nep-afr New Economics Papers
on Africa
Issue of 2010‒07‒10
nine papers chosen by
Quentin Wodon
World Bank

  1. Responsible Investment: A Vehicle for Environmentally Sustainable Economic Growth in South Africa By Giamporcaro, Stephanie; Pretorius, Lise; Visser, Martine
  2. Markets for cotton by-products : global trends and implications for African cotton producers By Baffes, John
  3. Spatial Comparisons of Poverty and Inequality in Living Standards in Malawi By Mussa, Richard
  4. Effets Non Linéaires de l'Inflation sur la Croissance dans l'UEMOA By COMBEY, Adama; NUBUKPO, Kako
  5. Collective Action forWatershed Management: Field Experiments in Colombia and Kenya By Cardenas, Juan-Camilo; Rodriguez, Luz Angela; Johnson, Nancy
  6. As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming By Bellemare, Marc F.
  7. Rural Electrification and Fertility – Evidence from Côte d’Ivoire By Jörg Peters; Colin Vance
  8. Rural Electrification and Manufacturing Firm Performance in Benin – An Ex-Ante Impact Assessment By Jörg Peters; Colin Vance; Marek Harsdorff
  9. Insecure Land Rights and Share Tenancy in Madagascar By Bellemare, Marc F.

  1. By: Giamporcaro, Stephanie; Pretorius, Lise; Visser, Martine
    Abstract: This paper explores whether any investment products or strategies in South Africa take environmental sustainability into account. By looking at how environmental, social, and governance (ESG) criteria are used in investment decision making, we found that most socially-responsible investment products and responsible investment strategies largely focus on infrastructure, development, and black economic empowerment. Environmental criteria do not yet receive comparable attention from South African asset managers and owners. Mainstreaming responsible investment principles will need to come from either an increase in demand for such practices by asset owners or from company positions on ESG issues.
    Keywords: responsible investment, socially responsible investment, pension funds, asset managers, screening, active share ownership
    JEL: G23 G28 H23
    Date: 2010–06–18
  2. By: Baffes, John
    Abstract: This paper analyzes and compares the structure of cotton by-products industries in se-lected countries (Uganda, Tanzania, Benin, and Burkina Faso) in the context of the global vegetable oil market. It reaches several conclusions. First, because the markets for various edible oils are highly integrated with each other, examination of each oil market should be done in conjunction with all other (relevant) edible oil markets. Second, the recent surge in demand for commodities used as feedstocks for biofuels is unlikely to become a new source of growth for the cotton oil market. Third, within the context of deepening the on-going reform efforts in West and Central African countries, cotton by-products should be taken into consideration, both in terms of the cotton price setting mechanism and the size of the organization of the cotton by-products industry. Fourth, trade policies including export bans or import tariffs to protect the domestic crushing industries, and policies that favor crude over refined oils, should be rationalized. Fifth, large cottonseed processing operations using advanced technology, while efficient from a technological perspective, tend not to be economically profitable in the African context. Last, research efforts for new cotton varieties should consider the value of by-products, not just lint.
    Keywords: Crops&Crop Management Systems,Markets and Market Access,Energy Production and Transportation,Livestock&Animal Husbandry,Agricultural Industry
    Date: 2010–06–01
  3. By: Mussa, Richard
    Abstract: The paper looks at poverty and inequality across areas in Malawi. The focus is on both monetary (consumption) and non monetary (health and education) dimensions of well being. Stochastic poverty dominance tests show that rural areas are poorer in the three dimensions regardless of poverty line chosen. Stochastic inequality dominance tests find that the north and south dominate the centre in health inequality, and there is no dominance between the north and south. With respect to education inequality, dominance is declared for the south-centre pair only. A sub group decomposition analysis finds that the south contributes the most to consumption and education poverty while the centre is the largest contributor to health poverty. We establish that within area inequalities (vertical inequalities) rather than between area inequalities (horizontal inequalities) are the major driver of consumption, health, and education inequality in Malawi.
    Keywords: Poverty; inequality; stochastic dominance; decomposition; Malawi.
    JEL: D30
    Date: 2010–06–26
  4. By: COMBEY, Adama; NUBUKPO, Kako
    Abstract: The monetary policy conducted by the Central Bank of West African States (BCEAO) faces many challenges, including the need to fight against inflation, which is driven mainly by the volatility of commodity prices on international markets. It is also fall to common criticisms about the lack of economic growth objective in her mandate as developing countries central bank in among the poorest in the world. It therefore not immune to reflection on the existence of a dilemma "inflation-growth" it would, consciously or unconsciously involved. The aim of this paper is to demonstrate the existence of a non-linear relationship between inflation and the economic growth within the West African Economic and Monetary Union (WAEMU) and to determine the inflation threshold at which a trade-off between inflation and growth is effective. From a threshold effects dynamic panel model, the study shows that the optimal level of inflation in the WAEMU zone is 8.08%. This result raises the question of the relevance of the standard deduction of 3% under the convergence criteria of the WAEMU zone. In addition, the inclusion of such a result is likely to help the BCEAO in the definition and conduct of monetary policy.
    Keywords: Inflation; Croissance; Politique monétaire; Effets de seuil; Panel dynamique; UEMOA.
    JEL: C15 E61
    Date: 2010–06–28
  5. By: Cardenas, Juan-Camilo; Rodriguez, Luz Angela; Johnson, Nancy
    Abstract: The dilemma of collective action around water use and management involves solving both the problems of provision and appropriation. Cooperation in the provision can be affected by the rival nature of the appropriation and the asymmetries in the access. We report two field experiments conducted in Colombia and Kenya. The Irrigation Game was used to explore the provision and appropriation decisions under asymmetric or sequential appropriation, complemented with a Voluntary Contribution Mechanism experiment which looks at provision decisions under symmetric appropriation. The overall results were consistent with the patterns of previous studies: the zero contribution hypotheses is rejected whereas the most effective institution to increase cooperation was face-to-face communication, and above external regulations, although we find that communication works much more effectively in Colombia. We also find that the asymmetric appropriation did reduce cooperation, though the magnitude of the social loss and the effectiveness of alternative institutional options varied across sites.
    Keywords: Collective Action, Watersheds, Field Experiments, Colombia, Kenya, Community/Rural/Urban Development, Environmental Economics and Policy, Institutional and Behavioral Economics, Q0, Q2, C9, H3, H4,
    Date: 2009–11–12
  6. By: Bellemare, Marc F.
    Abstract: What is the impact of participation in commodity chains on producer welfare? Contract farming – wherein a processing firm delegates its production of agricultural commodities to growers – is often viewed as a means of increasing grower welfare in developing countries. Because the nonrandom participation of growers in contract farming has so far not been dealt with convincingly, whether participation in contract farming increases welfare is up for debate. This paper uses the results of a contingent valuation experiment to estimate willingness to pay to enter contract farming, which is then used to control for actual participation in contract farming. Using data from Madagascar, results indicate that contract farming entails a 12- to 18-percent increase in income; a 16-percent decrease in income volatility; a two-month decrease in the duration of the hungry season; and a 30-percent increase in the likelihood that a household receives a formal loan.
    Keywords: Contract Farming; Welfare; Grower-Processor Contracts; Outgrower Schemes
    JEL: L23 O13 L24 Q12 O14
    Date: 2010–07–03
  7. By: Jörg Peters; Colin Vance
    Abstract: Using household-level survey data from Côte d’Ivoire, this paper investigates the determinants of fertility with a particular focus on the effect of electrification. Based on count data regression models, our analysis suggests a highly significant relationship between fertility and electricity, but one that is only revealed when the model distinguishes between rural and urban areas. Specifically, we find a positive association between electricity and fertility for urban households, contrasted by a negative relationship for rural households. This dichotomy is suggested to reflect the influences of electricity in facilitating child care, off set by its modernizing impacts through the provision of information.
    Keywords: Rural development; energy access; demography; count data
    JEL: O12 O33 J13
    Date: 2010–04
  8. By: Jörg Peters; Colin Vance; Marek Harsdorff
    Abstract: Productive electricity use is widely believed to contribute to positive impacts of electrification projects. This paper investigates these impacts by comparing the performance of micro manufacturing enterprises in grid-covered and non-covered villages in Northern Benin. Using firm-level data, the empirical analysis employs a Propensity Score Matching. While beneficial impacts are found from firm creation after electrification, firms that existed before actually show a non-significantly inferior performance to their matched counterparts from a non-electrified region. Complementary measures that sensitize firms about the implications of a grid connection are recommended as important features of program design.
    Keywords: Mobility; Impact evaluation; propensity score matching; productive electricity use
    JEL: C21 O14 O22 L69
    Date: 2010–04
  9. By: Bellemare, Marc F.
    Abstract: While most studies looking at the consequences of tenurial insecurity on land markets in developing countries focus on the effects of tenurial insecurity on the investment behavior of landowners, this paper studies the hitherto unexplored relationship between tenurial insecurity and contract choice in land tenancy. Based on a distinct feature of the interaction between formal law and customary rights in Madagascar, this paper augments the canonical model of share tenancy by making the strength of the landlord’s property right increasing in the amount of risk she chooses to bear within the contract. Sharecropping may thus emerge as the optimal contract even when the tenant is risk-neutral. Using data on landlords’ subjective perceptions of tenurial insecurity in a rural area of Madagascar, empirical tests strongly support the hypothesis that insecure property rights drive contract choice while offering little support in favor of the canonical hypothesis that risk sharing considerations drive contract choice.
    Keywords: Sharecropping; Property Rights; Tenurial Insecurity; Subjective Expectations
    JEL: D86 O13 Q15 K11 O12
    Date: 2010–07–03

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