nep-afr New Economics Papers
on Africa
Issue of 2009‒08‒02
fifteen papers chosen by
Quentin Wodon
World Bank

  1. The Global Economic Crisis: Towards Syndrome-Free Recovery for Africa By Fosu, Augustin Kwasi; Naude, Wim
  2. Entrepreneurship and Income Inequality in Southern Ethiopia By Kimhi, Ayal
  3. The opportunity cost of the upkeep of the criminal justice system in South Africa from 1980 to 2006 By Pierre de Villiers; Soon Nel
  4. Botswana as a Role Model for Country Success By Robinson, James A.
  5. High-Growth Entrepreneurial Firms in Africa: A Quantile Regression Approach By Goedhuys, Micheline; Sleuwaegen, Leo
  6. Labour Market Racial Discrimination in South Africa Revisited By Maciej, Szelewicki; Tyrowicz, Joanna
  7. The dynamics of inequality in a newly settled, pre-industrial society: The case of the Cape Colony By Johan Fourie; Dieter von Fintel
  8. Socialism without liberation: Land Reclamation Projects in Guinea-Bissau By Kohnert, Dirk
  9. Literacy and Numeracy in Faith-Based and Government Schools in Sierra Leone By Wodon, Quentin; Ying, Yvonne
  10. Linkages, Access to Finance and the Performance of Small-Scale Enterprises in Kenya By Atieno, Rosemary
  11. Comparing the Performance of Faith-Based and Government Schools in the Democratic Republic of Congo By Backiny-Yetna, Prospere; Wodon, Quentin
  12. The impact of the increase in food prices on child poverty and the policy response in Mali By Sami Bibi; John Cockburn; Luca Tiberti; Massa Coulibaly
  13. Comparing the Private Cost of Education at Public, Private, and Faith-Based Schools in Cameroon By Backiny-Yetna, Prospere; Wodon, Quentin
  14. Forecasting local climate for policy analysis : a pilot application for Ethiopia By Blankespoor, Brian; Pandey, Kiran Dev; Wheeler, David
  15. The Mauritian Success Story and its Lessons By Subramanian, Arvind

  1. By: Fosu, Augustin Kwasi; Naude, Wim
    Abstract: This paper outlines the impact of the global economic crisis on Africa. Recovery requires coordinated and consistent efforts to assist individual countries in mitigating (reducing) the risk, coping with the impact, and reducing risk over the longer term. Care should be exercised to maintain and improve good governance, which is essential for African countries to avoid introducing various .anti-growth policy syndromes. into their economies. These could arise if responses to the crisis result in (i) further boom-bust cycles and flaming the historically high volatility of African growth, including inflation, (ii) another debt crisis, (iii) household engaging in adverse coping strategies with lasting impacts; (iv) reversal of gains made in opening up African economies and re-introducing crippling state controls; and (v) entrenchment of inequities and inefficiencies in the global financial and aid architecture.
    Keywords: Africa, least developed countries, global economic crisis, financial crisis, governance
    Date: 2009
  2. By: Kimhi, Ayal
    Abstract: This paper uses inequality decomposition techniques in order to analyse the consequences of entrepreneurial activities to household income inequality in southern Ethiopia. A uniform increase in entrepreneurial income reduces per capita household income inequality. This implies that encouraging rural entrepreneurship may be favourable for both income growth and income distribution. Such policies could be particularly successful if directed at the low-income, low-wealth, and relatively uneducated segments of the society.
    Keywords: entrepreneurship, income inequality, redistribution, Ethiopia, Africa
    Date: 2009
  3. By: Pierre de Villiers (Department of Economics, University of Stellenbosch); Soon Nel (Department of Accountancy, University of Stellenbosch)
    Abstract: South African crime rates rose to unacceptably high levels between 1980 and 2006. As a result, vast amounts of funds were devoted to the upkeep of the criminal justice system – correctional services, justice and the police. Although it is necessary to spend a certain amount on the criminal justice system, in South Africa this expenditure was excessive by most measures. The excess funds that were spent on the upkeep of the criminal justice system could have covered the cost of financing the entire backlog in schooling facilities and a large part of the current housing shortage.
    Keywords: crime, opportunity costs, criminal justice system, social services
    JEL: D00 E62 H10 H40
    Date: 2009
  4. By: Robinson, James A.
    Abstract: I argue that the economic success of Botswana can be explained by the historical development of its institutions which is related to the trajectory of the Tswana states over the past 200 years. These institutions created a much more stable and accountable government than elsewhere in Africa after independence with the desire and incentive to adopt good economic policies. There are two main lessons from this experience. The first is how successful an African economy can become using simple orthodox well-understood policies. The second is that successful development in Africa will be helped by a focus on the development of state institutions. Though Botswana inherited different institutions from elsewhere, it also built on these, in particular trying to create a national identity and to continually modernize and adapt institutions. There are many lessons for other African countries from these policy choices.
    Keywords: governance, patrimonialism, state formation
    Date: 2009
  5. By: Goedhuys, Micheline; Sleuwaegen, Leo
    Abstract: This paper studies the growth performance of a large set of entrepreneurial firms in ten manufacturing sectors of eleven Sub-Saharan African countries. The focus of the paper is on identifying those entrepreneurs. attributes and firm characteristics that tend to generate a significant number of high-growth firms in these countries. To this end, we use a quantile regression, which provides a more complete estimation of the growth distribution of firms conditional on different attributes. The results indicate that especially firms that engage in product innovation, have their own transport means and are connected to the internet through their own website are characterized by higher growth rates and display a more skewed distribution to the right, hosting a higher number of high-growth firms. The effect of the last two variables, which relate to distance-bridging modes of infrastructure, points to the self-reinforcing growth effects.
    Keywords: quantile regression, high-growth firms, firm growth, Africa
    Date: 2009
  6. By: Maciej, Szelewicki; Tyrowicz, Joanna
    Abstract: Discrimination is a significant issue in labour market economics across developed as well as developing countries. In this paper we inquire the actual size of wage discrimination in the Republic of Soutn Africa, accounting for large differences in individual endowments. We apply the Oaxaca-Blinder decomposition as well as propensity score matching to adequately determine the role of discrimination in the wage gaps observed. Although the size of the absolute racial wage gap is enormous, amounting for more than 500%, the actual estimated effect non-attributable to other factors ranges between 45%-55%. This estimator, however, assumes homogenous discrimination across the wage distribution, while data suggest that there are significant educational, sectoral and occupational differentials. To account for these effects, we implement propensity score matching by finding “statistical twins” of the White population among the Black population, thus we demonstrate how wages differ between these groups in comparable labour market situations. Here too we find that wages for the White are on average approximately 30%, while the effects vary at quartiles of the wage distribution.
    Keywords: discrimination; Oaxaca-Blinder decomposition; propensity score matching; Republic of South Africa; racial wage gap
    JEL: J08 J71 O12
    Date: 2009
  7. By: Johan Fourie (Department of Economics, University of Stellenbosch); Dieter von Fintel (Department of Economics, University of Stellenbosch)
    Abstract: One reason for the relatively poor development performance of many countries around the world today may be the high levels of inequality during and after colonisation. Evidence from colonies in the Americas suggests that skewed initial factor endowments could create small elites that owned a disproportionate share of wealth, human capital and political power. The Cape Colony, founded in 1652 at the southern tip of Africa, presents a case where a mercantilist company (the Dutch East India Company) settles the land and establishes a unique set of institutions within which inequality and development evolve. This paper provides a long-run quantitative analysis of trends in asset-based inequality (using Principle Components' Analysis on tax inventories) during the seventeenth and eighteenth century, allowing, for the first time, a dynamic rather than static analysis of inequality trends in a newly settled and pre-industrial society over this period. While theory testing in other societies has been severely limited because of a scarcity of quantitative evidence, this study presents a history with evidence, enabling an evaluation of the Engerman-Sokoloff and other hypotheses.
    Keywords: South Africa, settler societies, Kuznets, income distribution, asset index, institutions, mercantilism, Dutch East India Company
    JEL: N37 D31 D63
    Date: 2009
  8. By: Kohnert, Dirk
    Abstract: One of the outstanding aims of most liberation movements has been to increase the economic well-being of their people, Guinea-Bissau being no exception in this respect. How far has the new Nation State succeeded in fulfilling this aim? A comparative analysis of the implementation of land reclamation projects during colonial and post-colonial times reveals astonishing similarities: especially the centralization of development efforts in the hands of administrators disconnected from the grassroots, lack of target group analysis and misconceptions about the aims and needs, as well as the resources, of the population involved in the development efforts, on the part of the administration. The effects of this negative conditioning process of 'development' over many years on the chances of cooperation between peasants and the administration are still largely unknown. Any development planner who wants to encourage the local population to take their future into their own hands, would have to take account of this negative conditioning process.
    Keywords: rural development; rice farming; land reclamation; colonialism; socialism; Guinea-Bissau; West Africa
    JEL: Z1 P21 P51 P32 O12 A14
    Date: 1988–01
  9. By: Wodon, Quentin; Ying, Yvonne
    Abstract: This paper provides a comparative assessment of the market share, reach to the poor, and performance of faith-based and public schools in Sierra Leone using data from the 2004 Integrated Household Survey. One-third of primary school students attend government schools and more than half are in faith-based government-assisted schools. Faith-based schools tend to serve children who live in poverty more than public schools, and after controlling for student and household characteristics and school choice, they also perform slightly better than public schools.
    Keywords: Primary education; faith-based; poverty; performance; Sierra Leone
    JEL: Z12 H11 I21 L33 H44
    Date: 2009–06
  10. By: Atieno, Rosemary
    Abstract: Micro- and small-scale enterprises (MSEs) have become important players in the Kenyan economy, but at the same time they continue to face constraints that limit their development. Lack of access to financial services is one of the main constraints, and a number of factors have been identified to explain this problem. These include the segmented and incomplete nature of financial markets, which increases transaction costs associated with financial services. On the supply side, most formal financial institutions consider MSEs uncreditworthy, thus denying them credit. Lack of access to financial resources has been seen as one of the reasons for the slow growth of firms. Literature from the new institutional economics, however, shows that institutional arrangements, like linkages and networks between firms, provide an important avenue through which firms can overcome some of these constraints.
    Keywords: linkages, finance, enterprise performance
    Date: 2009
  11. By: Backiny-Yetna, Prospere; Wodon, Quentin
    Abstract: This paper provides a comparative assessment of the market share, reach to the poor, and performance of faith-based and public schools in the Democratic Republic of Congo using data from the 2004-2005 "123" survey. More than two thirds of primary school students attend faith-based government-assisted schools. Both types of school cater to a similar population that is overwhelmingly poor. Faith-based schools perform slightly better at least in some dimensions than government schools, but the differences between the two types of schools are small and not statistically significant.
    Keywords: Primary education; faith-based; performance; poverty; Democratic Republic of Congo
    JEL: Z12 H11 I21 L33 H44
    Date: 2009–06
  12. By: Sami Bibi; John Cockburn; Luca Tiberti; Massa Coulibaly
    Abstract: Since 2006, Mali has experienced the full effects of the global food crisis, with price increases of up to 67%. This study presents simulations of the impacts of this crisis and a number of policy responses with respect to the welfare of children. The impacts are analyzed in terms of monetary (food) poverty, nutrition, education, child labor and access to health services of children. According to simulations, food poverty among children would have increased from 41% to 51%, with a corresponding rise in caloric insufficiency from 32% to 40%, while the impacts on school participation, work and access to health services would have been relatively weak.
    Keywords: child education; child health; child labour; child poverty; economic crisis; food crises; nutrition;
    JEL: E39
    Date: 2009
  13. By: Backiny-Yetna, Prospere; Wodon, Quentin
    Abstract: This paper uses recent household survey data for Cameroon to measure the cost for households of the education services that their children receive and assess how this cost varies according to the type of service provider. Contrary to what has been observed in some other countries, the data suggest that faith-based schools in Cameroon serve primarily better-off children, with public schools serving the poor more. Faith-based schools are also more expensive for households than private schools (possibly due to lower levels of public funding). This may be one of the reasons why the poor tend to go to public schools more than to faith-based schools.
    Keywords: Education; cost of schooling; faith-based schools; public schools; Cameroon
    JEL: Z12 H11 I21 L33 H44
    Date: 2009–06
  14. By: Blankespoor, Brian; Pandey, Kiran Dev; Wheeler, David
    Abstract: This paper describes an approach to forecasting future climate at the local level using historical weather station and satellite data and future projections of climate data from global climate models (GCMs) that is easily understandable by policymakers and planners. It describes an approach to synthesize the myriad climate projections, often with conflicting messages, into an easily-interpreted set of graphical displays that summarizes the basic implications of the ensemble of available climate models. The method described in the paper can be applied to publicly-available data for any country and for any number of climate models. It does not depend on geographic scale and can be applied at the subnational, national, or regional level. The paper illustrates the results for future climate for Ethiopia using future climate scenarios projects by 8 global climate models. The graphical displays of nine possible future climate regimes (average temperature, precipitation and their seasonal distribution) for each grid-cell about 50km X 50 km). It also provides the probability associated with each of the nine-climate regimes.
    Keywords: Climate Change,Global Environment Facility,Water Conservation,Information Security&Privacy,Water Resources Assessment
    Date: 2009–07–01
  15. By: Subramanian, Arvind
    Abstract: This paper examines different explanations.initial conditions, openness to trade and FDI, and institutions.of the Mauritian growth experience since the mid-1970s. We show that arguments based on openness to trade and FDI are either misleading or incomplete. Even when correctly articulated, openness appears to be a proximate rather than an underlying explanation for the Mauritian experience. The institution-based explanation offers greater promise. Ultimately, however, the econometric results indicate that existing explanations may be incomplete. Some idiosyncratic factors, particularly Mauritian diversity and the responses to managing it, may provide the missing pieces in the story of Mauritius.s success.
    Keywords: Mauritius; growth; institutions, openness
    Date: 2009

This nep-afr issue is ©2009 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.
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