nep-afr New Economics Papers
on Africa
Issue of 2015‒02‒16
nine papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Can Adoption of Improved Maize Varieties Help Smallholder Farmers Adapt to Drought? Evidence from Malawi By Holden , Stein; Fischer, Monica
  2. On the efficiency of public health expenditure in Sub-Saharan Africa: Does corruption and quality of public institutions matter? By Novignon, Jacob
  3. ETHNIC FRACTIONALIZATION,GOVERNANCE AND LOAN DEFAULTS IN AFRICA: By Svetlana Adrianova; Badi H. Baltagi; Panicos Demetriades; David Fielding
  4. What works for young people's development? A Case Study of BRAC's Empowerment and Livelihoods for Adolescent Girls programme in Uganda and Tanzania By Nicola Banks
  5. Alternatives to network neutrality: A South African perspective By Potgieter, Petrus H.
  6. The Future in Mind: Aspirations and Forward-Looking Behaviour in Rural Ethiopia By Stefan Dercon; Tanguy Bernard; Kate Orkin; Alemayehu Seyoum Taffesse
  7. Employment Creation, Poverty and the Structure of the Job Market in Nigeria By Francis Teal
  8. From Rebellion to Electoral Violence Evidence from Burundi By Olivier Sterck; Andrea Colombo; Olivia D'Aoust
  9. Agriculture in African Development: A Review of Theories and Strategies By Stefan Dercon; Douglas Gollin

  1. By: Holden , Stein (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Fischer, Monica (International Maize and Wheat Improvement Center – Ethiopia)
    Abstract: This study used a three-year panel dataset for 350 Malawian farm households to examine the potential for widespread adoption of drought tolerant (DT) maize varieties, a technology that holds considerable promise for helping smallholder farmers in SSA adapt to drought risk. Regression results revealed that DT maize cultivation increased substantially from 2006 to 2012, with the main driver being the Malawi Farm Input Subsidy Program. Some other key factors related to adoption were having recently experienced drought and farmer risk aversion. As far as yield performance, improved maize varieties performed significantly better than local maize during the 2011/12 drought year. However, DT maize did not perform significantly better than other improved maize varieties used in Malawi, which is in contradiction to results from on-station and on-farm trials (e.g., Magorokosho et al. 2010; Setimela et al., 2012). A plausible explanation is that farmers had inadequate training or experience to move towards the yield potentials of the DT maize varieties. Expansion of agricultural extension activities may be required to help farmers achieve the DT maize yield potentials and, subsequently, improve farmer resilience to drought.
    Keywords: Improved maize varieties; drought; drought tolerance; input subsidies; maize yields; agricultural adaptation; risk aversion
    JEL: Q12 Q18
    Date: 2015–02–04
  2. By: Novignon, Jacob
    Abstract: Health expenditure in Sub-Saharan Africa (SSA) has improved over the years with several recent efforts to improve resource commitments to the health sector. Health outcomes in the region have, however, seen little improvements over the years. Several reasons, including the efficiency of health expenditure, have been given to justify this mismatch. Studies on health expenditure efficiency have mainly focused on developed regions with little attention to SSA. The objective of the study was, therefore, to examine The effects of corruption and public institution quality on efficiency. The efficiency of health expenditure was also compared across selected SSA countries. Data for the study was sourced from the World Bank's World Development Indicators for 45 countries covering the period 2005 to 2011. The two-stage Data Envelopment Analysis (DEA) was employed for the analysis. The first stage computes efficiency scores while the second stage examines the determinants of efficiency using the Tobit model. Per capita health expenditure was used as input while infant, under-five mortality and crude death rates were used as outputs. The results show that health expenditure efficiency was low with average scores of approximately 0.5. This suggests that there exist significant potential for SSA countries to improve population health outcomes given the level of expenditure. There was significant variation across countries with Cape Verde, Eritrea and Mauritius among the efficient countries while Equatorial Guinea, Sierra Leone and Swaziland were relatively inefficient. High corruption and poor public sector institutions reduced health expenditure efficiency. The findings emphasize the fact that, while increased health spending is necessary, it is also important to ensure efficiency in resource use across SSA countries. This can be achieved by effective monitoring and evaluation programmes that ensure reduced corruption and improved public institutions.
    Keywords: Health expenditure efficiency, Tobit model, DEA, SSA, Corruption, Public institutions
    JEL: H51 I10 I18
    Date: 2015–02–04
  3. By: Svetlana Adrianova (University of Leicester); Badi H. Baltagi (Syracuse University and University of Leicester); Panicos Demetriades (University of Leicester); David Fielding (Department of Economics, University of Otago, New Zealand)
    Abstract: We present a theoretical model of moral hazard and adverse selection in an imperfectly competitive loans market that is suitable for application to Africa. The model allows for variation in both the level of contract enforcement (depending on the quality of governance) and the degree of market segmentation (depending on the level of ethnic fractionalization). The model predicts a specific form of non-linearity in the effects of these variables on the loan default rate. Empirical analysis using African panel data for 111 individual banks in 29 countries over 2000-2008 provides strong evidence for these predictions. Our results have important implications for the conditions under which policy reform will enhance financial development.
    Keywords: Ethnic fractionalization, Governance, Financial development, African Banks, Panel data
    JEL: G21 O16
    Date: 2014–10
  4. By: Nicola Banks
    Abstract: Abstract On the record of poverty and inequality in India over the last thirty or so years, the general scholarly view seems to be that there have been substantial declines in money-metric poverty, that there has been no significant over-time increase in inequality, and that the growth in per capita consumption expenditure has not been marked by any discernible evidence of non-inclusiveness. It is argued in this paper that inferences of this nature are largely a consequence of the particular approaches to the measurement of poverty, inequality and inclusiveness that have been generally adopted in the literature. Alternative, and arguably more plausible, protocols of measurement suggest a picture of money-metric deprivation and disparity in India which shares little in common with the product of received wisdom on the subject.
    Date: 2014
  5. By: Potgieter, Petrus H.
    Abstract: The debate on network neutrality over the past decade has evolved (in the academic sphere but not so much in public) to include sophisticated considerations of the welfare enhancing or reducing effects of mandating network neutrality. For example, in a model by Economides and Hermalin (2012) it can be shown mathematically that among what they term the \feasible discrimination schemes," it will be the case that network neutrality is welfare enhancing. Other authors, often by looking at the European market, have argued against ex ante regulation of network neutrality Crocioni (2011) and have pointed out other dangers inherent in the mandating of network neutrality Yoo (2005). The issue is in the public eye and has, at the time of writing, lead to occasional (\Save our Internet!") street protests in various places. Similarly to Bauer and Obar (2014), this paper suggests a mix of policies and interventions might be the most appropriate way of addressing the concerns raised by activists and industry analysts in the discussion of discrimination on the last-mile network. Our preference is for an approach that can be easily understood by consumers; allows for relatively simple welfare and competition enhancing regulation and allows for the greatest possible degree of freedom for service providers to invest and to pursue their commercial interests.
    Date: 2014
  6. By: Stefan Dercon; Tanguy Bernard; Kate Orkin; Alemayehu Seyoum Taffesse
    Abstract: Poor people often do not make investments, even when returns are high.  One possible explanation is that they have low aspirations and form mental models which ignore some options for investment.  This paper reports on findings of an innovative experiment to test this in rural Ethiopia.  Firstly, individuals were randomly invited to watch documentaries about people from similar communities who had succeeded in agriculture or small business, without help from government or NGOs.  A placebo group watched an Ethiopian entertainment programme and a control group were simply surveyed.  Secondly, the number of invitees was varied by village to assess the impotance of peer effects in the formation of aspirations.  Six months after the screening of the documentaries, aspirations had improved among treated individuals but did not change in the placebo or control groups.  Effects were larger for those with higher aspirations at baseline.  We also find evidence of treatment effects on savings and credit behaviour, children's school enrolment and investments in children's schooling, suggesting that changes in aspirations can translate into changes in forward-looking behaviour.  There are also positive treatment effects on a set of related measures from psychology and sociology, including a measure of locus of control, which theory predicts should behave in similar ways to aspirations.  We also find that peer effects result in further impact on educational spending and induce more work and less leisure.  That a one-house documentary shown six months earlier induces such actual behaviour change offers challenging and promising areas for further research and the design of poverty-related interventions.
    Keywords: aspirations, expectations, future-oriented behaviour, media interventions
    JEL: D03 I31
    Date: 2014–04–22
  7. By: Francis Teal
    Abstract: Job creation is a central part of the policy of almost all African countries.  The problems are particularly acute in Nigeria where over the period of the early 2000s there was a substantial decline in the number of private wage jobs.  While policy discussion focuses on the extent of unemployment the unemployment rate, as measured in labour force surveys, is low in Nigeria.  This is a common finding across a range of sub-Saharan African countries.  To understand the nature of the employment problem it is argued in this paper that jobs need to be linked to the incomes those jobs generate.  While wage jobs do, on average, produce more income than those in self-employment a critical issue is the extent of the distribution of incomes within occupational categories and the overlaps across these sectors.  It is the very low incomes we observe in Nigeria at the bottom of the distribution, for both wage and the self-employed, that creates high exit rates from the labour market - the jobs simply pay too little.  In this paper the evidence is reviewed as to how far the more rapid growth of recent years has translated into poverty reduction and how these poverty measures link to job creation.  There is evidence that the headcount measure of poverty has fallen and has been associaed with a rapid rise in rural employment over the period from 1999 to 2006.  It is this sector which has seen the largest increases in income.  This was not due to investment in human capital, the return for which has fallen over the period, but to a general increase in the returns to the labour and land owned by the poor.
    Date: 2014–04–28
  8. By: Olivier Sterck; Andrea Colombo; Olivia D'Aoust
    Abstract: We aim at understanding the triggers of electoral violence, which spoiled 80% of elections in Africa during the last decades.  We focus on Burundi, a country which experienced polls in 2010, only a few months after the end of a long-lasting civil war.  Our results suggest that higher polarization between ex-rebels' groups increases the risk of electoral violence at the municipal level.  However, neither ethnic or political cleavages significantly determine such electoral malpractices.  These results are robust to numerous specifications.  We threfore argue that policies supporting the transition of ex-rebel groups from warfare to the political arena should be reinforced.
    Keywords: Civil war, Electoral violence, Polarization, Demobilization, Burundi
    Date: 2014–05–02
  9. By: Stefan Dercon; Douglas Gollin
    Abstract: Agriculture is the largest sector in most sub-Saharan economies in terms of employment, and it plays an important role in supplying food and export earnings.  Rural poverty rates remain high, and labor productivity is strikingly low.  This paper asks how these factors shape the role of agriculture in African development strategies.  Is agricultural growth a prerequisite for growth in other sectors?  Or will urbanization and non-agricultural export markets ultimately be the forces that pull the rural economy into higher productivity?  We argue that agricultural development strategies will vary widely because of heterogeneity across and within countries.
    Keywords: economic growth, structural transformation, sub-Saharan Africa, rural development
    JEL: O10 O13 O55 O1 O18
    Date: 2014–06–04

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