nep-afr New Economics Papers
on Africa
Issue of 2011‒11‒28
thirty-six papers chosen by
Quentin Wodon
World Bank

  1. An Informationalised Economy in Africa? The Impact of New ICT on the Wood Products Industry in Durban, South Africa By Pádraig Carmody;
  2. Land, Poverty and Human Development in Kenya By Mwangi wa Githinji
  3. Small and as Productive : Female Headed Households and the Inverse Relationship between Land Size and Output in Kenya By Mwangi wa Githinji; Charalampos Konstantinidis; Andrew Barenberg
  4. Xenophobic Attacks, Migration Intentions and Networks: Evidence from the South of Africa By Guido Friebel; Juan Miguel Gallego; Mariapia Mendola
  5. Coping with Fuel Wood Scarcity: Household Responses in Rural Ethiopia By Abebe Damte; Steven F. Koch; Alemu Mekonnen
  6. Borders that Divide: Education and Religion in Ghana and Togo since Colonial Times By Denis Cogneau; Alexander Moradi
  7. Inequality Traps in South Africa: An overview and research agenda By Miquel Pellicer; Vimal Ranchhod; Mare Sarr; Eva Wegner
  8. Inflation Dynamics in the CEMAC Region By Marcos Poplawski-Ribeiro; Carlos Caceres; Darlena Tartari
  9. Wealth, Credit Conditions and Consumption: Evidence from South Africa By Janine Aron; John Muellbauer
  10. Mozambique's infrastructure : a continental perspective By Dominguez-Torres, Carolina; Briceno-Garmendia, Cecilia
  11. Effects of Maize Fertilizer Subsidies on Food Security in Malawi By Bentry Mkwara; Dan Marsh
  12. What Drives Corruption? Evidence from North African Firms By Clara Delavallade
  13. Ethnic Solidarity and the Individual Determinants of Ethnic Identification By Thomas Bossuroy
  14. Health outcomes for children born to teen mothers in Cape Town, South Africa By Nicola Branson; Cally Ardington; Murray Leibbrandt
  15. Employer of Last Resort? South Africa’s Expanded Public Works Programme (EPWP) By Charles Meth
  16. Avoiding the fragility trap in Africa By Andrimihaja, Noro Aina; Cinyabuguma, Matthias; Devarajan, Shantayanan
  17. How not to present poverty research results: The South African case By Charles Meth
  18. The Policies for Reducing Income Inequality and Poverty in South Africa By Murray Leibbrandt; Eva Wegner; Arden Finn
  19. The Welfare Effect of Common Property Forestry Rights:Evidence from Ethiopian Villages By Dambala Gelo; Steven F. Koch
  20. Talking to the inattentive public: How the media translates the Reserve Bank’s communications By Monique Reid; Stan Du Plessis
  21. Political dispensation and macroeconomic performance in Nigeria (1970-2009) By SAIBU, Olufemi Muibi; FAKANBI, KEHINDE Ernest; AGBOOLA, Olawode Wasiu
  22. The valuation of biodiversity conservation by the South African Khomani San "bushmen" community By Johane Dikgang; Edwin Muchapondwa
  23. The Weight of Success: The Body Mass Index and Economic Well-being in South Africa By Martin Wittenberg
  24. The fate of Zimbabwe's children: Insights from changes in nutrition outcomes, 1999-2006 By Obert Pimhidzai
  25. Individual notions of distributive justice and relative economic status By Abigail Barr; Justine Burns; Luis Miller; Ingrid Shaw
  26. Les institutions independantes des droits de l'homme pour les enfants en Afrique francophone : la situation au Mali, au Burkina Faso et au Sénégal By Rébecca Steward; Vanessa Sedletzki; UNICEF Innocenti Research Centre
  27. The South African unemployment debate: three worlds, three discourses? By Frederick C.v.N. Fourie
  28. Contingent Valuation of Community Forestry in Ethiopia: Should We Care About Preference Anomalies in Double-Bounded CVM? By Dambala Gelo; Steven F. Koch
  29. Estimating the effect of adolescent fertility on educational attainment in Cape Town using a propensity score weighted regression By Vimal Ranchhod; David Lam; Murray Leibbrandt; Leticia Marteleto
  30. Early childbearing, human capital attainment and mortality risk By Cally Ardington; Alicia Menendez; Tinofa Mutevedzi
  31. Re-weighting South African National Household Survey Data to create a consistent series over time: A cross entropy estimation approach By Nicola Branson; Martin Wittenberg
  32. Leave None to Claim the Land. A Malthusian Catastrophe in Rwanda? By Verpoorten, Marijke
  33. Education and Migration Choices in Hierarchical Societies: The Case of Matam, Senegal By Auriol, Emmanuelle; Demonsant, Jean-Luc
  34. A century of growth? A history of tobacco production and marketing in Malawi 1890-2005 By Prowse, Martin
  35. A comparative value chain analysis of burley tobacco in Malawi - 2003/04 and 2009/10 By Prowse, Martin
  36. Determinants of Non-oil Growth in the CFA-Zone Oil Producing Countries: How do they Differ? By Alexandra Tabova; Carol L. Baker

  1. By: Pádraig Carmody (Geography and Institute for International Integration Studies, Trinity College Dublin);
    Abstract: Sub-Saharan Africa (SSA) experienced a process of marginalization in the global economy in the 1980s and 1990s. Some now assert this is being reversed by an information technology revolution on the sub-continent. SSA now has the fastest growing mobile phone penetration rates in the world and most people there now live under the "footprint" of mobile phones. However, while many claims are made for the poverty reduction potential of new ICTs, very little research has been done on how access affects firm strategies, and innovation and consequently may contribute to broader economic transformation; vital to sustainable poverty reduction. This paper contextualises the adoption of new ICTs and then examines evidence of the uses and impacts of new ICTs in the wood products industry in Durban, South Africa and its surrounding region. It finds that while ICT usage is being routinised in the sector, their impacts are incremental than transformative. Consequently while these technologies are being absorbed into the socio-technical regime, their overall economic impact is limited.
    Keywords: Information technology, wood products, South Africa
    Date: 2011
  2. By: Mwangi wa Githinji (University of Massachusetts Amherst)
    Abstract: The question of poverty has become central to the work of development economists in the last decade and a half. The 2000 World Development Report was entitled Attacking Poverty and the UN held a series of World Conferences in the 1990s, all of which addressed in some form or fashion the problem of poverty. Despite this and because of limited data there has been relatively little empirical work at the household level on determinants of poverty in Africa generally and Kenya specifically. In the few econometric studies that have been done for Kenya land has not been a significant determinant of poverty. This is a surprising result for a country where 80 per cent of the population depends on agriculture. Further the little that has been done has not incorporated the role of human development in the determination of poverty. Via an examination of a nationwide sample this paper will examine the role that land and social capital play in determining households poverty status in rural Kenya in addition to the standard theorized determinants. JEL Categories: O150, Q150
    Keywords: Poverty, Rural, Land, Kenya, Africa, Human Development
    Date: 2011–11
  3. By: Mwangi wa Githinji (University of Massachusetts Amherst); Charalampos Konstantinidis (University of Massachusetts Amherst); Andrew Barenberg (University of Massachusetts-Amherst)
    Abstract: Access to land and particularly its distribution has reemerged as an important part of both academic and policy discussions in the last decade, leading to the resuscitation of the debate on the relationship between size of holdings and output per land unit. Across the world, studies have suggested the existence of a decreasing relationship between land size and output per unit of land. The most-widely accepted explanation for this relationship is that households with smaller holdings tend to be labor rich relative to land, and therefore can achieve higher output through the increased application of labor. Despite the rich literature on this topic there has been little work on whether this relationship is valid for female-headed households, particularly in the case of African countries. Past African studies have found female-headed households to be smaller by close to one adult in comparison to male-headed households. Given this difference one would expect there to be a difference in the outcome of land redistribution for different types of households, ceteris paribus. Additionally, the aggregate impact in African countries could be substantial, as female-headed households comprise in several cases up to 30 percent of the rural households. In this paper we will examine empirically whether the inverse size and output relationship is different between female and male headed households in the case of Kenya, using the Kenya Integrated Household Budget and Expenditure Survey of 2006, which includes modules on agricultural holdings and agricultural output in addition to the standard demographic characteristics. By controlling for the endogeneity of crop choice and fertilizer use we are able to find that cash crop production and human capital, and not differences in household size, determines the differences in male and female headed land productivity. Hence, our study goes beyond the simple discussion of the inverse relationship between land size and output per unit and the potential impact of redistribution. Specifically we will be able to address the kind of broad rural development policies in addition to land redistribution that would allow female headed households to do at least as well as (if not better than) male headed households. JEL Categories: J16, O13, Q15
    Keywords: Agriculture, Gender, Kenya, Africa, Crop Choice, Land Productivity
    Date: 2011–11
  4. By: Guido Friebel; Juan Miguel Gallego; Mariapia Mendola
    Abstract: We investigate how emigration flows from a developing region are affected by xenophobic violence at destination. Our empirical analysis is based on a unique survey among more than 1000 households collected in Mozambique in summe 2008, a few months after a series of xenophobic attacks in South Africa killed dozens and displaced thousands of immigrants from neighbouring countries. We estimate migration intentions of Mozambicans before and after the attacks, controlling for the characteristics of households and previous migration behaviour. Using a placebo period, we show that other things equal, the migration intention of household heads decreases from 37 to 33 percent. The sensitivity of migration intentions to violence is larger for household heads with many children younger than 15 years, decreasing the migration intention by 11 percentage points. Most importantly, the sensitivity of migration intentions is highest for those household heads with many young children whose families have no access to social networks. For these household heads, the intention falls by 15 percentage points. Social networks provide insurance against the consequences young children suffer in case the household head would be harmed by xenophobic violence and consequently could not provide for the family.
    Keywords: violence, risk, migration, household behaviour, Mozambique
    JEL: O1 R2 J6 D1
    Date: 2011–11
  5. By: Abebe Damte (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria); Alemu Mekonnen (School of Economics, Addis Ababa University)
    Abstract: This study examines the coping mechanisms applied by rural households in the face of fuel wood scarcity by using survey data from randomly selected rural households in Ethiopia. The determinants of collection of other biomass energy sources were also examined. The results of the empirical analysis show that rural households residing in forest-degraded areas respond to fuel wood shortages by increasing their labour input to fuel wood collection. However, for households in high forest cover regions, forest stock and forest access may be more important factors than scarcity of fuel wood in determining household’s labour input to fuel wood collection. The study also finds that there is limited evidence of substitution between fuel wood and dung or fuel wood and crop residues. Therefore, supply-side strategies alone may not be effective in addressing the problem of forest degradation and biodiversity loss. Any policy on natural resource management, especially related to rural energy, should make a distinction between regions with different levels of forest degradation.
    Keywords: Fuel wood, labor allocation, biomass, rural Ethiopia
    Date: 2011–11
  6. By: Denis Cogneau (Paris School of Economics); Alexander Moradi (Department of Economics, University of Sussex)
    Abstract: When European powers partitioned Africa, individuals of otherwise homogeneous communities were divided and found themselves randomly assigned to one coloniser. This provides for a natural experiment: applying a border discontinuity analysis to Ghana and Togo, we test what impact coloniser’s policies really made. Using a new data set of men recruited to the Ghana colonial army 1908-1955, we find literacy and religious beliefs to diverge between British and French mandated part of Togoland as early as in the 1920s. We attribute this to the different policies towards missionary schools. The British administration pursued a ”grant-in-aid” policy of missionary schools, whereas the French restricted missionary activities. The divergence is only visible in the Southern part. In the North, as well as at the border between Ghana and Burkina Faso (former French Upper Volta), educational and evangelization efforts were weak on both sides and hence, did not produce any marked differences. Using contemporary survey data we find that border effects originated at colonial times still persist today.
    Keywords: Economic History, Africa, Colonization, Education.
    JEL: O12 R12 P52
    Date: 2011–11
  7. By: Miquel Pellicer (SALDRU, School of Economics, University of Cape Town); Vimal Ranchhod (School of Economics, University of Cape Town); Mare Sarr (School of Economics, University of Cape Town); Eva Wegner (SALDRU, School of Economics, University of Cape Town)
    Abstract: There has been considerable eort in ascertaining with condence the trends in income inequality in South Africa. South Africa has traditionally been among the most unequal countries in the world and continues to be so. Surprisingly, levels of inequality have not decreased despite the transition to democratic rule in the 1990s; if any, they seem to have increased. There has also been considerable work on the proximate causes of these high levels of inequality on the basis of inequality decompositions (See Leibbrandt, Levinsohn and McCrary 2010, Leibbrandt. Woolard, Finn and Argent 2010, and Bhorat et al. 2009 for recent analyses). However, much less is known about the underlying causes of this high level of inequality and of its persistence.
    Date: 2011–03
  8. By: Marcos Poplawski-Ribeiro; Carlos Caceres; Darlena Tartari
    Abstract: This paper analyses inflation dynamics in the Central African Economic and Monetary Community (CEMAC) using a constructed dataset for country-specific commodity price indices and panel cointegrated vector autoregressive (VAR) models. Imported commodity price shocks are significant in explaining inflation in the region. Governments are another driving force of inflation dynamics mainly through controlled prices and the role of capital expenditure in domestic activity. In most CEMAC countries, the largest effect of global food and fuel prices occurs after four or five quarters in noncore inflation and then decays substantially over time. Second-round effects are significant only in Cameroon and to a lesser extent in the Republic of Congo.
    Keywords: Central Africa , Central African Economic and Monetary Community , Commodity price fluctuations , Commodity prices , Cross country analysis , Economic models , Energy prices , External shocks , Food imports , Government expenditures , Imports , Inflation , Price controls ,
    Date: 2011–10–07
  9. By: Janine Aron; John Muellbauer
    Abstract: There is widespread disagreement about the role of housing wealth in explaining consumption. This paper exploits liquid and illiquid wealth time series from household balance sheet data for South Africa, previously constructed by the authors, to explain fluctuations in the ratios of consumption and household debt to income in South Africa, from 1971 to 2005. The paper emphasizes the role of substantial credit liberalization and of wealth, treating credit conditions as a latent variable with key interactions with drivers of consumption and debt. Credit conditions are proxied by a spline function entering jointly estimated consumption, debt and income expectations equations in a ‘latent interactive variable equation system’ (LIVES). The empirical results corroborate the theory in the paper, confirming that consumption relative to income is driven by credit liberalization, fluctuations in a range of asset values and asset accumulation, uncertainty and income expectations, inter alia. The paper confirms a collateral interpretation of housing wealth on consumption as opposed to a life-cycle interpretation. The paper also throws important light on the monetary policy transmission mechanism in South Africa.
    Keywords: Consumption, Household debt, Credit market liberalization, Credit conditions, Liquid and illiquid wealth, Housing collateral and housing wealth
    JEL: C52 E21 E27 E32 E44 E51 E52 E58
    Date: 2011
  10. By: Dominguez-Torres, Carolina; Briceno-Garmendia, Cecilia
    Abstract: In the last 10 years, Mozambique's economy has grown steadily at an impressive rate of 7.7 percent per year, driven by the service sector, light industry, and agriculture. This pace is expected to continue or even increase with the massive influx of already-planned investment on the order of $15-20 billion. Mozambique's infrastructure is well developed in some sectors, including its east-west transport infrastructure, power grid, and water and sanitation networks. But the nation still faces critical challenges in these and other areas, including developing north-south transport connections, properly managing the water system, and expanding hydroelectric generation to meet potential. Mozambique spent about $664 million per year on infrastructure during the late 2000s, with as much as $204 million lost annually to inefficiencies. Comparing spending needs with existing spending and potential efficiency gains leaves an annual funding gap of $822 million per year. Mozambique could reduce inefficiency losses by positioning itself as a key power exporter. The country could reach infrastructure targets in 20 years through a combination of increased finance, improved efficiency, and cost-reducing innovations.
    Keywords: Transport Economics Policy&Planning,Infrastructure Economics,Town Water Supply and Sanitation,Energy Production and Transportation,Water Supply and Systems
    Date: 2011–11–01
  11. By: Bentry Mkwara (University of Waikato); Dan Marsh (University of Waikato)
    Abstract: This study employs spatial analysis to examine the impact of smallholder fertilizer subsidies on national and household food security in Malawi. It illustrates that at national level, food security is positively linked to fertilizer subsidies. However, at household level, maize production is heavily skewed with the south lagging behind the centre and the north. In the short-to-medium term, replacing the current countrywide subsidy program with a more targeted one is highly recommended. Furthermore, by diversifying into other crops or small-scale businesses, smallholders may be able to increase their income and hence food buying power.
    Keywords: maize; subsidy; food security; Malawi
    JEL: C01 Q18
    Date: 2011–11–18
  12. By: Clara Delavallade (SALDRU, School of Economics, University of Cape Town)
    Abstract: We estimate the effect of the child support grant on mothers' labour supply in South Africa. Identification is based on the use of specific samples, such as black mothers, aged 20 to 45, whose youngest child is aged within 2 years of the age eligibility cut-off, and unanticipated variation over the years in the age eligibility cut-off. Balancing tests across the age cut-o s are used to show that there are no signi cant di erences between mothers of eligible and ineligible children in the samples used, over the years. Different techniques are used to estimate the effect of the child support grant from many angles, including simple OLS as a bench mark, a difference in difference estimator, using appropriately constructed treatment and control groups, instrumental variables estimates, and descriptive analysis. The effect of having an age eligible child is large. Mothers who become recipients in their twenties see an average increase in employment probability of 15%, and in labour force participation of 9%. Many robustness and specification checks are used, including placebo regressions in the pre-treatment years, to ensure the estimated effect is not due to age or another variable.
    Keywords: Supply of Corruption, Administrative Corruption, State Capture, Tax Evasion, Competitiveness, North Africa
    JEL: C2 D73 O17 H32
    Date: 2011–09
  13. By: Thomas Bossuroy (SALDRU, School of Economics, University of Cape Town)
    Abstract: This paper examines the individual determinants of ethnic identification using large sample surveys (about 30,000 respondents) representative of seven capitals of West-African countries. A small model that relates ethnic identification to an investment in ethnic capital suggests that individuals initially deprived of social or human capital resort to ethnicity to get socially inserted, and do even more so if their ethnic group itself is well inserted. Empirical results are consistent with this simple theory. First, education lowers ethnic salience. Second, ethnic identification is higher for uneducated unemployed or informal workers who seek a new or better job, and is further raised by the share of the individual’s ethnic group integrated on the job market. Third, ethnic identification is higher among migrants, and raised by the share of the migrant’s ethnic group that is employed. Group solidarity makes ethnic identity more salient for individuals deprived of other means for upward mobility.
    Keywords: Ethnicity, Identity, Social capital, Networks, Africa.
    JEL: A13 A14 D74 O17
    Date: 2011–11
  14. By: Nicola Branson (SALDRU, School of Economics, University of Cape Town); Cally Ardington (SALDRU, School of Economics, University of Cape Town); Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town)
    Abstract: This paper analyzes the effect of being born to a teen mother on child health outcomes in South Africa using propensity score reweighting. Exploiting the longitudinal nature of the Cape Area Panel Study, we estimate the probability of being a teen mother conditional on pre-childbirth characteristics. We use this score to construct a weighted counterfactual group of children born to mothers over nineteen whose pre-childbirth characteristics are very similar to the teen mother sample except for their age at the birth of their first child. Our reweighted regressions indicate that being born to a teen mother has some significant adverse effects on child health, especially among Coloured children. In particular, children born to teens are more likely to be underweight at birth and to be stunted with the negative effect being double the size for Coloureds than Africans. No negative impact of teenage childbearing is found on head circumference at birth or the incidence of incomplete first year immunizations. These results remain robust even when we simulate influential unobservable effects in both the reweighting equation and the outcome equation.
    Date: 2011–03
  15. By: Charles Meth (SALDRU, School of Economics, University of Cape Town)
    Abstract: South Africa’s largest active labour market intervention (ALMP) is the Expanded Public Works Programme (EPWP). Its first five-year phase has been completed and a second phase, more ambitious by far than its predecessor, has commenced. Critical analysis suggests that contrary to the hype, the programme has thus far made little lasting impact on the poverty and unemployment it is supposed to address. The analysis is in four parts: the first is an exploration of the background to the EPWP, in its role as South Africa’s largest active labour market policy; the second presents an examination of aspects of the performance of EPWP Phase 1, looking in particular at target vs. actual numbers of job opportunities and training days. This section also looks briefly at the EPWP’s proposed monitoring and evaluation (M&E) programme, before undertaking a more detailed consideration of the published information available on the training/employment nexus. The section ends with a glance at weaknesses in one of the surveys (the Labour Force Surveys, LFSs) put forward as data sources for evaluating the EPWP during Phase1; the third considers aspects of the vast increases in the scope of EPWP from Phase 1 to Phase 2, of the way in which these have been communicated, and of the way in which they are to be funded, while fourth the looks at the possible contribution that this second phase could/may make to the goal of halving unemployment by 2014. This part of the paper reproduces a set of scenarios produced by the National Treasury and published in the Budget Review 2010. These point to the extreme unlikelihood of the unemployment halving goal being attained. The paper ends with a set of recommendations, many relating to the production and distribution of knowledge about the EPWP.
    Date: 2011–03
  16. By: Andrimihaja, Noro Aina; Cinyabuguma, Matthias; Devarajan, Shantayanan
    Abstract: Not only do Africa's fragile states grow more slowly than non-fragile states, but they seem to be caught in a"fragility trap". For instance, the probability that a fragile state in 2001 was still fragile in 2009 was 0.95. This paper presents an economic model where three features -- political instability and violence, insecure property rights and unenforceable contracts, and corruption -- conspire to create a slow-growth-poor-governance equilibrium trap into which these fragile states can fall. The analysis shows that, by addressing the three problems, fragile countries can emerge from the fragility trap and enjoy a level of sustained economic growth. But addressing these issues requires resources, which are scarce because external aid is often tailored to the country's performance and cut back when there is instability, insecurity, and corruption. The implication is that, even if aid is seemingly unproductive in these weak-governance environments, it could be hugely beneficial if it is invested in such a way that it helps these countries tackle the root causes of instability, insecurity, and corruption. Empirical estimations corroborate the postulated relationships of the model, supporting the notion that it is possible for African fragile countries to avoid the fragility trap.
    Keywords: Economic Theory&Research,Debt Markets,Emerging Markets,Inequality,Achieving Shared Growth
    Date: 2011–11–01
  17. By: Charles Meth (SALDRU, School of Economics, University of Cape Town)
    Abstract: Because of their vital role in charting progress (or the lack thereof) in the pursuit of the povert y reduction, statistics are of obvious importance. In South Africa, these leave much to be desired.Disagreements among academics on the severity of poverty, the result of the failure of Statistics South Africa to conduct the appropriate surveys, are the inevitable result. Far from losing money (or sleep) as a result, some in the profession resort to further research, some of it quite highly paid, to squeeze new results out of old, often unreliable data. This could have serious consequences for the poor – policy failure caused by faulty monitoring can easily damage the vulnerable. Regardless of the reliability or otherwise of their findings, it is argued in the present paper that researchers would do well to offer them in a way that minimises the possibility of their being misinterpreted and/or misrepresented, and that maximises the likelihood that the non-specialist reader will be able to understand them. It is common practice to give poverty estimates in the form of the (FGT) ratios suggested by Foster, Greer and Thorbecke (1984), often without accompanying estimates of the absolute magnitudes involved. This, the present paper claims, allows overly optimistic conclusions to be drawn, making possible the concealment of rising misery behind a veil of aggregate improvement. Commencing with a glance in the abstract at the FGT ratios, the paper concludes that in order for poverty statistics not to convey a misleading impression of changes in the phenomenon they seek to represent, the ratios have to be augmented with sufficient information of concurrent changes in the income distribution. Most poverty studies look at changes in inequality. Often, however, the inequality results are not linked directly to the changes in poverty. As far as income poverty is concerned, the present piece of research suggests that doing so is the only appropriate way to present results. Having sketched a conceptual foundation, the paper looks at the regurgitation by government, without comment, of poverty statistics that directly contradict each other. After that, the strange case of an undeserved accolade government awards its anti-poverty policies, is found to be based upon a misinterpretation of their own findings by the authors of a recent poverty and inequality study (Bhorat and van der Westhuizen, 2008). A new set of poverty and inequality estimates (Leibbrandt et al, 2010), although it does not conform to the mode of presentation suggested above as necessary, points (as do the Bhorat and van der Westhuizen findings) to the strong likelihood that although the poverty headcount ratio may have fallen since the advent of democracy in the country, the poverty headcount is likely to have risen by several million between 1993 and 2008. An appendix at the end of the paper offers a little speculation on what poverty levels might have been had the AIDS epidemic not killed so many people.
    Date: 2011–06
  18. By: Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town); Eva Wegner (SALDRU, School of Economics, University of Cape Town); Arden Finn (NIDS-SALDRU, School of Economics, University of Cape Town)
    Abstract: Trends in inequality, poverty, and redistribution in post-apartheid South Africa have received intense attention especially in terms of measuring inequality and poverty levels and the proximate causes of these levels. We review this literature and find a set of established trends. Inequality levels have increased but the face of inequality has changed with present-day inequality displaying a lessened racial make-up than under apartheid. In contrast, poverty has decreased but is still bears the strong racial makers of apartheid. The labour market continues to drive inequality. A related literature has concentrated on fiscal redistribution in South Africa after the transition, arguing that social policies are well targeted towards the poor with social grants being central in lifting people out of poverty. At the same time, these policies have not succeeded in reversing inequality trends and in providing equal opportunities for all South Africans. To bulk of paper probes this further. We use fiscal incidence analysis to show that redistribution increased slightly since 1993, that this redistribution is higher than in Latin America but far below European levels. Second, looking at spending for all social services we find a mixed picture. There has been an increase in spending since the end of apartheid on social policy and for a number of social policy items in the progressivity of this spending. At the same time, spending has not increased as a percentage of GDP and has become less progressive for social grants. Finally, we examine education policy in more detail. We find that the importance of tertiary education, as a predictor of income has increased considerably whereas individuals with low or incomplete secondary education were worse off in 2008, compared to 1993. Second, we find that state spending on education has increased since the early 1990s. The spending gap between rich and poor provinces has become much narrower but spending equality has not been reached. The academic achievements of students display high inequality, compared to international standards and there is also evidence that the capabilities of students have decreased, rather than increased, suggesting that increased spending has not translated into an increase in the quality of education provision.
    Date: 2011–09
  19. By: Dambala Gelo (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: In this study, welfare impacts associated with a unique common-property forestry program in Ethiopia were examined. This program is different from other programs, because it is two-pronged: a community forest is developed and additional support is provided for improved market linkages for the community’s forestry products. The treatment effects analysis is based on both matching, which assumes random treatment assignment conditional on the observable data, and instrumental variable (IV) methods, which relax the matching assumptions. Data for the analysis is taken from selected villages in Gimbo district, southwestern Ethiopia. The program was found to raise the average welfare of program participant households. Correcting for selection into the program led to both increased welfare impacts and less precise estimates, as is common in IV analyses. The analysis results underscore the benefits to be derived from expanding the current forestry management decentralization efforts, although these benefits, given the design of the program, cannot be separated from the benefits to be derived from increasing market access for forestry products. However, the evidence suggests that placing property rights in the hands of those closest to the forest, combined with improved forest product market linkages, offers one avenue for both rural development and environmental improvement.
    Keywords: community forestry, treatment effects, IV, matching and Ethiopia
    Date: 2011–11
  20. By: Monique Reid; Stan Du Plessis
    Abstract: Central bank communication is widely recognised as crucial to the implementation of monetary policy. This communication should enhance a central bank’s management of the inflation expectations of the financial markets as well as the general public — the latter being a part of the central bank’s audience that has received relatively little research attention. In this paper, the role of the media in transmitting the SARB’s communication to the general public is explored, with the aim of improving our understanding of its impact on the expectations channel of the monetary policy transmission mechanism. A deliberate evaluation of this channel could aid the design of future strategies to communicate with the general public.
    Keywords: South Africa, central bank communication, consistency, monetary policy transmission mechanism, transparent monetary policy.
    JEL: E42 E52 E58
    Date: 2011
  21. By: SAIBU, Olufemi Muibi; FAKANBI, KEHINDE Ernest; AGBOOLA, Olawode Wasiu
    Abstract: This study examines the extent to which Nigeria has benefited from its democratic experience since independence. Using simple descriptive statistics and data series from 1970 to 2009, the study showed that the trend in macroeconomic performance has not significantly improved. Indeed, the period of democratic regimes seemed more volatile than the other period of non-democratic regimes. The policy inferences from this analysis are that there is more to socioeconomic development than the form of government. Unless those development-enhancing factors are addressed, democracy may not lead to improved socioeconomic development in Nigeria.
    Keywords: Political Dispensation; Democratic Governance and Macroeconomic Performance
    JEL: P51 P16 E60
    Date: 2011
  22. By: Johane Dikgang; Edwin Muchapondwa
    Abstract: The restitution of land to the Khomani San "bushmen" and Mier "agricultural" communities in May 2002 marked a significant shift in conservation in the Kgalagadi area in South Africa. The Khomani San and Mier communities were awarded land inside and outside the Kgalagadi Transfrontier Park. Given that the Khomani San interact more with nature, biodiversity conservation will only benefit from the land restitution in this case if the Khomani San are good environmental stewards. Therefore, this paper uses the contingent valuation method to investigate the values assigned to biodiversity conserved under the various forms of land tenure arrangements by the Khomani San in the Kgalagadi area and compares them to similar valuations by the adjacent Mier community. The proposed conservation programme sought to plant as many native trees, shrubs and grasslands as required to reduce biodiversity loss by 10% in terms of the quantities of each of the selected major species of the area. Despite the fact that the conservation programme has both winners and losers when implemented under any of the three land tenure arrangements considered, the findings suggest that the Khomani San, whose attitudes towards modern conservation have not been evaluated until now, and the adjacent Mier community generally attach a significant economic value to biodiversity in their area. The net economic value for conserving biodiversity under the various forms of land tenure arrangements by the Khomani San ranged from R928 to R4 672 relative to the Mier community’s range of R25 600 to R64 000. However, for both communities, in order for all members of the local communities to support biodiversity conservation unconditionally, mechanisms for fair distribution of the associated costs and benefits should be put in place.
    Keywords: biodiversity, contingent valuation, Khomani San, Kgalagadi, land restitution
    JEL: Q01 Q53 Q57
    Date: 2011
  23. By: Martin Wittenberg (DataFirst, SALDRU, School of Economics, University of Cape Town)
    Abstract: We show that body mass increases with economics resources among most South Africans, although not all. Among Black South Africans the relationship is non-decreasing over virtually the entire range of incomes/wealth. Furthermore in this groupd other measures of success (e.g. employment and education) are also associated with increases in body mass. This is true both in 1998 (the Demographic and Health Survey) and 2008 (National Income Dynamics Survey). This suggests the body mass can be used as a crude measure of wellbeing. Used in this way it suggests that unemployment is involuntary. This is true even if we control for household fixed effects. This is joint SALDRU/DataFirst Working Paper as part of the Mellon Data Quality Project.
    Keywords: obesity, asset index, body mass index
    JEL: D31 I19 I32
    Date: 2011–09
  24. By: Obert Pimhidzai (World Bank)
    Abstract: The economic situation in Zimbabwe deteriorated significantly between 2000 and 2009. However, little empirical effort has been directed towards analysing changes in outcomes at micro levels during this challenging period. This paper therefore investigates changes in welfare during this period, with specific reference to child health outcomes. In addition to using height and weight for age as proxies for welfare, the analysis further overcomes the absence of consumption data expenditure by using a food variety score to proxy for access to food and an asset index based on principal component analysis to provide an alternative for economic ranking. Results from a comparative analysis of the 1999 and 2005/6 DHS data show that average height and weight for age z-scores for children aged 5 years or under worsened by 19% and 16% respectively while food consumption declined by 34%. These declines were across the entire wealth distribution but were more pronounced among children in middle quartile and the poorest households, but least for the rich. Multivariate regressions of height and weight for age show that a large part of their decline between 1999 and 2005/06 is explained by the deterioration in access to food over this period. Oaxaca-Blinder decompositions show that deterioration in access to food explains half the overall decline in mean height for age.
    Keywords: Zimbabwe, Africa, Nutrition, Stunting, Food Variety Score, Diet Diversity Score, Height for age, Weight for age
    Date: 2011–09
  25. By: Abigail Barr (University of Nottingham); Justine Burns (SALDRU, School of Economics, University of Cape Town); Luis Miller (University of the Basque Country); Ingrid Shaw
    Abstract: We present two experiments designed to investigate whether individuals’ notions of distributive justice are associated with their relative (within-society) economic status. Each participant played a specially designed four-person dictator game under one of two treatments, under one initial endowments were earned, under the other they were randomly assigned. The first experiment was conducted in Oxford, United Kingdom, the second in Cape Town, South Africa. In both locations we found that relatively well-off individuals make allocations to others that reflect those others’ initial endowments more when those endowments were earned rather than random; among relatively poor individuals this was not the case.
    Keywords: Distributive Justice, Inequality, Laboratory Experiments.
    JEL: D63 C91 C93
    Date: 2011–09
  26. By: Rébecca Steward; Vanessa Sedletzki; UNICEF Innocenti Research Centre
    Abstract: Tous les Etats francophones de l’Afrique de l’Ouest sont parties à la Convention relative aux droits de l’enfant (CDE) ainsi qu’à la Charte africaine des droits et du bien-être de l’enfant (CADBE) et ont donc l’obligation de les mettre en œuvre, en particulier en suivant les indications des organes chargés du contrôle de leur application. Le Comité des droits de l’enfant a identifié les mesures générales essentielles à la mise en œuvre de la CDE. Parmi elles, figure l’établissement d’institutions indépendantes de défense des droits de l’enfant. Ces institutions ont généralement pour mandat de contrôler les activités de divers acteurs – publics et privés – au regard des droits des enfants, de promouvoir les droits des enfants en émettant des recommandations et en éduquant le public, et d’examiner des plaintes individuelles concernant des violations de ces droits. Le présent document fait l’état des avancées pour l’établissement d’institutions indépendantes de défense des droits de l’enfant à la lumière des standards internationaux et africains, en particulier au Burkina Faso, Mali et Sénégal.
    Keywords: burkina faso; children's rights; convention on the rights of the child; governance; international standards; mali; senegal;
    JEL: H0
    Date: 2011
  27. By: Frederick C.v.N. Fourie (Department of Economics, University of the Free State)
    Abstract: This paper presents a critical survey and meta-analysis of the South African academic literature on unemployment. It asks whether the research has produced a coherent analytical picture. Key elements of seminal contributions are summarised. A number of key themes and findings are identified, as are significant differences relating to subdisciplines but also to epistemology, method and technique (and ideology).
    Date: 2011–06
  28. By: Dambala Gelo (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: This study examines the potential for anomalous response behaviour effects within the context of double-bounded contingent valuation methods applied to community forestry programs in rural Ethiopia. Anomalous responses considered include shift effects, framing effects and anchoring effects, and these effects are considered within a double-bounded contingent valuation study. The results confirmed the presence of incentive incompatibility and framing effects. However, anchoring effects are not uncovered. After controlling for these biases, the community forestry program considered is shown to offer a welfare gain ranging from Ethiopian Birr (ETB) 20.14 to 22.80. In addition to these welfare benefits, the results raise questions with respect to the validity of previous welfare estimates associated with double-bounded CVM studies in developing countries, suggesting that future studies should control for incentive incompatibility and framing effects bias.
    Keywords: Double-bounded CVM, incentive incompatibility bias, anchoring bias
    JEL: Q26 Q23 Q28
    Date: 2011–11
  29. By: Vimal Ranchhod (School of Economics, University of Cape Town); David Lam (University of Michigan); Murray Leibbrandt (SALDRU, School of Economics, University of Cape Town); Leticia Marteleto (University of Texas at Austin.)
    Abstract: We estimate the effect of a teenage birth on the educational attainment of young mothers in Cape Town, South Africa. Longitudinal and retrospective data on youth from the CAPS dataset are used. We control for a number of early life and pre-fertility characteristics. We also reweight our data using a propensity score matching process to generate a more appropriate counterfactual group. Accounting for respondent characteristics reduces estimates of the effect of a teen birth on dropping out of school, successfully completing secondary school, and years of schooling attained. Our best estimates of the effect of a teen birth on high school graduation by ages 20 and 22 are -5.9 and -2.7 percentage points respectively. The former is significant at the 5% level,while the latter is not statistically significant. Thus, there appears to be some `catching up' in educational attainment by teen mothers. We find only limited support for the hypothesis that there is heterogeneity in the effect of a teen birth, depending on the actual age of the first birth. By age 22, none of the estimates for high school graduation or years of schooling are statistically significant, regardless of the specific age at which the teen birth occurred. Despite this, we do find evidence that a teen birth does correlate with reduced educational expectations. The proportion of teen mothers who report an expected final educational attainment of high school graduation or greater is about 15 percentage points lower than the matched set of non-teen mothers, but this is not manifest amongst the girls whom we know will subsequently become teen mothers at some point after these expectations are measured.
    Date: 2011–03
  30. By: Cally Ardington (SALDRU, School of Economics, University of Cape Town); Alicia Menendez (Harris School, University of Chicago); Tinofa Mutevedzi (Africa Centre for Health and Population Studies)
    Abstract: This paper uses a rich longitudinal dataset to examine the relationship between teen fertility and both subsequent educational outcomes and mortality risk in rural South Africa. Human capital deficits among teen mothers are large and significant, with earlier births associated with greater deficits. In contrast to many other studies, we find no clear evidence of selectivity into teen childbearing in either schooling trajectories or pre-fertility household characteristics. Enrolment rates among teen mothers only begin to drop in the period immediately preceding the birth and future teen mothers are not behind in their schooling relative to other girls. Older teen mothers and those further ahead in school for their age pre-birth are more likely to continue schooling after the birth. Following women over a six year period we document a higher mortality risk before the age of 30 for teen mothers that cannot be explained by household characteristics in early adulthood.
    Date: 2011–03
  31. By: Nicola Branson (SALDRU, School of Economics, University of Cape Town); Martin Wittenberg (SALDRU, School of Economics, University of Cape Town)
    Abstract: In the absence of established longitudinal panel surveys in South African, national cross-sectional household survey data are frequently used to analyse change. When these data are stacked side-byside, however, inconsistencies both in time trends and between household and person level data are found. This study uses a new set of weights calibrated to the ASSA 2003 model totals using a cross entropy estimation approach. This approach is favoured because the calculated weights are similar to the initial sample weights (and hence retain the survey design benefits) but match to a series of age-sex-race and province marginal totals that are consistent over time. The weights are publicly available for a fourteen year period between 1994 and 2007. This is a SALDRU/DataFirst Working Paper
    Date: 2011–02
  32. By: Verpoorten, Marijke
    Abstract: More than 200 years after its first publication, the Malthusian thesis is still much debated, albeit in a modified form. Rather than predicting a global catastrophe, most neo-Malthusians stress the local character of the relationship between population pressure, natural resource scarcity, and conflict as well as its dependency on the socio-political and economic context. This softened version of Malthus' thesis has received little empirical support in cross-country studies. In contrast, a number of sub-national analyses have provided some evidence for local conditional Malthusian catastrophes, although "catastrophe" is a big word since these studies have largely focused on low-intensity violence. This article adds to the small body of sub-national studies, but focuses on a high-intensity conflict, the Rwandan genocide. In particular, it provides a meso-level analysis of the relation between population pressure and the intensity of violence measured by the death toll among the Tutsi across 1,294 small administrative units. The results indicate that the death toll was significantly higher in localities with both high population density and little opportunity for young men to acquire land. On the one hand, this finding can be interpreted as support for the neo-Malthusian thesis. On the other hand, it is possible that another mechanism played, i.e. in densely populated areas it may have been relatively easy for the elite to mobilize the population, because of dependency relations through the land and labor market. Alternatively, in densely populated areas, there may have been more lootable assets, and the violence may have been opportunistic rather than driven by need or by fear.
    Keywords: Armed Conflict, Micro-level Conflict Measures, Rwanda, Schooling
    Date: 2011–09
  33. By: Auriol, Emmanuelle (TSE, ARQADE and IDEI); Demonsant, Jean-Luc (Universidad Autonoma de Nuevo Leon)
    Abstract: The paper aims at studying determinants of schooling in traditional hierarchical societies confronted with an established history of outmigration. In the village, a ruling caste controls local political and religious institutions. For children who do not belong to the ruling caste, migration is a social mobility factor that is enhanced by formal schooling. Since formally educated children tend not to return, the ruling caste seeks to develop family loyalty by choosing religious education instead. The theory hence predicts that the social status of the family has a signicant impact on educational choice. Children from the ruling caste who are sent abroad have a lower probability of being sent to formal school. They are more likely to be sent to Koranic schools that emphasize religious and family values. The theoretical predictions are tested on data from Matam region in Senegal, a region where roughly one of every two children have ever attended school.
    Keywords: Schooling, Migration, Social Status, Haalpulaar
    JEL: I21 O12 O15 O17 Z13
    Date: 2011–03–28
  34. By: Prowse, Martin
    Abstract: During the past century tobacco production and marketing in Nyasaland/Malawi has undergone periods of dynamism similar to changes since the early 1990s. This article highlights four recurrent patterns. First, estate owners have either fostered or constrained peasant/smallholder production dependent on complementarities or competition with their estates. Second, rapid expansion of peasant/smallholder production has led to three recurrent outcomes: a large multiplier effect in tobacco-rich districts; re-regulation of the marketing of peasant/smallholder tobacco by the (colonial) state; and, lastly, concerns over the supply of food crops. The article concludes by arguing that whilst the reform of burley tobacco production and marketing in the 1990s engaged with the first two issues, it may have benefitted from paying greater attention to the latter two issues as well.
    Date: 2011–11
  35. By: Prowse, Martin
    Abstract: This article conducts a value chain analysis of smallholder burley tobacco production in Malawi for the 2003/04 and 2009/10 agricultural seasons. The comparison suggests in 2003/04 smallholder profits from growing burley were limited by two main factors: first, the practices of leaf merchant companies on the auction floors who operated as a cartel (and governed the burley supply thread); and secondly, by inefficient marketing arrangements. By the 2009/10 season the rents, governance and systemic efficiency within the supply thread had changed considerably: there was greater competition on the auction floors largely due to direct state intervention (which increased growers' net margins in nominal terms), improvements in marketing arrangements, tighter state regulation (including the introduction of minimum prices for grades of burley) and increased systemic efficiency (through a rapid expansion of contract farming). The article concludes by highlighting some of the opportunities and threats that this form of vertical integration poses smallholder growers.
    Date: 2011–11
  36. By: Alexandra Tabova; Carol L. Baker
    Abstract: Non-oil growth in the CFA oil exporting countries has been lackluster despite their great natural resource wealth. In this paper we study the key determinants of non-oil growth and explore to what extent these countries differ from countries with comparable levels of development that do not depend on nonrenewable resources. Using a panel of 38 countries comprising LICs and CFA zone oil exporters, we find that while real exchange rate appreciation negatively impacted growth in all countries over the period 1985-2008, what distinguishes the oil producers of the CFA zone is the failure of public and private investment to spur non-oil growth.
    Keywords: Cross country analysis , Economic growth , Economic models , Low-income developing countries , Nonoil sector , Oil exporting countries , Private investment , Public investment ,
    Date: 2011–10–12

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