nep-afr New Economics Papers
on Africa
Issue of 2010‒12‒18
nineteen papers chosen by
Quentin Wodon
World Bank

  1. Sahara or Sahel? The fuzzy geography of terrorism in West Africa By WALTHER Olivier; RETAILLE Denis
  2. The Impact of Governance on Economic Growth: Further Evidence for Africa. By Bichaka Fayissa; Christian Nsiah
  3. Ecology, trade and states in pre-colonial Africa By Fenske, James
  4. Mauritius: African Success Story By Jeffrey A. Frankel
  5. Linking Smallholders to Markets: Determinants and Impacts of Farmer Collective Action in Kenya By Elisabeth Fischer; Matin Qaim
  6. Inflation Dynamics and Food Prices in Ethiopia By Durevall, Dick; Loening, Josef L.; Birru, Yohannes A.
  7. Stages of Agricultural Commercialization in Uganda: The Role of the Markets By Oleg Nivievskyi; Stephan von Cramon-Taubadel; Sergiy Zorya
  8. IMF programs and tax effort What role for institutions in Africa? By Jean-François BRUN; Gérard CHAMBAS; Bertrand LAPORTE
  9. African Export Successes: Surprises, Stylized Facts, and Explanations By William Easterly; Ariell Reshef
  10. Health Shocks and Natural Resource Management: Evidence from Western Kenya By Joshua Graff Zivin; Maria Damon; Harsha Thirumurthy
  11. Introduction: Social security and the challenge of demographic change By David E. Bloom; Roddy McKinnon
  12. As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming By Bellemare, Marc F.
  13. 'Mavenism' and 'innovativeness' among small ruminant keepers in Kenys'a Isiolo and Marsabit Districts By Mailu, S.K
  14. Heterogeneous returns and the persistence of agricultural technology adoption By Andrew Zeitlin; Stefano Caria; Richman Dzene; Petr Janský; Emmanuel Opoku; Francis Teal
  15. Who Gets to Stay in School? Long-run Impact of Income Shocks on Schooling in Rural Tanzania By Sofya Krutikova
  16. Live aid revisited: long-term impacts of the 1984 Ethiopian famine on children By Stefan Dercon; Catherine Porter
  17. Assessing the impact of Mali's water privatization across stakeholders By Antonio Estache; Emili Grifell-Tatjé
  18. Emergence of a biofuel economy in Tanzania: Local developments and global connections from an institutional perspective By Saurabh Arora; Marjolein C.J. Caniëls; Henny Romijn
  19. Sector Monitoring and Evaluation Systems in the context of Changing Aid Modalities: The Case of Rwanda’s Health Sector By Holvoet, Nathalie; Inberg, Liesbeth

  1. By: WALTHER Olivier; RETAILLE Denis
    Abstract: Since the mid-2000s, terrorism has pushed the peripheries of West Africa into the news and the public eye. While the political implications of this phenomenon have been extensively documented, most commentators have adopted a zonal approach to terrorism in which the Sahel and the Sahara are usually confused. This paper assumes that this confusion dramatically highlights the failure of academic and common geography to think beyond territories in West Africa, and to move away from a ‘sedentary’ vision of West African societies. The paper contributes to an understanding of the geographical locations of terrorism in West Africa by showing, firstly, what the main reasons behind the current confusion between the Sahel and Sahara are. Secondly, we show that this confusion arose from a territorial vision of space, which has important implications not only for local economic activities, but also for our own understanding of the spatiality of networks in West Africa.
    Keywords: terrorism; space; networks; Social Network Analysis (SNA); Sahel; Sahara; West Africa
    JEL: C81 D85 L14
    Date: 2010–11
  2. By: Bichaka Fayissa; Christian Nsiah
    Abstract: Sub-Sahara African countries have had a checkered past when it comes to good governance and good institutions. Increasingly, economists and policy makers are recognizing the importance of good governance and institutions for economic growth and development. The New Partnership for Africa’s Development (NEPAD) which was initiated by the African Heads of State and endorsed by the G8 countries including the European Union, Japan, and China in October 2001 has four main goals: eradicating poverty, promoting sustainable growth and development, integrating Africa into the world economy, and accelerating the empowerment of women. The NEPAD objectives are based on the underlying principles of a commitment to good governance, democracy, human rights and conflict resolution, and the recognition that the maintenance of these standards is fundamental to the creation of an environment conducive to investment and long-term economic growth. The objective of this paper is to investigate the role of governance in explaining the sub-optimal economic growth performance of African economies while controlling for the conventional sources of growth. Our results suggest that good governance or lack thereof contributes to the gaps in income per capita between richer and poorer African countries. Furthermore, our results indicate that the role of governance on economic growth depends on the type and the level of income growth of countries under consideration.
    Keywords: Workers’ Remittances, Economic Growth, Panel Data, Arellano-Bond, Quantile Regression, Sub-Saharan Africa
    JEL: E21 F21 G22 J61 O16
    Date: 2010–12
  3. By: Fenske, James
    Abstract: I test Bates' view that trade across ecological divides promoted the development of states in pre-colonial Africa. My main result is that sub-Saharan societies in ecologically diverse environments had more centralized pre-colonial states. I use spatial variation in rainfall to control for possible endogeneity. I construct artificial societies and present narrative evidence to show the results are not due to conquest of trading regions. I also test mechanisms by which trade may have caused states, and find that trade supported class stratification between rulers and ruled.
    Keywords: Africa; ecology; states; trade
    JEL: N57 O10
    Date: 2010–12
  4. By: Jeffrey A. Frankel
    Abstract: What explains the success of Mauritius, a top performer among African countries? It has mostly followed growth-enhancing policies, which can in turn be attributed to sound institutions. But from where did the institutions come? Mauritius chose well around the time of independence in 1968, for example opting for the rule of law over nationalization of its sugar plantations. Some fundamental determinants that econometrically can explain success worldwide do not work within Africa: size, remoteness, tropics, and ethnic fragmentation. An intriguing theory: small islands that were populated entirely by immigrants escape the ethnic conflict that arises when one group is indigenous.
    JEL: O1 O55
    Date: 2010–12
  5. By: Elisabeth Fischer (Georg-August-University Göttingen); Matin Qaim (Georg-August-University Göttingen)
    Abstract: This article investigates determinants and impacts of cooperative organization, using the example of smallholder banana farmers in Kenya. Farmer groups are inclusive of the poor, although wealthier households are more likely to join. Employing propensity score matching, we find positive income effects for active group members. Yet price advantages of collective marketing are small, and high-value market potentials have not yet been tapped. Beyond prices, farmer groups function as important catalysts for innovation adoption through promoting efficient information flows. Some wider implications are discussed under what conditions collective action is useful, and through what mechanisms the potential benefits emerge.
    Keywords: agricultural markets; smallholder farmers; collective action; cooperative organization; Kenya; East-Africa
    Date: 2010–12–07
  6. By: Durevall, Dick (Department of Economics, School of Business, Economics and Law, Göteborg University); Loening, Josef L. (World Bank); Birru, Yohannes A. (National Bank of Ethiopia)
    Abstract: During the global food crisis, Ethiopia experienced an unprecedented increase in inflation, among the highest in Africa. Using monthly data over the past decade, we estimate models of inflation to identify the importance of the factors contributing to CPI inflation and three of its major components: cereal prices, food prices, and non-food prices. Our main finding is that movements in international food and goods prices, measured in domestic currency, determined the long-run evolution of domestic prices. In the short run, agricultural supply shocks affected food inflation, causing large deviations from long-run price trends. Monetary policy seems to have accommodated price shocks, but money supply growth affected short-run non-food price inflation. Our results suggest that when analyzing inflation in developing economies with a large food share in consumer prices, world food prices and domestic agricultural production should be considered. Omitting these factors can lead to biased results and misguide policy decisions.<p>
    Keywords: Ethiopia; Exchange rate; Food prices; Inflation; Money demand
    JEL: E31 E37 O55 Q17
    Date: 2010–12–09
  7. By: Oleg Nivievskyi (Institute for Economic Research and Policy Consulting, Kyiv, Ukraine); Stephan von Cramon-Taubadel (Georg-August-University Göttingen); Sergiy Zorya (World Bank)
    Abstract: Agricultural commercialization has become the centerpiece of the sector development strategy in Uganda in recent years. Nevertheless the low market participation of most smallholders in the country remains a fact. We employ semi-parametric regression techniques to analyze the current state of market participation and production diversification and to identify the determinants of commercialization in Uganda. We find that the key constraint to agricultural commercialization in Uganda is inadequate access of farmers to infrastructure and assets, both physical and human. Those with access to assets and closer to markets engage actively in the markets, while those lacking one or more of these essential ingredients largely do not. These findings are in line with the recent literature on smallholder market participation in Africa. We also find that commercialization proceeds in stages. When farmers have appropriate incentives and access to markets, they do not immediately separate production and consumption decisions. Instead they first diversify their production portfolios before subsequently increasing commercial specialization. The result is a U-shaped relationship between commercialization and diversification.
    Keywords: commercialization; diversification; smallholder agriculture; Uganda; semi-parametric regression
    Date: 2010–12–08
  8. By: Jean-François BRUN (Centre d'Etudes et de Recherches sur le Développement International); Gérard CHAMBAS (Centre d'Etudes et de Recherches sur le Développement International); Bertrand LAPORTE (Centre d'Etudes et de Recherches sur le Développement International)
    Abstract: When compared to other developing countries, most Sub-Saharan African countries are characterized by a disappointing level of development. Among the factors explaining this poor performance, the inadequate supply of public goods is often advocated. This inadequate supply is due either to poor efficiency of public expenditure, or to an insufficient tax effort. This paper is focused on this last factor. One of the reasons for the low level of public revenues could be the weak impact of the IMF programs on the tax effort. In the agreements that developing countries reach with the IMF, they commit to reduce their macro-economic imbalances, notably fiscal deficit, to a sustainable level. The measures necessary to achieve the overall budgetary objectives apply mainly to public expenditures as they are easy to reduce in the short term. However, the hypothesis of a positive effect of IMF programs must be considered: one objective of the African governments could be to maintain public expenditures at their previous level. To this end, African governments could choose to mobilize additional public revenues. Thus, most of IMF programs promote tax reforms leading to a more effective policy of public revenue mobilization. This last scenario of an increase of the level of public revenue is corroborated by the econometric analysis. The level of public revenue depends, among other factors, on the quality of institutions. However, the institutional quality of custom and tax administrations is weaker in Africa than elsewhere. This poor quality reduces the efficiency of IMF programs which may have a lower impact on the level of public revenue in African countries. These results point up two main lessons for the IMF (and more generally for lenders) and for recipient countries: 1) The role of technical assistance associated with the IMF programs is crucial, since it enables capacity reinforcement of the technical administrations in charge of the definition and implementation of the reform; 2) The technical assistance for tax and custom administrations must be strengthened for those countries which initially have a poor quality of bureaucracy.
    Date: 2010
  9. By: William Easterly; Ariell Reshef
    Abstract: We establish the following stylized facts: (1) Exports are characterized by Big Hits, (2) the Big Hits change from one period to the next, and (3) these changes are not explained by global factors like global commodity prices. These conclusions are robust to excluding extractable products (oil and minerals) and other commodities. Moreover, African Big Hits exhibit similar patterns as Big Hits in non-African countries. We also discuss some concerns about data quality. These stylized facts are inconsistent with the traditional view that sees African exports as a passive commodity endowment, where changes are driven mostly by global commodity prices. In order to better understand the determinants of export success in Africa we interviewed several exporting entrepreneurs, government officials and NGOs. Some of the determinants that we document are conventional: moving up the quality ladder, utilizing strong comparative advantage, trade liberalization, investment in technological upgrades, foreign ownership, ethnic networks, and personal foreign experience of the entrepreneur. Other successes are triggered by idiosyncratic factors like entrepreneurial persistence, luck, and cost shocks, and some of the successes occur in areas that usually fail.
    JEL: D8 F1 O1 O3 O4
    Date: 2010–12
  10. By: Joshua Graff Zivin; Maria Damon; Harsha Thirumurthy
    Abstract: Poverty and altered planning horizons brought on by the HIV/AIDS epidemic can change individual discount rates, altering incentives to conserve natural resources. Using longitudinal data from household surveys in western Kenya, we estimate impacts of health status on labor productivity and discount rates. We find that household size and composition are predictors of whether the effect on productivity dominates the discount rate effect, or vice-versa. Since households with more and younger members are better able to reallocate labor to cope with productivity shocks, the discount rate impact dominates for these households and health improvements lead to greater levels of conservation. In smaller families with less substitutable labor, the productivity impact dominates and health improvements lead to greater environmental degradation.
    JEL: I1 O13 O55 Q27 Q5 Q56
    Date: 2010–12
  11. By: David E. Bloom (Harvard School of Public Health); Roddy McKinnon (International Social Security Association)
    Abstract: From 29 November to 4 December 2010, the International Social Security Association (ISSA) will meet in Cape Town, Republic of South Africa, to mark the event of the ISSA World Social Security Forum. The Forum provides a unique opportunity for decision-makers from all regions to share knowledge, recognize good practices and discuss key policy challenges as these relate to the design and delivery of national social security programmes. One key policy challenge identified by the ISSA's worldwide membership is demographic change. For this important reason, among the events planned for the Cape Town Forum, a plenary will focus specifically on demography. To coincide with the preparations for the World Forum, and to complement the wider and longer-term endeavours of the ISSA to promote knowledge sharing, the International Social Security Review has chosen to produce this double special issue on "Social security and the challenge of demographic change". The expectation is that this set of papers will make a contribution to supporting social security policy-makers, practitioners, analysts and researchers in all countries as they work towards developing and implementing tailored policy responses to the multifaceted challenge of demographic change.
    Keywords: social security, demographic change, demography, policy
    Date: 2010–09
  12. By: Bellemare, Marc F.
    Abstract: What is the impact of participation in agricultural value chains on the welfare of smallholders? Contract farming, wherein a processing firm delegates its production of agricultural commodities to growers, is often viewed as a means of increasing smallholder welfare in developing countries. Because the problem posed by the nonrandom participation of grower smallholders in contract farming has so far not been dealt with convincingly, however, whether participation in contract farming actually increases smallholder welfare is still up for debate. This paper uses an experimentally derived nonparametric measure of willingness to pay to enter contract farming to control for actual participation in contract farming. Using data from Madagascar, results indicate that participation in contract farming is associated with a 10- to 16-percent increase in income; a 15-percent decrease in income volatility; a two-month decrease in the duration of the hungry season; and a 31-percent increase in the likelihood of receiving a formal loan.
    Keywords: Contract Farming, Welfare, Grower-Processor Contracts, Outgrower Schemes
    JEL: L23 O13 L24 Q12 O14
    Date: 2010–07–03
  13. By: Mailu, S.K
    Abstract: Small ruminants play an important social and economic role in the lives of many pastoralists who inhabit many parts of Northern Kenya. Compared to other parts of the country, the area is poorly served by modern communication services but as mobile telephone services are rolled into these areas, this gap is slowly eroding. This possibility will likewise improve the chances of providing this population with up-to-date market intelligence which in turn should improve the returns from the sale of livestock in distant markets. To operationalise this, the use of the internet as well as SMS delivered market intelligence through the National Livestock Market Information System (NLMIS) was launched in 2007. As a novel idea in the region, it was expected that information about its existence would pass through a series of intermediaries. Based on a study of 250 pastoral households, this paper attempts to explore the concepts of mavenism, opinion leadership and innovativeness in the marketing of small ruminants from the larger Marsabit and Isiolo Districts of Eastern Province, Kenya. The results are mixed with an indication that mavens are not necessarily those with large flocks. It further concludes that though the NLMIS is still relatively unknown among respondents, the presence of market mavens who in the study are indistinguishable from opinion leaders could catalyze the spread and eventual use of the system.
    Keywords: Opinion Leaders; Mavens; Market Information
    JEL: M31 Q13
    Date: 2010–10–15
  14. By: Andrew Zeitlin; Stefano Caria; Richman Dzene; Petr Janský; Emmanuel Opoku; Francis Teal
    Abstract: In this paper we explore whether low rates of sustained technology use can be explained by heterogeneity in returns to adoption. To do so we evaluate impacts of the Cocoa Abrabopa Association,which provideda packageof fertilizerand other inputson credit to cocoa farmers in Ghana.Highestimatedaverageproductiveimpactsfortreatedfarmersarefoundtobeconsistent with negative economic profits for a substantial proportion of the treated population. By constructing an individualspecific measure of returns,we demonstrate that low realized returns amongadopters are associatedwith low retention rates, even after conditioningonoutput levels andsuccessfulrepayment.Theresultsareconsistentwiththehypothesisthathighaveragereturns masksubstantialandpersistentheterogeneity,andthatfarmersexperimentinordertolearnabout theiridiosyncraticreturns.
    JEL: O13 O33 Q12 Q16
    Date: 2010
  15. By: Sofya Krutikova
    Abstract: This paper shows that income shocks to rural households have permanent effects on the educational attainment of 7-15 year old children within the household. Using a 13 year panel survey of households in rural Tanzania, I find that idiosyncratic crop shocks such as pests, theft and fire cause changes in the distribution of schooling among children within the household that persist 10-13 years after the shock. They affect older (12-15) girls and younger (7-11) boys most adversely. The effects are remarkably persistent in households affected by shocks of varying magnitudes. An investigation of plausible channels for these effects suggests that an increase in the chore burden of older girls within the household in response to a crop shock is likely to be part of the explanation for the adverse effect of shocks on this cohort.
    Date: 2010
  16. By: Stefan Dercon; Catherine Porter
    Abstract: In 1984, the world was shocked at the scale of a famine in Ethiopia that caused over half a million deaths, making it one of the worst in recent history. The mortality impacts are clearly significant. But what of the survivors? This paper provides the first estimates the long-term impact of the famine twenty years later, on the height of young adults aged 17–25 who experienced this severe shock in-utero and as infants during the crisis. Improving methodologically on other studies, famine intensity is measured at the household level, while impacts are assessed using a difference-indifferences comparison across siblings. We find that by adulthood, affected children who were under the age of 36 months at the peak of the crisis are significantly shorter than the older cohort, by at least 3cm. They are also less likely to have completed primary school, and more likely to have experienced recent illness. Indicative calculations show that this may lead to income losses of between 3% and 8% per year over their lifetime. The evidence also suggests that the relief operations at the time made little difference.
    Keywords: Famine, human development, Ethiopia
    JEL: I12 O12 J13 O15
    Date: 2010
  17. By: Antonio Estache; Emili Grifell-Tatjé
    Abstract: This paper offers a quantitative evaluation of the distribution of the welfare of a water privatization experience in Mali among labor, investors,intermediate input providers, users and taxpayers. The assessment is based on an index number inspired by Bennet (1920). We find four main impacts. First, taxpayers are the main losers as subsidies are still needed. Second, users benefited through lower real water prices, although users in Bamako did better than the others and future users will be hurt by insufficient investment. Third, labor, intermediate suppliers and investors have also benefited. Fourth, efficiency-equity trade-offs are for real in the water business in Africa. Indeed, the distribution of the gains within factor categories has not been even, largely favoring foreign actors over domestic actors. This easily explains the unhappiness of the Malians. The regulatory decisions to correct it explains why the private operator lost its incentive to stay in the country.
    Keywords: privatzation, regulation, efficiency, equity; distributional effects
    Date: 2010–12
  18. By: Saurabh Arora; Marjolein C.J. Caniëls; Henny Romijn
    Abstract: Jatropha is emerging as an important biofuel crop throughout developing countries in the tropics. Initially lauded as an environmentally-benign ‘wonder crop’ suitable for arid wasteland cultivation that would avoid competition with scarce livelihood resources, it has recently begun to attract mounting criticisms related to competition with food production, biodiversity impacts, insecurity of land access by local populations, exploitative employment conditions, and disappointing effects on greenhouse gas emission reduction. In this paper we analyse the nature of the local developments that have given rise to these criticisms, and the underlying innovation processes and global forces that are driving the sector in the direction of these contested outcomes. We focus on Tanzania, an important forerunner in Jatropha biofuels production whose experiences have informed the international biofuel debate more broadly. Two surveys among biofuel actors in Tanzania held in 2005 and 2008/9 are the primary data sources. An extended innovation systems perspective is adopted, which is instrumental in studying patterns of global and local institutional embeddedness from a long-term perspective. These patterns are found to be key drivers behind the emergence and evolution of three distinct organizational models in the sector: local energy production and use for rural communities; decentralised subcontracting for centralised oil processors; and large centralised plantations. Socio-economic interactions in these models seem to be regulated by institutions put in place by colonial and early post-colonial governance of agri-commodity production and exchange. Each is also closely associated with different social (network) relations, organizational choices, economic viability, and environmental sustainability effects.
    Keywords: Sustainable development, Globalization, Institutions, Energy, Biofuels, Jatropha
    JEL: O30 R10
    Date: 2010–10
  19. By: Holvoet, Nathalie; Inberg, Liesbeth
    Date: 2010

This nep-afr issue is ©2010 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.