nep-afr New Economics Papers
on Africa
Issue of 2008‒03‒15
eight papers chosen by
Suzanne McCoskey
George Washington University

  1. Chutes brutales des prix des céréales improbables en ce début de campagne de commercialisation 2007/08 (Sharp Drops in Cereals Prices Improbable at the Beginning of the Marketing) By Niama Nango Dembélé
  2. A Theory of Efficiency Wage with Multiple Unemployment Equilibria: How a Higher Minimum Wage Law Can Curb Unemployment By Basu, Kaushik; Felkey, Amanda J.
  3. From Violence to Voting: War and political participation in Uganda By Christopher Blattman
  4. Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis By Benno Torgler; Friedrich Schneider
  5. Explaining the Violence Pattern of the Algerian Civil War By Roman Hagelstein
  6. Market Returns and Weak-Form Efficiency: the case of the Ghana Stock Exchange By Frimpong, Joseph Magnus; Oteng-Abayie, Eric Fosu
  7. The Cognitive Link Between Geography and Development: Iodine Deficiency and Schooling Attainment in Tanzania By Erica M. Field; Omar Robles; Máximo Torero
  8. Brain Drain and Productivity Growth: Are Small States Different? By Schiff, Maurice; Wang, Yanling

  1. By: Niama Nango Dembélé (Department of Agricultural Economics, Michigan State University)
    Abstract: The 2007 – 2008 agricultural campaign was characterized by an important delay of rainfall. As a result, certain acreages on which cotton is traditionally cultivated were used for the cultivation of millet and sorghum. The production of rice is satisfactory. However, the area planted to maize is lower this year because of the limited access to fertilizers due to the reduction of cotton acreage (as farmers typically use some of their cotton fertilizer on maize). The availability and the growing demand for shea nuts and the emergence of water melons and shallots on the markets are alternate sources of incomes for producers and permit them to delay the sale of coarse grains until later in the season, when prices are higher. These alternate sources of income and the anticipated reconstitution of institutional grain stocks (for the National Security Stock and local cereal banks) in December would further limit the drops of prices at harvest time.
    Keywords: food security, food policy, Mali
    JEL: Q18
    Date: 2007
  2. By: Basu, Kaushik (Cornell University); Felkey, Amanda J. (Lake Forest College)
    Abstract: This paper uses efficiency wage theory and the existence of community-based sharing to hypothesize that labor markets in developing countries have multiple equilibria – the same economy can be stuck at different levels of unemployment with different levels of wages. The model is meant for developing economies where wage-productivity links are discernible and income-sharing among the poor is prevalent. It seems reasonable to posit that in such an economy more unemployment leads to more income sharing. The main results are generated combining this claim with a theoretical demonstration of the fact that more sharing increases unemployment rates. As corollaries, we show that (1) within the same society, two different racial groups that may be ex ante identical can have different levels of unemployment and wages in equilibrium and (2) the imposition of a legal minimum wage can raise employment.
    Keywords: unemployment, efficiency wage, minimum wage law, racial differences, South Africa
    JEL: J60 O12 D40
    Date: 2008–03
  3. By: Christopher Blattman (Center for Global Development & Yale University)
    Abstract: What is the political legacy of violent conflict? This paper presents evidence for a link between war, violence and increased individual political participation and leadership among former combatants and victims of violence, and uses this link to understand the deeper determinants of individual political behavior. The setting is northern Uganda, where rebel recruitment methods generated quasiexperimental variation in who became a rebel conscript and who did not. Original survey data shows that the exogenous element of conscription (by abduction) leads to significantly greater political participation later in life. The principal determinant of this increased political participation, moreover, appears to be war violence experienced. Meanwhile, abduction and violence do not appear to affect multiple nonpolitical types of community participation. I show that these patterns are not easily explained by models of participation based on simple rational preferences, social preferences, mobilization by elites, or information availability. Only ‘expressive’ theories of participation appear consistent with the patterns observed, whereby exposure to violence augments the value a person places on the act of political expression itself. The implications for general theories of political participation are discussed.
    Date: 2008–01
  4. By: Benno Torgler; Friedrich Schneider
    Abstract: The following paper examines the different options to finance local public infrastructure in Ethiopia based on the assumption that the federal government of Ethiopia will not provide any guarantees for local borrowing. Besides a detailed description of the local public finance system and the capital market in Ethiopia, the paper also sets out some international successful practices in municipal infrastructure financing. Based on the observation of the Ethiopian case and the consideration of the international experiences, the paper has two major pillars that very specifically identify actions required for implementation. On the one hand, the paper recommends a number of feasible arrangements to generate a revenue enhancement of the local authorities in the existing intergovernmental framework. On the other hand, the paper suggests a solution - for creditworthy as well as for potentially creditworthy urban local governments (ULG) - to finance their future demand of public infrastructure together with the national finance institutions as well as the international donors.
    Keywords: Shadow economy, tax morale, governance quality, government intervention, corruption
    JEL: D73 D78 H2 H26 O17 O5
    Date: 2007–12
  5. By: Roman Hagelstein (Universität Tübingen)
    Abstract: I draw a geographically and temporally disaggregated model of the location and course of the Algerian civil war, using new battle event and location data from press reports. I show that the war was located in areas and at moments in time in which both the rebels and the government were about equally strong, according to my novel relative strength index. Additional factors that can robustly predict high location-specific war intensity are the severity of violence at a location in the past period, and unemployment. Finally, violence is unlikely to take place in unpopulated areas.
    Date: 2008–03
  6. By: Frimpong, Joseph Magnus; Oteng-Abayie, Eric Fosu
    Abstract: This paper examines the weak-form efficient market hypothesis (EMH) in the case of the Ghana Stock Exchange (GSE) an emerging market. Daily returns from the Databank Stock Index (DSI) over a 5-year period 1999-2004 were used for the exercise. Random walk (RW) and GARCH(1,1) models are used as the basis for our analysis. The GSE DSI returns series exhibit volatility clustering, an indication of inefficiency on the GSE. The weak-form efficient market (random walk) hypothesis was rejected for the GSE, meaning that the market is inefficient. The inefficient market has important implications for investors, both domestic and international. Knowledge of profitable arbitrage opportunities due to market predictability serves to attract investors to diversify from more efficient markets to invest on the GSE bourse to increase their returns.
    Keywords: Ghana Stock Exchange; FINSAP; efficient market hypothesis; nonlinearity test
    JEL: G14 C12 C22
    Date: 2007–08–08
  7. By: Erica M. Field; Omar Robles; Máximo Torero
    Abstract: An estimated 20 million children born each year are at risk of brain damage from in utero iodine deficiency, the only micronutrient deficiency known to have significant, non-reversible effects on cognitive development. Cognitive damage from iodine deficiency disorders (IDD) has potentially important implications for economic growth through its effect on human capital attainment. To gauge the magnitude of this influence, we evaluate the impact of reductions in fetal IDD on child schooling attainment that resulted from an intensive distribution of iodized oil capsules (IOC) in Tanzania. We look for evidence of improvements in cognitive ability attributable to the intervention by assessing whether children who benefited from IOC in utero exhibit higher rates of grade progression at ages 10 to 14 relative to siblings and older and younger children in the district who did not. Our findings suggest that reducing fetal IDD has significant benefits for child cognition: Protection from IDD in utero is associated with 0.36 years of additional schooling. Furthermore, the effect appears to be substantially larger for girls, consistent with new evidence from laboratory studies indicating greater cognitive sensitivity of the female fetus to maternal thyroid deprivation. There is no indication that IOC improved rates of illness or school absence due to illness, suggesting that IOC improves schooling through its effect on cognition rather than its effect on health. However, there is weak evidence that the program also reduced child but not fetal or infant mortality, which may bias downward the estimated effect on education. Cross-country regression estimates corroborate the results from Tanzania, indicating a strong negative influence of total goiter rate and strong positive influence of salt iodization on female school participation. Together, these findings provide micro-level evidence of the direct influence of ecological conditions on economic development and suggest a potentially important role of variation in rates of learning disability in explaining cross-country growth patterns and gender differences in schooling attainment.
    JEL: I1 I21 O12 O55
    Date: 2008–03
  8. By: Schiff, Maurice (World Bank); Wang, Yanling (Carleton University)
    Abstract: This paper examines the impact of North-South trade-related technology diffusion on TFP growth in small and large states in the South. The main findings are: i) TFP growth increases with North-South trade-related technology diffusion, with education, and with the interaction between the two, and it decreases with the emigration of skilled labor (brain drain); ii) these effects are substantially (over three times) larger in small states than in large ones. Small states also exhibit a much higher brain drain level. Consequently, the brain drain generates greater losses in terms of TFP growth both because of its greater sensitivity to the brain drain and because the brain drain is substantially larger in small than in large states.
    Keywords: trade, technology diffusion, brain drain, productivity growth
    JEL: F22 J61
    Date: 2008–02

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