scientific gaps and knowledge related to the local and global environmental services produced by rangelands and addresses questions related to the beneficiaries of these services. Institutional conditions necessary for the implementation of such schemes are discussed." Authors' Abstract
    Keywords: Environmental services, Environmental management,
    Date: 2007
  7. By: Coulter, Jonathan
    Abstract: "There are some apparently successful cases of collective marketing with staple food commodities (grains and root crops), but these are less common than cases involving higher value agricultural products. These can be attributed to the benefit/cost ratio to participants being generally higher for collective marketing of the higher-value crops. Some of the costs are ‘hidden', in the sense that they are borne by individuals in time spent in attending meetings, and not shown in the financial statements of the enterprises concerned. Examining a series of cases, the paper advocates an approach to the marketing of staples which involves analyzing the value chain and identifying those activities which on the one hand, best lend themselves to individual initiative, and those where on the other hand, group approaches are more likely to prosper. Dual purpose food marketing involving village storage in anticipation of both external market opportunities and local lean season shortages usually falls into the former category. Collective initiatives have a higher probability of success when they complement agricultural intensification and involve bulking substantial quantities of produce for quality-conscious commercial buyers. Prospects for successful collective marketing are moreover greater where there is a history of collective endeavor, where focused on simple activities like bulking and distribution of inputs, where primary groups are small and homogenous in terms of interests and objectives, where they can establish lasting relationships with strong trade counterparties, where supported by effective training (especially re attitudes, numeracy, and business skills), where they can access effectively managed storage and inventory credit services, and where there is framework of law enforcement. The immediate poverty alleviation and programmatic priorities of funding agencies often undermine the effectiveness of promotional activities in support of collective marketing. This problem may be addressed by instituting systems of independent review and peer review processes, and involving open discussion of pros and cons of individual and collective approaches." authors' abstract
    Keywords: Collective marketing, Producer organization, Staple food, Village storage, Inventory credit, Microfinance, Disbursement-driven,
    Date: 2007
  8. By: Philippe De Vreyer (Université de Lille II, DIAL); Flore Gubert (DIAL, IRD, Paris); François Roubaud (DIAL, IRD)
    Abstract: (english) We use a unique set of identical labour force surveys that allow to observe, at the same time, migrants in seven WAEMU countries and their country of origin's labour market. We use these data first to document the patterns of migration flows in the sub-region, second to estimate the determinants of migration behaviour across these countries and to correct the estimated returns to education for the endogeneity of location choice. We finally estimate a structural model to evaluate the impact of expected earnings differentials on the probability of selecting a particular country to reside in. Our results show that Cote d'Ivoire remains the most important immigration country in the sub-region. Our data also suggests that Mali and Burkina Faso have been and still are major labour-exporting countries, largely towards Cote d'Ivoire. Benin and Togo, by contrast, combine both emigration and immigration. Looking at migrants characteristics we find that migrants tend to be less educated than non migrants in both their origin and destination countries, are more likely than natives to work in the informal sector and that they receive lower wages. Our econometric results suggest that not holding account of international migration in estimating returns to education yields upward biased estimates in three countries out of seven and downward biased estimates in two others. However, disparities in returns to education between capital cities do not vanish, suggesting that country-specific amenities and other un-measurable non-wage variables play important roles in the location choice of individuals with different levels of education. We also find that expected earnings differentials have a very significant effect on the choice probabilities: all else equal, people tend to live in countries in which their expected earnings are higher than elsewhere. _________________________________ (français) Nous utilisons les données issues d'enquêtes réalisées simultanément dans sept capitales de l'Union Economique et Monétaire Ouest Africaine pour documenter les caractéristiques des flux migratoires entre pays de l'Afrique de l'Ouest, puis pour estimer un modèle individuel de choix résidentiel faisant intervenir la différence de gains potentielle comme déterminant. Une estimation en trois étapes est réalisée qui permet de contrôler de l'auto-sélection des individus dans les différentes destinations. Nos résultats montrent que la Côte d'Ivoire demeure le premier pays d'accueil des migrants de la sous région, alors que le Burkina Faso et le Mali sont au contraire des pays d'émigration, principalement à destination de la Côte d'Ivoire. Le Bénin et le Togo sont à la fois des pays d'émigration et d'immigration. L'examen des caractéristiques des migrants montre qu'ils tendent à être moins éduqués que les non migrants, aussi bien dans leur pays d'origine que dans leur pays d'accueil, travaillent plus fréquemment dans le secteur informel et reçoivent une rémunération plus faible. Nos estimations économétriques montrent que la prise en compte de l'auto-sélection des individus dans les différentes destinations modifie les rendements estimés de l'éducation dans certains pays. Nous trouvons également que les différences de gains potentielles ont un impact très significatif sur les probabilités de choix et que, toutes autres choses égales par ailleurs, les individus tendent à vivre dans des pays où ils reçoivent des revenus plus élevés.
    Keywords: International migration, Wage differentials,Discrete regressions, qualitative choice models, Migrations internationales, Différences de salaires, Régressions sur variables discrètes, modèles de choix qualitatifs.
    JEL: F22 C35 J31 O15
    Date: 2007–10
  9. By: Narrod, Clare; Roy, Devesh; Okello, Julius; Avendaño, Belem; Rich, Karl
    Abstract: "Many developing countries have moved into the production of non-traditional agricultural products to diversify their exports and increase foreign currency earnings. Accessing developed country markets and urban domestic markets requires meeting the food safety requirements due to several demand and supply side factors. Food retailers have developed protocols relating to pesticide residues, field and packinghouse operations, and traceability. In this changing scenario where food safety requirements are getting increasingly stringent, there are worries regarding the livelihood of the poor since companies that establish production centers in LDCs might exclude them. Poor producers face problems of how to produce safe food, be recognized as producing safe food, identify cost-effective technologies for reducing risk, and be competitive with larger producers with advantage of economies of scale in compliance with food safety requirements. In enabling the smallholders to remain competitive in such a system, new institutional arrangements are required. In particular, public-private partnerships can play a key role in creating farm to fork linkages that can satisfy the market demands for food safety while retaining smallholders in the supply chain. Furthermore, organized producer groups monitoring their own food safety requirements through collective action often become attractive to buyers who are looking for ways to ensure traceability and reduce transaction costs. This paper compares how small producers of different fruit and vegetable products in different countries have coped with increased demands for food safety from their main export markets. These commodities are Kenyan green beans, Mexican cantaloupes, and Indian grapes." authors' abstract
    Keywords: Food safety, Supply chain management, Public-private partnerships, Collective action, Public and private standards, Traceability,
    Date: 2007
  10. By: Kristin E. Davis; Martha Negash
    Abstract: "TA mixed-methods, multiple-stage approach was used to obtain data on how gender and wealth affected participation in community groups in Meru, Kenya, and how men and women farmers obtain and diffuse agricultural information. Research techniques included participant observation, documentary analysis, semi-structured interviews, social mapping, group timelines, and structured questionnaires. Dairy-goat farmer groups were interviewed for the study. Qualitative data provided baseline information, and helped in the formulation of research questions. Quantitative data were analyzed using contingency tables, descriptive statistics, correlations, tests of significance, and regression. Factors that affected participation in different types of groups included household composition, age, and gender. Women made up 59 percent of the dairy-goat group (DGG) members, with the DGG project encouraging women's participation. Women made up 76 percent of DGG treasurer positions; 43 percent of secretary positions, and 30 percent of chairperson positions. Gender also influenced participation in clan groups, water groups, and merry-go-round (savings and loans) groups. Wealth did not appear to have a significant effect on participation in community groups. Extension was the most important information source for both men and women farmers. However, church and indigenous knowledge (passed on from parents) seemed more important to women. Both men and women mentioned other farmers, groups, and “baraza” (public meetings used to make announcements and diffuse information) as important information sources, but they rated them at different levels of importance. Men were diffusing information to greater numbers of people than women, although men and women diffused to similar sources. This study shows that because men and women traditionally participate in different types of groups and receive agricultural information from different sources, development agencies must target different types of groups and institutions to reach men, women, or poor farmers. Mechanisms should be developed to include women, the poor, and other targeted groups in community associations that provide market and other income-earning opportunities.." Author's Abstract
    Keywords: Gender, Collective action,
    Date: 2007
  11. By: Knedlik, Tobias; Kronthaler, Franz
    Abstract: The paper explores the relationships between economic freedom on the one side and development aid and IMF credit as approximation for conditional aid on the other side. After a short review of current literature the paper develops a simple panel regression model to evaluate the relationships. In contrast to previous research, our results allow the rejection of the hypothesis that IMF credit increases economic freedom and that development aid is not contributing to economic freedom. It could not be shown that countries can be forced to economic freedom by aid conditions. The paper discusses explanations of the empirical findings.
    Keywords: Aid receiving countries, economic freedom, development aid, IMF credit
    JEL: F35 O19 P10
    Date: 2007
  12. By: Nathalie Rousset (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II)
    Abstract: Les prospectives sur le changement climatique amplifient les risques déjà lourds qui pèsent sur les ressources hydriques et les capacités agricoles au sud de la Méditerranée. Ce papier analyse la portée méthodologique du concept de " commerce d'eau virtuelle " en quantifiant le contenu en eau du commerce international des produits agricoles des pays d'Afrique du Nord. Il montre aussi sa pertinence en tant qu'outil stratégique susceptible de structurer les stratégies d'adaptation à la rareté croissante de l'eau et les politiques commerciales dans la région.
    Date: 2007–10–19
  13. By: Sarris, Alexander; Hoffmann, Vivian; Christiaensen, Luc
    Abstract: Studies of risk and its consequences tend to focus on one risk factor, such as a drought or an economic crisis. Yet 2003 household surveys in rural Kilimanjaro and Ruvuma, two cash-crop-growing regions in Tanzania that experienced a precipitous coffee price decline around the turn of the millennium, identified health and drought shocks as well as commodity price declines as major risk factors, suggesting the need for a comprehensive approach to analyzing household vulnerability. In fact, most coffee growers, except the smaller ones in Kilimanjaro, weathered the coffee price declines rather well, at least to the point of not being worse off than non-coffee growers. Conversely, improving health conditions and reducing the effect of droughts emerge as critical to reduce vulnerability. One-third of the rural households in Kilimanjaro experienced a drought or health shocks, resulting in an estimated 8 percent welfare loss on average, after using savings and aid. Rainfall is more reliable in Ruvuma, and drought there did not affect welfare. Surprisingly, neither did health shocks, plausibly because of lower medical expenditures given limited health care provisions.
    Keywords: Health Monitoring & Evaluation,Crops & Crop Management Systems,Access to Finance,Rural Poverty Reduction,
    Date: 2007–11–01
  14. By: Gebremariam Woldemicael (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Current research and policy on maternal and child health-care in Eritrea and Ethiopia focus primarily on female education and employment, while little attention is placed on women’s decision-making autonomy. However, the role of women’s decision-making in reproductive health cannot be overemphasized. In this paper, different dimensions of women’s decision-making autonomy and their relationship to maternal and child health-care utilization are investigated using data from the Demographic and Health Surveys of Ethiopia and Eritrea. We simultaneously consider the role of socio-economic (indirect) indicators of women’s status . The study shows that most autonomy indicators are important predictors of maternal and child health-care utilization although the strength and statistical significance vary by health-care utilization outcome and country, and in some cases significance is lost when socio-economic indicators are held constant. The strong positive effect of women’s sole decision-making in visiting family or relatives on use of antenatal care and child immunization is particularly impressive. On the other hand, the loss of significance of other dimensions of women’s decision-making when socio-economic factors are controlled for indicates that some health-care seeking behaviours are more dependent on socio-economic factors like education and employment. The results show that most socio-economic indicators have strong influence on both women’s decision-making autonomy and on maternal and child health-care utilization. These findings suggest that both women’s autonomy and socio-economic indicators should be analyzed in order to derive a complete understanding of the determinants of maternal and child health-care utilization.
    Keywords: Eritrea, Ethiopia
    JEL: J1 Z0
    Date: 2007–11
  15. By: Xavier Le Roy (Dynamiques environnementales entre forêt, agriculture et biodiversité : des pratiques locales sur la nature aux politiques de conservation - IRD : UR168)
    Abstract: Quelle est la singularité du sorgho de décrue dans la vallée du fleuve Sénégal ? Permettant une utilisation différée de l’abondance en eau, il se distingue d’autres contextes par l’absence de repiquage et par un cycle cultural exclusivement en saison sèche. Cette pratique millénaire semble échapper aux mutations agraires, reflétant une stricte hiérarchie sociale et observant un itinéraire technique immuable. Alors que vingt années de sécheresse et l’introduction de l’agriculture irriguée semblaient le condamner, le sorgho de décrue ressurgit en 1994, démontrant l’attachement des populations de la moyenne vallée à cette production sans risque économique. Toutefois, la mise en route des turbines au barrage de Manantali accentue l’incertitude et la variabilité qui les caractérisent les cultures de décrue.
    Date: 2007–10–15
  16. By: Tatom, John
    Abstract: Morocco has a distinguished reputation for opening the economy, privatization and for increasing the role of the private sector in economic development. The nation has also had well known success in achieving a high degree of price stability through a fixed and credible exchange rate that was supported by sound monetary policy. All of these successes led to accelerated investment, both domestically and by foreigners. One highly important potential impediment to growth is that Morocco, however, appears to have neglected the global fiscal reform movement aimed at providing a growth oriented and fairer tax system that encourages private sector risk-taking and investment. Following some key reform in the early 1990s, tax rates have not been altered much since then and remain relatively high, especially for individuals at low and moderate income levels, in comparison with other countries. This paper examines the importance of tax policy for investment and whether there are opportunities there to accelerate productivity and growth through tax reform. Morocco has extremely high taxes, especially the individual income tax, social insurance or payroll taxes and the value added tax. The individual income tax is the highest in the region and the highest marginal rate begins at a relatively low level of income. The corporate tax rate is among the highest in the region as well. At least one country in the region, Tunisia, has already taken the initiative to follow the global trend of cutting marginal tax rates in order to stimulate investment and growth. Morocco could usefully consider taking the lead in pursuing more competitive and lower, broader and less-discriminating taxation. Among the most critical steps would be cutting the top rate on individual income from 44 percent and extending the income level from where it begins to a larger multiple of median income. There are numerous loopholes that could be closed in order to finance such a change. Such steps would have the added benefits of lowering interest rates and boosting private capital formation and economic growth. But a broader and more aggressive agenda of tax reform is easily justified by regional or international comparisons.
    Keywords: Tax policy; economic development; investment and growth
    JEL: O23 H21 O55
    Date: 2007–11–29
  17. By: Cavalcanti, Carlos
    Abstract: This paper examines whether the structure of the Multi-Donor Budget Support (MDBS) in Ghana evolved over time to minimize transaction costs commonly found in accessing and delivering development assistance in multi-donor settings. While the MDBS was expected to reduce the transaction costs involved in dealing with multiple development agencies, it created three additional sources of transaction costs: coordination failures, the costs of collective action, and measurement costs. The answer that emerges from this paper is that the structure of the MDBS evolved to mitigate these transaction costs. The problems associated with coordination was addressed by delegating the policy dialogue to sector-specific groups aimed at reaching agreements over a narrower set of issues and a mongst a smaller group of participants. Also, the MDBS reduced the cost of collective action by devising rules that allowed all the participating agencies to have a role in the decision-making process, and, in doing so, encouraged these agencies to increase the share of their contribution coming through the MDBS, rather than through large projects and off-budget disbursements. There was less success in reaching a settled view on how to reduce so-called measurement costs, however. While the group of development agencies made several attempts to overcome the difficulties in measuring progress in the program supported by the MDBS, it was not able to reach consensus on the extent to which the monitoring of the program should rely on outcome indicators. The Government did not favor the use of outcome indicators, and some development agencies placed greater emphasis on maintaining a dialogue around policy actions aimed at reaching the desired outcomes.
    Keywords: Economic Theory & Research,Debt Markets,Public Sector Expenditure Analysis & Management,,Development Economics & Aid Effectiveness
    Date: 2007–11–01

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