nep-afr New Economics Papers
on Africa
Issue of 2011‒07‒13
twenty-two papers chosen by
Quentin Wodon
World Bank

  1. Poverty transitions among older households in Brazil and South Africa By Armando Barrientos; Julia Mase
  2. Divide and Rule or the Rule of the Divided? Evidence from Africa By Stelios Michalopoulos; Elias Papaioannou
  3. Growth, Colonization, and Institutional Development. In and Out of Africa By Graziella Bertocchi
  4. The cycle of development in Africa. A story about the power of economic ideas By Martin Paldam
  5. Yield Effects of Tissue Culture Bananas in Kenya: Accounting for Selection Bias and the Role of Complementary Inputs By Nassul S. Kabunga; Thomas Dubois; Matin Qaim
  6. Sierra Leone's infrastructure : a continental perspective By Pushak, Nataliya; Foster, Vivien
  7. Firm Registration and Bribes: Results from a Microenterprise Survey in Africa By Clarke, George R.G.
  8. The Role of Asset Prices in Forecasting Inflation and Output in South Africa By Rangan Gupta; Faaiqa Hartley
  9. Assessing wellbeing and deprivation in later life: A multidimensional counting approach By Armando Barrientos; Casilda Lasso de la Vega
  10. Interaction between HIV Awareness, Knowledge, Safe Sex Practice and HIV Incidence: Evidence from Botswana By Ranjan Ray; Kompal Sinha
  11. Malnutrition, subsequent Risk of Mortality and Civil War in Burundi By Philip Verwimp
  12. Activity Choices of Internally Displaced Persons and Returnees: Quantitative Survey Evidence from Post-War Northern Uganda By Carlos Bozzoli; Tilman Brück; Tony Muhumuza
  13. Manipulating the rural landscape: Villagisation and income generation in Rwanda By Isaksson, Ann-Sofie
  14. Access to Improved Water Sources and Rural Productivity: Analytical Framework and Cross-country Evidence By Youssouf Kiendrebeogo
  16. The impact of income shocks on children education: the 1987-1989 locust plague in Mali. By MESPLE-SOMPS, Sandrine; DE VREYER, Philippe; GUILBERT, Nathalie
  17. When is capital enough to get female microenterprises growing? Evidence from a randomized experiment in Ghana By Fafchamps, Marcel; McKenzie, David J.; Quinn, Simon; Woodruff, Christopher
  18. Self-Help Groups and Mutual Assistance: Evidence from Urban Kenya By Fafchamps, Marcel; La Ferrara, Eliana
  19. A matching decomposition of the rural-urban difference in malnutrition in Malawi By Mussa, Richard
  20. The effects of conflict on fertility in Rwanda By Schindler, Kati; Bruck, Tilman
  21. Can diaries help improve agricultural production statistics ? Evidence from Uganda By Deininger, Klaus; Carletto, Calogero; Savastano, Sara; Muwonge, James
  22. The SADC region and EPA/EBAI – trade balance analysis By Sukati, Mphumuzi

  1. By: Armando Barrientos; Julia Mase
    Abstract: Using a panel dataset of older people and their households in Brazil and South Africa, this paper provides estimates of changes in poverty among older people in Brazil and South Africa. It examines poverty status transitions of older people and their households over time. It measures the extent to which panel households managed to escape from poverty, whilst others fell into poverty, and others still remained persistently poor or persistently non-poor over time. The analysis in the paper also throws light on changes in the depth and intensity of poverty among older households. A comparative approach provides an additional dimension to the estimates.
    Date: 2011
  2. By: Stelios Michalopoulos; Elias Papaioannou
    Abstract: We investigate jointly the importance of contemporary country-level institutional structures and local ethnic-specific pre-colonial institutions in shaping comparative regional development in Africa. We utilize information on the spatial distribution of African ethnicities before colonization and regional variation in contemporary economic performance, as proxied by satellite light density at night. We exploit the fact that political boundaries across the African landscape partitioned ethnic groups in different countries subjecting identical cultures to different country-level institutions. Our regression discontinuity estimates reveal that differences in countrywide institutional arrangements across the border do not explain differences in economic performance within ethnic groups. In contrast, we document a strong association between pre-colonial ethnic institutional traits and contemporary regional development. While this correlation does not necessarily identify a causal relationship, this result obtains conditional on country fixed-effects, controlling for other ethnic traits and when we focus on pairs of contiguous ethnic homelands.
    JEL: N0 N17 O1 O11 O55
    Date: 2011–06
  3. By: Graziella Bertocchi
    Abstract: This essay investigates the determinants of the growth performance of Africa. I start by illustrating a broader research agenda which accounts not only for basic economic and demographic factors, but also for the role of history and institutional development. After reporting results from standard growth regressions, I analyze the role of Africa’s peculiar history, which has been marked by its colonization experience. Next I discuss the potential growth impact of state fragility, a concept which reflects multiple facets of the dysfunctions that plague the continent. The last topic I address is the influence, in and out of Africa, of the slave trades. The essay ends with critical conclusions and suggestions for further research.
    Keywords: Growth; Africa; history; colonization; institutions; state fragility; slavery
    JEL: O43 N17 H11
    Date: 2011–06
  4. By: Martin Paldam (School of Economics and Management, Aarhus University, Denmark)
    Abstract: During the last 60 years development in Sub-Sahara Africa has had three main phases – P1, P2 and P3 – divided by kinks in 1972 and in 1994. P1 (before 1972) and P3 (after 1994) had fairly satisfactory growth, but P2 (between the kinks) had negative growth. This cyclical growth path has to be explained by variables with a similar path. A set of socio-economic variables representing 11 possible explanations are considered. Some of these were proposed to account for the low growth of Africa, while most are meant to explain the growth tragedy of P2. Most of the variables have paths with no relation to the cycle, but the shifts in the dominating development strategy do have a cyclical path that matches. At the end of P1 the main policy-package in Africa became the one of African socialism. It led to large scale rent seeking, inefficiency and economic regression. At the end of P2 policies were adjustment towards a more market based system and growth resumed.
    Keywords: Cyclical path, African growth
    JEL: O11 O55
  5. By: Nassul S. Kabunga (Georg-August-University Göttingen); Thomas Dubois (International Institute of Tropical Agriculture (IITA)); Matin Qaim (Georg-August-University Göttingen)
    Abstract: We analyze yield effects of tissue culture (TC) banana technology in the Kenyan small farm sector, using recent survey data and an endogenous switching regression approach. TC banana plantlets, which are free from pests and diseases, have been introduced in East Africa since the late-1990s. While field experiments show significant yield advantages over traditional banana suckers, a rigorous assessment of impacts in farmers’ fields is still outstanding. A comparison of mean yield levels between TC adopters and non-adopters in our sample shows no significant difference. However, we find a negative selection bias, indicating that farmers with lower than average yields are more likely to adopt TC. Controlling for this bias results in a positive and significant TC net yield gain of 7%. We also find that TC technology is more knowledge-intensive and more responsive to irrigation than traditional bananas. Simulations show that improving access to irrigation could lift TC productivity gains to above 20%. The analytical approach developed and applied here may also be useful for the evaluation of other knowledge-intensive package technologies and innovations in perennial crops.
    Keywords: Biotechnology; adoption; productivity; impact; endogenous switching regression; Kenya
    Date: 2011–07–05
  6. By: Pushak, Nataliya; Foster, Vivien
    Abstract: Infrastructure development in Sierra Leone contributed about half a percentage point to the economy's per capita growth rate in 2003-07. But if Sierra Leone could upgrade its infrastructure to the level of the best performer in Africa, per capita growth rates could be boosted by more than three percentage points. After nine years of peace, economic activity is flourishing at every level in Sierra Leone. But the 11-year civil war destroyed the country's infrastructure, and rebuilding the road network and ports while improving the electrical, water, and telecommunications infrastructure is proving difficult. Looking ahead, expanding electrification is a top priority because current access levels, at only 1-5 percent of the urban population and 0 percent in rural areas, are impeding other development. The water and sanitation sector faces similar challenges, as only 1 percent of the rural population has access to piped water. Sierra Leone has been spending about $134 million annually on infrastructure in recent years. About $66 million is lost each year to inefficiencies. Comparing spending needs against existing spending and potential efficiency gains leaves an annual funding gap of $59 to $278 million per year. If savings from greater efficiency could be fully captured, Sierra Leone would not meet its posited infrastructure targets for another 30 years. Sierra Leone needs to make difficult decisions about the prioritization of infrastructure investments and must think strategically about bundling and sequencing investments for maximum returns.
    Keywords: Transport Economics Policy&Planning,Infrastructure Economics,Energy Production and Transportation,Town Water Supply and Sanitation,Public Sector Economics
    Date: 2011–06–01
  7. By: Clarke, George R.G.
    Abstract: If corrupt bureaucrats target registered firms, then corruption may discourage registration. Using data from a survey of 4,801 microenterprises in Zambia, this paper looks at whether corruption is a more or less serious problem for registered firms. The paper finds results consistent with the cross-country evidence—registered firms appear to be more concerned about corruption than unregistered firms. This suggests that remaining informal and out-of-sight might reduce the burden of corruption. The paper also looks at two possible reasons why registered firms might be more concerned about corruption. It finds that there is little evidence that government officials specifically target registered firms. Registered firms were more likely to be involved in transactions with government or parastatal officials that could involve bribes—possibly explaining why they are more concerned about corruption than other firms are—but they were no more likely to pay bribes during these transactions.
    Keywords: Zambia; Africa; Corruption; Petty Corruption; Informality; Bribes; Registration
    JEL: D73 O17 E26
    Date: 2011–06–25
  8. By: Rangan Gupta (Department of Economics, University of Pretoria); Faaiqa Hartley (Department of Economics, University of Pretoria)
    Abstract: This paper assesses the predictive ability of asset prices relative to other variables in forecasting inflation and real GDP growth in South Africa. A total of 42 asset and non-asset predictor variables are considered. Forecasts of inflation and real GDP growth are computed using both individual predictor autoregressive distributed lag (ARDL) models, forecast combination approaches, as well as, large scale models. The large scale data models considered include Bayesian vector autoregressive models, and classical and Bayesian univariate and multivariate factor augmented vector autoregressive models. The models are estimated for an in-sample of 1980:Q2 to 1999:Q4, and then one- to eight step-ahead forecasts for inflation and real GDP growth are evaluated over the 2000:Q1 to 2010:Q2 out-of-sample period. Principle Component forecast combination models are found to produce the most accurate out-of-sample forecasts of inflation and real GDP growth relative to the other combination and more sophisticated models considered. Asset prices are found to contain particularly useful information for forecasting inflation and real GDP growth at certain horizons. Asset prices are however found to be stronger predictors of inflation, particularly in the long run.
    Keywords: Asset Prices, Combination Forecasts, BVAR, FAVAR
    JEL: C32 R31
    Date: 2011–07
  9. By: Armando Barrientos; Casilda Lasso de la Vega
    Abstract: The paper applies a multidimensional and comparative approach to the assessment of wellbeing and deprivation among a panel of older people in Brazil and South Africa. It develops and justifies a counting approach to rank order wellbeing and deprivation distributions. An application of this approach generates substantive findings on the dynamics of the distribution of wellbeing and deprivation in later life, on stratification, and on the importance of social policy addressing ageing.
    Date: 2011
  10. By: Ranjan Ray; Kompal Sinha
    Abstract: This paper makes methodological and empirical contributions to the study of HIV awareness, knowledge, incidence and safe sex practice in the context of Botswana, one of the most HIV prone countries in the world. While the focus is on Botswana, the paper presents comparable evidence from India to put the Botswana results in perspective. The results point to the strong role played by affluence and education in increasing HIV knowledge, promoting safe sex and reducing HIV incidence. The study presents African evidence on the role played by the empowerment of women in promoting safe sex practices such as condom use. The Botswana results show however that simply increasing HIV knowledge may not be effective in lowering HIV incidence unless people are also made fully aware of the lethal nature of the disease. The lack of significant association between HIV incidence and safe sex practice points to the danger of HIV infected individuals spreading the disease through multiple sex partners and unprotected sex. This danger is underlined by the result that females with multiple sex partners are at higher risk of being infected with HIV.
    Keywords: HIV incidence, Female Empowerment, Safe Sex Methods, Finite Mixture Models, Principal Components Analysis.
    JEL: C01 D13 I18 O55
    Date: 2011–06
  11. By: Philip Verwimp
    Abstract: The paper investigates the effect of child malnutrition on the risk of mortality in Burundi, a very poor country heavily affected by civil war. We use anthropometric data from a longitudinal survey (1998-2007). We find that undernourished children, as measured by the height-for-age z-scores (HAZ) in 1998 had a higher probability to die during subsequent years. In order to address the problem of omitted variables correlated with both nutritional status and the risk of mortality, we use the length of exposure to civil war prior to 1998 as a source of exogenous variation in a child’s nutritional status. Children exposed to civil war in their area of residence have worse nutritional status. The paper finds that one year of exposure translates into a 0.15 decrease in the HAZ, resulting in a 10% increase in the probability to die for the whole sample as well as a 0.34 decrease in HAZ per year of exposure for boys only, resulting in 25% increase in the probability to die. We show the robustness of our results. Food and income transfer programs during civil war should be put in place to avoid the long-term effects of malnutrition.
    Keywords: malnutrition; mortality; children; war; Africa; instrumental variables
    Date: 2011–06
  12. By: Carlos Bozzoli; Tilman Brück; Tony Muhumuza
    Abstract: We study the effect of living in an internally displaced people's (IDP) camp on economic activity choices in post war northern Uganda. As the decision to relocate from a camp is voluntary, camp residents may be different from returnees. We merge household data with micro-level conflict data to control for endogeneity (selection of households out from camps). We find a strong effect of camp residence on activity choices. Particularly, individuals in IDP camps are more inclined to cultivate and engage in trading, than those who returned. However they are less likely to make handicrafts and participate in any of the wide range of activities. The observation that individuals living in camps strive to ensure self-reliance underscores the need for livelihood interventions and other recovery programmes to target not only returnee households but also create opportunities for households still in displacement. This should be coupled with improvement of security around camps to foster increased economic activity. Results also point to the need to fast-track infrastructure development and stimulate local demand that allows returnees to self-sustain.
    Keywords: Activity choice, camp residents, conflict, Internally Displaced Persons, northern Uganda, returnees
    JEL: J01 O12
    Date: 2011
  13. By: Isaksson, Ann-Sofie (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The aim of the present paper is to investigate whether households relocated to governmentbuilt village settlements, as part of Rwanda’s Villagisation programme (‘Imidugudu’), diversify into non-farm income-generating activities to a greater extent than other rural households in Rwanda, and if so, to what extent the variation can be explained by differences in micro-level asset and meso-level access factors. Despite the programme objective to stimulate non-farm activity, the results of empirical estimations drawing on household and community-level data suggest that Imidugudu households differ surprisingly little from other rural households in terms of diversification into non-farm income sources. The slightly greater participation in non-farm income-generating activities observed among the Imidugudu households can be attributed to regional variation and household characteristics mattering for selection into the programme rather than to asset endowments and improved service access.
    Keywords: Income diversification; livelihoods; villagisation; Rwanda
    JEL: O12 O22 O55
    Date: 2011–06–28
  14. By: Youssouf Kiendrebeogo (GED, Université Montesquieu Bordeaux IV)
    Abstract: In this paper we address the issue of access to drinking water in rural areas related to the productivity of the agricultural workforce. Considering an agricultural household model as our basic conceptual framework, we analyze the theoretical aspects of increasing the access rate to drinking water on the productivity of the agricultural workforce. First, we show that the increased access rate to drinking water is conducive to agricultural productivity due to increased intrinsic productivity of individuals and additional gain in time for agricultural production. Second, it comes out that the constraints on the access to drinking water may be costly costs in terms of decreased productivity and well-being of rural people. Moreover, the results of econometric estimates do not reject our theoretical implications. On a sample of 27 African countries, these results show mainly that access to clean water improves agricultural productivity. This positive effect is reinforced by the presence of a better sanitation system, even after controlling for country-specific effects and for the characteristics of rural areas. Nous abordons la question de l’accès à l’eau potable en milieu rural en relation avec la productivité de la main d’œuvre agricole. Sur la base du cadre d’analyse des ménages agricoles, nous analysons les aspects théoriques des effets d’un accroissement du taux d’accès à l’eau potable sur la productivité de la main d’œuvre agricole. En premier lieu, nous montrons qu'une augmentation du taux d'accès à l’eau potable est propice à la productivité agricole du fait de l'accroissement de la productivité intrinsèque des individus et du gain additionnel de temps pour la production agricole. D’autre part, il ressort que les contraintes d’accès à l’eau potable sont susceptibles d’imposer des coûts en termes de baisse de productivité et de bien-être aux populations rurales. En outre, les résultats économétriques ne rejettent pas ces arguments théoriques. Sur un échantillon de 27 pays africains, ces résultats montrent principalement que l’accès à l’eau potable améliore la productivité agricole. Cet effet favorable est renforcé par la présence d’un meilleur système d’assainissement, même après avoir contrôlé pour les effets spécifiques pays ainsi que pour les caractéristiques du milieu rural.(Full text in english)
    JEL: Q12 Q52 Q53
    Date: 2011–04
  15. By: Aliyu Ahmad Aliyu; Rozilah Kasim (PhD); David Martin (PhD) (Faculty of Technology Management, Business and Entrepreneurships Universiti Tun Hussein Onn Malaysia)
    Abstract: The purpose of the paper is to examine the problem of finance for home acquisition by private residential property developers in Bauchi metropolis, Nigeria
    Keywords: Developers, Finance, Home acquisition Problem, Nigeria, Private residential property
    JEL: M00
    Date: 2011–06
  16. By: MESPLE-SOMPS, Sandrine; DE VREYER, Philippe; GUILBERT, Nathalie
    Abstract: This paper estimates the long run impact of a large income shock, by exploiting the regional variation of the 1987-1989 locust invasion in Mali. Using exhaustive Population Census data, we construct birth cohorts of individuals and compare those born and living in the years and villages a ected by locust plagues with other cohorts. We assert that in-utero and early childhood exposure to income shock had a larger negative effects on the probability to go to school than later childhood exposure. Indeed, the proportion of boys born during the shock and who later enrolled at school is reduced by 4.9% if they lived in a community invaded by locusts, and by 3.5% for girls. This impact goes up to 6% for boys and 5% for girls living in rural areas. Concerning the number of years of education and the probability to achieve primary school, no real impact is found for boys while girls who lived in a community a ected by locusts have completed between 0.25 and 0.67 lower grades than if they had lived in another community. Finally, we nd that children living in rural localities and belonging to farmer households appear to have been much more affected than other children, living in urban localities or belonging to cattle breeder or shopkeeper households.
    Keywords: Locust.; Mali; Shocks; Education;
    JEL: O55 O12 I21
  17. By: Fafchamps, Marcel; McKenzie, David J.; Quinn, Simon; Woodruff, Christopher
    Abstract: Standard models of investment predict that credit-constrained firms should grow rapidly when given additional capital, and that how this capital is provided should not affect decisions to invest in the business or consume the capital. We randomly gave cash and in-kind grants to male- and female-owned microenterprises in urban Ghana. Our findings cast doubt on the ability of capital alone to stimulate the growth of female microenterprises. First, while the average treatment effects of the in-kind grants are large and positive for both males and females, the gain in profits is almost zero for women with initial profits below the median, suggesting that capital alone is not enough to grow subsistence enterprises owned by women. Second, for women we strongly reject equality of the cash and in-kind grants; only in-kind grants lead to growth in business profits. The results for men also suggest a lower impact of cash, but differences between cash and in-kind grants are less robust. The difference in the effects of cash and in-kind grants is associated more with a lack of self-control than with external pressure. As a result, the manner in which funding is provided affects microenterprise growth.
    Keywords: Microenterprises; Ghana; Conditionality; Asset Integration
    JEL: C93 O12 O16
    Date: 2011–07
  18. By: Fafchamps, Marcel; La Ferrara, Eliana
    Abstract: This paper examines the incomes of individuals who have joined self-help groups in poor neighborhoods of Nairobi. Self-help groups are often advocated as a way of facilitating income pooling. We find that incomes are indeed more correlated among individuals in the same group than among individuals who belong to different groups. Using an original methodology, we test whether this correlation is due to self-selection of similar individuals into the same groups. We find that this correlation is not driven by positive assortative matching. If anything, selection works in the opposite direction: incomes from group activities would be more correlated if individuals were matched at random. These findings are consistent with the idea that self-help groups play a mutual assistance role.
    Keywords: income pooling; self-help groups
    JEL: O12 O17
    Date: 2011–06
  19. By: Mussa, Richard
    Abstract: This paper applies a nonparametric matching method to decompose the rural-urban malnutrition gap in Malawi. The results show that 90 per cent and 89 per cent of the stunting and underweight gaps respectively would be eliminated if there were no urban children with combinations of characteristics which positively influence child nutrition that remain entirely unmatched by rural children. Further to that, 4 per cent and 6 per cent of the stunting and underweight gaps respectively would disappear if there were no rural children with combinations of characteristics which negatively affect child nutrition that remain entirely unmatched by urban children.
    Keywords: Matching; malnutrition; Malawi
    JEL: I12
    Date: 2011–06–29
  20. By: Schindler, Kati; Bruck, Tilman
    Abstract: The aim of this paper is to study the short and long-term fertility effects of mass violent conflict on different population sub-groups. The authors pool three nationally representative demographic and health surveys from before and after the genocide in Rwanda, identifying conflict exposure of the survivors in multiple ways. The analysis finds a robust effect of genocide on fertility, with a strong replacement effect for lost children. Having lost siblings reduces fertility only in the short term. Most interesting is the continued importance of the institution of marriage in determining fertility and in reducing fertility for the large group of widows in Rwanda.
    Keywords: Population Policies,Gender and Law,Post Conflict Reconstruction,Population&Development,Gender and Social Development
    Date: 2011–06–01
  21. By: Deininger, Klaus; Carletto, Calogero; Savastano, Sara; Muwonge, James
    Abstract: Although good and timely information on agricultural production is critical for policy-decisions, the quality of underlying data is often low and improving data quality could have a high payoff. This paper uses data from a production diary, administered concurrently with a standard household survey in Uganda to analyze the nature and incidence of responses, the magnitude of differences in reported outcomes, and factors that systematically affect these. Despite limited central supervision, diaries elicited a strong response, complemented standard surveys in a number of respects, and were less affected by problems of respondent fatigue than expected. The diary-based estimates of output value consistently exceeded that from the recall-based production survey, in line with reported disposition. Implications for policy and practical administration of surveys are drawn out.
    Keywords: Rural Development Knowledge&Information Systems,Crops&Crop Management Systems,Food&Beverage Industry,Scientific Research&Science Parks,Science Education
    Date: 2011–06–01
  22. By: Sukati, Mphumuzi
    Abstract: This paper investigates the potential trade balance outcomes of the EPA/EBAI policies in the SADC region using the GTAP7 model and database. The analysis of these policies therefore make conclusion on SADC member states’ changes in trade balance overall, per commodity groups and on overall welfare outcomes as a result of these policies. The study has found that although the EPA/EBAI initiative policies will potentially result in overall welfare gain in the SADC region this welfare gain will only be 6% of the EU27. Analysis of trade balance outcome reveals that the SADC ACP region will suffer a negative trade balance of US$1596.8 million with the EU on the other hand having a positive trade balance of US$105.61 million. Since a positive trade balance is important for sustainable development of nations, these results once again throw into doubt the potential sustainable economic growth benefits of these policies to ACP countries.
    Keywords: Key words: Trade Balance; Welfare; EPA/EBAI Policies; Sustainable Development; Sustainable Economic Growth
    JEL: D50 A13 N17 E61 A11 B41
    Date: 2011–07–04

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