nep-afr New Economics Papers
on Africa
Issue of 2012‒09‒03
seventeen papers chosen by
Quentin Wodon
World Bank

  1. Growth of African Economies: Productivity, Policy Syndromes and the Importance of Institutions By Augustin Kwasi Fosu
  2. Conspicuous consumption and the distribution of income within social groups By Andreas Chai; Wolfhard Kaus
  3. Community-Based Management and Interrelations between Different Technology Adoption Decisions: Innovations in Village Poultry Farming in Western Africa By Epiphane Sodjinou; Arne Henningsen
  4. Shelter from the storm -- but disconnected from jobs : lessons from urban South Africa on the importance of coordinating housing and transport policies By Lall, Somik V.; Brink, Rogier van den; Dasgupta, Basab; Leresche, Kay Muir
  6. Input Subsidies, Cash Constraints and Timing of Input Supply:-Experimental Evidence from Malawi By Holden, Stein T.; Lunduka, Rodney
  7. Distance to market and search costs in an African maize market By Mahdi, Shireen
  8. Up in Smoke?: Agricultural Commercialization,Rising Food Prices and Stunting in Malawi By Wood, Benjamin; Nelson, Carl H.; Kilic, Talip; Murray, Siobhan
  9. Monetary policy and commodity terms of trade shocks in emerging market economies By Seedwell Hove; Albert Touna Mama; Fulbert Tchana Tchana
  10. Market structure and coherence of international cooperation: the case of the dairy sector in Malawi By Revoredo-Giha, Cesar
  11. Impact of climate related shocks on child's health in Burkina Faso By Catherine Araujo Bonjean; Stéphanie Brunelin; Catherine Simonet
  12. "Access, Sorting and Achievement: the Short-Run Effects of Free Primary Education in Kenya" By Adrienne M. Lucas; Isaac M. Mbiti
  13. Transformations on Whose Terms? Understanding the New EU-ACP Trade Relations from the Outside In By Ulrike Lorenz
  14. Analysis of efficiency in sugarcane production: the case of men and women headed households in SONY sugar out -grower zone, Rongo and Trans-Mara districts, Kenya By Nyanjong', Oyugi Johana; Lagat, Job
  15. Benefit incidence analysis, needs and demography. Measurement issues and an empirical study for Kenya By Isis Gaddis; Lionel Demery
  16. Quality contingent contracts : evidence from Tanzania's coffee market By Mahdi, Shireen
  17. Politique monétaire et croissance économique en zone cemac [une évaluation empirique en données de panel] By Fouda Ekobena, Simon Yannick

  1. By: Augustin Kwasi Fosu
    Abstract: Recent evidence from an exhaustive political-economy study of growth of African economies – the Growth Project of the African Economic Research Consortium (AERC) - suggests that ‘policy syndromes’ have substantially contributed to the generally poor growth in sub-Saharan Africa during post-independence. The current article employs the unique data and insights generated by the Growth Project to further explore the importance of a ‘syndrome-free’ (SF) regime for growth in the region by examining: (i) the channels via which SF affects growth: total factor productivity (TFP) versus factors of production; and (ii) the role of institutions in mediating this impact, with special attention accorded the efficacy of the restraint on the executive branch of government in mitigating the potentially adverse effect of ethnicity.
    Date: 2012
  2. By: Andreas Chai; Wolfhard Kaus
    Keywords: Conspicuous consumption, income distribution, signaling, status, South Africa
    JEL: J15 D83 D12 O12
    Date: 2012–02
  3. By: Epiphane Sodjinou (Institut National des Recherches Agricoles du Benin); Arne Henningsen (Institute of Food and Resource Economics, University of Copenhagen)
    Abstract: Community-based management (CBM) of village poultry aims to foster development and reduce poverty in Benin by disseminating five technologies for improving village poultry farming. We develop a theoretical model to analyze multiple technology adoption decisions that takes into account the interrelations between the technologies. Estimates from multivariate probit models indicate significant interrelations between the five adoption decisions. We show how the estimation results, and particularly the different types of marginal effects, can be utilized to deeply analyze the interrelations between adoption decisions. CBM successfully promoted the adoption of various technologies. Some adoption decisions indicate farmers’ general openness towards new technologies.
    Keywords: Community-Based Management, Technology adoption, Multivariate probit, Village poultry, Benin, West Africa
    JEL: Q12 Q16 C31 C35 O13 O14
    Date: 2012–08
  4. By: Lall, Somik V.; Brink, Rogier van den; Dasgupta, Basab; Leresche, Kay Muir
    Abstract: Informal settlements are a permanent feature of South Africa's cities. Estimates from the General Household Survey by Statistics South Africa show that more than 26 percent of all households in the country's six metropolitan areas live in informal dwellings. The government's policy efforts have focused on provision of subsidized housing, first introduced as part of the Reconstruction and Development Program. Through the lens of new urbanism and coordination in planning this paper explores the possible impact of the program using data from the General Household Survey. The analysis of the program's beneficiaries relative to non-beneficiaries does not show that public housing provision has multiplier effects in terms of complementary private investments in housing maintenance or in upgrading. This is likely because Reconstruction and Development Program housing is often far from employment centers, with the houses built in the"old"apartheid locations that are disconnected from employment centers. In addition, households do not receive title deeds and are not allowed to rent out these dwelling. On the demand side, the authors carried out a small sample survey in Cape Town and find that, on a per hectare basis, shack dwellers are paying around the same for access to land as can be found in the up-scale market for undeveloped land. However, land zoning regulations and subdivision laws do not allow supply of small plots that are compatible with the affordability of poor households.
    Keywords: Housing&Human Habitats,Urban Housing,Municipal Housing and Land,Real Estate Development,Land and Real Estate Development
    Date: 2012–08–01
  5. By: Kankwamba, Henry; Mangisoni, Julius H.; Simtowe, Franklin; Mausch, Kai; Siambi, Moses
    Abstract: The overall objective of this paper is to assess the demand for improved groundnut, bean, and soybean seed in central Malawi. Specifically, it examines how smallholder farmers respond to changes in market prices of improved legume seed. It also assesses factors that affect the decision to participate in improved seed technology transfer. Considering four commodities namely groundnuts, beans, soybeans and maize, a staple food, the paper estimates a multivariate probit and a linear approximate of the Almost Ideal Demand System (LA/AIDS) using cross section data collected by ICRISAT in 2010. Uncompensated price and expenditure elasticities are reported for the LA/AIDS model. The paper finds high own price elasticities in all four commodities considered. It also indicates that land, household size and education levels affect participation in improved technology. Cross elasticities varied across the commodities considered. As pertain expenditure elasticities, farmers would increase expenditure on improved groundnut and beans if their incomes increased. The results also reveal that if farmers’ incomes increase they would reduce soybean’s expenditure share. The results generally show that farmers are very sensitive to changes in improved legume seed prices and incomes.
    Keywords: legumes, demand, LA/AIDS, multivariate probit, Agricultural and Food Policy, Crop Production/Industries, Production Economics,
    Date: 2012
  6. By: Holden, Stein T.; Lunduka, Rodney
    Abstract: The study investigated the demand for fertilizer among rural farm households in Malawi that have been exposed to high fertilizer subsidy levels. Subsidies and cash constraints may limit their demand but their cash constraint may be less severe at harvest time than at planting time when they normally get their inputs. Three different experiments were used to assess the demand for fertilizer at harvest time and at planting time, to elicit farm gate shadow prices for fertilizer and to assess the gap between WTA and WTP prices for a standard input package The experiments demonstrated significant effects of timing and of cash constraints.
    Keywords: Malawi, input subsidies, fertilizer, cash constraints, time inconsistency, input delivery timing., Agricultural and Food Policy, Consumer/Household Economics, Crop Production/Industries, Food Security and Poverty, Institutional and Behavioral Economics, Political Economy, Q12, Q18,
    Date: 2012–08–16
  7. By: Mahdi, Shireen
    Abstract: Farm-gate buying by small itinerant buyers is the dominant mode of primary marketing in Tanzania's maize market. This paper estimates the effect of household distance to market on maize farm-gate prices, and the extent to which seasonally determined search costs can explain price variations between the lean and the harvest seasons using data from the most recent Tanzania Household Budget Survey (2007). The author observes that greater distance to market depresses farm-gate prices but that it is a relatively modest effect, and that this effect is pro-cyclical in that it is stronger during the harvest season when prices are lowest. The paper discusses the latter result with reference to search costs as an explanatory factor. It also briefly places the findings in the context of Tanzania's food security patterns, making a link between food insecurity and high search costs. The main policy conclusion is that coordinating mechanisms such as village market places (in parallel with farm-gate buying) may reduce transaction costs in rural markets.
    Keywords: Markets and Market Access,Transport Economics Policy&Planning,E-Business,Food&Beverage Industry,Access to Markets
    Date: 2012–08–01
  8. By: Wood, Benjamin; Nelson, Carl H.; Kilic, Talip; Murray, Siobhan
    Abstract: Agricultural commercialization, or the transition from food to cash crops, has gained increasing attention over the past few decades. Plans for developing world farmers to focus on labor-intensive cash crops, to exploit their natural comparative advantage, typically depend on stable food markets to supply these formerly subsistence households. The trade-off between cash and food crop production requires reevaluation in the context of numerous food price spikes and general food price increases experienced globally over the last decade. Discovery of a correlation between Malawian cash crop production and low nutritional health outcomes creates questions of the traditional development path. This paper clarifies the causal effect behind that negative relationship. A nationally representative data set and the 2002-2003 Malawian domestic food crisis allow for time-specific comparisons between the health of children in utero during stable and increasing food price markets. Identifying children exposed to in utero food shocks is the first step to explaining the recent changes in the nutritional outcomes of cash crop producers. Estimates of the effects of Malawian crop adoption on children’s health are obtained using robust inference techniques. The causal effects of cash crop production are identified by instrumenting endogenous adoption decisions with predetermined variables. The findings show children of cash crop farmers experienced disproportionately negative effects if they were in utero during the food price shock. The results support the argument that food price shocks negatively influence those more reliant on the market for food purchases, suggesting the need for targeting small scale commercial farmers during times of staple food price spikes.
    Keywords: Malawi, poverty, food prices, cash crops, tobacco, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Development, D13, I15, O13, Q16,
    Date: 2012
  9. By: Seedwell Hove; Albert Touna Mama; Fulbert Tchana Tchana
    Abstract: Commodity terms of trade shocks have continued to drive macroeconomic ‡uctuations in most emerging market economies. The volatility and persistence of these shocks have posed great challenges for monetary policy. This study employs a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model to evaluate the optimal monetary policy responses to commodity terms of trade shocks in commodity dependent emerging market economies. The model is calibrated to the South African economy. The study shows that CPI in‡ation targeting performs relatively better than exchange rate targeting and non-traded in‡ation targeting both in terms of reducing macroeconomic volatility and enhancing welfare. However, macroeconomic stabilisation comes at a cost of increased exchange rate volatility. The results suggest that the appropriate response to commodity induced exogeneous shocks is to target CPI inflation.
    Keywords: Commodity terms of trade, monetary policy; DSGE
    JEL: E52 G28
    Date: 2012
  10. By: Revoredo-Giha, Cesar
    Abstract: A supply chain in disarray can be identified not only as a barrier to growth for the agricultural sector but also as one to achieving food security in a country because it may lead to either a deficiency in food production and/or too high prices. Using the dairy sector of Malawi as an example, the purpose of this paper is to discuss the coherence between market structure and the development strategy pursued by international donors via. Within Malawi the dairy sector may be characterised as a segmented market: with both formal and informal milk markets, with smallholder producers serving both markets. The formal market includes a reducing number of processing firms operating with idle capacity and selling dairy products to an affluent segment of the urban population, whilst the informal market comprises the sale of unprocessed milk products to the less affluent urban population and also rural areas. In this context, cooperative international action, conducted through agencies from a range of countries, is targeted at improving the efficiency of the formal supply chain and also the creation of local supply chains that sell processed products directly to poor consumers. The paper discusses reasons why these two cooperation strategies, given the structure of the sector, may potentially conflict with each other, the need to address the degree of market imperfection of the formal sector and the desirability of ex-ante coordination of plans amongst donors.
    Keywords: Malawi dairy supply chain, development economics, industrial organisation., Food Security and Poverty, International Development,
    Date: 2012–08
  11. By: Catherine Araujo Bonjean (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Stéphanie Brunelin (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Catherine Simonet (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: The aim of this paper is to estimate the impact of weather related income shocks on child health in rural Burkina Faso where rain fed agriculture is the dominant production system. We combine health data originating from the 2008 household survey with meteorological data to define shocks at the child level. We first estimate the marginal effect of rainfall at various ages on the child's health in order to identify the critical period during which deprivation has the most severe consequences. Then we look for a different impact of shocks on girls and boys that would reflect a gender bias in intra household resource allocation. We also assess the household ability to smooth consumption by testing for an asymmetric effect of rainfall shocks according to their size and by testing the impact of shocks according to household endowments. Results evidence a strong relationship between rainfall shocks during the prenatal period and child health. Households are not able to dampen small but negative rainfall shocks. Unexpectedly, girls are less severely affected by shocks than boys. The robustness of results is tested by using the sibling and difference-in-differences estimators as well as placebo regressions.
    Keywords: Child health;rainfall shock;burkina faso;sibling estimator;treatment-effect model
    Date: 2012–08–24
  12. By: Adrienne M. Lucas (Department of Economics, University of Delaware); Isaac M. Mbiti (Department of Economics, Southern Methodist University)
    Abstract: We examine the impact of the Kenyan Free Primary Education program on student participation, sorting, and achievement on the primary school exit examination. Exploiting variation in pre-program dropout rates between districts, we find that the program increased the number of students who completed primary school, spurred private school entry, and increased access for students from disadvantaged backgrounds. We argue that the program was welfare enhancing as it promoted educational access without substantially reducing the test scores of students who would have been in school in the absence of the program.
    Keywords: Schooling, Free Primary Education, Kenya, Achievement
    JEL: I2 O15 H52
    Date: 2012
  13. By: Ulrike Lorenz
    Abstract: In the past ten years, the long-standing trade relations between the European Union (EU) and the African, Caribbean, and Pacific (ACP) countries have experienced radical transformations. The negotiations of the Economic Partnership Agreements (EPAs) between the EU and seven regional groupings formed by the ACP countries have led to the EU being maneuvered into an unexpectedly weak position. For the first time, European negotiators had to substantially leave their pre-agreed negotiation path and positions due to the immense pressure from ACP countries, regional organizations, and non-state actors – and still have not been able to finalize negotiations that had initially been expected to only take five years until the end of 2007.These developments constitute a two-tire puzzle: Not only could the EU not play its ‘negotiation game’ and largely determine the outcomes of negotiations, but also did the outcomes of the negotiations differ between the individual regional negotiations groups despite a single European mandate for all seven regionally conducted EPA negotiations. The paper argues that a comparative ‘outside-in perspective’ from the ACP countries’ side towards the EU is essential to understand the puzzling EPA negotiation process and its (preliminary) outcomes. More specifically, it argues that the negotiations were rather determined by regional dynamics, different negotiation structures of individual EPA configurations, and the role of regional hegemons than by the EU’s actions and positions. This perspective has so far gained little attention. Trade negotiations with the EU have largely been illustrated as a clear-cut case in most studies and it is to be questioned to what extent the EPA negotiations challenge such a scenario. The paper presents a comparative case study on the EPA negotiation groups of the Southern African Development Community (SADC) and the East African Community (EAC) from a ‘South-Eastern African perspective’.
    Keywords: regional development; pre-negotiation; regions; trade policy; international relations
    Date: 2012–06–21
  14. By: Nyanjong', Oyugi Johana; Lagat, Job
    Abstract: About one quarter of cane producers in SONY Outgrower Zone are women headed households. However, a number of studies have suggested that women in rural areas are more disadvantaged in terms of accessing education, land, credit, and extension services. If this is the case, women cane farmers would be expected to be less efficient compared to men farmers. Before this can be concluded, there was need to establish whether differences in economic efficiency between men and women headed households exist in cane growing. The objectives of the research were; to characterize men and women headed cane growing households, to evaluate the relationship between institutional factors and gender, and to determine the differences in economic efficiency between men and women managed sugarcane farms. A multi stage sampling procedure was employed to select 205 active sugarcane farmers. A dual parametric stochastic decomposition technique was employed to disaggregate the components of economic efficiency. FRONTIER 4.1 program was used to derive maximum likelihood estimates and farm level technical efficiencies. A two limit Tobit model was then used to determine the influence of selected socio-economic and institutional variables on farm level technical, allocative and economic efficiency. Results showed that men headed households had a mean technical efficiency of 67.6%, a mean allocative efficiency of 82.48% and a mean economic efficiency of 58.0%. Women headed households had a mean technical efficiency of 72.0%, a mean allocative efficiency of 83.15% and a mean economic efficiency of 62.5%. Land under sugarcane cultivation was the single most important contributor to farmers’ efficiency. Women managed farms were on average more technically, allocative and economically efficient than men managed farms. Membership to outgrower associations in addition to encouraging increase in human capital will be important in enhancing farmers’ efficiency.
    Keywords: efficiency; Kenya; sugarcane productivity; stochastic frontier functions
    JEL: O13 O12
    Date: 2012–06–13
  15. By: Isis Gaddis (Georg-August-University Göttingen); Lionel Demery
    Abstract: Benefit incidence analysis is an extremely popular tool to assess the distribution of benefits from government expenditure in developing countries, particularly in the social sectors. The analysis describes the welfare impact of public spending on groups of people or households, typically along the income distribution. While benefit incidence analysis has generated useful insights into the distribution of benefits from public spending in a variety of sectors, many studies fail to take into account differences in needs for public services across population groups. This can lead to an inappropriate and potentially misleading assessment of equity in public spending. This article reviews the evidence and introduces techniques to account better for heterogeneous needs in benefit incidence analysis. Using the example of an empirical benefit incidence study of education expenditure in Kenya, we show that our understanding of the distributional implications of public spending is greatly improved if we account for demographic differences between population groups.
    Keywords: Benefit incidence; public spending; education; demography; population-normalization; stochastic dominance; Kenya
    JEL: D3 I2 I3 H4
    Date: 2012–08–21
  16. By: Mahdi, Shireen
    Abstract: The literature on product quality in markets where product attributes are not readily observable indicates that information asymmetries and incentive problems may lead to the under-provision of quality. This paper contributes to this literature by estimating the effects of village-level contractual arrangements on producer incomes and on quality enhancing production practices. Three contract types are studied: spot contracts, contingent contracts with product grading and contingent contracts without product grading. To do this, the study uses original data from a survey of 450 coffee producers in Tanzania's coffee market that take advantage of contractual variation in the Kilimanjaro region. The results indicate that coffee contracts that include village-based product grading have a large positive effect on producer incomes, and that the grading effect is associated with production practices that enhance quality. The results also indicate that cooperative membership has no significant effect on producer incomes.
    Keywords: Crops&Crop Management Systems,Debt Markets,Markets and Market Access,Labor Policies,E-Business
    Date: 2012–08–01
  17. By: Fouda Ekobena, Simon Yannick
    Abstract: The economic literature emphasizes the existence of a debate having milked with the impact of the monetary policy on the economic activity. At the beginning of the years 1990, the monetary policy of the countries of the CEMAC knew significant reforms which aimed at conferring to him of advantage of flexibility and effectiveness. This study attempts to determine the impact of the monetary policy on the economic growth in CEMAC region. In order to take account of individual and temporal specificities phenomena of growth, we use a panel model to estimate the equation of growth of the CEMAC region under the 1986-2006’s period. Generally, results show that the monetary policy centred on the role played by the nominal aggregates of money and credit negatively influences the economic growth in CEMAC region, which is against the assumption formulated at the beginning, one also notes that inflation has a negative effect on the economic growth. These results emphasize the need for maintaining a framework macroeconomic stable to profit from the positive externalities inherent in the impacts of the monetary policy as well as the concomitant installation of mechanisms of correction of the harmful effects coming from these policies.
    Keywords: monetary policy; economic growth; inflation; panel data; externality; CEMAC
    JEL: E58 C23 E52 C33
    Date: 2012–08–25

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