nep-afr New Economics Papers
on Africa
Issue of 2013‒10‒11
fourteen papers chosen by
Quentin Wodon
World Bank

  1. Sub-Saharan African Cotton Policies in Retrospect By Claire Delpeuch; Antoine Leblois
  2. African Development,Partnership and Rationality Challenge:An Exposition By NWAOBI, GODWIN
  3. Testing the foreign aid-led growth hypothesis in West Africa By Jones, Yakama Manty
  4. Transportation Choices and the Value of Statistical Life By Gianmarco León; Edward Miguel
  5. Industrial policy in the African context By Stiglitz, Joseph; Lin, Justin; Monga, Celestin; Patel, Ebrahim
  6. Addressing household air pollution : a case study in rural Madagascar By Dasgupta, Susmita; Martin, Paul; Samad, Hussain A.
  7. BASIC effect on global climate governance. Power changes and regime shifts By Pierre Berthaud; Tancrède Voituriez
  8. Africa's macroeconomic story By Hostland, Douglas; Giugale, Marcelo M.
  9. Development at the border : policies and national integration in Cote d'Ivoire and its neighbors By Cogneau, Denis; Mesple-Somps, Sandrine; Spielvogel, Gilles
  10. Ethiopia Public Sector Reform Approach : Building the Developmental State - A Review and Assessment of the Ethiopian Approach to Public Sector Reform By World Bank
  11. Investing abroad from the bottom of the productivity ladder – BRICS multinationals in Europe By Sanfilippo , Marco
  12. Weather-index drought insurance : an ex ante evaluation for millet growers in Niger By Antoine Leblois; Philippe Quirion
  13. Civil conflict and firm performance : evidence from Cote d'Ivoire By Klapper, Leora; Richmond, Christine; Tran, Trang
  14. Uganda Economic Update, August 2013 : Special Focus - Jobs, Key to Prosperity By World Bank

  1. By: Claire Delpeuch (IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris - Institut d'Études Politiques [IEP] - Paris - PRES Sorbonne Paris Cité - Fondation Nationale des Sciences Politiques [FNSP]); Antoine Leblois (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales [EHESS] - École des Ponts ParisTech (ENPC) - AgroParisTech)
    Abstract: Calls for liberalizing cash crop sectors in sub-saharan Africa have been voiced for decades. Yet, the impact of reforms remains elusive in empirical studies. This paper offers new opportunities to solve this problem by creating precise and consistent market organisation indices for 25 African cotton markets from 1961 to 2008. The aggregation of scores reveals interesting trends : markets are not more competitive today than in the late 1990s, 50% of production still originates from markets with fixed prices and reforms are giving rise to a new type of regulated markets with mixed ownership both in East and West Africa.
    Date: 2013–09–30
    Abstract: Since 1950s, most African nations have gained independence from their colonial powers. Fortunately, independence has brought many changes to these nations and these include multi-party democratic government and western education systems. Unfortunately, the Africa’s economy is the least developed of any continent after Antarctica. Yet, Africa is rich in natural resources and part of its economic base is the export of this wealth. With ethnic ties that often cross national boundaries and continual political upheavals, African national identity is not as strong as racial ties. However, every functioning social system is based on a consensus of values among its members while every society is at every point subject to processes of change that is ubiquitous. Thus, certain regularities of individual’s feelings, thoughts and predispositions to act towards some aspect of this environment are imperative. This paper therefore argues that GOD has created man and African society cannot develop together unless faithful leaders are in command to give effective direction and unity of purpose. Again, a renewed global partnership will require a new spirit from the national leaders as well as many other citizens to adopt new mindsets and change their behavior positively. Indeed, these changes will not happen overnight but with righteousness, it is possible for Africa prosperity to emerge in the 21st century.
    Keywords: character, psychology, personality, religion, Africa, leadership, spirituality, God, development, irrationality, partnership, finance, righteousness, society, family, citizenship, institutions, poverty, transformation, immorality, ethics, norms, values, behavior, attitudes, deliverance, prayers, wisdom, church, growth, conscience
    JEL: A12 A13 A14 C91 C92 D02 D63 H80 O19 O43 Z10 Z11 Z12 Z13 Z18 Z19
    Date: 2013–10–05
  3. By: Jones, Yakama Manty
    Abstract: This paper assesses the foreign aid-led growth hypothesis in a panel of West African countries using panel cointegration techniques ( Pendroni Residual Cointegration Test, Error Correction Model, Johansen Fisher Panel Cointegration Test) and then on a country-by-country basis using time series cointegration techniques (Engle-Granger test, Error Correction Model , Johansen system cointegration test). The panel cointegration results indicate a long run relationship between aid and growth in the whole panel. For the individual countries, at least one test showed evidence of this long run relationship. Granger causality tests were done for the whole panel and then for each country individually to establish direction of causality between foreign aid and economic growth. There is evidence of unidirectional causality from foreign aid to economic growth, from economic growth to foreign aid and there are cases where both variables are independent. A simplified variation of the Chenery and Strout Two-Gap Model was estimated to test the impact of foreign aid and selected explanatory variables on economic growth in countries where aid was found to granger cause growth and this impact varied from country to country.
    Keywords: Foreign Aid, Growth, Error Correction Model, Johansen Panel Cointegration Test, Engle-Granger test, Granger causality
    JEL: E6 O1 O19
    Date: 2013–04
  4. By: Gianmarco León; Edward Miguel
    Abstract: This paper exploits an unusual transportation setting to estimate the value of a statistical life (VSL). We estimate the trade-offs individuals are willing to make between mortality risk and cost as they travel to and from the international airport in Sierra Leone (which is separated from the capital Freetown by a body of water). Travelers choose from among multiple transport options – namely, ferry, helicopter, hovercraft, and water taxi. The setting and original dataset allow us to address some typical omitted variable concerns in order to generate some of the first revealed preference VSL estimates from Africa. The data also allows us to compare VSL estimates for travelers from 56 countries, including 20 African and 36 non -African countries, all facing the same choice situation. The average VSL estimate for African travelers in the sample is US$577,000 compared to US$924,000 for non-Africans. Individual characteristics, particularly job earnings, can largely account for the difference between Africans and non-Africans ; Africans in the sample typically earn somewhat less. There is little evidence that individual VSL estimates are driven by a lack of information, predicted life expectancy, or cultural norms around risk-taking or fatalism. The data implies an income elasticity of the VSL of 1.77. These revealed preference VSL estimates from a developing country fill an important gap in the existing literature, and can be used for a variety of public policy purposes, including in current debates within Sierra Leone regarding the desirability of constructing new transportation infrastructure.
    Keywords: value of statistical life, risk taking behavior, Africa, Sierra Leone
    JEL: J17 O18
    Date: 2013–09
  5. By: Stiglitz, Joseph; Lin, Justin; Monga, Celestin; Patel, Ebrahim
    Abstract: After long suffering from benign neglect if not outright contempt, industrial policy is almost fashionable again. The global financial and economic crisis known as the Great Recession has forced researchers and policy makers to confront the reality that market forces alone generally do not lead to (constrained) Pareto-efficient outcomes. Many important national and global policy objectives (equality of opportunity for all citizens, financial stability and inclusion, environmental protection and pollution control, etc.) are simply often not reflected in market prices and not achieved by markets on their own. In addition to traditional justification for industrial policies -- dealing with externalities and coordination issues—economists and policy makers now acknowledge the need to foster learning at the level of each economic agent and throughout society and the ultimate responsibility that the state must bear in that crucial process. But converting the now widely accepted theoretical principles of industrial policy into practical frameworks for concrete government action is indeed a daunting task everywhere and perhaps more so in the African context where the institutional underpinnings of effective government are often not as strong as one might have hoped. This essay highlights the intellectual foundations and broad principles of good industrial policy, outlines the contours of the policy agenda, and fleshes out the lessons learned. It argues that there has been substantial progress on the understanding and acceptance of industrial policy and that Africa could benefit enormously from it and from the unprecedented new opportunities brought to light by a multipolar world.
    Keywords: Environmental Economics&Policies,Population Policies,Climate Change Economics,Economic Theory&Research,Public Sector Corruption&Anticorruption Measures
    Date: 2013–10–01
  6. By: Dasgupta, Susmita; Martin, Paul; Samad, Hussain A.
    Abstract: Household air pollution is the second leading cause of disease in Madagascar, where more than 99 percent of households rely on solid biomass, such as charcoal, wood, and crop waste, as the main cooking fuel. Only a limited number of studies have looked at the emissions and health consequences of cook stoves in Africa. This paper summarizes an initiative to monitor household air pollution in two towns in Madagascar, with a stratified sample of 154 and 184 households. Concentrations of fine particulate matter and carbon monoxide in each kitchen were monitored three times using UCB Particle Monitors and GasBadge Pro Single Gas Monitors. The average concentrations of both pollutants significantly exceeded World Health Organization guidelines for indoor exposure. A fixed-effect panel regression analysis was conducted to investigate the effects of various factors, including fuel (charcoal, wood, and ethanol), stove (traditional and improved ethanol), kitchen size, ventilation, building materials, and ambient environment. Judging by its effect on fine particulate matter and carbon monoxide, ethanol is significantly cleaner than biomass fuels and, for both pollutants, a larger kitchen significantly improves the quality of household air. Compared with traditional charcoal stoves, improved charcoal stoves were found to have no significant impact on air quality, but the improved wood stove with a chimney was effective in reducing concentrations of carbon monoxide in the kitchen, as was ventilation.
    Keywords: Renewable Energy,Climate Change Mitigation and Green House Gases,Energy Production and Transportation,Energy and Poverty Alleviation,Health Monitoring&Evaluation
    Date: 2013–09–01
  7. By: Pierre Berthaud (CREG - Centre de recherche en économie de Grenoble - Université Pierre-Mendès-France - Grenoble II : EA4625); Tancrède Voituriez (MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR99 - Institut de recherche pour le développement [IRD] - IAMM - Institut national de la recherche agronomique (INRA) : UR1110)
    Abstract: In this paper we address the issue of the indeterminacy of climate change negotiations and examine the role played by the BASIC countries (Brazil, South Africa, India and China) in this indeterminacy. Mobilising the analytical tools of international political economy (IPE), we show that changes in the distribution of power over the last 20 years explain the indeterminacy of negotiation outcomes far more than changes in political preferences, which have remained fairly stable.
    Keywords: climate change ; sustainable development ; international political economy ; international negotiation ; South Africa ; Brazil ; China ; India
    Date: 2013–07–09
  8. By: Hostland, Douglas; Giugale, Marcelo M.
    Abstract: Much of Sub-Saharan Africa's post-independence macroeconomic history has been characterized by boom-bust cycles. Growth accelerations have been common, but short lived. Weak policy formulation and implementation led to large external and fiscal imbalances, excessive debt accumulation, volatile inflation, and sharp exchange rate fluctuations. This characterization changed, however, in the mid-1990s, when debt relief and better macroeconomic policy began to provide a source of stability that has helped sustain robust growth throughout much of the region. In resource rich countries, the process was supported over the past few years by a dramatic increase in commodity prices. But resources are only one part of the story. Growth has exhibited impressive resilience even in the face of negative external shocks, as in 2008-2009. While the short-term outlook remains positive, over the medium term policy makers face new challenges. Several countries have the potential to greatly expand natural resource production and become major commodity exporters; volatile resource revenue will complicate their fiscal and monetary planning. Rising investor appetite for financial assets of frontier markets and the development of domestic debt markets will continue to broaden the menu of and trade-offs among financing options at a time when global interest rates may start sloping upward. Complex financing arrangements -- notably for private-public or public-public partnerships in infrastructure -- will become more common and will generate new types of fiscal commitments and contingencies.
    Keywords: Debt Markets,Currencies and Exchange Rates,Emerging Markets,Economic Theory&Research,Environmental Economics&Policies
    Date: 2013–10–01
  9. By: Cogneau, Denis; Mesple-Somps, Sandrine; Spielvogel, Gilles
    Abstract: Regression discontinuity designs applied to a set of household surveys from the 1980-90s allow to examine whether Cote d'Ivoire's aggregate wealth was translated at the borders of neighboring countries. At the border of Ghana and at the end of the 1980s, large discontinuities are detected for consumption, child stunting, and access to electricity and safe water. Border discontinuities in consumption can be explained by differences in cash crop policies (cocoa and coffee). When these policies converged in the 1990s, the only differences that persisted were those in rural facilities. In the North, cash crop (cotton) income again made a difference for consumption and nutrition (the case of Mali). On the one hand, large differences in welfare can hold at the borders dividing African countries despite their assumed porosity. On the other hand, border discontinuities seem to reflect the impact of reversible public policies rather than intangible institutional traits.
    Keywords: Economic Theory&Research,Regional Economic Development,Climate Change Economics,Emerging Markets,Population Policies
    Date: 2013–09–01
  10. By: World Bank
    Keywords: Public Sector Corruption and Anticorruption Measures Public Sector Expenditure Policy Public Sector Economics Governance - National Governance Governance - Governance Indicators Public Sector Development
    Date: 2013–08
  11. By: Sanfilippo , Marco (BOFIT)
    Abstract: This paper analyses differences in total factor productivity and other competitiveness indicators of emerging multinationals (EMNEs) from Brazil, Russia, India, China and South Africa (BRICS) against their counterparts from developed countries and domestic MNEs. The current literature suggests that early internationalisation strategies by EMNEs are characterised by a lack of experience in diverse economic and cultural contexts and are explicitly driven by asset-exploration strategies. If true, this should translate into significant differences in performance, especially when they invest in developed countries. Based on a large database on foreign affiliates in Europe, results find EMNEs at the bottom of the productivity ladder, with a productivity gap around 20-30 percentage points compared to more established competitors. Moreover, the paper points to high heterogeneity among EMNEs that affects their relative performance according to their current levels of productivity or to differences in their sectorial and geographic patterns.
    Keywords: emerging market multinationals; total factor productivity; foreign direct investment
    JEL: F21 F23
    Date: 2013–10–02
  12. By: Antoine Leblois (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales [EHESS] - École des Ponts ParisTech (ENPC) - AgroParisTech); Philippe Quirion (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales [EHESS] - École des Ponts ParisTech (ENPC) - AgroParisTech)
    Abstract: In the Sudano-Sahelian region, which includes South Niger, the inter-annual variability of the rainy season is high and irrigation is scarce. As a consequence, bad rainy seasons have a massive impact on crop yield and regularly entail food crises. Traditional insurances based on crop damage assessment are not available because of asymmetric information and high transaction costs compared to the value of production. We assess the risk mitigation capacity of an alternative form of insurance which has been implemented in India since 2003 : insurance based on a weather index. We compare the capacity of various weather indices to increase utility of a representative risk-averse farmer. We show the importance of using plot-level yield data rather than village averages, which bias results. We also illustrate the need for out-of-sample estimations in order to avoid overfitting. Even with the appropriate index and assuming a substantial risk aversion, we find a limited gain of implementing insurance, roughly corresponding to, or slightly exceeding, the cost of implementing such insurances observed in India. However, when we treat separately the plots with and without fertilizers, we show that the benefit of insurance is higher in the former case. This suggests that insurances may increase the use of risk-increasing inputs like fertilizers and improved cultivars, hence average yields, which are very low in the region.
    Date: 2013–09–30
  13. By: Klapper, Leora; Richmond, Christine; Tran, Trang
    Abstract: This paper investigates the impact of political instability and civil conflict on firms. It studies the unrest in Cote d'Ivoire that began in 2000, using a census of all registered firms for the years 1998-2003. The analysis uses structural estimates of the production function and exploits spatial variations in conflict intensity to derive the cost of conflict on firms in terms of productivity loss. The results indicate that the conflict led to an average 16-23 percent drop in firm total factor productivity and the decline is 5-10 percentage points larger for firms that are owned by or employing foreigners. These results are consistent with anecdotal evidence of increasing violent attacks and looting of foreigners and their businesses during the conflict. The results suggest increases in operating costs is a possible channel driving this impact. Finally, the paper investigates whether firms responded by hiring fewer foreign workers and finds evidence supporting this hypothesis.
    Keywords: Economic Theory&Research,Labor Policies,Microfinance,E-Business,Post Conflict Reconstruction
    Date: 2013–10–01
  14. By: World Bank
    Keywords: Finance and Financial Sector Development - Debt Markets Banks and Banking Reform Economic Theory and Research Environmental Economics and Policies Public Sector Expenditure Analysis and Management
    Date: 2013–08

This nep-afr issue is ©2013 by Quentin Wodon. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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