nep-afr New Economics Papers
on Africa
Issue of 2010‒01‒10
thirteen papers chosen by
Quentin Wodon
World Bank

  1. The Dynamics of Job Creation and Job Destruction: Is Sub-Saharan Africa Different? By Shiferaw, Admasu; Bedi, Arjun S.
  2. Job Satisfaction and Employment Equity in South Africa By Hinks, Timothy
  3. Rural electrification programmes in Kenya: Policy conclusion from a valuation study By Abdullah, Sabah; Markandya, Anil
  4. Does Land Abundance Explain African Institutions? By James Fenske
  5. Measuring the impact of social cash transfers on poverty and inequality in Namibia By Sebastian Levine; Servaas van der Berg; Derek Yu
  6. Determining the Causes of the Rising South African Unemployment Rate: An Age, Period and Generational Analysis By Rulof Burger; Dieter von Fintel
  7. From Experience to Experiments in South African Water Management: Defining the Framework By Mathieu Désolé; Stefano Farolfi; Fioravante Patrone; Patrick Rio
  8. Demand for Electricity Connection in Rural Areas: The Case of Kenya By Abdullah, Sabah; Jeanty, P.W.
  9. Crime and Happiness Amongst Heads of Households in Malawi By Davies, Simon; Hinks, Timothy
  10. Unbundling Zimbabwe’s journey to hyperinflation and official dollarization By Terrence Kairiza
  11. Reshaping Political Space? The Impact of the Armed Insurgency in the Central African Republic on Political Parties and Representation By Andreas Mehler
  12. Ethnic Cleansing or Resource Struggle in Darfur? An empirical analysis By Olsson, Ola; Siba, Eyerusalem
  13. On the Contribution of Mother’s Education to Children’s Nutritional Capabilities in Mozambique By Francesco Burchi

  1. By: Shiferaw, Admasu (University of Göttingen); Bedi, Arjun S. (Institute of Social Studies)
    Abstract: This paper analyzes the creation, destruction and reallocation of jobs in order to understand the micro-dynamics of aggregate employment change in African manufacturing. The nature and magnitude of gross job flows are examined using a unique panel data of Ethiopian manufacturing establishments over the period 1996-2007. We also assess the relative importance of firm demographics, industry effects and business cycles for job flows. The rates and patterns of job creation and destruction in our sample are comparable to the findings from developed and emerging economies suggesting that African firms adjust their labor force in a manner broadly similar to firms elsewhere and that African labor markets are not uniquely restrictive in terms of undermining job reallocation across firms. We also find, as in many other countries, that job reallocation is relatively higher in industries dominated by smaller and younger establishments. However, unlike other regions, job reallocation in our sample is pro-cyclical and its variation across industries bears little similarity to the patterns found in other developed and emerging economies. Small firms in Africa create jobs mainly at the point of market-entry and play a limited role in terms of contributing to manufacturing employment through post-entry expansion.
    Keywords: job creation, job destruction, job reallocation, firm dynamics, Sub-Saharan Africa, Ethiopia
    JEL: J20 J23 J49
    Date: 2009–12
  2. By: Hinks, Timothy
    Abstract: This paper is the first to estimate job satisfaction equations in post-Apartheid South Africa. Earnings and relative earnings are both found to contribute to greater job satisfaction. Racial group is also an important predictor of job satisfaction but when interacted with a proxy for affirmative action legislation it is found that black job satisfaction is positively correlated with this legislation whereas coloured and to a lesser extent white job satisfaction is diminished.
    Keywords: Job satisfaction; Employment Equity; ordered probit; South Africa
    Date: 2009
  3. By: Abdullah, Sabah; Markandya, Anil
    Abstract: Developing countries have struggled with low electrification rates in the rural areas. This study investigates one major issue impeding the rural electrification programmes in rural Kenya: high connection payments. The paper uses estimates obtained from a stated preference study, namely a contingent valuation method completed in 2007, to examine the willingness to pay to connect to grid-electricity and photovoltaic services. Expanding rural electrification will need subsidies, but the study shows that some forms of subsidy are more effective than others. The key findings suggest that the government needs to reform the energy subsidies, increase market ownership and performance of private suppliers, establish financial schemes and create markets that vary according to social-economic and demographic groups.
    Keywords: Sub-Saharan Africa; willingness to pay (WTP); affordability; energy; rural electrification
    Date: 2009–09
  4. By: James Fenske (Department of Economics, Yale University)
    Abstract: I show how abundant land and scarce labor shaped African institutions before colonial rule. I present a model in which exogenous suitability of the land for agriculture and endogenously evolving population determine the existence of land rights, slavery, and polygyny. I then use cross-sectional data on pre-colonial African societies to demonstrate that, consistent with the model, the existence of land rights, slavery, and polygyny occurred in those parts of Africa that were the most suitable for agriculture, and in which population density was greatest. Next, I use the model to explain institutions among the Egba of southwestern Nigeria from 1830 to 1914. While many Egba institutions were typical of a land-abundant environment, they sold land and had disputes over it. These exceptions were the result of a period of land scarcity when the Egba first arrived at Abeokuta and of heterogeneity in the quality of land.
    Keywords: Africa, institutions, land rights, slavery, polygyny
    JEL: N57 O10
    Date: 2009–11
  5. By: Sebastian Levine (United Nation Development programme, Namibia); Servaas van der Berg (Department of Economics, University of Stellenbosch); Derek Yu (Department of Economics, University of Stellenbosch)
    Abstract: This paper reviews the system for social cash transfers in Namibia, a middle-income country with a long experience in making available a universal and non-contributory old age pension, child grants using means-testing and quasi-conditionalities and other cash transfers. The paper traces the origins of the cash transfers back to the country’s past annexation into apartheid South Africa and shows how Namibia’s system is now faced with a set of distinct challenges that are particularly pertinent as the authorities are rapidly scaling-up access. Notably, in the years after the remaining elements of racial discrimination were eliminated, and the value of the transfers were equalised across the ethnic groups, new discrepancies have developed in the values of the different grants. Moreover, using newly available household data the paper finds inefficiencies in the means-testing for the child grants – especially when compared to South Africa. In spite of these challenges the paper also shows that social cash transfers have a large effect on poverty reduction and that the effects are particularly positive for the poorest of the poor. The transfers also tend to reduce inequality but this impact is more limited. Simulations indicate the fiscal sustainability of an expanded system of social cash transfers and highlight the potential cost-savings that would accrue from a more effective means-test of the child grants. In the analysis the effects of using income and expenditure data as the basis for the welfare variable are discerned.
    Keywords: Namibia, Sub-Saharan Africa, Social protection, Social transfers, Old age pension, Disability grants, Child grants
    JEL: H55 O1
    Date: 2009
  6. By: Rulof Burger (St Anthony's College, Oxford University and Department of Economics, University of Stellenbosch); Dieter von Fintel (Department of Economics, Universty of Stellenbosch)
    Abstract: This paper takes advantage of the wealth of cross-sectional household surveys conducted after South Africa’s political transition, in order to gain insights into the causes of the acceleration in the already high unemployment rate. A synthetic panel dataset is constructed to decompose unemployment and other labour market outcomes into cyclical, generational and life-cycle effects. This dynamic view isolates which groups are at risk across the period and allows a more nuanced understanding of the long-run and short-run impacts. Our results indicate that the higher unemployment rates faced by the young are predominantly due to the disadvantage of entering the labour market more recently, rather than being attributable to their age. We furthermore isolate what has driven this long-run increase in labour market participation. In particular, higher educational attainment and household formation decisions across generations fuel labour supply among the more recent entrants. We find some correspondence between the cyclical variation in unemployment and the business cycle. This suggests that jobless growth is not a relevant feature of the South African labour market. This paper confirms many of the causes of unemployment that are postulated in the literature. The dynamic nature of this study has furthermore allowed the separation of short-run and long-run aspects of unemployment. The decomposition approach adopted here has uncovered the linkages between the schooling system and the labour market across all generations, but, in particular, has isolated why the youngest generations have exhibited such distinct risks. The surge in labour supply amongst most recent generations (those aged 20 in 1995) can be explained by rapid exit rates from the education system resulting from over-age enrolment policies enacted in the post-apartheid period. This has pushed individuals into the labour market prematurely and without the adequate skills to be absorbed into the workplace. The importance of the generational aspects of unemployment relative to life cycle and business cycle impacts suggests that policies should address the structural issues affecting each of these birth cohorts, rather than focussing on age groups per se.
    Keywords: Unemployment, Participation, Feminisation of Labour Force, Education Policy, Birth Cohort Panels, Age-Period-Cohort Decompositions
    JEL: C4 J1 J2 J3
    Date: 2009
  7. By: Mathieu Désolé; Stefano Farolfi; Fioravante Patrone; Patrick Rio
    Abstract: A role-playing game (RPG), KatAware, was developed in the Kat River catchment of South Africa to support the negotiation process among water users on the allocation rules of the resource. Playing the RPG with local stakeholders exhibited some regularity in the behaviour of players, particularly on their attitude of defining binding agreements. These regularities were first formalized through a model of cooperative game theory (CGT), and then, to confirm the results of the model, tested by an experimental protocol. Both the model and the protocol were based and calibrated on the results of the RPG. The progressive simplification (decontextualization) required to bring the RPG into the laboratory suggested to explore the role of context (in our case water related issues) on players’ behaviour. The objective of this paper is to illustrate the process that conducted the research team from the experience in the Kat River to the first experiments to test the hypotheses exhibited in the experience and then to analyze the influence of context on players’ behaviour. Terms and concepts are clarified in order to provide a clear research framework in this new field at the border between experiences and experiments in social sciences for commons management.
    Date: 2009–12
  8. By: Abdullah, Sabah; Jeanty, P.W.
    Abstract: A modern form of energy, in particular electricity for household use, is an important vehicle in alleviating poverty in developing countries. However, access and costs of connecting to this service for most poor in these countries is inconceivable. Policies promoting electricity connection in rural areas are known to be beneficial in improving the socio-economic and health well-being for households. This paper examines willingness to pay (WTP) for rural electrification connection in Kisumu district, Kenya, using the contingent valuation method (CVM). A nonparametric and a parametric model are employed to estimate WTP values for two electricity products: grid electricity (GE) and photovoltaic (PV) electricity. The results indicate that respondents are willing to pay more for GE services than PV and households favoured monthly connection payments over a lump sum amount. Some of the policies suggested in this paper include: subsidizing the connection costs for both sources of electricity, adjusting the payment periods, and restructuring the market ownership of providing rural electricity services.
    Keywords: Contingent valuation; Double bounded; Electricity connection; Rural; Willingness to pay (WTP)
    Date: 2009–11
  9. By: Davies, Simon; Hinks, Timothy
    Date: 2009
  10. By: Terrence Kairiza (National Graduate Institute for Policy Studies)
    Abstract: The first impetus to Zimbabwe’s drive to hyperinflation and official dollarization predates the disruption in production caused by the fast-track land reform programme. The initial push came from the departure from relatively disciplined fiscal policies to a string of measures aimed at pacifying restive groups threatening political power through the transfer of economic and financial resources to those groups to the detriment of the fiscus. This stance caused investors to run away from the Zimbabwean currency thus causing currency depreciation hence inducing cost-push inflation which was worsened by the decline in production that accompanied the land reform programme and the associated disturbances to production in all sectors of the economy. The liquidity expansion by the central bank to prop the ruling party embodied in the quasi-fiscal activities veiled as expansionary Keynesian economics played a major role in firmly setting the stage for hyperinflation in the latter stages of the saga. In the backdrop of hyperinflation, the institution of official dollarization was merely de jure recognition of the unofficial dollarization that had set in. On the basis of Zimbabwe’s idiosyncrasies, the article contends that any attempt to dedollarize should be an endogenous outcome of a policy of macroeconomic stabilization.
    Keywords: Africa, Zimbabwe, Hyperinflation, Currency problems
    JEL: E31 E42 E58 E61 O55
    Date: 2009–09
  11. By: Andreas Mehler (GIGA Institute of Global and Area Studies)
    Abstract: This paper analyzes the declining importance of political parties in the Central African Republic (CAR). It argues that the problematic attitude of elites who are fluctuating between violent and peaceful behavior in order to further their own careers is jeopardizing both peace and democracy. The author hypothesizes that both political parties and rebel movements are failing to adequately represent (ethnoregional) interests, but that parties are suffering more in the course of the enduring war and the peace process. Patterns of elite behavior are presented as the main explanation for the resulting crisis of representation, with international actors’ preference for inclusionary power-sharing deals seen as the main aggravating factor.
    Keywords: Central African Republic, peace process, political parties, rebel movements,representation
    Date: 2009–12
  12. By: Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University); Siba, Eyerusalem (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The con‡ict in Darfur has been described both as an ethnic cleansing campaign, carried out by the Sudanese government and its allied militias, and as a local struggle over dwindling natural resources between African farmers and Arab herders. In this paper, we construct a theoretical framework for understanding the choice between ethnic cleansing and resource capture and use a previously unexploited data set on 530 villages in Southwestern Darfur to analyze the determinants of attacks in the region. Our results clearly indicate that Janjaweed attacks have been targeted at villages dominated by the major rebel tribes, resulting in a massive displacement of those populations. Resource variables, capturing access to water and land quality, also have some explanatory power but are not consistently significant. These patterns suggest that attacks in the area had ethnic cleansing as a primary objective.<p>
    Keywords: Ethnic cleansing; resource struggle; Darfur
    JEL: O41 P16
    Date: 2009–12–09
  13. By: Francesco Burchi
    Abstract: This paper examines the role of mother’s education in expanding children’s nutritional capabilities in Mozambique, a country where both educational and nutritional deprivations are dramatic. The econometric results, based on data from the 2003 DHS survey, suggest that mother’s schooling is a key determinant of children’s nutrition, but its direct marginal contribution is declining after completion of primary education. Children whose mothers have completed primary education are far more likely to be well nourished than children whose mothers have lower or no educational attainments. Primary education works through the increase of mother’s general knowledge and, to a less extent, of her nutrition knowledge. Mother’s secondary schooling, instead, contributes only indirectly, by increasing household wealth. A further empirical analysis shows that there is no substantial difference in the benefits of mother’s education depending on whether she resides in urban or rural areas. Finally, the paper provides empirical evidence that female education is essential to improve children’s wellbeing in Mozambique, and that only a small part of this influence works through the traditional economic channel.
    Keywords: Development economics; capability approach; nutrition; women’s education; Mozambique.
    JEL: J13 O15 I20 R20 O55
    Date: 2009

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