nep-afr New Economics Papers
on Africa
Issue of 2012‒07‒29
fifteen papers chosen by
Quentin Wodon
World Bank

  1. Factors Determining FDI in Nigeria: Role of Emerging Economies By Dinda, Soumyananda
  2. Africa and Global Economic Trends Quarterly Review - Second Quarter 2012 By AfDB
  3. Volatile Capital Flows and a Route to Financial Crisis in South Africa By McKenzie, Rex; Pons-Vignon, Nicolas
  4. Poverty & Privilege: Primary School Inequality in South Africa By Nicholas Spaull
  5. Economic policy, does It help life expectancy? an african evidence of the role of economic policy on longevity. By Ojeaga, Paul
  6. Pro-Poor Policies in Sudan and South Sudan A Study Based on the National Baseline Household Survey of 2009 By David SAHN; Stephen YOUNGER
  7. Who Benefits from Customary Justice? Rent-seeking, Bribery and Criminality in Sub-Saharan Africa By Olivier STERCK; Olivia D’AOUST
  8. Agriculture and trade opportunities for Tanzania : past volatility and future climate change By Ahmed , Syud Amer; Diffenbaugh, Noah S.; Hertel, Thomas W.; Martin, William J.
  9. Effectiveness of Large Scale Water and Sanitation Interventions: the One Million Initiative in Mozambique By Chris Elbers; Samuel Godfrey; Jan Willem Gunning; Matteus van der Velden; Melinda Vigh
  10. More fair play in an ultimatum game after resettlement in Zimbabwe: A field experiment and a structural model By Kohler, Stefan
  11. Food security in African and Arab countries: a review of the topic and some suggestions for building composite indicators with Principal Components Analysis By Ernest Reig
  12. The Spread of Manufacturing to the Periphery 1870-2007: Eight Stylized Facts By Bénétrix, Agustín; O'Rourke, Kevin H.; Williamson, Jeffrey G
  13. Does poverty trap rural Malagasy households? By Frédéric Gaspart; Anne-Claire Thomas
  14. On-the-Job Learning and Earnings: Comparative Evidence from Morocco and Senegal By Nordman, Christophe Jalil; Wolff, François-Charles
  15. Pertinence de la dévaluation du Franc CFA de janvier 1994 : une évaluation par le taux de change réel d'équilibre. Cas de l'économie camerounaise By Jamal BOUOIYOUR; Oscar KUIKEU

  1. By: Dinda, Soumyananda
    Abstract: This paper investigates the determinants of FDI in Nigeria, which is poor in terms of income but rich in natural resources. This study is an extension of our earlier work (Dinda 2012). Incorporating emerging trade partners of Nigeria in VECM this paper re-examine the factors determining FDI inflow to Nigeria in this globalized era. The economic activity of the emerging trade partners may be good proxy for exogenous factors to Nigerian economic activity. Considering per capita income of trading partners as proxy for their economic activities are incorporated as exogenous variables in this study. Findings clearly ensure that FDI inflow to Nigeria is resource-seeking FDI and market size has no role that contradicts our earlier result and also the existing literature. Short run dynamics as well as causal linkage are also completely different from our earlier paper. China is emerging as a strong trade partner of Nigeria and significantly influences its natural resource outflow while South Africa raises its competitiveness.
    Keywords: FDI; Natural resource export; exchange rate; openness; inflation rate; VECM; Emerging economy; Nigeria; China; South Africa
    JEL: Q32 C32 C13 F12 O13 F21 Q43
    Date: 2012–07–18
  2. By: AfDB
    Date: 2012–07–13
  3. By: McKenzie, Rex; Pons-Vignon, Nicolas
    Abstract: Abstract This is a review article; its purpose is to support a debate on the use of the best available economic theory and evidence in monetary policy in contemporary South Africa. In order to do so, I contrast South Africa's laissez-faire management of capital flows with the experience of other countries where the authorities have opted to use capital control techniques of one type or another. The empirical evidence is fairly substantial, capital control techniques can play a useful part in staving off fragility and financial crisis in the event of sharp surges in capital flows. The key idea is that capital control techniques would offer the authorities more freedom and flexibility in the management of capital flows and the pursuit of monetary policy. The article follows on from Mohammed (2010) who concludes that South African policy makers have not yet learned the relevant lessons stemming from their neoliberal embrace. This article takes up that theme and uses macroeconomic data to show that without capital controls South Africa courts a financial crisis that can be transmitted via any one of at least three channels.
    Keywords: monetary policy; capital flows; capital controls
    JEL: E52 E44
    Date: 2012–02
  4. By: Nicholas Spaull (Department of Economics, University of Stellenbosch)
    Abstract: Although racial segregation has been abolished for 18 years now, schools which served predominantly White students under apartheid remain functional, while those which served Black students remain dysfunctional and unable to impart the necessary numeracy and literacy skills students should be acquiring by this level. The present study provides an overview of this dualistic nature of the primary education system in South Africa, with special attention paid to the bimodality of student performance. It argues that there are in fact two different education systems in South Africa and thus two different data-generating processes. These two sub-systems can be seen when splitting student performance by former-department, language, or socioeconomic status. The implications of such a dualistic schooling system are also elucidated, with special emphasis on government reporting and econometric modeling. The recently released SACMEQ III dataset is used for the econometric modeling. The study finds that when modeling student performance separately for the wealthiest 25% of schools on the one hand, and the poorest 75% of schools on the other, there are stark differences in the factors influencing student performance which are large and statistically significant. Only 5 of the 27 factors are shared between the two models for mathematics, and 11 of the 29 factors for reading. This suggests a bifurcated system where the process which converts inputs into outputs is fundamentally different for each sub-system. Ultimately the paper has two logical conclusions: 1) Observing averages in South African education is uniquely misleading and overestimates the educational achievement of the majority of students, and 2) Modeling a single schooling system when there are in fact two school systems can lead to spurious results and misleading policy conclusions.
    Keywords: Primary schooling; South Africa; SACMEQ; educational inequality, student performance
    JEL: I20 I21 I28
    Date: 2012
  5. By: Ojeaga, Paul
    Abstract: This paper evaluates some factors that affect longevity in Africa, with the aim of offering an insight on how government economic policy and consumption spending affect the lives of people in developing countries. Government economic policy was found to be contributing in a negative manner to life expectancy in the countries in our sample. It was also found that apathy between the civil service (the embodiment of institutions) and political office holders to be the greatest stumbling block against the success of governmental economic policy, this creates a hole in institutions since they remain the pipe through which revenue is disbursed and policies are implemented for the general good of the populace. After interacting institution with economic policy economic policy had significant effect on life expectancy it was likely that institutions were either circumvented or ignored, leading to possible short comings on the overall effect that government economic policy would have had on life expectancy.
    Keywords: Corruption; life expectancy; economic policy; institutions; government spending
    JEL: I18 H5 I38 I28
    Date: 2012–07–20
  6. By: David SAHN (Centre d'Etudes et de Recherches sur le Développement International); Stephen YOUNGER
    Abstract: Pro-Poor Policies in Sudan and South Sudan A Study Based on the National Baseline Household Survey of 2009
    Date: 2012
  7. By: Olivier STERCK (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Olivia D’AOUST (UNIVERSITE LIBRE DE BRUXELLES, ECARES)
    Abstract: In many Sub-Saharan countries, customary and statutory judicial systems co-exist. Customary justice is exercised by clan leaders or local courts, and based on restorative principles. By contrast, statutory justice is mostly retributive and administered by magistrates’ courts. As the jurisdiction of the customary and the statutory systems often overlap, victims can choose which judicial system to refer to, which may lead to contradictions between rules and inconsistencies in judgments. In this essay, we construct a model representing a dual judicial system. We show that the overlap of competence encourages rent-seeking and bribery, and yields to high rates of petty crimes and civil disputes. We recommend the subsidization of the statutory judicial system, as it efficiently improves deterrence and incapacitation in the dual judicial system while minimizing corruption of customary judges. We illustrate our theoretical predictions by discussing the functioning of the Ugandan dual judicial system.
    Keywords: Custom, Justice, Criminal Behavior, Informal Institutions
    JEL: K40 O17 D70
    Date: 2012–07–06
  8. By: Ahmed , Syud Amer; Diffenbaugh, Noah S.; Hertel, Thomas W.; Martin, William J.
    Abstract: Given global heterogeneity in climate-induced agricultural variability, Tanzania has the potential to substantially increase its maize exports to other countries. If global maize production is lower than usual due to supply shocks in major exporting regions, Tanzania may be able to export more maize at higher prices, even if it also experiences below-trend productivity. Diverse destinations for exports can allow for enhanced trading opportunities when negative supply shocks affect the partners'usual import sources. Future climate predictions suggest that some of Tanzania's trading partners will experience severe dry conditions that may reduce agricultural production in years when Tanzania is only mildly affected. Tanzania could thus export grain to countries as climate change increases the likelihood of severe precipitation deficits in other countries while simultaneously decreasing the likelihood of severe precipitation deficits in Tanzania. Trade restrictions, like export bans, prevent Tanzania from taking advantage of these opportunities, foregoing significant economic benefits.
    Keywords: Climate Change Economics,Economic Theory&Research,Climate Change Mitigation and Green House Gases,Science of Climate Change,Trade Policy
    Date: 2012–07–01
  9. By: Chris Elbers (VU University Amsterdam); Samuel Godfrey (UNICEF Mozambique); Jan Willem Gunning (VU University Amsterdam); Matteus van der Velden (UNICEF Mozambique); Melinda Vigh (VU University Amsterdam)
    Abstract: The One Million Initiative aims to give one million people in rural Mozambique access to clean drinking water and adequate sanitation by constructing new water points and providing sanitation training. We use panel survey data for 1600 households to analyze the health impact of the Initiative. The paper moves beyond a black box evaluation by analyzing the contribution of various channels through which the interventions affected health. To our knowledge this is the first rigorous evaluation of such a large scale program in the water and sanitation sector. We find that the water point intervention had a sizeable impact on the use of improved water sources and on the health of young children (up to 3 years), while the sanitation training had a strong impact on latrine ownership and on the health of both adults and older children.
    Keywords: impact evaluation; water and sanitation programs; health impact
    JEL: I15 I18 I38
    Date: 2012–07–17
  10. By: Kohler, Stefan
    Abstract: Zimbabwean villagers of distinct background have resettled in government organized land reforms for more than three decades. Against this backdrop, I assess the level of social cohesion in some of the newly established communities by estimating average preferences for fairness in a structural model of bounded rationality. The estimations are based on behavioral data from an ultimatum game field experiment played by 234 randomly selected households in six traditional and 14 resettled villages almost two decades after resettlement. In two out of three distinct resettlement schemes studied, the resettled villagers exhibit significantly higher degrees of fairness ($p ≤ 0.11$) and rationality ($p ≤ 0.04$) than those who live in traditional villages. Overall, villagers are similarly rational ($p = 0.30$) but the attitude toward fairness is significantly stronger in resettled communities ($p ≤ 0.01$). These findings are consistent with the idea of a raised need for cooperation required in recommencement.
    Keywords: Africa; behavioral economics; inequality aversion; land reform; impact evaluation; social change; social development; social preferences; structural estimation; quantal response model
    JEL: D03 Q15 C93
    Date: 2012–07–24
  11. By: Ernest Reig (University of Valencia)
    Abstract: This paper is concerned with the issue of food security, placing special emphasis on the current situation of Arab and African countries. The main conceptual aspects of food security are briefly reviewed, pointing to the shift from a former focus on food energy availability to a more comprehensive appraisal of this phenomenon in recent times. The most likely causes of recent rises in food prices are also described. Food security issues are analysed in connection with rural poverty issues and with the failure to achieve successful agricultural development in some developing countries, which sometimes have to overcome strong restrictions concerning the availability of land and water resources for food production. The paper points to the convenience of using multivariate statistical tools to summarise a wealth of food security-related indicators, and a practical example of the use of Principal Components Analysis (PCA) for data concerning 52 African and Middle East countries is provided, with a dataset originally comprising 13 variables. The PCA methodology is described in a non-mathematical fashion, also showing the basic steps in its application to this case. Two basic composite indicators, or ‘principal components’ are selected, one in connection with ‘human development’ and the other with ‘being at risk of hunger’, and countries in the sample are ranked according to their situation with regards to these dimensions.
    Keywords: food security, agricultural development, Arab countries, Principal Components Analysis
    Date: 2012–07
  12. By: Bénétrix, Agustín; O'Rourke, Kevin H.; Williamson, Jeffrey G
    Abstract: This paper documents industrial output growth around the poor periphery (Latin America, the European periphery, the Middle East and North Africa, Asia, and sub-Saharan Africa) between 1870 and 2007. We provide answers to the following questions: When and where did rapid industrial growth begin in the periphery? When and where did peripheral growth rates exceed those in the industrial core? When was the high-point of peripheral industrial growth? When and where did it become widespread? When was the high-point of peripheral convergence on the core? How variable was the growth experience between countries? And how persistent was peripheral industrial growth?
    Keywords: history; Third World industrialization
    JEL: F1 N7 O2
    Date: 2012–07
  13. By: Frédéric Gaspart (UMR 225 DIAL, IRD, Université Paris Dauphine, Earth and Life Institute, Université catholique de Louvain); Anne-Claire Thomas (UMR 225 DIAL, IRD, Université Paris Dauphine, Earth and Life Institute, Université catholique de Louvain)
    Abstract: (english) This paper studies the determinants of poverty dynamics in several rural areas from Madagascar. A particular attention is devoted to testing if rural poverty persistence in Madagascar could be explained by a vicious circle leading to a poverty trap. Annual poverty transitions retrieved from an original household panel data survey covering the 1996-2006 periods show that differences in household and environment characteristics are clearly associated with di¤erences in poverty transitions probabilities. Poverty-vulnerable households have higher dependency ratio and are less educated. They also show different income-generating activities pattern. They cultivate less market-oriented crops and have more vulnerable activities such as agricultural wage work. A Markovian poverty transition model is used to evaluate the role of past poverty in this situation. Past poverty is allowed to have both an intercept and a slope effect on poverty transitions probabilities. Our results show that a substantial share of the di¤erences in household poverty transitions probabilities is attributable to past poverty status. These results encourage the development of social protection to prevent households to fall into a poverty trap as well as speciffic measures to encourage paths out of poverty traps. _________________________________ (français) Cet article étudie les déterminants de la dynamique de la pauvreté dans plusieurs zones rurales de Madagascar. Une attention particulière est portée à l’identification d’un éventuel effet délétère de la pauvreté passée sur la pauvreté future pouvant conduire à un cercle vicieux de perpétuation de la pauvreté. Le papier se base sur l’étude des transitions annuelles sur et sous le seuil de pauvreté observées sur un panel de ménages ruraux malgaches entre 1996 et 2006. Un modèle markovien est utilisé pour évaluer le rôle des caractéristiques des ménages, de l’environnement et de la pauvreté passée dans la probabilité de passer sur ou sous le seuil de pauvreté. Les résultats montrent que certaines caractéristiques des ménages et de l'environnement sont clairement associées à différences dans les probabilités de transitions sur et sous le seuil de pauvreté. En particulier, les ménages vulnérables à la pauvreté ont un rapport de dépendance plus élevé, sont moins éduqués et ont une composition de revenus différentes. Ils sont notamment moins orientés vers les cultures agricoles et plus orientés vers des activités précaires comme le salariat agricole. Un effet délétère de la pauvreté passée sur le risque d’être pauvre dans le futur est également mis en évidence. Il passe à la fois par un effet de pente et un effet de niveau. Ces résultats soulignent la nécessite de mettre en place des politiques spécifiques contre la vulnérabilité à la pauvreté, d’une part, et contre la pauvreté de long terme d’ autre part.
    Keywords: Poverty dynamics, state dependence, panel data, rural Madagascar, Dynamique de la pauvreté, données longitudinales, Madagascar.
    JEL: C01 C33 C34 O12
    Date: 2012–07
  14. By: Nordman, Christophe Jalil (IRD, DIAL, Paris); Wolff, François-Charles (University of Nantes)
    Abstract: In this paper, we consider a model of on-the-job learning where workers learn informally by watching and imitating colleagues. We estimate the rate of knowledge diffusion inside the firm using two matched worker-firm data sets from Morocco and Senegal. We rely on non-linear least squares to estimate the structural parameters of the informal learning model and account for firm heterogeneity using firm factors derived from a principal component analysis. We find that the rate of knowledge diffusion is around 7 percent in Morocco and Senegal, but part of the learning-by-watching returns stems from firm heterogeneity. Informal training significantly affects the shape of returns to tenure in these two countries. Finally, we estimate an extended model with both learning-by-watching and learning-by-doing and find significant benefits from imitating colleagues in Morocco.
    Keywords: earnings functions, informal training, learning-by-watching, learning-by-doing, returns to tenure, Morocco, Senegal
    JEL: J24 J31 O12
    Date: 2012–07
  15. By: Jamal BOUOIYOUR; Oscar KUIKEU
    Abstract: Pertinence de la dévaluation du Franc CFA de janvier 1994 : une évaluation par le taux de change réel d'équilibre. Cas de l'économie camerounaise
    Date: 2012–07

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