nep-afr New Economics Papers
on Africa
Issue of 2011‒11‒21
seven papers chosen by
Quentin Wodon
World Bank

  1. Law and Investment in Africa By Simplice A., Asongu
  2. A matching approach to study the impact of agoa on Sub-Saharan African countries By Cooke, Edgar F. A.
  4. The household enterprise sector in Tanzania : why it matters and who cares By Kweka, Josaphat; Fox, Louise
  5. The Progressivity Of Health Care Services In Ghana By Mawuli Gaddah; Alistair Munro
  6. Seeds of hope: Assessing the effect of development aid on the reduction of child mortality By Roberto Burguet; Marcelo Soto
  7. The regressive demands of demand-driven development By Baird, Sarah; McIntosh, Craig; Ozlera, Berk

  1. By: Simplice A., Asongu
    Abstract: This paper sets a new tone in the legal origins debate with the overwhelming dominance of French civil-law countries in private investment: contrary to mainstream consensus where-in, English common-law countries are better at championing private property rights (La Porta et al., 1998; Beck et al, 2003). Findings are premised on much recent data (1996-2007) from 38 African countries. The study investigates how French, English, French sub-Saharan, Portuguese and North African legal origins shape domestic, foreign, private and public investments through law channels of regulation quality and the rule of law.
    Keywords: Law; investment; developing countries
    JEL: K40 K20 E22 G20 P50
    Date: 2011–11–14
  2. By: Cooke, Edgar F. A.
    Abstract: The impact of the USA's agoa preferences on SSA countries is studied using a matching approach. The results indicate that agoa beneficiaries have exported less to the USA compared to their matched controls. However, this has not been the case for their exports to the EU which has seen a higher share of exports relative to the control group. In addition, the results show that, in the short--run the SSA countries reduce exports to the EU in order to take advantage of agoa. Thus, due to capacity constraints these countries switched exports from the EU to the USA market. China, OECD, European and other developed countries are excluded from the control group used in the analysis. We therefore do not expect the strengths of these economies to be driving any of our results
    Keywords: African Growth and Opportunity Act; Africa; Trade preferences; Matching
    JEL: F00 F10
    Date: 2011–11–13
  3. By: Dennis, Kinambuga
    Abstract: The Kenya dairy sub-sector has been undergoing developments since the 1980s, these has been in the areas of adoption of intensive dairy farming especially zero grazing. There have been concerted efforts to commercialize the sub-sector so as to make it more profitable to farmers, especially smallholder farmers. Despite the development, the profitability in the sector has not been consistent among the smallholder farmers; some farmers realize very dismal profits and even losses. The causes of the varying profits have not been empirically established with the influence of institutional arrangements and financial factors contributing to this inconsistency not fully established. The main objective of this study was to establish the critical institutional arrangements and financial factors that constrain the profitability of small-holder dairy farmers in Nakuru County. A sample of 129 smallholder dairy farmers was selected from Rongai, Baruti, Ngata and Mbogoini divisions of the County. Multi-stage sampling procedure was used to select respondents and the data was collected by the use of structured interview schedules administered by enumerators. The work employed the Data Envelopment Analysis to come up with profit efficiency rankings among the farmers, and the Frontier Model was used to establish the factors that constrain profit efficiency. The data was processed using STATA and DEA frontier packages. The mean efficiency according to the results was 86%. The factors that were significant in explaining profitability efficiency according to the frontier results were: feeding systems (-0.38), breed type (-0.11), gender (0.37), debt amount (-0.0002) and debt asset ratio (21.43). Issues of trust were also found to have effect on profitability, and they included trust on local buyer price (0.52), trust on institutional buyer unit of measure (-0.1.77), and trust on middlemen unit of measurement (-0.05). The positive sign signifies that the factor increases profit inefficiency while the negative sign indicates that the factor reduces profit inefficiency. These findings will be useful to the stakeholders of the dairy industry sub sector to formulate policy pertaining to dairy enterprise inputs, marketing issues and financial products and also provide smallholder dairy farmers with a package of critical factors to enhance and stabilize their profitability
    Keywords: Farm Management, Livestock Production/Industries, Productivity Analysis,
    Date: 2010–11
  4. By: Kweka, Josaphat; Fox, Louise
    Abstract: The household enterprise sector has a significant role in the Tanzanian economy. It employs a larger share of the urban labor force than wage employment, and is increasingly seen as an alternative to agriculture as a source of additional income for rural and urban households. The sector is uniquely placed within the informal sector, where it represents both conditions of informal employment and informal enterprise. This paper presents a case study on Tanzania using a mixed approach by combining both quantitative and qualitative analysis to examine the important role of household enterprises in the labor force of Tanzania, and to identify key factors that influence their productivity. Household enterprise owners are similar to typical labor force participants although primary education appears to be the minimum qualification for household enterprise operators to be successful. Access to location matters -- good, secure location in a marketplace or industrial cluster raises earnings - and access to transport and electricity is found to have a significant effect on earnings as well. In large urban areas, the biggest constraint faced by household enterprises is the lack of access to secure workspace to run the small business. Although lack of credit is a problem across all enterprises in Tanzania, household enterprises are more vulnerable because they are largely left out of the financial sector either as savers or borrowers. Although HEs are part of the livelihood strategies of over half of households in Tanzania, they are ignored in the current development policy frameworks, which emphasize formalization, not productivity. Tanzania has a large number of programs and projects for informal enterprises, but there is no set of policies and program interventions targeted at the household enterprise sector. This gap exacerbates the vulnerability of household enterprises, and reduces their productivity.
    Keywords: Access to Finance,Banks&Banking Reform,Labor Markets,Population Policies,Debt Markets
    Date: 2011–11–01
  5. By: Mawuli Gaddah; Alistair Munro (National Graduate Institute for Policy Studies)
    Abstract: This paper examines the incidence of public health subsidies in Ghana using the Ghana Living Standards Survey. Using a combination of (uniform) benefit incidence analysis and a discrete choice model, our results give a clear evidence of progressivity with consistent ordering: postnatal and prenatal services are the most progressive, followed by clinic visits, and then hospital visits. Children health care services are more progressive than adults'. Own price and income elasticities are higher for public health care than private health care and for adults than children. Poorer households are substantially more price responsive than wealthy ones, implying that fee increases for public health care will impact negatively on equity in health care. Simulations based on an estimated nested logit model show the importance of opportunity costs in healthcare decisions and suggest that reforms that focus only on out-pocket expenses will have a limited ability to extend public healthcare to all potential users.
    Date: 2011–11
  6. By: Roberto Burguet; Marcelo Soto
    Abstract: The Millennium Declaration (2000) set as one of its targets a substantial reduction in child mortality. This paper studies whether the massive increase in development aid can account for part of the reduction in child mortality observed in developing countries since the year 2000. To do so, we analyze a panel of more than 130 developing countries over the 2000-2008 period. We use the time trend evolution of aid to identify an exogenous source of variation. Total aid has had no statistically significant effect on child mortality. However, a disaggregate analysis identifies certain sectors of aid that have had a significant impact. The effects have been larger in high mortality countries, including Sub-Saharan Africa. Projections based on our estimates strongly support the concern that most countries in that region will miss the Millennium Goals target on child mortality.
    Keywords: ODA, child mortality, aid effectiveness.
    JEL: O11 O15
    Date: 2011–01–14
  7. By: Baird, Sarah; McIntosh, Craig; Ozlera, Berk
    Abstract: Despite their explicit focus on reaching the poor, many community driven development (CDD) projects have been found to be only mildly pro-poor in their funding allocations. This paper presents evidence of an explanation that has been overlooked in the CDD literature to date: the requirement that beneficiaries must apply for projects in order to receive support. The authors first examine data on the universe of project applications and funding under Tanzania's flagship CDD program, Tanzania's Social Action Fund, and then use a census of 100 program villages to examine the determinants of both program awareness and program participation at the household level. The data paint a consistent picture at both levels: wealth, access to information, and political capital are important correlates of the ability to navigate the application process successfully. The centrally dictated features of this decentralized program appear to be the most effective mechanisms in directing funds to the poor. The results suggest that unless demand-driven projects can develop ways of soliciting engagement from a broader cross-section of the population, they are unlikely to achieve truly progressive targeting.
    Keywords: Rural Poverty Reduction,Housing&Human Habitats,Poverty Monitoring&Analysis,Services&Transfers to Poor,Regional Economic Development
    Date: 2011–11–01

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