nep-afr New Economics Papers
on Africa
Issue of 2014‒03‒08
nine papers chosen by

  1. Can Intra-Regional Trade Act as a Global Shock Absorber in Africa? By Mthuli Ncube; Zuzana Brixiova; Qingwei Meng
  2. The effect of schooling on worker productivity: evidence from a South African industry panel By Rulof P. Burger; Francis J. Teal
  3. Effect of Conflict on Dietary Energy Supply: Evidence from Cote d'Ivoire By Andrew L. Dabalen; Saumik Paul
  4. The Real Exchange Rate, Foreign Aid and Macroeconomic Transmission Mechanisms in Tanzania and Ghana By Katarina Juselius; Abdulaziz Reshid; Finn Tarp
  5. Gender Differences in Agricultural Productivity: The Role of Market Imperfections By Palacios-López, Amparo; López, Ramon E.
  6. The dynamics of returns to education in Uganda: National and subnational trends By Jesus Crespo Cuaresma; Anna Raggl
  7. Working Paper 196 - Uses and Abuses of Per-diems in Africa- A Political Economy of Travel Allowances By Guy Nkamleu; Guy Nkamleu; Bernadette Dia Kamgnia
  8. Do property rights and contract farming matter for rural development? Evidence from a large-scale investment in Ghana By Susanne Väth; Michael Kirk
  9. Peer effects in development programme awareness of vulnerable groups in rural Tanzania By Bet Caeyers

  1. By: Mthuli Ncube; Zuzana Brixiova; Qingwei Meng
    Abstract: The global financial crisis has reiterated the need for Africa to build resilience to global output shocks. In this paper we examine empirically the role of intra-regional and intra-African trade linkages in being an absorber of the global output shocks in two African regional economic communities. We find that deeper intra-regional and intra-African trade ties have helped the East African Community (EAC) absorb the global output shocks. In contrast, the Southern Africa Custom Union (SACU) region has been less able to cope with global output shocks partly due to weaker regional integration. Intra-regional and intra-African trade with fast-growing economies, together with geographically diversified trade links, can strengthen the capacity to absorb global shocks.
    Keywords: Intra-regional trade; output co-movement; regional economic communities, Africa
    JEL: E32 F42 F15 C53
    Date: 2014–02–01
  2. By: Rulof P. Burger; Francis J. Teal
    Abstract: Schooling is typically found to be highly correlated with individual earnings in African countries. However, African firm or sector level studies have failed to identify a similarly strong effect for average worker schooling levels on productivity. This has been interpreted as evidence that schooling does not increase productivity levels, but may also indicate that the schooling effect cannot be identified when using a schooling measure with limited variation. Using a novel South African industry-level dataset that spans a longer period than typical firm-level panels, this paper identifies a large and significant schooling effect. This result is highly robust across different estimators that allow for correlated industry effects, measurement error, heterogeneous production technologies and cross-sectional dependence.
    Keywords: Returns to schooling, human capital, labour demand, panel data econometrics, South Africa
    JEL: J24 D24 C23
    Date: 2014
  3. By: Andrew L. Dabalen; Saumik Paul
    Abstract: In this paper we estimate the causal effects of conflict on dietary energy supply in Côte d’Ivoire. To identify the true impact of conflict, we use prewar and post-war household data bracketing the conflict period and the spatial variation in the prevalence of conflict between the North and South regions. Our second identification strategy uses the specific counts of conflict events across departments. For our third identification strategy, we employ self-reported victimization indicators at the individual level. Combining data from household surveys (Households Living Standards Surveys) and the conflict database (ACLED), we find robust and statistically significant evidence of households in the worst-hit conflict areas and individuals who are the direct victims of the conflict having lower dietary energy supply. The propensity score matching estimates do not alter the main findings. Other robustness checks including firstly, subsamples of households with children and secondly, alternative estimation of conflict intensity provide mixed but encouraging evidence that supports the impact of conflict on food security. JEL Classifications: I20, I3, D12, C40, H43, O15
    Keywords: Conflict, Food security, Nutrition, Evaluation, Africa
  4. By: Katarina Juselius (Department of Economics, Copenhagen University); Abdulaziz Reshid (Linnaeus University); Finn Tarp (Department of Economics, Copenhagen University)
    Abstract: A recent study of 36 Sub Saharan African countries found a positive impact of aid in the absolute majority of these countries. However, for Tanzania and Ghana, two major aid recipients, aid did not seem to have been equally beneficial. This paper singles out these two countries for a more detailed empirical investigation. The focus is now on the effect of aid when allowing external and nominal factors to play a role in the macroeconomic transmission mechanism. We conclude that aid played a significantly positive - but very different - role in the two countries. Due in part to generous aid inflows Tanzania experienced positive investment and GDP growth from the late 1960s to 2007. But, until the mid-1980s, the impact of aid on growth was well below its potential as the large inflows of aid facilitated a serious over-appreciation of the real exchange rate. In Ghana, declining aid in the 1970s was associated with lacking growth while the reactivation of aid flows in the 1980s supported an economic rebound. When monetary and external factors are properly accounted for, we find that aid has been pivotal to growth in both real GDP and investment.
    Date: 2014–01
  5. By: Palacios-López, Amparo; López, Ramon E.
    Abstract: This paper shows the implications of credit and labor market imperfections on gender differences in agricultural labor productivity, especially highlighting how both imperfections negatively affect female productivity by discouraging off-farm income generating activities and restricting access to inputs. The paper theoretically models the relationship between gender differences in agricultural labor productivity and market imperfections and it provides empirical evidence consistent with our theoretical model by decomposing the contribution of different factors to such gender differences. We find that agricultural labor productivity is on average 44 percent lower on plots belonging to female-headed households than on those belonging to male-headed households.
    Keywords: Gender, Agriculture, Productivity, Decomposition Methods, Sub-Saharan Africa, Malawi, International Development, Labor and Human Capital, Productivity Analysis, C21, J16, Q12,
    Date: 2014–02
  6. By: Jesus Crespo Cuaresma (Department of Economics, Vienna University of Economics and Business); Anna Raggl (Department of Economics, Vienna University of Economics and Business)
    Abstract: We assess empirically the changes in returns to education at the subnational level in Uganda using the Uganda National Household Surveys for 2002/2003 and 2005/2006. Our results indicate that average returns to schooling tended to converge across regions in the last decade. The overall trend in convergence of returns to schooling took place at all levels of educational attainment and this behaviour in returns to education is mostly driven by the dynamics of returns to schooling in urban areas. We analyse subnational convergence in returns to education and unveil deviant dynamics in Northern Uganda. We discuss the potential challenges to inclusive economic growth in Uganda which are implied by our results.
    Keywords: Human capital, returns to education, regions, Uganda
    JEL: J24 R23 O55
    Date: 2014–02
  7. By: Guy Nkamleu (International Institute of tropical Agriculture); Guy Nkamleu; Bernadette Dia Kamgnia
    Abstract: An increasing amount of publicspending in Africa is allocated toper-diems as acore instrument ofthe incentive structure. These aremainly given to provide financialincentives to employees in order toincrease their motivation to attendmeetingsor travel for workmissions. Anecdotal as well assystematic evidence from manycountries and projects suggeststhat abuse of per-diemsisbecomingtherule rather thantheexception;whichdistorts the impact ofdevelopment efforts. At a time whenthe efficiency and effectiveness ofpublic spending features high onthe political and developmentagendas, improving the efficiency ofthe management of per-diems couldhaveamajor impact on publicfinances andonattainment ofdevelopment goals. Unfortunatelythis topic has been largelyunexplored and little has beenwritten on the subject. Thispaperexamines the political economy ofper-diems in the African context. Itrevisits the conception of per-diemson the continent, scans the extent towhich per-diems are used andabused, and proposes a conceptualframework that could help tomodelingthe mechanism throughwhich the per-diems paymentinfluences motivations andbehaviors.The paper argues that although perdiems are in many cases justifiedpayment, the current practices aremoving from being part of thesolution to becoming part of theproblem. The analysis illustrateshow the possibilities of earning per-diems negatively influencesprojects and programs design,management decisions, and howemployees spend their time. Allthese have a powerful distortingimpact on development efforts.We propose a conceptualframework which demonstrates thelimits of per-diems as a motivationalfactor for travel missions and drawsimplications for economic theoryand policy. The framework showshow intrinsic motivation is partiallydestroyed when large per-diems arepaid. As the amount of per-diemincreases, the incentive ofintrinsically motivated individualsdecreases while the incentive ofextrinsically motivated onesincreases; explaining for examplewhy paying high per-diem rates fora meeting will increase theprobability of having inappropriatepeople attending. Where publicspirit prevails (intrinsic motivation),using large per-diems incentives toincrease motivation to attendmeeting/workshop comes at ahigher price than suggested bystandard economic theory. That isespecially the case as suchincentives tend to crowd out themost suitable participants. Thepaper concludes by warning againstgeneralized use of per-diems asmotivational factor, and exploresalternatives for a more efficient per-diemssystem.
    Date: 2014–02–27
  8. By: Susanne Väth (University of Marburg); Michael Kirk (University of Marburg)
    Abstract: With the rising demand for agricultural land, land deals must be designed to benefit not only the investors but also the local population. This paper looks at two ways this might be done for farmers in the vicinity of a large-scale oil palm investment in Ghana: contract farming and secure property rights to land. We compare farmers to whom outgrower contracts were allocated, in a quasi-natural experiment, with independent oil palm growers. We find that property rights have a significantly positive effect on households’ agricultural income, profit per acre, and perceived future security, but that while contract farming has a significantly positive effect on households’ aggregated assets and perceived future security, its effect on agricultural income and profit per acre is significantly negative because of effort substitution, since outgrowers have a higher probability of engaging in non-farm business. The identified effects are highly significant and supported by robustness checks. We conclude that large-scale investment need not be to the disadvantage of the local population if it respects existing bundles of property rights and may be beneficial for those who participate in contract farming.
    Keywords: Contract farming; Property rights; Large-scale land investment; Quasi-natural experiment; Oil palm; Ghana
    JEL: D60 O17 Q13
    Date: 2014
  9. By: Bet Caeyers
    Abstract: A pre-condition for grassroots participation, key for community-based development success, is widespread programme knowledge among the eligible population. The current literature on local participatory institutions mainly focuses on village meetings and media campaigns as a means to strengthen community awareness. The role played by social interactions in this process has received little attention to date. In this paper I use Manski’s (1993) standard linear-in-means model to estimate endogenous peer effects on the awareness of vulnerable groups on Tanzania Social Action Fund II (TASAF II), i.e. Tanzania’s flagship community-driven development programme. I employ a popular 2SLS estimation strategy developed by Bramouille et al. (2009) and De Giorgi et al. (2010) on a unique spatial household dataset from Tanzania to eliminate both the ‘reflection bias’ (Manski, 1993) and the ‘exclusion bias’ (Caeyers, 2014). Denoting the geographically nearest neighbours set as the relevant peer group in this context, I identify significant average and heterogeneous endogenous social interaction effects in the diffusion of information about TASAF II. The findings of this paper inform the design of effective sensitisation campaigns.
    Date: 2014

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