nep-afr New Economics Papers
on Africa
Issue of 2009‒11‒07
twelve papers chosen by
Quentin Wodon
World Bank

  1. The Distributional Impact of Large Dams: Evidence from Cropland Productivity in Africa By Eric Strobl
  2. The impact of banning export of cereals in response to soaring food prices: Evidences from Ethiopia using the new GTAP African database By Woldie, Getachew Abebe; Siddig, Khalid
  3. HIV and Fertility in Africa: First Evidence from Population Based Surveys By Juhn, Chinhui; Kalemli-Ozcan, Sebnem; Turan, Belgi
  4. Constraints to growth in Malawi By Lea, Nicholas; Hanmer, Lucia
  5. Designing cost-effective cash transfer programs to boost schooling among young women in Sub-Saharan Africa By Baird, Sarah; McIntosh, Craig; Ozler, Berk
  6. Can a market-assisted land redistribution program improve the lives of the poor ? evidence from Malawi By Datar, Gayatri; Del Carpio, Ximena; Hoffman, Vivian
  7. Boats and Tides and Trickle Down Theories: What Stochastic Process Theory Has To Say About Modeling Poverty, Inequality, Mobility and Polarization By Gordon Anderson
  8. A Bayesian analysis of government expenditure in Nigeria By Olayeni, Olaolu Richard
  9. Price Volatility, Expectations and Monetary Policy in Nigeria By Ajimuda Olumide
  10. Patterns and determinants of urban chicken consumption in Haiti and Cameroon: similar contexts, differentiated prospects By Cathie Laroche Dupraz; Cyprien Awono
  11. Competitiveness assessment of tourism in Sierra Leone : a cluster-based approach By Shakya, Mallika
  12. Mozambique and natural disasters: human capital under threat By Prado C. Alfaiate, Jorge

  1. By: Eric Strobl (Ecole Polytechnique, Département d'Économie, France.)
    Abstract: We examine the distributional impact of large dams on cropland productivity in Africa. As our unit of analysis we use a scientifically based spatial breakdown of the continent that allows one to exactly define regions in terms of their upstream/downstream relationship at a highly disaggregated level. We then use satellite data to derive measures of cropland productivity within these areas. Our econometric analysis shows that while regions downstream benefit from large dams, cropland within the vicinity tends to suffer productivity losses during droughts. Overall our results suggest that because of rainfall shortages dams caused a net loss of 0.96 percent in production in Africa over our sample period (1981-2000). However, further dam construction in appropriate areas could potentially lead to large increases in cropland production even if rainfall is not plenty.
    Keywords: dams, agricultural productivity, Africa
    JEL: O20 Q19
    Date: 2009–10
  2. By: Woldie, Getachew Abebe; Siddig, Khalid
    Abstract: In the poorest countries like Ethiopia the spillover effects of a soaring food price is unbearable. To mitigate the recent rise in food prices and the burden on urban poor consumers, different measures have been considered by policy makers. Recently, Ethiopia banned the export of all grain products in a bid to stem huge price hikes. The export of indigenous grains, including the staple grains, like teff, maize, sorghum, and wheat are suspended indefinitely. Using the standard GTAP model and the recent GTAP Africa database, this paper simulates the overall implication of banning export of grains. Regarding the impact on prices, the simulation result tells us that prices are likely to fall. At macro level, the result reveals trade balance will not be decline following such actions. However, it has been shown that in terms of overall welfare the policy has a devastating impact as the country will likely to lose welfare equivalent of $ 148 million.
    Keywords: Food price inflation;- export ban;- WTO:- Ethiopia;- GTAP
    JEL: F13 E31 Q17 D58
    Date: 2009
  3. By: Juhn, Chinhui (University of Houston); Kalemli-Ozcan, Sebnem (University of Houston); Turan, Belgi (University of Houston)
    Abstract: The historical pattern of the demographic transition suggests that fertility declines follow mortality declines, followed by a rise in human capital accumulation and economic growth. The HIV/AIDS epidemic threatens to reverse this path. A recent paper by Young (2005), however, suggests that similar to the "Black Death" episode in Europe, HIV/AIDS will actually lead to higher growth per capita among the a affected African countries. Not only will population decline, behavioral responses in fertility will reinforce this decline by reducing the willingness to engage in unprotected sex. We utilize recent rounds of the Demographic and Health Surveys that link an individual woman’s fertility outcomes to her HIV status based on testing. The data allows us to distinguish the effect of own positive HIV status on fertility (which may be due to lower fecundity and other physiological reasons) from the behavioral response to higher mortality risk, as measured by the local community HIV prevalence. We show that HIV-infected women have significantly lower fertility. In contrast to Young (2005), however, we find that local community HIV prevalence has no significant effect on non-infected women's fertility.
    Keywords: HIV/AIDS, fertility, economic development
    JEL: O12 I12 J13
    Date: 2009–10
  4. By: Lea, Nicholas; Hanmer, Lucia
    Abstract: This paper applies a growth diagnostics approach to identify the most binding constraints to private-sector growth in Malawi - a small, landlocked country in Southern Africa with one of the lowest per capita incomes in the world. The approach aims to identify the constraints (in terms of public policy, implementation, and investments) most binding on marginal investment, and therefore whose relaxation would have the largest impact on growth through the investment channel. The authors find that growth in Malawi has been primarily driven by the domestic multiplier effect from export revenues. The multiplier effect is particularly pronounced due to the high number of smallholder farmers, which produce Malawi’s main export crop, tobacco, and consequently results in the widespread and rapid transmission of agricultural export income. Furthermore, despite changes in the structure of agricultural production from estate to smallholder farming and liberalization of prices and finance, a longstanding relationship persists between exports in real domestic currency and overall gross domestic product. This central role of exports in creating domestic demand highlights the importance of the real exchange rate in Malawi’s growth story, which directly increases the strength of the export multiplier. The most pressing constraint to growth in Malawi continues to be the regime of exchange rate management. Despite good progress, there is compelling evidence that the rate is still substantially overvalued. Furthermore, it is also likely that the inflow of foreign aid - in excess of 50 percent of exports -contributes to the overvaluation through its large component of recurrent expenditures.
    Keywords: Economic Theory&Research,Debt Markets,Emerging Markets,Currencies and Exchange Rates,Access to Finance
    Date: 2009–10–01
  5. By: Baird, Sarah; McIntosh, Craig; Ozler, Berk
    Abstract: As of 2007, 29 developing countries had some type of conditional cash transfer program in place, with many others planning or piloting one. However, the evidence base needed by a government to decide how to design a new conditional cash transfer program is severely limited in a number of critical dimensions. This paper presents one-year schooling impacts from a conditional cash transfer experiment among teenage girls and young women in Malawi, which was designed to address these shortcomings: conditionality status, size of separate transfers to the schoolgirl and the parent, and village-level saturation of treatment were all independently randomized. The authors find that the program had large impacts on school attendance: the re-enrollment rate among those who had already dropped out of school before the start of the program increased by two and a half times and the dropout rate among those in school at baseline decreased from 11 to 6 percent. These impacts were, on average, similar in the conditional and the unconditional treatment arms. Although most schooling outcomes examined here were unresponsive to variation in the size of the transfer to the parents, higher transfers given directly to the schoolgirls were associated with significantly improved school attendance and progress - but only if the transfers were conditional on school attendance. There were no spillover effects within treatment communities after the first year of program implementation. Policymakers looking to design cost-effective cash transfer programs targeted toward young women should note the relative insensitivity of these short-term program impacts with respect to conditionality and total transfer size.
    Keywords: Education For All,Tertiary Education,Primary Education,Poverty Monitoring&Analysis,Population Policies
    Date: 2009–10–01
  6. By: Datar, Gayatri; Del Carpio, Ximena; Hoffman, Vivian
    Abstract: This paper uses a rural household survey dataset collected in 2006 and 2008 to investigate the impact of a market-based land resettlement project in southern Malawi. The program provided a conditional cash and land transfer to poor families to relocate to larger plots of farm land. The average treatment effect of the program is estimated using a difference-in-difference matching technique based on propensity score matching; qualitative information complement the analysis to ensure unobservable characteristics do not bias the findings. As expected, the results show a significant effect on landholdings and agricultural production, with land size increasing and maize production increasing by more than 100 kilograms relative to the control. However, the impacts on food security and asset holdings were mixed. Households that relocated great distances had systematically lower impacts than those households that stayed within their district of origin because they had to adapt to unfamiliar agro-ecological, cultural, and market environments. Impacts also varied across gender of the household head; female-headed beneficiary households increased their productive and consumption assets significantly, while male-headed households increased their asset holdings less so.
    Keywords: Environmental Economics&Policies,Rural Development Knowledge&Information Systems,Economic Theory&Research,Debt Markets,Rural Poverty Reduction
    Date: 2009–10–01
  7. By: Gordon Anderson
    Abstract: Aphorisms that “Rising tides raise all boats” or that material advances of the rich eventually “Trickle Down” to the poor are really maxims regarding the nature of stochastic processes that underlay the income paths of groups of individuals. This paper looks at the implications of conventional assumptions made by economists concerning such processes for the empirical analysis of wellbeing in terms of poverty, inequality, mobility and polarization. The implications of attributing different processes to different groups in society following the club convergence literature are also discussed. Various forms of poverty, inequality and income mobility structures are considered and much of the conventional wisdom afforded us by such aphorisms is questioned. To exemplify these ideas the results are applied to the distribution of GDP per capita in the continent of Africa.
    Keywords: Stochastic Processes, Poverty, Inequality, Mobility, Polarization
    JEL: I3
    Date: 2009–10–23
  8. By: Olayeni, Olaolu Richard
    Abstract: This paper examines the productivity of government expenditure. It adopts a Barro-type production function to chart out a growth model that accounts for the productivity of government spending and also adopts Wagner’s hypothesis to account for endogeneity resulting from fiscal expansion. The model is estimated via the Bayesian technique using the data on Nigeria. The result shows that government expenditure was unproductive in Nigeria and that this conclusion is independent of the macroeconomic environment. Neither is it dependent on the external circumstances. The paper concludes that there is need for urgent budgetary evaluation and close monitoring of the government budget in Nigeria.
    Keywords: Bayesian analysis; Government expenditure; Wagner’s hypothesis; Nigeria
    JEL: H5 C11
    Date: 2009–08–18
  9. By: Ajimuda Olumide (Department of Economics and Statistics,University of Benin, Nigeria)
    Abstract: The study has as its objectives, to determine the influence of price volatility and price expectation in the rate of inflation as a measure of the price level. In addition, the study sought to evaluate ipso facto the extent to which monetary policy has influenced inflation by reducing price volatility and expectation towards zero. The study applied the maximum likelihood estimator in addition to the GARCH (p, q model) to estimate the steady state model of inflation. As a measure of volatility, the conditional standard deviation for inflation was obtained from the GARCH model. Inflation expectation was solved using the Gauss-Siedel algorithm for forward-looking expectations with actual inflation series as start values. The VAR model was estimated to determine the impulse response functions and the variance decomposition using Cholesky decomposition so as to determine the response to monetary policy of inflation, its volatility and expectations. The study found that inflation expectation and price volatility not only influence the contemporaneous inflation, it also results in persistence in interest rate differential and monetary growth, thus compromising the objective of monetary policy. The study recommends that explicit anchoring of expectations and volatility ensure that monetary policy is forward-looking and that a symmetric inflation target strengthens intertemporal sustainability in monetary policy management. In addition, the behaviour of inflation ex post and the speed of convergence of inflation expectations should provide the basis for determining the most appropriate pulse of nominal interest rate in the economy which will keep inflation trajectory consistent with the growth of the economy.
    Keywords: Price Volatility, Forward-looking Expectations, Persistence, Speed of Adjustment, Steady-State, Gauss-Siedel, GARCH, Impulse-Response functions
    JEL: C22 C32 D84 E31 E40 E5 E60
    Date: 2009–05
  10. By: Cathie Laroche Dupraz; Cyprien Awono
    Abstract: Since the beginning of 2000s, in order to let poor people accede to meat consumption, several African and Caribbean countries have opened their domestic chicken market to foreign imports, by reducing import tariffs. Thus imported frozen pieces of chicken from the European Union or America compete with local chicken meat, causing the collapse of many poultry husbandry and the loss of many jobs in the local chicken food chain. In order to highlight the determinants of urban consumer’s choice relative to chicken types, and assess the opportunity for local chicken to restore its market share, investigations have been done in 2005 in Yaoundé (Cameroon) and in 2006 in Port-au-Prince (Haiti) applied to 180 urban households in each country. While imported frozen pieces of chicken have almost entirely substituted for the local chicken which has already quite disappeared in Port-au-Prince, Yaoundé consumers still prefer the local flesh chicken to the imported ones, at least for particular uses.
    Keywords: chicken, urban consumption, developing countries, globalization, Cameroon, Haiti
    JEL: Q18 Q17 D12
    Date: 2009
  11. By: Shakya, Mallika
    Abstract: Seven years out of brutal conflict, Sierra Leone is now a peaceful and stable country. Yet, its strides toward economic recovery and competitiveness have been modest even in sectors such as tourism, which used to be a major generator of foreign exchange revenues prior to the conflict. This paper presents a cluster-based analysis of the tourism sector in Sierra Leone. The analysis shows that tourism in Sierra Leone draws entirely on basic factor conditions such as natural endowments; high-end lodging, catering, and entertainment services are virtually nonexistent. The cluster mapping exercise reveals that several non-profit organizations are present and active within the Sierra Leone tourism cluster but that the role of commercial enterprises has been somewhat limited. A critical mass of basic service providers has emerged over time, but their functions are often hindered by the absence of a market-based incentive regime and weaknesses in backbone infrastructure services. There is a mismatch of effort by the public and private sectors. An important policy implication arising from the analysis is for Sierra Leone to initiate a joint action among tourism entrepreneurs and policymakers to develop a coherent business strategy toward overcoming the bottlenecks of skill deficiency, policy ineffectiveness, and lack of infrastructure and market access.
    Keywords: Cultural Policy,Transport Economics Policy&Planning,Cultural Heritage&Preservation,Tourism and Ecotourism,Accommodation&Tourism Industry
    Date: 2009–10–01
  12. By: Prado C. Alfaiate, Jorge
    Abstract: This paper assesses the effect of a sequence of natural disasters on children’s health that hit Mozambique at the start of the 21st Century. The disasters in question were the floods of 2000 and the droughts of the years 2002 and 2003. Height-for-age z-scores of children between 1 and 3 years old is used to capture the cumulative effects of this sequence of natural disasters. It was found that the effect of the disasters on these children’s height was, on average, -0.4236 standard deviations, which corresponds to the affected children being more than 1.5 cm shorter by the time of the survey. The findings in this paper are important because of the long term economic cost associated with the disasters, and urge the need for further public intervention to mitigate the damage caused by the shocks. This paper also contributes to the existing literature on the subject of the impact of shocks on child health in the developing world by focusing on measurement errors, differences in physical stature among ethnic groups and migratory movements.
    Keywords: Mozambique; Health; Natural Disaster; Human Capital; Developing Country
    JEL: O1 O12
    Date: 2009–10–25

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