nep-afr New Economics Papers
on Africa
Issue of 2011‒12‒19
thirty-six papers chosen by
Quentin Wodon
World Bank

  1. Does Household Headship Affect Demand for Hybrid Maize Seed in Kenya? An Exploratory Analysis Based on 2010 Survey Data By Smale, Melinda
  2. Is Older Better? Maize Hybrid Change on Household Farms in Kenya By Smale, Melinda; Olwande, John
  3. Smallholder Heterogeneity and Maize Market Participation in Southern and Eastern Africa: Implications for Investment Strategies to Increase Marketed Food Staple Supply By Mather, David; Boughton, Duncan; Jayne, T.S.
  4. Cereal production and technology adoption in Ethiopia: By Yu, Bingxin; Nin-Pratt, Alejandro; Funes, José; Gemessa, Sinafikeh Asrat
  5. Climate risk management through sustainable land management in Sub-Saharan Africa: By Nkonya, Ephraim; Place, Frank; Pender, John; Mwanjololo, Majaliwa; Okhimamhe, Appollonia; Kato, Edward; Crespo, Susana; Ndjeunga, Jupiter; Traore, Sibiry
  6. Testing the Monetary Model for Exchange Rate Determination in South Africa: Evidence from 101 Years of Data By Riane de Bruyn; Rangan Gupta; Lardo Stander
  7. The Mental Health Cost of Corruption: Evidence from Sub-Saharan Africa By Robert Gillanders
  8. Violence, Political Instability, and International Trade: Evidence from Kenyaâs Cut Flower Sector By Muhammad, Andrew; DâSouza, Anna; Amponsah, William
  9. Carbon Credit Payment Options for Agroforestry Projects in Africa By Allwardt, Jennifer
  10. The 2011 Surplus in Smallholder Maize Production in Zambia: Drivers, Beneficiaries, & Implications for Agricultural & Poverty Reduction Policies By Mason, Nicole M.; Burke, William J.; Shipekesa, Arthur; Jayne, T.S.
  12. Who owns the land?: Perspectives from rural Ugandans and implications for land acquisitions By Bomuhangi, Allan; Doss, Cheryl; Meinzen-Dick, Ruth
  13. Property rights and economic growth: evidence from a natural experiment By Brunt, Liam
  14. The Design of Fiscal Adjustment Strategies in Botswana, Lesotho, Namibia, and Swaziland By Geneviève Verdier; Olivier Basdevant; Luis-Felipe Zanna; Dalmacio Benicio; Borislava Mircheva; Susan Yang; Joannes Mongardini
  15. Mountains of Maize, Persistent Poverty By Jayne, T.S.; Mason, Nicole; Burke, William; Shipekesa, Arthur; Chapoto, Antony; Kabaghe, Chance
  16. Poverty reduction in a refugee-hosting economy: A natural experiment By Maystadt, Jean-Francois
  17. Making agriculture pro-nutrition: Opportunities in Tanzania By Ecker, Olivier; Mabiso, Athur; Kennedy, Adam; Diao, Xinshen 22905
  18. How does ownership of farm implements affect investment in other farm implements when farmers' liquidity constraint is relaxed?: Insights from Nigeria By Takeshima, Hiroyuki; Salau, Sheu
  19. Education, development and knowledge: new forms of unequal change under globalization. The case of SSA countries By CHAGAS LOPES, MARGARIDA
  20. Oil-Price Boom and Real Exchange Rate Appreciation: Is There Dutch Disease in the CEMAC? By Juan Pedro Treviño
  21. Power tariffs : caught between cost recovery and affordability By Briceno-Garmendia, Cecilia; Shkaratan, Maria
  22. Comprehension and risk elicitation in the field: Evidence from rural Senegal By Charness, Gary; Viceisza, Angelino
  23. Financial development, trade openness and economic growth in Nigeria: time series evidence By Awojobi, Omotola; Katircioglu, Salih
  24. Managing future oil revenue in Uganda for agricultural development and poverty reduction: A CGE analysis of challenges and options By Wiebelt, Manfred; Pauw, Karl; Matovu, John Mary; Twimukye, Evarist; Benson, Todd
  26. Does Money Matter for Inflation in Ghana? By Arto Kovanen
  27. Analyses on efficiency of national innovation system for BRICS and the influencing factors: A comparative study based on DEA and panel data analysis By Cai, Yuezhou
  28. Fact or artefact : the impact of measurement errors on the farm size - productivity relationship By Carletto, Calogero; Savastano, Sara; Zezza, Alberto
  29. The renewed case for farmers' cooperatives: Diagnostics and implications from Ghana By Francesconi, Gian Nicola; Wouterse, Fleur
  30. On the Stability of Money Demand in Ghana: A Bounds Testing Approach By Jihad Dagher; Arto Kovanen
  31. Spending on Public Infrastructure : A Practitioner's Guide By Briceno-Garmendia, Cecilia; Sarkodie, Afua
  32. Understanding the linkage between agricultural productivity and nutrient consumption: Evidence from Uganda By Ulimwengu, John; Liverpool-Tasie, Saweda; Randriamamonjy, Josee; Ramadan, Racha
  33. Éducation et marchés du travail à Brazzaville et Pointe Noire (Congo-Brazzaville) By Mathias Kuepie; Christophe Nordman
  34. Monetary Policy Transmission in Ghana: Does the Interest Rate Channel Work? By Arto Kovanen
  35. Les déterminants du design des systèmes de contrôle de gestion dans les collectivités locales de l'Afrique au Sud du Sahara: une analyse empirique contingente des collectivités locales béninoises By Aimé Togodo Azon; Didier Van Caillie; François Pichault
  36. Lying about firm performance: Evidence from a survey in Nigeria By Clarke, George

  1. By: Smale, Melinda
    Abstract: Women are central to food production and maize is a dominant food staple in Sub-Saharan Africa, but published gender analyses of hybrid seed use in Sub-Saharan Africa are uncommon. Building on previous work, this paper tests the effects of headship definitions on hybrid seed use and explores the variation between male- and female-headed households and among female-headed households in Kenya. Analysis is based on survey data collected by Tegemeo Institute of Egerton College during the 2009-10 cropping season.
    Keywords: maize, seed, Kenya, household headship, Agricultural and Food Policy, Consumer/Household Economics, Crop Production/Industries, Food Security and Poverty,
    Date: 2011
  2. By: Smale, Melinda; Olwande, John
    Abstract: Kenya has been recognized globally as maize success story since the 1970s. Released on the eve of independence, Kenyaâs first maize hybrid diffused faster than did hybrids in the U.S Corn Belt during the 1930s-1940s. In recent decades, policy researchers have lamented that earlier gains in maize productivity have not lived up to their potential. Claims of stagnating yields and stagnating adoption are offset here, at least in part, by longitudinal survey data showing rising yields and adoption rates on farms. Tegemeo survey data confirm that Kenya has reached its adoption ceiling years ago in the major maize producing zones of the country, and is near to doing so in other zones. Data show adoption rates topping 80% of farmers.
    Keywords: maize, Kenya, Africa, household farms, Agricultural and Food Policy,
    Date: 2011–11
  3. By: Mather, David; Boughton, Duncan; Jayne, T.S.
    Abstract: In many African countries, as well as in other parts of the world where a significant part of the rural population is poor and food insecure, policymakers face what is called the food price dilemma. On the one hand, they need to provide farmers with incentives to increase the quantity of marketed food staples to feed a growing population, especially in rapidly growing urban centers where unrest can be politically destabilizing. On the other hand, because staple foods account for a large portion of total household expenditures for both urban and rural households, policymakers also are drawn to policies that lower the retail price of staple foods for consumers. Achieving both objectives â increasing marketed supplies of food staples while maintaining low retail prices â are also key to continued poverty reduction, as smallholder incomes increase when they receive higher prices for their surplus marketed output, while lower retail food prices decrease the cost of living for both rural and urban households. Hence, these objectives figure prominently in Comprehensive Africa Agriculture Development Programme (CAADP) investment plans and the United States (U.S.) Feed The Future initiative.
    Keywords: maize, Africa, food security, food supply, Agricultural and Food Policy, Consumer/Household Economics, Crop Production/Industries, Food Security and Poverty,
    Date: 2011–10
  4. By: Yu, Bingxin; Nin-Pratt, Alejandro; Funes, José; Gemessa, Sinafikeh Asrat
    Abstract: The Ethiopian government has been promoting a package-driven extension that combines credit, fertilizers, improved seeds, and better management practices. This approach has reached almost all farming communities, representing about 2 percent of agricultural gross domestic product in recent years. This paper is the first to look at the extent and determinants of the adoption of the fertilizer-seed technology package promoted in Ethiopia using nationally representative data from the Central Statistical Agency of Ethiopia. We estimate a double hurdle model of fertilizer use for four major cereal crops: barley, maize, teff, and wheat. Since maize is the only crop that exhibits considerable adoption of improved seed, we estimate a similar model for the adoption of improved seed in maize production. We find that access to fertilizer and seed is related to access to extension services and that production specialization together with wealth play a major role in explaining crop area under fertilizer and improved seed. One of the most important factors behind the limited adoption of the technological package is the inefficiency in the use of inputs, which implies that changes are needed in the seed and fertilizer systems and in the priorities of the extension service to promote more efficient use of inputs and to accommodate risks associated with agricultural production, especially among small and poor households.
    Keywords: Agriculture, cereals, double-hurdle model, maize, Technical change, Technology adoption, teff, Wheat,
    Date: 2011
  5. By: Nkonya, Ephraim; Place, Frank; Pender, John; Mwanjololo, Majaliwa; Okhimamhe, Appollonia; Kato, Edward; Crespo, Susana; Ndjeunga, Jupiter; Traore, Sibiry
    Abstract: Empirical evidence has shown that farmers can adapt to climate change by using sustainable land and water management (SLWM) practices that provide local mitigation benefits, reducing or offsetting the negative effects of climate change at the level of the plot, farm, or even landscape. However, adaptation to climate change using SLWM practices in sub-Saharan Africa (SSA) remains low. This study was conducted to examine the impact of government policies on adaptation to climate change.
    Keywords: Climate change, Sustainability, Water management, Adaptation, local institutions,
    Date: 2011
  6. By: Riane de Bruyn (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria); Lardo Stander (Department of Economics, University of Pretoria)
    Abstract: Evidence in favour of the monetary model of exchange rate determination for the South African Rand is at best mixed. A co-integrating relationship between the nominal exchange rate and fundamentals forms the basis of the monetary model. With the econometric literature suggesting that it is the span of the data, and not the frequency, that determines the power of the co-integration tests, and all the studies on South Africa using short-span data of the post-Bretton Woods era, we decided to test the long-run monetary model of exchange rate determination for the South African Rand relative to the US Dollar, using annual data from 1910 – 2010. The results provide some support for the monetary model in the sense that long-run co-integration is found between the nominal exchange rate and the output and money supply deviations. However, the theoretical restrictions required by the monetary model are rejected. A vector errorcorrection model identifies both the nominal exchange rate and the monetary fundamentals as the channel for the adjustment process of deviations from the long-run equilibrium exchange rate. A subsequent comparison of nominal exchange rate forecasts based on the monetary model with those of the random walk model, suggests that the forecasting performance of the monetary model is superior.
    Keywords: Nominal exchange rate, monetary model, long-span data, forecasting
    JEL: C22 C32 C53 F31 F47
    Date: 2011–12
  7. By: Robert Gillanders (University College Dublin)
    Abstract: This paper examines the effect that experiencing corruption has on an individual’s mental health using microeconomic data from the Afrobarometer surveys. The results show a statistically significant and economically meaningful effect in both binary and ordered probit models using both an experience of corruption index and a simple binary variable. Having to pay a bribe to obtain documents and permits, to avoid problems with the police or to access medical care emerge as the arenas in which corruption can have a damaging effect on mental health. Some evidence is presented that an individual needs to experience such corruption more than ‘once or twice’ for this effect to become evident.
    Keywords: Mental Health; Corruption; Well-Being; Sub-Saharan Africa
    Date: 2011–11–28
  8. By: Muhammad, Andrew; DâSouza, Anna; Amponsah, William
    Abstract: Abstract: We assess whether and how violence and political instability affect trade between developed and developing countries considering the special case of EU imports of Kenyan roses after the 2007/08 post-election violence and political instability in Kenya. Using the Rotterdam model to estimate EU demand for roses from Kenya and other global competitors, we find evidence of a structural change in the import growth rate for Kenya, approximately equivalent to an 18.6% tariff. These results highlight the importance of non-tariff barriers to trade and contribute to the growing literature on the role of insecurity and instability in hindering international trade.
    Keywords: Kenya, Africa, EU, election violence, cut flowers, roses, imports, international trade, Demand and Price Analysis, International Development, International Relations/Trade, Political Economy, F14, F23, F59, O13, Q17,
    Date: 2011–10
  9. By: Allwardt, Jennifer
    Abstract: The potential of using carbon offset credits from agroforestry projects for farmers in developing areas has become more prevalent in both Clean Development Mechanism and voluntary carbon markets. Since the implementation of the Kyoto Protocol, many international development organizations have been interested in using the Clean Development Mechanism (CDM) to help both mitigate CO2 emissions through agroforestry projects offsets and as a poverty reduction tool. Few organizations that have begun talking with farmers about planting trees for carbon offset credits have been able to tell the farmers how much money they would receive from their new tree growth or the costs they will incur in doing so. For this study, a whole farm budget toolkit was designed to help fill this gap and to help evaluate payment methods for carbon offset credits in agroforestry projects. This toolkit is intended to be used by development assistance organizations and farmers starting carbon credit programs. It gives a rough estimate of payments based on a farmerâs or groupâs unique situation. For testing purposes, previous agroforestry projects were entered into the toolkit to evaluate the benefits accruing to farmers using data on carbon credit payment methods for two previous agroforestry projects in Africa. The toolkit was also field tested in Kenya with individual farmers and a farmersâ group.
    Keywords: agroforestry, budget toolkit, carbon credits, Clean Development Mechanism, payment methods, smallholder farmers, Agricultural Finance, Community/Rural/Urban Development, International Development, Land Economics/Use, O13, O22, R30, Q54,
    Date: 2011
  10. By: Mason, Nicole M.; Burke, William J.; Shipekesa, Arthur; Jayne, T.S.
    Abstract: In 2011, Zambia recorded its second consecutive record-breaking maize harvest, and aggregate maize production levels in 2011 were more than double the average level from 2006 to 2008. The expansion in maize production over the period corresponds with the scaling up of the Government of the Republic of Zambia's (GRZ) two flagship agricultural sector programmes. These are: (i) maize purchases at pan-territorial, above-market prices through the Food Reserve Agency (FRA); and (ii) subsidized fertilizer distribution through the Fertilizer Support Programme and its successor, the Farmer Input Support Programme (FSP/FISP). More than 90% of GRZ funding for Poverty Reduction Programmes is devoted to the FRA and FSP/FISP, yet there has been no major reduction in rural poverty rates in Zambia since 2004.
    Keywords: maize, Zambia, poverty, Agricultural and Food Policy, Food Security and Poverty,
    Date: 2011–11
  11. By: Ayuya, Oscar Ingasia
    Abstract: Carbon markets are developing world wide with the major aim of environmental protection and poverty alleviation in developing countries. Some carbon sequestration projects have been started in Kenya though it is still not yet a vibrant investment in spite of the available suitable biophysical land. Njoro district has no such project regardless of being affected by deforestation. One inevitable result has been the unpredictable rainfall pattern constituting overall climate change, increased surface run off, the low water levels in river Njoro, loss of biodiversity and the increased poverty in the region. It is still not clear if such projects are to be initiated, the smallscale farmers would be willing to accept and adopt them. There was need therefore, to assess the willingness of small scale farmers to accept and adopt carbon trade tree project in order to understand farmerâs decision making process. The study used multi-stage sampling procedure to select 150 small-scale farmers in Njoro district. Both primary and secondary data sources collected using observations and interviews with the help of a semi-structured questionnaire. Data analysis was done using descriptive statistics, ordinal logit model and the double hurdle model using STATA computer programs. The results indicated that 29% of the farmers practiced tree planting/agro-forestry as the voluntary CDM practice in the study area. On the level of awareness the result indicates that 58% of the farmers were not aware of the project, 23% were aware and correct and 19% of the farmers were aware but wrong signifying low levels of awareness of the CDM project among farmers. Gender, household size, farm debt, attitude towards risk, farm size, land tenure, availability of voluntary CDM and perception of the technology were found to influence the willingness to accept the project. Further, age, extension contacts, attitude towards risk, land tenure and perception towards the technology influenced on the extent the farmer is willing to adopt. The study therefore, recommends policy interventions in increasing awareness, improved training through extension services on agro-environmental programmes, formation of agro-environmental self help groups by farmers and creation of strategies that would improve socio-economic conditions of smallholder farmers in Kenya. Through this, adoption of carbon tree trade would be successful consequently increasing carbon sinks and increased smallholder farm income hence poverty reduction and sustainable development.
    Keywords: Environmental Economics and Policy, Farm Management,
    Date: 2010–12
  12. By: Bomuhangi, Allan; Doss, Cheryl; Meinzen-Dick, Ruth
    Abstract: Rapid growth of demand for agricultural land is putting pressure on property rights systems, particularly in Sub-Saharan Africa, where customary tenure systems have provided secure land access. Patterns of gradual, endogenous change toward formalization are being challenged by rapid and large-scale demands from outsiders. Little attention has focused on the gender dimensions of this transformation. Based on a study of land tenure in Uganda, this paper analyzes how different ways of defining landownership—based on household reports, existence of ownership documents, and rights over the land—provide very different indications of the gendered patterns of landownership and rights. Although many households report that husbands and wives jointly own the land, women are less likely to be listed on ownership documents, especially titles, and women have fewer land rights. A simplistic focus on title to land misses much of the reality regarding land tenure and could especially have an adverse impact on women's land rights.
    Keywords: Gender, land acquisitions, Land tenure, landownership, Property rights,
    Date: 2011
  13. By: Brunt, Liam (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: In 1795 the British took control of the Cape colony (South Africa) from the Dutch; and in 1843 they exogenously changed the legal basis of landholding, giving more secure property rights to landholders. Since endowments and other factors were held constant, these changes offer clean tests of the effects on economic growth of colonial identity and secure property rights. The effects of both changes were immediate, positive and large. Other legal and institutional changes, such as the move to a common law system in 1827, had no such effects on economic growth.
    Keywords: Economic growth; legal origins; property rights
    JEL: N47 O43
    Date: 2011–12–08
  14. By: Geneviève Verdier; Olivier Basdevant; Luis-Felipe Zanna; Dalmacio Benicio; Borislava Mircheva; Susan Yang; Joannes Mongardini
    Abstract: Botswana, Lesotho, Namibia, and Swaziland face the serious challenge of adjusting not only to lower Southern Africa Customs Union (SACU) transfers because of the global economic crisis, but also to a potential further decline over the medium term. This paper assesses options for the design of the needed fiscal consolidation. The choice among these options should be driven by (i) the impact on growth and (ii) the specificities of each country. Overall, a focus on government consumption cuts appears to minimize the negative impact on growth, and would be appropriate given the relatively large size of the public sector in each country.
    Keywords: Customs duties , Economic models , Fiscal consolidation , Fiscal policy , Government expenditures , Revenues , Southern Africa ,
    Date: 2011–11–15
  15. By: Jayne, T.S.; Mason, Nicole; Burke, William; Shipekesa, Arthur; Chapoto, Antony; Kabaghe, Chance
    Abstract: The past two years are a tribute to Zambian farmers; they have responded admirably to government efforts to promote maize production. But ironically, rural poverty remains stubbornly high despite the fact that the government has spent over 2% of the nationâs gross domestic product in supporting maize production and subsidizing inputs for farmers. Why is it that maize production has increased so impressively without making a serious dent in rural poverty? And what are the lessons for the new government?
    Keywords: maize, poverty, Zambia, Agricultural and Food Policy, Food Security and Poverty,
    Date: 2011–11
  16. By: Maystadt, Jean-Francois
    Abstract: The role of migration in reducing poverty in developing countries has been investigated mainly from the perspective of migrants and their relatives. This paper exploits the time and spatial variations in the way households in the region of Kagera (Tanzania) traced between 1991 and 2004 have been affected by massive refugee inflows to assess how migration may affect poverty in the hosting communities. Large population inflows from Burundi and Rwanda have improved the welfare of the hosting population, particularly for the poor. Despite the process of structural transformation observed in the refugee-hosting economy, such pro-poor development is mainly explained by improved agricultural labor productivity and income diversification among the poor.
    Keywords: Migration, Poverty, Refugees, Structural transformation,
    Date: 2011
  17. By: Ecker, Olivier; Mabiso, Athur; Kennedy, Adam; Diao, Xinshen 22905
    Abstract: Extreme poverty and chronic malnutrition are widespread in rural Tanzania, where smallholder agriculture dominates the economy. Given the sector's role as the main source of food and livelihood for many malnourished people, agriculture has substantial potential to reduce poverty and hunger. Unfortunately, to date, the agricultural sector has not yet reached this potential, and agricultural growth has not translated to significant improvements in nutrition outcomes at large. In this study, we explore the links between agriculture and nutrition in Tanzania and review the evidence on how these links can be strengthened for improved nutrition. We further quantitatively evaluate the potential nutrition outcome of agricultural growth through productivity-enhancing investments over the next five years.
    Keywords: Agriculture, Nutrition, food security, Development strategy, intervention,
    Date: 2011
  18. By: Takeshima, Hiroyuki; Salau, Sheu
    Abstract: Mechanization is a key to agricultural productivity growth in developing countries. Farm implements, ranging from hand tools to draft animals to milling machines to power tillers and tractors, often play complementary roles with each other, and supporting adoption of certain farm implements may also speed up adoption of others. In the absence of credit, insurance, or information, however, such complementarity may be reduced. This study analyzes how the ownership of particular farm implements by Nigerian farmers affected their investment in other farm implements under a project that provided matching grants for the acquisition of various types of farm implements. We found that ownership of certain farm implements increased farmers' investment in the same implements but reduced their investment in other, potentially complementary, implements. We argue that these effects may be partly explained by high operating and maintenance costs associated with the use of farm equipment in these countries. Ownership of farm equipment may provide a good indicator of farmers' potential willingness to invest in the same of different farm equipment. At the same time, a public project supporting farmers' investment in farm equipment should provide financial support not only for the acquisition of farm implements but also for their operation and maintenance.
    Keywords: agricultural mechanization, average treatment effect, complementarity, liquidity constraint, operating cost,
    Date: 2011
    Abstract: Abstract One of the leading mismatches brought about by globalization has to do with the severe opposition between the national frameworks in which qualifications and skills are being developed and the wider international contexts in which they are increasingly utilized and reproduced. This gulf becomes almost impossible to overcome and imposes a growing inequality in the access to knowledge in the global economy as the prevalent forms of economic regulation are rendered obsolete. The limitations displayed by national systems of education and training interact with the growing insufficiencies in the performance of labor market and innovation hetero regulators. As a result, increasing flows of excluded workers have been paving the ways between the new global development centers and the emerging new peripheries.
    Keywords: Key Words: Education and economic development; quality of education; new North-South divide; Sub-saharan Africa
    JEL: A22 I21 D83 H52
    Date: 2011–11
  20. By: Juan Pedro Treviño
    Abstract: The paper employs a heuristic comparative approach suggested by Ismail (2009) to search for evidence of Dutch disease in oil-rich countries of the Central African Economic and Monetary Community (CEMAC). While these countries have benefitted from high international oil prices in recent years, they have also experienced relatively large real exchange rate appreciations, raising concerns regarding the presence of Dutch disease and casting doubts on their ability to achieve high growth and employment in the long run. To isolate from any dynamics related to the exchange rate regime, we focus on the 14 member countries that constitute the CFA franc zone. We separate them into net oil importers and net oil exporters and look at economic growth, the real exchange rate, and the agricultural and external sectors. Based on traditional models, our findings are broadly consistent with the presence of Dutch disease in the second group during the oil-price boom. Departing from these models yields mixed results, suggesting the need to employ a case-by-case approach.
    Keywords: Agricultural sector , Central African Economic and Monetary Community , Cross country analysis , Exchange rate appreciation , Exchange rate regimes , Global competitiveness , Imports , Oil exporting countries , Oil prices , Oil sector , Real effective exchange rates ,
    Date: 2011–11–16
  21. By: Briceno-Garmendia, Cecilia; Shkaratan, Maria
    Abstract: This is the first paper to build a comprehensive empirical picture of power pricing practices across Sub-Saharan Africa, based on a new database of tariff structures in 27 countries for the years 2004-2008. Using a variety of quantitative indicators, the paper evaluates the performance of electricity tariffs against four key policy objectives: recovery of historic power production costs, efficient signaling of future power production costs, affordability to low income households, and distributional equity. As regards cost recovery, 80 percent of the countries in the sample fully recover operating costs, while only around 30 percent of the countries are practicing full recovery of capital costs. However, due to the fact that future power development may be based on a shift toward more economic technologies than those available in the past, existing tariffs look as though they would be consistent with Long Run Marginal Costs in nearly 40 percent of countries and hence provide efficient pricing signals. As regards affordability, today's average effective tariffs are affordable for 90 percent of today's customers. However, they would only be affordable for 25 percent of households that remain unconnected to the grid. Tariffs consistent with full recovery of economic costs would be affordable for 70 percent of the population. As regards equity, the highly regressive patterns of access to power services, ensure that subsidies delivered through electricity tariffs are without exception also highly regressive in distributional incidence. The conclusion is that achieving all four of these policy objectives simultaneously is almost impossible in the context of the high-cost low-income environment that characterizes much of SSA today. Hence most countries find themselves caught between cost recovery and affordability.
    Keywords: International Trade and Trade Rules,Energy Production and Transportation,Infrastructure Economics,Debt Markets,Trade Policy
    Date: 2011–12–01
  22. By: Charness, Gary; Viceisza, Angelino
    Abstract: In the past decade, it has become increasingly common to use simple laboratory games and decision tasks as a device for measuring both the preferences and understanding of rural populations in the developing world. This is vitally important for policy implementation in a variety of areas. In this paper, we report the results observed using three distinct risk elicitation mechanisms, using samples drawn from the rural population in Senegal, West Africa. Whatever the intellectual merits of a particular elicitation strategy, there is little value in performing such tests if the respondents do not understand the questions involved. We test the understanding of and the level of meaningful responses to the typical Holt-Laury task, to a simple binary mechanism pioneered by Gneezy and Potters in 1997 and adapted by Charness and Gneezy in 2010, and to a nonincentivized willingness-to-risk scale à la Dohmen et al. We find a disturbingly low level of understanding with the Holt-Laury task and an unlikely-to-be-accurate pattern with the willingness-to-risk question. On the other hand, the simple binary mechanism produces results that closely match the patterns found in previous work, although the levels of risk-taking are lower than in previous studies. Our study is a cautionary note against utilizing either sophisticated risk-elicitation mechanisms at the possible cost of seriously diminished levels of comprehension or nonincentivized questions in the rural developing world.
    Keywords: comprehension, risk elicitation, laboratory experiments in the field, rural,
    Date: 2011
  23. By: Awojobi, Omotola; Katircioglu, Salih
    Abstract: Fundamentally, this study examines a possible linkage among financial development, trade liberalization and Economic Growth in Nigeria. For this purpose, the time-series econometric methodology of Cointegration and Granger Causality test are used to analyze data for period between 1960 and 2009. Results suggest that a long run equilibrium relationship exists between real income and its determinants, namely international trade and financial development. Granger causality test results also reveal causalities among these variables exist both in the short term and long term of the Nigerian Economy.
    Keywords: Granger Causality; Economic Growth; Financial Development; Trade Openness; Nigeria
    JEL: O10 G18 F43
    Date: 2011–04–10
  24. By: Wiebelt, Manfred; Pauw, Karl; Matovu, John Mary; Twimukye, Evarist; Benson, Todd
    Abstract: With the recent discovery of crude oil reserves along the Albertine Rift, Uganda is set to establish itself as an oil producer in the coming decade. Total oil reserves are believed to be two billion barrels, with recoverable reserves estimated at 0.8–1.2 billion barrels. At peak production, likely to be reached by 2017, oil output will range from 120,000 to 210,000 barrels per day, with a production period spanning up to 30 years. Depending on the exact production levels, the extraction period, the future oil price, and revenue sharing agreements with oil producers, the Ugandan government is set to earn revenue equal to 10–15 percent of GDP at peak production. The discovery of crude oil therefore has the potential to provide significant stimulus to the Ugandan economy and address its development objectives. However, this is subject to careful management of oil revenues to avoid the potential pitfall of a sudden influx of foreign exchange. Dominating the concerns is the potential appreciation in the real exchange rate and subsequent loss of competitiveness in the nonresource tradable goods sectors such as agriculture or manufacturing (Dutch Disease). These sectors are often major employers in developing countries and the engines of growth. Several mitigation measures can be employed by government to counter Dutch Disease, including measures that directly counter the real exchange rate appreciation or measures that offer direct support to traditional export sectors in the form of subsidies.
    Keywords: crude oil, agricultural competitiveness, general equilibrium modeling,
    Date: 2011
  25. By: Kariuki, Maina B. Joel
    Abstract: The role and contribution of the fisheries sub-sector in Kenya cannot be underestimated. In particular, the contribution of Rastrienebola Argentea, commonly referred to as Omena, or Dagaa is increasingly being recognized and appreciated by several Government institutions and Non-Governmental organizations. Omena production is valued at 200 million dollars while its trade supports more than 2 million livelihoods. Different interventions by the government and the Non-Governmental organizations have resulted to increased production of Omena fish. However, increased production alone is not enough to effectively develop this industry. Information on the marketing functions and the efficiency with which these functions are carried out is lacking. In addition, distribution of costs and benefits along the Omena marketing chain is not known while fluctuations in supply affect price transmission between different markets. The main objective of this study was thus to assess the performance of Omena marketing in Kenya. The specific objectives of the study included: assessing the effectiveness of the Omena marketing channels; evaluating the price spreads along the different marketing channels; and to determine whether the spatially separated markets for Omena are integrated. Primary data was collected in two purposively identified regional markets in Kenya (i.e. Kisumu and Nakuru) while additional secondary data from the Nairobi region was included only for the purposes of analyzing market integration. Selection of markets was based on whether the markets are deficit or surplus regions for Omena. A multistage sampling procedure resulted to a total of 43 fishermen; 42 small scale processors; 20 wholesalers; 31 retailers; 32 domestic consumers; and 7 industrial consumers making a grand total number of 175 respondents. Questionnaires were adopted as the major tools of data collection using one-on-one interviews. To analyze the resultant data, the study utilized gross margin analysis and co-integration modeling. Results indicate that Omena marketing channels are to a large degree effective as it regards to meeting the consumption needs. However, results also indicated that longer marketing channels resulted not only to high costs and thus high retail prices; but also to lower returns to the fishermen. Further, the study identified that there is no integration amongst Omena markets in Kisumu and Nakuru and that a weak degree of integration existed between Kisumu and Nairobi. Information generated by this study is important in guiding policy makers to identify points of interventions as well as in designing effective and efficient Omena marketing channels.
    Keywords: Marketing,
    Date: 2011–04
  26. By: Arto Kovanen
    Abstract: Money has only limited information value for future inflation in Ghana over a typical monetary policy implementation horizon (four to eight quarters). On the other hand, currency depreciation and demand pressures (as measured by the output gap) are shown to be important predictors of future price changes. Inflation inertia is high and inflation expectations are largely based on backward-looking information, suggesting that inflation expectations are not well anchored and hence more is needed to strengthen the credibility of Ghana’s inflation-targeting regime.1
    Keywords: Capital markets , Cross country analysis , Demand for money , Economic models , Emerging markets , Inflation targeting , Interest rates , Monetary policy ,
    Date: 2011–11–22
  27. By: Cai, Yuezhou
    Abstract: Efficiency scores of the National Innovation System (NIS) for 22 countries, including the BRICS, G7, are calculated with the Data Envelopment Analysis (DEA). Relevant factors that may affect the innovation system efficiency are summarized based on the NIS Approach and the New Growth Theory. Empirical study is further made with the Panel Data Analysis (PDA) and the Principal Component Analysis. The results of efficiency calculation and empirical test show that: (1) The BRICS differ greatly in the efficiency of NIS, with China, India and Russia ranking fairly high, and Brazil, South Africa among the few bottom; (2) The influencing factors involve a lot of elements, including the ICT infrastructure, enterprise R&D, market environment, government governance, education system, economic scale, natural endowments, external dependence, which is conformed to the NIS approach and New Growth Theory; (3) Enterprises innovation activities are of key importance to the NIS. To improve the efficiency of the innovation system, efforts should be made to improve the market circumstance, governance, and financial structure, and create a sound environment for innovation. (4) ICT infrastructure, economic scale and openness affect the diffusion of knowledge and technology, and in turn the NIS efficiency. (5) The BRICS have characters of low governance level and high natural resources dependency in common, which is determined by their developing stage and extensive growth pattern. To avoid the so called middle-income trap in the coming future, the BRICS should dedicate to transform the factor-driven pattern to an innovation-driven one. As for China, there is still much to be improved in the fields of ICT infrastructure, government governance, education system. During the 12th Planning, more efforts should be put into these fields and make better external conditions for innovation activities. --
    Keywords: The BRICS,National Innovation System (NIS),NIS efficiency,Data Envelopment Analysis (DEA),Panel Data Analysis (PDA)
    JEL: O30 O57 P52
    Date: 2011
  28. By: Carletto, Calogero; Savastano, Sara; Zezza, Alberto
    Abstract: This paper revisits the role of land measurement error in the inverse farm size and productivity relationship. By making use of data from a nationally representative household survey from Uganda, in which self-reported land size information is complemented by plot measurements collected using Global Position System devices, the authors reject the hypothesis that the inverse relationship may just be a statistical artifact linked to problems with land measurement error. In particular, the paper explores: (i) the determinants of the bias in land measurement, (ii) how this bias varies systematically with plot size and landholding, and (iii) the extent to which land measurement error affects the relative advantage of smallholders implied by the inverse relationship. The findings indicate that using an improved measure of land size strengthens the evidence in support of the existence of the inverse relationship.
    Keywords: Rural Development Knowledge&Information Systems,Regional Economic Development,Land Use and Policies,Rural Land Policies for Poverty Reduction,E-Business
    Date: 2011–12–01
  29. By: Francesconi, Gian Nicola; Wouterse, Fleur
    Abstract: This study presents a stylized but insightful diagnostic of the problems limiting collective action in Ghanaian farmer-based organizations (FBOs). In our analysis, we use a structure-conduct-performance framework, econometrics, and new primary data for 500 FBOs collected through surveys and games. We find that most Ghanaian FBOs are inactive, failing to mobilize their members into any sort of collective action. To understand why this is so, we postulate that in rural Ghana, four typologies can be used to classify FBOs and to distinguish them on the basis of their membership structure and rules of conduct. We then show that FBOs fail to mobilize collective action whenever their structure and conduct are not aligned. In particular, misalignment leads mainly to problems of access to external credit and to a lesser extent to problems of internal cohesion. To maximize collective action, this study recommends the diversification of policy through recognizing the four different types of FBOs, each facing particular and to some extent opposing problems.
    Keywords: Collective action, Cooperatives, econometrics, games,
    Date: 2011
  30. By: Jihad Dagher; Arto Kovanen
    Abstract: This paper adopts the bounds testing procedure developed by Pesaran et al. (2001) to test the stability of the long-run money demand for Ghana. The results provide strong evidence for the presence of a stable, well-identified long-run money demand during a period of substantial changes in the financial markets. The empirical evidence points to complex dynamics between money demand and its determinants while suggesting that deviations from the equilibrium are rather short-lived.1
    Keywords: Capital markets , Demand for money , Inflation targeting , Monetary policy ,
    Date: 2011–11–22
  31. By: Briceno-Garmendia, Cecilia; Sarkodie, Afua
    Abstract: This paper provides a methodological tool to support the collection and preparation of standardized, comprehensive data regarding public spending on infrastructure services that can be rigorously compared across countries. Infrastructure is defined to cover six sectors: irrigation, energy (primarily power), transport, communication, wastewater management, and water supply. The guide is designed to provide a much richer and more complete measurement of infrastructure spending than the limited highly aggregated data currently available through the IMF Government Financial Statistics. Originally developed for Africa, the methodology is relevant and readily applicable to any developing country. With the aim of being as comprehensive as possible, the methodology covers central and sub-national government expenditures, non-budgetary vehicles (such as road funds), state-owned enterprises (SOEs), and public-private partnerships (PPPs). While the methodology focuses on collecting quantitative data on the level and composition of spending, this is complemented with qualitative data that provides the institutional context. Importantly, the methodology allows for cross-classification of infrastructure spending by purpose (power, roads, etc) and by function (operational versus capital spending). This guide provides practical guidance -- including concepts, definitions, and classifications -- for each of the three stages of work, namely: (i) pre-field, (ii) field, and (iii) back office.
    Keywords: Transport Economics Policy&Planning,Public Sector Expenditure Policy,Banks&Banking Reform,Public Sector Economics,Debt Markets
    Date: 2011–12–01
  32. By: Ulimwengu, John; Liverpool-Tasie, Saweda; Randriamamonjy, Josee; Ramadan, Racha
    Keywords: Agricultural productivity, Consumption, Nutrients, malnutrition, production model, structural equations model (SEM),
    Date: 2011
  33. By: Mathias Kuepie (CEPS/INSTEAD, UMR DIAL IRD Université Paris Dauphine); Christophe Nordman (IRD, UMR DIAL Université Paris Dauphine)
    Abstract: (english) The aim of this study is to analyze the impact of education on labor market entry, particularly on earnings in the two largest cities of the Republic of Congo. We examine firsthand data from the 2009 Congo's Employment and Informal Sector Survey (Enquête sur l’emploi et le secteur informel au Congo - EESIC) from a representative sample of about 3000 households in the cities of Brazzaville and Pointe-Noire. Results indicate that education is relatively widespread in both cities, with an average of about ten years of schooling. This phenomenon goes back a relatively long time, since even for the over 50 generations, more than eight out of ten adults completed primary school. The labor market itself is characterized by a large informal sector (where more than six out of ten working age people have an activity), which could potentially become a poverty trap and reflects high unemployment (especially among the youth), increasing with the level of education on the market. The Congolese urban labor market is also specifically characterized by the weight of the public sector, where almost one out of three people employed in the capital (Brazzaville) and a little over one out of five for both cities are employed. Therefore, the formal private sector is reduced to its congruent proportion. Multivariate analyses of the risk of unemployment and sectoral choice confirm that young people suffer greatly from lack of professional insertion: for most of these youth, their only choice is to remain unemployed or join the informal sector. To measure the specific impact of education on entry into various segments of the labor market, particularly on activity generated earnings, we directly address issues related to sample selection (related to the endogenous distribution among sectors) and the endogeneity of the education variable in the earnings function. Another important methodological challenge relates to the definition of the functional shape of the link that exists between earnings and the number of years of schooling. In the context of this study, we propose a piecewise linear function that allows variation in the marginal return to education when graduating from one educational cycle to another. With this specification, it is possible to emphasize the convexity of education returns; in other words, the last years in secondary and tertiary schooling yield the highest returns, while those of primary education are generally lower. This convexity is also apparent in the informal sector, where education (albeit on another scale) is also an important determinant of earnings. These results point to employment and poverty alleviation policies in the Republic of Congo. Policy proposals are thus developed in that regard throughout the study. _________________________________ (français) L’objectif de cette étude est d’analyser l’impact de l’éducation sur l’insertion sur le marché du travail et en particulier sur les rémunérations dans les deux principales métropoles de la République du Congo. Nous exploitons les données de première main de l’Enquête sur l’Emploi et le Secteur Informel au Congo (EESIC) de 2009 portant sur environ 3000 ménages représentatifs des villes de Brazzaville et de Pointe-Noire. Les résultats montrent que l’éducation est relativement répandue dans les deux villes, puisque le niveau moyen tourne autour de dix années d’études. Il s’agit d’un phénomène relativement ancien, car même dans les générations de plus de 50 ans, plus de huit adultes sur dix ont achevé le cycle primaire. Quant au marché du travail, il est marqué par une hypertrophie du secteur informel (plus de six actifs sur dix y exercent), qui constitue potentiellement une trappe à pauvreté et reflète un chômage élevé (surtout chez les jeunes) et croissant avec le niveau d’étude sur le marché. Le marché du travail urbain congolais présente aussi une caractéristique spécifique qui est le poids du secteur public, qui emploie presqu’un actif sur trois dans la capitale (Brazzaville) et un peu plus d’un sur cinq dans l’ensemble des deux villes. Le secteur privé formel y est donc réduit à la portion congrue. Des analyses multivariées sur le risque de chômage et l’orientation sectorielle confirment que les jeunes sont très défavorisés en matière d’insertion professionnelle : ces jeunes n’ont, pour la plupart, que le choix entre le chômage et le secteur informel. Pour mesurer l’effet propre du capital éducatif sur l’insertion dans les différents segments du marché du travail et en particulier sur les revenus de l’activité, nous abordons de front les problèmes de sélection d’échantillon (liée à l’allocation endogène entre les secteurs) et d’endogénéité de la variable d’éducation dans la fonction de revenu. Un autre défi méthodologique important concerne la spécification de la forme fonctionnelle du lien entre rémunération et années d’éducation. Dans le cadre de cette étude, nous proposons une fonction linéaire par morceaux, qui permet au rendement marginal de l’éducation de varier quand on passe d’un cycle à l’autre. Cette spécification permet de mettre en évidence le caractère convexe des rendements de l’éducation, c'est-à-dire que les dernières années du lycée et du supérieur sont les plus rentables alors que les rendements du primaire sont généralement plus faibles. Cette convexité s’observe même dans le secteur informel dans lequel l’éducation (certes à une autre échelle) est également un important déterminant des gains. Ces résultats interpellent les politiques d’emploi et de lutte contre la pauvreté à Congo-Brazzaville. Des propositions de politiques sont ainsi développées dans ce sens tout au long de l’étude.
    Keywords: Participation au marché du travail, Chômage, Rendements de l’éducation, Fonctions de gains, Secteur informel, Congo-Brazzaville,Labor market participation, Unemployment, Returns to education, Earnings functions, Informal sector,Congo-Brazzaville.
    JEL: J24 J31 O12
    Date: 2011–10
  34. By: Arto Kovanen
    Abstract: This paper analyzes interest rate pass-through in Ghana. Time series and bank-specific data are utilized to highlight linkages between policy, wholesale market, and retail market interest rates. Our analysis shows that responses to changes in the policy interest rate are gradual in the wholesale market. Prolonged deviation in the interbank interest rate from the prime rate illustrate the challenges the Bank of Ghana faces when targeting a short-term money market interest rate. Asymmetries in the wholesale market adjustment possibly relate to monetary policy signaling, weak policy credibility, and liquidity management. In the retail market, pass-through to deposit and lending interest rates is protracted and incomplete.1
    Keywords: Banks , Central bank policy , Financial systems , Interest rates , Monetary policy ,
    Date: 2011–11–23
  35. By: Aimé Togodo Azon (Centre d'Étude de la Performance des Entreprises - HEC École de Gestion de l'Université de Liège); Didier Van Caillie (Centre d'Étude de la Performance des Entreprises - HEC École de Gestion de l'Université de Liège); François Pichault (Centre d'Étude de la Performance des Entreprises - HEC École de Gestion de l'Université de Liège)
    Abstract: La présente communication vise à tester empiriquement les facteurs qui influencent le design des systèmes de contrôle de gestion dans les collectivités locales en Afrique au Sud du Sahara. L‟analyse factorielle en correspondance multiple a permis de conclure qu‟en dehors des facteurs organisationnels habituels tels que la culture organisationnelle, la stratégie organisationnelle, la structure organisationnelle et la politique de gestion des ressources humaines, les pressions légales et institutionnelles, les pressions de la dépendance financière, les pressions ethniques et les pressions religieuses sont autant de facteurs qui déterminent le design du système de contrôle de gestion de ces organisations.
    Keywords: Collectivités locales ; Afrique au Sud du Sahara ; Design du Système de Contrôle de Gestion ; facteurs institutionnels ; facteurs socioculturels
    Date: 2011
  36. By: Clarke, George
    Abstract: It is difficult to be sure that managers in developing countries report financial information accurately and truthfully during firm surveys. The most common concern is that managers might under-report performance to avoid attracting attention from the tax authorities or corrupt bureaucrats. Using a method developed in the literature on corruption, this paper identifies managers who appear to be reticent or deceptive and compares their answers with the answers of non-reticent managers. The paper shows that reticent managers report that their firms are more, not less, productive than non-reticent managers. The paper then assesses possible reasons for this, finding that the most likely explanation is that reticent managers exaggerate performance so that they or their firms look good. Because past studies have found that reticent managers appear to lie about other aspects of firm and manager behavior—including underreporting corruption—this suggests that it will be difficult to fully assess how these behaviors affect firm performance unless reticence is controlled for.
    Keywords: Reticence; Nigeria; Firm Surveys; Corruption; Labor Productivity
    JEL: D73 C42 O12
    Date: 2011–12–11

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