nep-afr New Economics Papers
on Africa
Issue of 2008‒12‒21
twelve papers chosen by
Quentin Wodon
World Bank

  1. Food Price Inflation and Children's Schooling By Michael Grimm
  2. Spatial Inequalities Explained - Evidence from Burkina Faso By Johannes Gräb; Michael Grimm
  3. Conflict, Disasters, and No Jobs: Reasons for International Migration from Sub-Saharan Africa Creation Date: 2008 By Naude, Wim
  4. Attracting Microfinance Investment Funds: Promoting Microfinance Growth through Increased Investments in Kenya By Matu, Jeffrey Ben
  5. The significance of the Cape trade route to economic activity in the Cape colony: a medium-term business cycle analysis By Willem H Boshoff; Johan Fourie
  6. Tax Reforms in Ghana Creation Date: 2005 By Osei, Robert; Quartey, Peter
  7. Effect of changes in state funding of higher education on higher education output in South Africa: 1986-2007 By Pierre de Villiers; Gert Steyn
  8. What explains the academic success of second-year economics students? An exploratory analysis By Pietie Horn; Ada Jansen; Derek Yu
  9. Tracking, Attrition and Data Quality in the Kenyan Life Panel Survey Round 1 (KLPS-1) By Sarah Baird; Joan Hamory; Edward Miguel
  10. Analyse des conditions de l'habitat en Tunisie: une approche par la statistique multivariée By Filali, Radhouane
  11. The 30-Year Challenge: Agriculture's Strategic Role in Feeding and Fueling a Growing World By Thompson, Wyatt
  12. IDE et retards d'investissement de l'entreprise domestique au Sénégal : une solution par la gouvernance d'entreprise By Sene, Serigne Moustapha

  1. By: Michael Grimm
    Abstract: I analyze the impact of food price inflation on parental decisions to send their children to school. Moreover, I use the fact that food crop farmers and cotton farmers were exposed differently to that shock to estimate the income elasticity of school enrolment. The results suggest that the shock-induced loss in purchasing power had an immediate effect on enrolment rates. Instrumental variable estimates show that the effect of household income on children's school enrolment is much larger than a simple OLS regression would suggest. Hence, policies to expand education in Sub-Saharan Africa, should not neglect the demand side.
    Keywords: Education, Household Income, Inflation, Aggregate Shocks, Africa
    JEL: I21 O12 Q12
    Date: 2008
  2. By: Johannes Gräb; Michael Grimm
    Abstract: Empirical evidence suggests that regional disparities in incomes are often very high, that these disparities do not necessarily disappear as economies grow and that these disparities are itself an important driver of growth. We use a novel approach based on multilevel modeling to decompose the sources of spatial disparities in incomes among households in Burkina Faso. We show that spatial disparities are not only driven by the spatial concentration of households with particular endowments but to a large extent also by disparities in community endowments. Climatic differences across regions due also matter, but to a much smaller extent.
    Keywords: Spatial inequality, poverty, multilevel modeling, decomposition, Sub-Saharan Africa
    JEL: C21 I32 O12 R12
    Date: 2008
  3. By: Naude, Wim
    Abstract: Sub-Saharan Africa (SSA) has the highest growth rate in net international migration in the world. The reasons for this migration are investigated in this paper. First, a survey of the literature on the profile and determinants of international migration in SSA is given. Second, panel data on 45 countries spanning the period 1965 to 2005 are used to determine that the main reasons for international migration from SSA are armed conflict and lack of job opportunities. An additional year of conflict will raise net out-migration by 1.35 per 1,000 inhabitants and an additional 1 per cent growth will reduce net out-migration by 1.31 per 1,000. Demographic and environmental pressures have a less important direct impact, but a more pronounced indirect impact on migration through conflict and job opportunities. In particular, the frequency of natural disasters has a positive and significant effect on the probability that a country will experience an outbreak of armed conflict. Furthermore, there is no evidence of a ?migration hump? or of persistence in net migration rates in SSA, and no evidence that immigration is causing conflict in host countries.
    Keywords: international migration, conflict, natural disasters, environmental degradation, environmentally forced migration, Africa
  4. By: Matu, Jeffrey Ben
    Abstract: Although microfinance has played a significant role in providing a wide range of financial products and services, many microfinance institutions (MFIs) in Kenya still face major challenges with efficiently and effectively delivering microfinance services in the country. As the demand for these services continues to grow, the limited sources of available capital have greatly undermined the capabilities of MFIs to efficiently operate their services and expand their various microfinance activities. This has led to a financial gap in the supply of microfinance services, and consequently has reduced the opportunities for the poor to access basic socio-economic benefits that could potentially improve their wellbeing. The widening financial gap in the microfinance sector has been attributed to self-governance issues, capacity building issues, non-compliance with reporting requirements, and a lack of appropriate performance criteria. These and other factors have jeopardized MFIs sustainability and have compromised the delivery of microfinance services in the country. There is a need for a policy that advocates for better access to capital sources and investment opportunities for microfinance sustainability, and also encourages MFIs to increase their accessibility, build capacity, be more transparent, adopt acceptable performance standards, and promote professionalism to enhance service delivery. This paper analyzes three policy alternatives which include: (i) maintaining the status quo; (ii) government regulation of all MFIs; and (iii) voluntarily self-regulating by member MFIs as alternatives for closing the financial gap in the supply of microfinance services. All the three alternatives are evaluated against the following criteria: efficiency, financial and political feasibility, and accessibility to determine the best policy option.
    Keywords: microfinance; investment funds; social responsible investing; Africa; Kenya; public policy; economics; finances; financial economics; public economics; Kenya microfinance Act
    JEL: G2 E58 E22 O2 F21 G20
    Date: 2008–04–18
  5. By: Willem H Boshoff (Department of Economics, University of Stellenbosch); Johan Fourie (Department of Economics, University of Stellenbosch)
    Abstract: Trade is a critical component of economic growth in newly settled societies. This paper tests the impact of ship traffic on the Cape economy using a time series smoothing technique borrowed from the business cycle literature and employing an econometric procedure to test for long-run relationships. The results suggest a strong systematic co-movement between wheat production and ship traffic, with less evidence for wine production and stock herding activities. While ship traffic created demand for wheat exports, the size of the co-movement provides evidence that ship traffic also stimulated local demand through secondary and tertiary sector activities, supporting the hypothesis that ship traffic acted as a catalyst for growth in the Cape economy.
    Keywords: Colonial trade, Cape of Good Hope, Dutch East India, Band-pass filter, Medium-term fluctuations, Business cycle, South Africa, Ships, Harvest cycles, Colonial economy
    JEL: N17 E32 N77
    Date: 2008
  6. By: Osei, Robert; Quartey, Peter
    Keywords: tax reforms, poverty, Ghana
  7. By: Pierre de Villiers (Department of Economics, University of Stellenbosch); Gert Steyn (Institutional Research and Planning Division, University of Stellenbosch)
    Abstract: During the last two decades state funding of higher education in South Africa has decreased substantially (especially if public expenditure of HE as a percentage of GDP is used as a yardstick). HE institutions were forced to increase tuition fees and rely more on the third income stream to balance their books. In the process increases in instruction/research staff did not keep up with the increase in student numbers. During the period 1986-2003 qualifications awarded to students per full-time equivalent instruction/research staff member increased over time – indicating greater efficiency of the HE sector in delivering more teaching output. High-level research in the form of publication units in accredited journals, however, stagnated during this period. In recent years until 2007, however, publications in accredited journals increased substantially. This was mainly the result of broadening the number of accredited journals by the Department of Education. In this paper two indicators, linked to the current funding formula for higher education, to measure academic output of HEIs are defined and applied to the output of institutions for the period since 2002. It is concluded that there is large variability between HEIs as far as teaching and research output are concerned. A cause for concern is that the majority of the research is conducted by just a few HE institutions.
    Keywords: Higher education, Financing, Subsidy formula, Education output
    JEL: H40 I22 I23
    Date: 2008
  8. By: Pietie Horn (Department of Economics, University of Stellenbosch); Ada Jansen (Department of Economics, University of Stellenbosch); Derek Yu (Department of Economics, University of Stellenbosch)
    Abstract: The factors influencing academic success of first-year Economics students have received much attention from researchers. Very little attention, however, has been given to the determinants of success of senior Economics students. In the USA, Graunke and Woosley (2005: 367) indicate that college sophomores (second years) face academic difficulties, but this receives little attention in the literature. Economics is an elective subject for second-year students at Stellenbosch University. The academic performance of the second-year students has shown a decline, as compared to the first-year Economics performance and the faculty’s average performance. An observed phenomenon at Stellenbosch University is the poor attendance of lecture and tutorials by second year students, some of the factors than can perhaps explain why students perform poorly. This phenomenon may be explained in part by second year students losing interest in academic activities, focusing on other social commitments. This study investigates the academic success of second-year Economics students. It adds to the existing literature on the factors affecting the academic success of Economics students by focusing on the second-year students (a much neglected group in empirical studies, particularly in South Africa). The empirical analyses confirm some of the existing findings in the literature, namely that lecture and tutorial attendance are important contributors to academic success. We also find that as students progress to Economics at the second-year level, their performance in individual matriculation subjects is less relevant, except for those students who had taken Additional Mathematics. However, the matriculation aggregate mark is significant in explaining the academic performance, in a non-linear way. An important finding is that non-White students tend to perform more poorly in essay writing (one of the components of the course mark in the second year) than White students.
    Keywords: Education, Undergraduate, Second-year economics, Academic performance
    JEL: A2 A22 A29
    Date: 2008
  9. By: Sarah Baird (UC San Diego); Joan Hamory (UC Berkeley); Edward Miguel (UC Berkeley and NBER)
    Abstract: Understanding the possible pitfalls of survey data is critical for empirical research. Among other things, poor data quality can lead to biased regression estimates, potentially resulting in incorrect interpretations that mislead researchers and policymakers alike. Common data problems include difficulties in tracking respondents and high survey attrition, enumerator error and bias, and respondent reporting error. This paper describes and analyzes these issues in Round 1 of the Kenyan Life Panel Survey (KLPS-1), collected in 2003-2005. The KLPS-1 is an innovative longitudinal dataset documenting a wide range of outcomes for Kenyan youths who had originally attended schools participating in a deworming treatment program starting in 1998. The careful design of this survey allows for examination of an array of data quality issues. First, we explore the existence and implications of sample attrition bias. Basic residential, educational, and mortality information was obtained for 88% of target respondents, and personal contact was made with 84%, an exceptionally high follow-up rate for a young adult population in a less developed country. Moreover, rates of sample attrition are nearly identical for respondents who were randomly assigned deworming treatment and for those who were not, a key factor in the validity of subsequent statistical analysis. One vital component of this success is the tracking of respondents both nationally and across international borders (in our case, into Uganda), thus we discuss in detail the costs and benefits of tracking movers. Finally, we study KLPS-1 data quality more broadly by examining enumerator error and bias, as well as survey response consistency. We conclude that the extent of enumerator error is low, with an average of less than one recording error per survey. Errors decrease over time as enumerator experience with the survey instrument increases, but increase over the course of multiple interviews within a single day, presumably due to fatigue. We do find some evidence that the enumerator-respondent match in terms of gender, ethnicity, and religion correlates with responses regarding trust of others and religious activities, suggesting some field officer bias on sensitive questions. Reporting reliability is analyzed using respondent re-surveys. These checks show high levels of consistency across survey/re-survey rounds for the respondent's own characteristics and personal history,with lower reliability rates on questions asked about others' characteristics. The steps taken in the design of KLPS-1 to avoid common errors in survey data collection greatly improved the quality of this panel dataset, and provide some valuable lessons for future field data collection projects.
    Keywords: survey data, enumerator error, longitudinal dataset, Kenya, deworming,
    Date: 2008–08–01
  10. By: Filali, Radhouane
    Abstract: This paper discusses housing condition in Tunisia in the late 1990s, using a housing condition indicator that relies on less arbitrary weights. Evidences from household survey data indicate that despite the substantial improvement of tunisian's housing condition between 1994 and 2001, great disparities between urban and rural areas and between regions prevail. Moreover, it is shown that public authorities should stimulate the supply of social housing and local services in order to reduce housing poverty and disparities.
    Keywords: Indicateur composite; Conditions de l'Habitat; Inégalité; Pauvreté
    JEL: R58 D63 I32
    Date: 2008–06–20
  11. By: Thompson, Wyatt
    Abstract: To develop this report, Farm Foundation drew on the insights of leaders from business, government, non-governmental organizations and academia. We began with a small group of individuals whose discussions defined the 30-year challenge in six broad categories: 1. global financial markets and recession, 2. global food security, 3. global energy security, 4. climate change, 5. competition for natural resources, and 6. global economic development. Farm Foundation then invited a broader group of leaders to explore each of the six categories, identifying critical strategic problems, alternative strategies and potential policies. Those discussions are the basis of this report. The topics and options presented here are not intended to be inclusive; rather they are a template from which to expand discussion and debate. This is not a consensus document and it does not make recommendations. It does reflect the diverse opinions expressed by project participants, their analysis of the problems which must solved to meet the 30-year challenge, and their assessment of some potential options to deal with those problems.
    Keywords: Agricultural and Food Policy, Agricultural Finance, Environmental Economics and Policy, Food Security and Poverty, International Development, Resource /Energy Economics and Policy,
    Date: 2008–12
  12. By: Sene, Serigne Moustapha
    Abstract: This paper focuses on agency theory to explain investment behavior difference between private domestic and foreign in Senegalese industry. We put domestic companies into two groups with regard to managerial ownership and institutional ownership. An augmented accelerator model with demand uncertainty is used for that purpose. Empirical checkings have been performed using in panel of 187 firms. The results reveal that investment sensibility to uncertainty, sales and free cash flow is higher in foreign firms. Considering the efforts made by these firms in developing countries to meet international standards, our second area of research proposes managerial ownership to mitigate investment delays of domestic firms. It is showed that domestic firms can benefit from a high sensibility to uncertainty, be less financially constrained and less subject to underinvestment (due to manager extraction funds). A reduction of behavioral delays could be reached via optimal managerial ownership (within 5%-25%); none institutional ownership also improve domestic firms investment.
    Keywords: Investissement de la firme, Structure de propriété, Coûts d’agence, Propriété managériale, Panel, Sénégal
    JEL: O55 G31 C23 G32 M52
    Date: 2008–01–30

This nep-afr issue is ©2008 by Quentin Wodon. 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.