nep-afr New Economics Papers
on Africa
Issue of 2011‒03‒26
23 papers chosen by
Quentin Wodon
World Bank

  1. Explaining African Growth Performance: A Production-Frontier Approach By Romain Houssa; Oleg Badunenko; Daniel J. Henderson
  2. Orphans at risk in Sub-Saharan Africa: Evidence on educational and health outcomes By Coneus, Katja; Mühlenweg, Andrea M.
  3. Quality of education and the labour market: A conceptual and literature overview By Eldridge Moses
  4. Kenya's infrastructure: a continental perspective By Briceno-Garmendia, Cecilia M.; Shkaratan, Maria
  5. The when and how of leaving school: The policy implications of new evidence on secondary schooling in South Africa By Martin Gustafsson
  6. Who has been affected, how and why? The spillover of the global financial crisis to Sub-Saharan Africa and ways to recovery By Sophie Chauvin; André Geis
  7. Constraints to school effectiveness: what prevents poor schools from delivering results? By Debra L. Shepherd
  8. Zambia's infrastructure : a continental perspective By Foster, Vivien; Dominguez, Carolina
  9. Ghana's infrastructure : a continental perspective By Foster, Vivien; Pushak, Nataliya
  10. Why Do African Banks Lend so Little? By Svetlana Andrianova; Badi H. Baltagi; Panicos O. Demetriades; David Fielding
  11. Wars and Child Health: Evidence from the Eritrean-Ethiopian Conflict By Akresh, Richard; Lucchetti, Leonardo; Thirumurthy, Harsha
  12. Ethiopia's infrastructure: a continental perspective By Foster, Vivien; Morella, Elvira
  13. Malawi's infrastructure: a continental perspective By Foster, Vivien; Shkaratan, Maria
  14. Information Asymmetries and Technology Adoption: The Case of Tissue Culture Bananas in Kenya By Nassul S. Kabunga; Thomas Dubois; Matin Qaim
  15. Exchange rate pass-through to consumer prices in Ghana: Evidence from structural vector auto-regression By Sanusi, Aliyu Rafindadi
  16. The Democratic Republic of Congo's infrastructure : a continental perspective By Foster, Vivien; Benitez, Daniel Alberto
  17. Liberia's infrastructure: a continental perspective By Foster, Vivien; Pushak, Nataliya
  18. Can the removal of VAT Exemptions support the Poor? The Case of Niger By Celine DE QUATREBARBES; Dorothée BOCCANFUSO; Luc SAVARD
  19. Cote d'Ivoire's infrastructure : a continental perspective By Foster, Vivien; Pushak, Nataliya
  20. Productivity Growth in Food Crop Production in Imo State, Nigeria By Onyenweaku, C.E; Nwachukwu, Ifeanyi N.; Opara, T.C.
  21. Gender Differences, HIV Risk Perception and Condom Use By Judith Lammers; Sweder van Wijnbergen; Daan Willebrands
  22. Impact of Ethnicities on Market Outcome: Results of Market Experiments in Kenya By Ken-Ichi Shimomura; Takehiko Yamato
  23. Does the system of allocation of intergovernmental transfers in Senegal eliminate politically motivated targeting? By Emilie Caldeira

  1. By: Romain Houssa; Oleg Badunenko; Daniel J. Henderson (Center for Research in the Economics of Development, University of Namur)
    Abstract: This paper employs a production frontier approach that allows distinguishing technologic progress from efficiency development. Data on 35 African countries in 1970-2007 show that efficiency losses have constrained growth in Africa while technology progress has played a marginal growth enhancing role in the region. Moreover, physical and human capital accumulation are the main factors that drive productivity growth at the country level. Examining the outcomes of successful countries suggests that good governance, institutional quality and good policies are key factors for improving economic development in Africa. These factors are even more required in Sub-Saharan Africa given the natural constraints of geography in the region.
    Date: 2010–11
  2. By: Coneus, Katja; Mühlenweg, Andrea M.
    Abstract: In this paper, we examine how orphanhood affects children's educational and health outcomes in eleven sub-Saharan African countries. Our analysis is based on a comparison of orphans and non-orphaned children living under the same conditions. We also examine the impacts of various family structures and compare social orphans (non-orphaned children not living with a biological parent) to orphans. Using household fixed-effects estimation, we provide evidence that children not living with a biological parent lag behind in education and are more often malnourished and stunted. Educational gaps are particularly evident among orphans and social orphans not living with a mother. The effect of paternal death or absence is rather modest in most countries. --
    Keywords: Orphans,family structure,human capital,sub-Saharan Africa,fixed-effects
    JEL: I12 I21 J24
    Date: 2011
  3. By: Eldridge Moses (Department of Economics, University of Stellenbosch)
    Abstract: In South Africa earnings inequality between races still persists despite the convergence of educational attainment between races. There is a now a growing body of evidence which suggests that the quality of education received by South Africans differs markedly amongst and within race groups, and that schools differ substantially in their ability to impart cognitive skills. This paper reviews the international and South African literature which considers the role of education quality in improving labour market prospects. Education quality is considered from both from an input and output perspective. This paper concludes that education output quality, particularly the ability of a school system to impart cognitive skills, is a crucial determinant of labour market success.
    Keywords: South Africa, Education, Earnings Functions, Education Quality, Cognitive Skills, Labour Market
    JEL: I20 I21 I30 J30
    Date: 2011
  4. By: Briceno-Garmendia, Cecilia M.; Shkaratan, Maria
    Abstract: In the past decade, infrastructure contributed 0.5 percentage points to Kenya's annual per capita GDP growth. Raising the country’s infrastructure endowment to that of Africa's middle-income countries could increase that contribution by 3 percentage points. Several accomplishments are notable. More than 90 percent of the population has access to GSM cell signals. A successful public-private partnership in air transport has made Kenya's airline a top carrier in the region and its international airport a key gateway to Africa. Institutional reforms in the power sector have reduced the burden of subsidies on the public by approximately 1 percent of GDP. But the power sector continues to pose Kenya's greatest infrastructure challenge. Over the next decade, current capacity will have to double. A second challenge is to improve the efficiency of operations at the Port of Mombasa. Other concerns include low levels of access to household services, underfunding of road maintenance, and negative progress on the Millennium Development Goals for water supply and sanitation. Addressing Kenya's infrastructure deficit will require sustained expenditures of approximately $4 billion per year (20 percent of GDP) over the next decade. As of 2006, Kenya needed and additional $2.1 billion per year (11 percent of GDP) to meet that funding goal. The gap could be halved through the use of more efficient technologies to meet infrastructure targets in the transport and WSS sectors. If Kenya is unable to increase infrastructure spending, it could nevertheless meet infrastructure targets in 18 years by eliminating existing inefficiencies in infrastructure sectors.
    Keywords: Transport Economics Policy&Planning,Infrastructure Economics,Town Water Supply and Sanitation,Public Sector Economics,Water Supply and Systems
    Date: 2011–03–01
  5. By: Martin Gustafsson (Department of Economics, University of Stellenbosch)
    Abstract: South African and international household and education datasets are analysed to characterise patterns of dropping out, grade repetition, academic under-performance and under-preparedness for post-school life in South African secondary schools. A number of measurement error problems are moreover discussed and in some cases remedied. The proportion of South African youths entering upper secondary schooling is above the trend found in comparable middle income countries, the proportion entering the last grade (Grade 12) is about average, but the proportion successfully completing secondary schooling (40%) is below average. The data suggest improving quality should be a greater planning priority than increasing enrolments. A what-if subject choice analysis using examination data moreover suggests that successful completion could be greatly enhanced by guiding students to more appropriate subject choices, possibly through a more standardised set of assessments in Grade 9. Any attempt to reduce dropping out must pay close attention to financial constraints experienced by students with respect to relatively low-cost inputs such as books. Teenage pregnancies must be reduced as these explain half of female dropping out. The quality problem in schools underlined by the fact that income returns and test score gains associated with each additional year of secondary schooling are well below those associated with a year of post-school education.
    Keywords: Human capital, Unemployment, Earnings function, South Africa, Secondary schools, Examinations, Education policy
    JEL: E24 I28 J31
    Date: 2011
  6. By: Sophie Chauvin (Banque de France, DAMEP, 31 rue Croix des Petits Champs, 75049 Paris Cedex, France.); André Geis (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main)
    Abstract: This paper first presents a comprehensive analysis of the significance of different transmission channels of the global economic and financial crisis to Sub-Saharan African countries. It then examines the repercussions of the crisis for the growth of gross domestic product (GDP) and its components; this is complemented by a study of the responses of monetary and fiscal authorities to the challenges posed by the crisis, both in regional terms and on the basis of selected country case studies. Finally, the paper highlights medium-term to long-term challenges for ensuring a sustainable recovery and for fostering resilience against potential future shocks.The authors find that the intensity of the impact of the crisis varies widely across countries, with a lack of export diversification apparently having been particularly conducive to its transmission. However, the analysis of the magnitude of the observed swings in macroeconomic variables also reveals that although they were large, they were not exceptional and are comparable to fluctuations Sub-Saharan Africa has witnessed in the recent past. Furthermore, in a non-negligible number of instances the extent of the slowdown seems to have been determined by domestic factors as well. Particularly, policies and conditions prior to the global recession, rather than crisis contagion per se, appear decisively to have shaped the scope of possible responses in many cases. As a result, many of the policy lessons Sub-Saharan Africa might draw from the crisis do not involve radical deviation from the policies in place before. Efforts to improve the management of resource revenue for commodity-dependent countries, necessary reforms of the economic and business environment to enable a diversification of the export base, and further regional integration might help to alleviate possible future external shocks. Additionally, the crisis re-emphasises the need to back growth prospects by redefining sectoral priorities, for example by concentrating on infrastructure and agricultural supply. Lastly, new challenges in the wake of the crisis may call for a re-focusing of policy initiatives, e.g. to address an emergence of potential financing constraints for aid-dependent economies or the exposure of domestic financial sectors to systemic shock. JEL Classification: R11, E60, F30, O10
    Keywords: Regional growth, Sub-Saharan Africa, balance of payments, global economic crisis, international spillovers.
    Date: 2011–03
  7. By: Debra L. Shepherd (Department of Economics, University of Stellenbosch)
    Abstract: The poor state of quality education in South Africa is confirmed by the weak performance of South African students on international tests, even when compared to countries with comparatively poorer education systems. This paper aims to shed light on this issue through the use of the PIRLS 2006 dataset and education production function techniques. A unique feature of this dataset is that schools were able to choose the language in which the test was conducted. This provided a proxy for former school department, a feature that has not been captured in international survey datasets. A clear distinction between the historically black and the historically white, coloured and Indian school systems is needed in order to identify the different data generating processes at work. The regression model results reveal that family and student characteristics are undoubtedly important for performance within both school samples. At the level of the school, quite divergent school factors and classroom processes were found to have significant impacts on student performance across the two school systems. It is concluded that a lack of enabling conditions such as effective leadership, flexibility and autonomy, and a capable teaching force may contribute to certain school and classroom processes not playing a significant role in determining performance in the less affluent black school system.
    Keywords: South Africa, Education, Education production function, Educational Achievement, Educational Inequality
    JEL: C20 C21 I20 I21 I30
    Date: 2011
  8. By: Foster, Vivien; Dominguez, Carolina
    Abstract: Infrastructure improvements contributed 0.6 percentage points to Zambia's annual per capital GDP growth over the past decade, mostly because of exponential growth in information and communication services. The power sector, by contrast, pulled the growth rate down by more than 0.1 percentage points. Improving Zambia's infrastructure endowment could boost growth by up to 2 percentage points per year. Zambia's relatively high generation capacity and power consumption are accompanied by fewer power outages than elsewhere in the region. But Zambia's power sector emphasizes the mining industry, while household electrification is about half that in other resource-rich countries. Zambia's power tariffs, among the lowest in Africa, are less than half the level needed to accelerate electrification and keep pace with mining sector demands. In power as in just about every other aspect of infrastructure, rural Zambians lag well behind their African peers. In a country where 70 percent of the population depends on agriculture for its livelihood, this represents a huge drag on the economy. Zambia would need to spend an average of $1.6 billion a year over the decade 2006-15 to develop the infrastructure found in the rest of the developing world. This is equivalent to 20 percent of Zambia's GDP and about double the country's rate of investment in recent years. Closing the country's annual infrastructure funding gap of $500 million requires raising more funds, looking for more cost-effective ways to meet infrastructure targets, and eliminating the inefficiencies that cause the loss of $300 million annually.
    Keywords: Transport Economics Policy&Planning,Infrastructure Economics,Energy Production and Transportation,Town Water Supply and Sanitation,Banks&Banking Reform
    Date: 2011–03–01
  9. By: Foster, Vivien; Pushak, Nataliya
    Abstract: Infrastructure contributed just over one percentage point to Ghana's annual per capital GDP growth during the 2000s. Raising the country’s infrastructure endowment to that of the region's middle-income countries could boost the annual growth rate by more than 2.7 percentage points. Ghana has an advanced infrastructure platform when compared with other low-income countries in Africa. The country’s coverage levels for rural water, electricity, and GSM signals are impressive. A large share of the road network is in good or fair condition. Institutional reforms have been adopted in the ICT, ports, roads, and water supply sectors. Ghana’s most pressing challenges lie in the power sector, where outmoded transmission and distribution assets, rapid demand growth, and periodic hydrological shocks leave the country reliant on high-cost oil-based generation. Exceptionally high losses in water distribution leave little to reach end customers, who are thus exposed to intermittent supplies. Addressing Ghana's infrastructure challenges will require raising annual expenditures to $2.3 billion. The country already spends about $1.2 billion per year on infrastructure, equivalent to about 7.5 percent of GDP. A further $1.1 billion is lost each year to inefficiencies, notably underpricing of power.Ghana's annual infrastructure funding gap is about $0.4 billion per year, chiefly related to power and water. Following its recent oil discoveries, Ghana can raise additional public funding from increased tax receipts. The country has several strong areas on which to build and a solid economic base from which to fund incremental efforts.
    Keywords: Transport Economics Policy&Planning,Infrastructure Economics,Town Water Supply and Sanitation,Energy Production and Transportation,Water Supply and Systems
    Date: 2011–03–01
  10. By: Svetlana Andrianova; Badi H. Baltagi; Panicos O. Demetriades; David Fielding
    Abstract: We put forward a plausible explanation of African financial under-development in the form of a bad credit market equilibrium. Utilising an appropriately modified IO model of banking, we show that the root of the problem could be unchecked moral hazard (strategic loan defaults) or adverse selection (a lack of good projects). Applying a dynamic panel estimator to a large sample of African banks, we show that loan defaults are a major factor inhibiting bank lending when the quality of regulation is poor. We also find that once a threshold level of regulatory quality has been reached, improvements in the default rate or regulatory quality do not matter, providing support for our theoretical predictions.
    Keywords: Dynamic panel data; African financial under-development; African credit markets
    JEL: G21 O16
    Date: 2011–03
  11. By: Akresh, Richard (University of Illinois at Urbana-Champaign); Lucchetti, Leonardo (University of Illinois at Urbana-Champaign); Thirumurthy, Harsha (World Bank)
    Abstract: This is the first paper using household survey data from two countries involved in an international war (Eritrea and Ethiopia) to measure the conflict’s impact on children's health in both nations. The identification strategy uses event data to exploit exogenous variation in the conflict's geographic extent and timing and the exposure of different children's birth cohorts to the fighting. The paper uniquely incorporates GPS information on the distance between survey villages and conflict sites to more accurately measure a child’s war exposure. War-exposed children in both countries have lower height-for-age Z-scores, with the children in the war-instigating and losing country (Eritrea) suffering more than the winning nation (Ethiopia). Negative impacts on boys and girls of being born during the conflict are comparable to impacts for children alive at the time of the war. Effects are robust to including region-specific time trends, alternative conflict exposure measures, and an instrumental variables strategy.
    Keywords: child health, conflict, economic shocks, Africa
    JEL: I12 J13 O12
    Date: 2011–03
  12. By: Foster, Vivien; Morella, Elvira
    Abstract: Infrastructure contributed 0.6 percentage points to Ethiopia's annual per capita GDP growth over the last decade. Raising the country's infrastructure endowment to that of the region's middle-income countries could add an additional 3 percentage points to infrastructure's contribution to growth. Ethiopia's infrastructure successes include developing Ethiopia Airlines, a leading regional carrier; upgrading its network of trunk roads; and rapidly expanding access to water and sanitation.The country's greatest infrastructure challenge lies in the power sector, where a further 8,700 megawatts of generating plant are needed over the next decade, implying a doubling of current capacity. The transport sector faces the challenges of low levels of rural accessibility and inadequate road maintenance. Ethiopia’s ICT sector currently suffers from a poor institutional and regulatory framework. Addressing Ethiopia's infrastructure deficit will require a sustained annual expenditure of $5.1 billion over the next decade. The power sector alone requires $3.3 billion annually, with $1 billion needed to facilitate regional power trading. That level of spending represents 40 percent of the country's GDP and a tripling of the $1.3 billion spent annually in the mid-2000s. As of 2006, there was an annual funding gap of $3.5 billion. Improving road maintenance, removing inefficiencies in power (notably underpricing), and privatizing ICT services could shrink the gap. But Ethiopia needs a significant increase in its already proportionally high infrastructure funding and careful handling of public and private investments if it is to reach its infrastructure targets within a reasonable time.
    Keywords: Transport Economics Policy&Planning,Infrastructure Economics,Public Sector Economics,Banks&Banking Reform,Town Water Supply and Sanitation
    Date: 2011–03–01
  13. By: Foster, Vivien; Shkaratan, Maria
    Abstract: Infrastructure contributed 1.2 percentage points to Malawi's annual per capital GDP growth over the past decade. Raising the country's infrastructure endowment to that of the region’s middle-income countries could increase that contribution by 3.5 percentage points. Malawi's successes in infrastructure development include reaching the Millennium Development Goals for water and making GSM telephone signals widely available without public subsidy. Challenges include improving the reliability and sustainability of the power sector, raising funding for road maintenance, preventing overengineering of roads, enhancing market access in agricultural areas, and lowering the cost of information and communications services. The latter goal may be achievable by securing competitive access to the new submarine infrastructure on the East African coast.Addressing Malawi's infrastructure deficit would require sustained expenditures of almost $600 million per year over the decade 2006-15. During the mid-2000s, the country spent close to $200 million per year, about half of which went to the transport sector. Because of widespread inefficiencies -- underpricing of power, improperly maintained roads, and utility distribution losses --about $200 million is wasted each year. But even if those inefficiencies were eliminated, Malawi would still face an annual infrastructure funding gap of almost $300 million. That gap could be cut to $100 million by engaging in regional trade of electricity, using lower-cost technologies in water and sanitation, and adopting less-ambitious road-building technologies. If inefficiencies were eliminated and recent spending levels sustained, Malawi could reach its infrastructure targets within 16 years.
    Keywords: Transport Economics Policy&Planning,Infrastructure Economics,Banks&Banking Reform,Energy Production and Transportation,Town Water Supply and Sanitation
    Date: 2011–03–01
  14. By: Nassul S. Kabunga (Georg-August-University Göttingen); Thomas Dubois (International Institute of Tropical Agriculture (IITA)); Matin Qaim (Georg-August-University Göttingen)
    Abstract: Classical innovation adoption models implicitly assume homogenous information flow across farmers, which is often not realistic. As a result, selection bias in adoption parameters may occur. We focus on tissue culture (TC) banana technology that was introduced in Kenya more than 10 years ago. Up till now, adoption rates have remained relatively low. We employ the average treatment effects approach to account for selection bias and extend it by explicitly differentiating between awareness exposure (having heard of a technology) and knowledge exposure (understanding the attributes of a technology). Using a sample of Kenyan banana farmers, we find that estimated adoption parameters differ little when comparing the classical adoption model with one that corrects for heterogeneous awareness exposure. However, parameters differ considerably when accounting for heterogeneous knowledge exposure. This is plausible: while many farmers have heard about TC technology, its successful use requires notable changes in cultivation practices, and proper understanding is not yet very widespread. These results are also important for other technologies that are knowledge-intensive and/or require considerable adjustments in traditional practices.
    Keywords: adoption; tissue culture; banana; average treatment effects; knowledge and exposure; adoption gap; Kenya
    Date: 2011–03–17
  15. By: Sanusi, Aliyu Rafindadi
    Abstract: This paper develops a Structural Vector Autoregression (SVAR) model for the Ghanaian economy to estimate the pass-through effects of exchange rate changes to consumer prices. The model incorporates the special features of the Ghanaian economy, especially its dependence on foreign aid and primary commodity exports for foreign exchange earnings. The findings show that the pass-through to consumer prices, although incomplete, is substantially large. This suggests that exchange rate depreciation is a potentially important source of inflation in Ghana. Using variance decomposition analyses, it is found that monetary expansion has been more important in explaining Ghana’s actual inflationary process than the exchange rate depreciation. One policy implication of these findings is that policies that aim at lowering inflation must focus on monetary and exchange rate stability.
    Keywords: Exchange Rate Pass-Through; Inflation; Structural Vector-Autoregression; Foreign Aid; Ghana
    JEL: E31 F41 F31
    Date: 2010–06
  16. By: Foster, Vivien; Benitez, Daniel Alberto
    Abstract: The Democratic Republic of Congo (DRC) faces possibly the most daunting infrastructure challenge on the African continent. Conflict has seriously damaged most infrastructure networks. Vast geography, low population density, extensive forestlands, and criss-crossing rivers complicate the development of new networks. Progress has been made since the return of peace in 2003. A privately funded GSM network now provides mobile telephone signals to two-thirds of the population. External funding has been secured to rebuild the country's road network, and domestic air traffic has grown. Modest investments could harness inland waterways for low-cost transport. Much more substantial investments in hydropower would enable the DRC to meet its own energy demands cheaply while exporting vast quantities of power. One of the country's most immediate infrastructure challenges is to reform the national power utility and increase power generation and delivery. Capacity must increase by 35 percent over the period 2006-15 to meet domestic demand. The dilapidated condition of both road and rail infrastructure presents another challenge. To meet the target defined in the report, investment in the country's infrastructure must increase from $700 million to $5.3 billion per year over the next decade, a staggering 75 percent of 2006 GDP. New infrastructure technologies, the elimination of inefficiencies, and cross-border finance (for hydropower development) could cut the annual funding gap in half. Recently, the country secured $4 billion in external finance commitments for infrastructure, enabling increases in budget allocations for public investment.
    Keywords: Transport Economics Policy&Planning,Infrastructure Economics,Public Sector Economics,Banks&Banking Reform,Energy Production and Transportation
    Date: 2011–03–01
  17. By: Foster, Vivien; Pushak, Nataliya
    Abstract: Liberia's power generating capacity and national grid were completely demolished during 14 years of civil war. Piped water access fell from 15 percent of the population in 1986 to less than 3 percent in 2008. War also left the national road network in a state of severe disrepair. Since the return of peace, the port of Monrovia has resumed normal operations under private management, and progress has been made in securing donor finance for road reconstruction. Liberia has also successfully liberalized its mobile telephone markets, with low-priced access surging to 40 percent in 2009. Liberia's starkest challenge lies in funding a more cost-effective power sector. The country's generation capacity is barely one-tenth of the benchmark level of Africa's other low-income countries. The cost of generating power is exorbitant, and the power tariff is three times the regional average. Addressing Liberia's public infrastructure needs will require sustained expenditures of between $350 million and $600 million annually, mostly to fund power and transport. In the mid-2000s, with all sources of spending taken into account, Liberia spent around $90 million a year on infrastructure. An additional $17 million was lost to inefficiencies, such as underpricing of power. Because Liberia suffers an annual funding gap of between $250 million and $500 million per year, it will need a combination of increased finance, improved efficiency, and cost-reducing innovations to reach its infrastructure targets in a reasonable time. Without these, Liberians may have to wait for up to 40 years to achieve the targets.
    Keywords: Transport Economics Policy&Planning,Infrastructure Economics,Energy Production and Transportation,Public Sector Economics,E-Business
    Date: 2011–03–01
    Abstract: In order to have the public funds necessary for its development, Niger is examining the possibility of expanding its VAT tax base to exempted goods and basic food products. This proposal has prompted violent opposition leading to the question of the social impacts of taxation. The first micro-macro computable general equilibrium model of Niger's actual economy has been developed. This model allows analysis of the social impact and distributional analysis of the following VAT structures: a pure VAT structure, a structure maintaining certain exemptions, and a multiple-rate VAT structure. The model's results shows that although restoring the VAT rate would be socially costly compared to the initial situation, the distributional impact of the VAT differs according to the system implemented in the country. Maintaining VAT exemptions in food crop agriculture sectors associated with a tax base expansion in the remaining sectors will increase public revenue while taking into account the national goal of poverty reduction. The net social impact of exoneration depends on the economic structure of the concerned sector. If the national goal is the end of exemption, the model shows that applying a pure VAT conforming to the theory is preferable in terms of economic growth whereas applying a reduced-rate on food crop agriculture lightens the social impact of the end of exemptions compared to a single rate.
    Keywords: distributional analysis, Value Added Tax, exemptions, micro-simulation, Computable general equilibrium model, niger
    JEL: I32 H22 E62 D58
    Date: 2011
  19. By: Foster, Vivien; Pushak, Nataliya
    Abstract: Infrastructure contributed 1.8 percentage points to Cote d'Ivoire's annual per capita GDP growth over the mid-2000s before conflict began to erase the country's infrastructure and its growth contributions. Raising the country's infrastructure endowment to the level of the region's middle-income countries could boost the growth rate by a further 2 percentage points. Private sector contracts signed in the 1990s resulted in improved operational performance and funding for investments in the water, power, transport, and ICT sectors. Impressively, those contracts survived the crisis and delivered uninterrupted service. But private investment flows have decreased since the mid-2000s. Cote d'Ivoire's most pressing infrastructural challenge will be to regain the financial equilibrium needed to restore a reliable energy supply. Reestablishing the prominence of Abidjan's port will require investments in terminal capacity and road and rail infrastructure upgrades on hinterland linkages. The underfunding of road maintenance and poor sanitation are additional challenges. Cote d'Ivoire's annual infrastructure spending was $750 million in the mid-2000s, with going to power sector operations and maintenance. If the underpricing of power and other inefficiencies (valued at $200 million annually) were eliminated, the country’s annual infrastructure funding gap would amount to $1 billion, and infrastructure goals could be reached within 20 years. Cote d'Ivoire's has relatively good prospects for bridging its funding gap by raising public investment from its low current level, choosing more efficient technologies, and harnessing additional private investment for infrastructure.
    Keywords: Transport Economics Policy&Planning,Infrastructure Economics,Public Sector Economics,Energy Production and Transportation,Banks&Banking Reform
    Date: 2011–03–01
  20. By: Onyenweaku, C.E; Nwachukwu, Ifeanyi N.; Opara, T.C.
    Abstract: The study examined the productivity growth in food crop production in Imo State with emphasis on the decomposition of total factor productivity into technical progress, changes in technical and allocative efficiency and scale effects. A panel data set comprising 210 observations drawn over 2001 – 2007 periods was used in the study. Using the translog stochastic frontier production function, the decomposition components were computed applying the appropriate formulae. The results showed that total factor productivity decreased through time while technical change was negative, implying downward shift of the production frontier. As a major component, technical change was the main constraint to the achievement of high levels of TFP during the study period. The scale effect, which is generally bigger than technical change component shows that the sampled farms on the average have not taken advantage of scale economies. The result further revealed that the allocative efficiency had an average magnitude closer to the scale effect and points towards decreases in the efficiency with which production factors are allocated. This is an indication of a decline in technical efficiency. On the basis of the results, the study suggested reforms of the ADPs with a bid to enhancing their capacity in extending novel technologies and innovations to farmers.
    Keywords: Productivity decomposition; scale effect; allocative; efficiency
    JEL: C13 C42 D01 B41
    Date: 2010–09–02
  21. By: Judith Lammers (University of Amsterdam); Sweder van Wijnbergen (University of Amsterdam); Daan Willebrands (Amsterdam Institute for International Development (AIID))
    Abstract: We analyze how HIV-knowledge influences condom use across the sexes. The empirical work is based on a household survey conducted among 1,979 households of a representative group of market persons in Lagos in 2008. Last-time-condom-use is analyzed based on a Probit model while correcting for clustering effects. Next to socioeconomic characteristics, the data includes questions on knowledge of the existence of HIV, HIV prevention, HIV stigma, intended pregnancy, and risk perceptions of engaging in unprotected sex. We observe a large HIV knowledge gap between males and females. Moreover, across the sexes different type of knowledge are important in condom use. Low risk perceptions of engaging in unprotected sex and not knowing that condoms prevent HIV infection appear to be the best predictors for risky sexual behavior among men. The latter is also important in condom use among single females. Both factors, however, do not explain sexual behavior of married women, suggesting a lack of bargaining power in HIV prevention decisions among married females. Our results call for programmatic approaches to differentiate the focus of HIV prevention campaigns for males and females including a separate focus for married men and women. Moreover, the large predictive power of high-risk perceptions of engaging in unprotected sex (while correcting for other HIV knowledge indicators) calls for further exploration of influencing these risk perceptions in HIV prevention programs.
    Keywords: prevention; knowledge; HIV/AIDS; risk perception; gender; condom use
    JEL: I1 I2
    Date: 2011–03–11
  22. By: Ken-Ichi Shimomura (Research Institute for Economics and Business Administration, Kobe University); Takehiko Yamato (Department of Social Engineering, Graduate School of Decision Science and Technology, Tokyo Institute of Technology)
    Abstract: We study market exchange in the laboratory by a multiethnic experiment in Kenya. The subjects of our experiment are of three ethnicities, Kikuyu, Luo, and Kalenjin. Our model contains two types of consumers and two kinds of commodities, and three competitive equilibria exist. The two equilibria with the lowest, and highest relative prices are beneficial for one type of the consumers, and the intermediate price gives an equitable allocation. The tatonnement dynamics however predict that relative prices diverge from the intermediate equilibrium towards the lowest equilibrium or the highest equilibrium depending on initial prices. In order to examine how much effect the ethnicities of subjects have on the equilibrium selection, we conducted manual experiments of pit market trading with different combinations of ethnicities of subjects. Our result shows strong support for the convergence to the intermediate equilibrium when Kalenjin subjects participated, whereas no such data are obtained without them. In addition, the frequencies of transactions with Kalenjin subjects were significantly less than that with the other subjects only, and the less frequent transactions resulted in the more efficient outcomes of the experimental market.
    Keywords: Economic Experiment, Kenya, Pit Market, Perfect Competition, Multiple Equilibria
    JEL: C92 D51
    Date: 2011–03
  23. By: Emilie Caldeira (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: While there is a large body of literature on the determinants of allocation of intergovernmental …fiscal transfers in developed countries, this kind of study is still very limited for developing countries, especially Subsaharan countries. Using an original micro-level public fi…nance panel data from Senegal, we address three issues: (1) Does the Senegalese allocation system of …fiscal transfers conform to the guidance of the normative theory, in particular, to the equity principle? (2) Does this allocation system eliminate the politically motivated targeting of transfers? (3) If not, what kind of political factors explain the horizontal allocation of resources? By estimating a panel data for 67 local gov- ernments ("communes"), from 1997 to 2009, we fi…nd that equity concerns do not affect the allocation of intergovernmental transfers in Senegal, leading to the conclusion that the resources distribution system does not comply with the dictates of normative theory. Moreover, we …find evidence that political considerations influence the horizontal allocation of …fiscal transfers. In particular, our analysis suggests that transfers allocation follows a pattern of tactical redistribution more than patronage, swing communes being targeted while partisan communes are not.
    Keywords: Senegal;Intergovernmental transfers;political economy;decentralization
    Date: 2011–03–14

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