nep-afr New Economics Papers
on Africa
Issue of 2015‒03‒13
ten papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Home-grown and grassroots-based strategies for determining inequality towards policy action: Rwanda.s Ubudehe approach in perspective By Ezeanya, Chika
  2. Foreign Aid and Governance in Africa By Simplice Asongu; Jacinta C. Nwachukwu
  3. Measurement of agricultural productivity in Africa south of Sahara: A spatial typology application: By Yu, Bingxin; Guo, Zhe
  4. The Impact of Software Piracy on Inclusive Human Development: Evidence from Africa By Simplice Asongu; Antonio Rodríguez Andrés
  5. China’s Strategies in Economic Diplomacy: A Survey of Updated Lessons for Africa, the West and China By Simplice Asongu; Jacinta C. Nwachukwu; Gilbert A. A. Aminkeng
  6. Rural finance and agricultural technology adoption in Ethiopia: Does institutional design matter?: By Abate, Gashaw Tadesse; Rashid, Shahidur; Borzaga, Carlos; Getnet, Kindie
  7. Beyond elite bargains: building democracy from below in Uganda By Sophie King; Sam Hickey
  8. Poverty persistence and informal risk management: Micro evidence from urban Ethiopia By Azomahou T.T.; Yitbarek E.
  9. The impact of food price volatility on consumer welfare in Cameroon By Kane, Gilles Quentin; Tene, Gwladys Laure Mabah; Ambagna, Jean Joel; Piot-lepetit, Isabelle; Sikod, Fondo
  10. Food crop diversification as a risk mitigating strategy during conflict : evidence from Cote d'Ivoire By Paul, Saumik; Shonchoy, Abu S.; Dabalen, Andrew

  1. By: Ezeanya, Chika
    Abstract: Survey-based tools for determining inequality in Africa south of the Sahara have been critiqued for being too expensive, and oftentimes unsuitable to the realities of the region. The need for a reliable alternative for determining wealth distribution, fro
    Keywords: Ubudehe, Rwanda, grassroots, home-grown, inequality measurement, African development
    Date: 2015
  2. By: Simplice Asongu (Yaoundé/Cameroun); Jacinta C. Nwachukwu (Huddersfield, HD1 3DH, UK)
    Abstract: Purpose – This paper investigates the effect of foreign aid on governance in order to extend the debates on foreign aid and to verify common positions from Moyo’s ‘Dead Aid’, Collier’s ‘Bottom Billion’ and Eubank’s ‘Somaliland’. The empirical evidence is based on updated data from 52 African countries for the period 1996-2010. Design/methodology/approach – An endogeneity robust instrumental variable Two-Stage-Least Squares empirical strategy is employed. Findings – The findings reveal that development assistance deteriorates economic (regulation quality and government effectiveness) and institutional (corruption-control and rule of law) governance, but has an insignificant effect on political (political stability, voice and accountability) governance. While, these findings are broadly in accordance with Moyo (2009) and Collier (2007) on weak governance, they neither confirm the Eubank (2012) position on political governance nor the Asongu (2012) stance on the aid-corruption nexus in his debate with Okada & Samreth (2012). Practical implications – The use of foreign aid as an instrument to influence the election and replacement of political leaders in Africa may have insignificant results. It is time to solve the second tragedy of foreign aid and that economists and policy makers start rethinking the models and theories on which foreign aid is used to influence economic, institutional and political governance in recipient countries. Originality/value – The paper extends the debate on foreign aid and institutions in Africa in the light a plethora of recent studies in the aid literature.
    Keywords: Foreign Aid; Political Economy; Development; Africa
    JEL: B20 F35 F50 O10 O55
    Date: 2014–12
  3. By: Yu, Bingxin; Guo, Zhe
    Abstract: The great diversity of agricultural activities and practices across the African continent has significant implications for technology transfer and productivity growth. This paper compiles diverse spatial data on biophysical conditions, farming systems, demographics, and infrastructure to spatially disaggregate country targets into subsystem units, namely agricultural production zones. The resulting typologies highlight the limitations of simple national aggregates and reveal remarkable heterogeneity in the subsystems within the country. The typologies provide a natural linkage between national-level analysis and localized production information and can help policymakers in refining national agricultural strategies through location- and subsystem-oriented policies based on local comparative advantages and constraints. The classification is useful in identifying commonalities beyond a country’s borders and hence encourages cross learning and joint efforts in scaling up policies.
    Keywords: productivity, Agricultural policies, Markets, Market access, Economic development, Population density, Typology, farming systems, Normalized Difference Vegetation Index (NDVI),
  4. By: Simplice Asongu (Yaoundé/Cameroun); Antonio Rodríguez Andrés (Madrid, Spain)
    Abstract: This paper examines two dimensions of the software piracy-development nexus to complement existing formal literature. It empirically assesses the incidence of piracy on the Human Development Index (HDI) and its constituents and then the instrumentality of Intellectual Property Right (IPR) treaties (laws) in the linkages. An instrumental variable or Two-stage least squares is applied on panel of 11 African countries with data for the period 2000-2010. Three main findings are established: (1) software piracy has a negative incidence on inequality adjusted human development; (2) the unappealing effect of piracy on the HDI is fuelled by per capita economic prosperity and life expectancy components of human emancipation; (3) software piracy increases literacy. Two major policy implications have been retained from the findings. Firstly, adherence to international IPRs protection treaties (laws) may not impede per capita economic prosperity and could improve life-expectancy. Secondly, adoption of tight IPRs regimes may negatively affect human development by diminishing the literacy rate and restricting diffusion of knowledge.
    Keywords: Software piracy; Human development; Intellectual property rights; Panel data, Instrumental variables
    JEL: K42 O34 O38 O47 O57
    Date: 2014–12
  5. By: Simplice Asongu (Yaoundé/Cameroun); Jacinta C. Nwachukwu (Huddersfield, HD1 3DH, UK); Gilbert A. A. Aminkeng (Yaoundé/Cameroon)
    Abstract: The Washington consensus, the hitherto dominant scheme is being encroached by the Beijing model. Many African nations are increasingly embracing this Beijing approach because the dominant Western model has failed to deliver on a number of fronts. This is increasingly evident because China’s economic diplomacy has been politely and strategically coined to achieve just that. A case study is used here to articulate the currents of the survey. The paper puts some structure on China’s economic diplomatic strategies and discusses lessons for Africa, China and the West. It contributes to existing literature by critically engaging on why it is necessary for the West to adjust the conception and definition of the Washington Consensus as a complement to the Beijing model. In order to remain relevant in the 21st century and beyond, the Washington consensus can incorporate the Moyo (2013) conjecture which postulates that, while the Beijing model is optimal in the short-run, the Washington Consensus remains the optimal long-term development model because it is more inclusive.
    Keywords: Economic relations; China; Africa
    JEL: F19 F21 O10 O19 O55
    Date: 2014–12
  6. By: Abate, Gashaw Tadesse; Rashid, Shahidur; Borzaga, Carlos; Getnet, Kindie
    Abstract: Financial cooperatives and microfinance institutions (MFIs) are the two major sources of rural finance in Ethiopia. Whereas MFIs are relatively new, financial cooperatives have existed for centuries in various forms. The coexistence of two different institutions serving the same group of people, and delivering the same financial services, raises several policy questions. Those questions have become particularly relevant, as the government has embarked on developing a new strategy for improving rural financial services delivery. This study is expected to serve as an input to that policy discussion. Using a unique household survey dataset and the propensity-score-matching technique, we examine the impacts of the two financial service providers on agricultural technology adoption. The results suggest that access to institutional finance has significant positive impacts on both the adoption and extent of technology use.
    Keywords: Finance, Agricultural technologies, technology adoption, Rural finance, Microfinance, rural areas, propensity score matching, impact analysis,
  7. By: Sophie King; Sam Hickey
    Abstract: New theories of how democratic development is likely to emerge within developing countries obscure the effects of popular agency, and of ideas, offering an incomplete view of such historical processes and exaggerating the extent to which a particular sequencing of change is required. Insights from the experiences of non-governmental and cooperative organisations in rural Uganda, an unpromising context for the flourishing of democratic development, suggest that certain strategies can achieve meaningful (if limited) forms of progress, particularly where they focus on challenging power relations, developing synergies between civil and political society, and generating ideas that reshape perceptions of subordinate groups.
    Date: 2015
  8. By: Azomahou T.T.; Yitbarek E. (UNU-MERIT)
    Abstract: Two factors that have received limited attention in poverty dynamic studies are the role of risk in causing poverty mobility and attrition bias. Controlling for the attrition bias, we study poverty dynamics in urban Ethiopia with an emphasis on the effect of idiosyncratic shocks and informal risk management strategies. We used a unique panel data spanning a decade. Our results show the adverse impact of uninsured idiosyncratic shocks on welfare. We find unemployment of household head propels households to persistent poverty. We also observe poor households using ineffective risk management strategies which have negative consequences on welfare than their non-poor counterparts. Further, we find strong poverty state dependence which is mainly driven by households heterogeneity. The overall results of our study suggest that public insurance programmes that support poor households during bad times may improve welfare by providing consumption insurance. Indeed, policies focusing on household heterogeneities such as exposure to risk, lack of education, personal skills and capacities, could have long lasting effects.
    Keywords: Personal Finance; Measurement and Analysis of Poverty; Microeconomic Analyses of Economic Development;
    JEL: D14 I32 O12
    Date: 2015
  9. By: Kane, Gilles Quentin; Tene, Gwladys Laure Mabah; Ambagna, Jean Joel; Piot-lepetit, Isabelle; Sikod, Fondo
    Abstract: The objective of this paper is to analyse the welfare effects of food price volatility on Cameroonian consumers. Using data from the third Cameroonian Household Consumption Surveys, the price elasticities are obtained from a Quadratic Almost Ideal Demand
    Keywords: price volatility, consumer welfare, Cameroon
    Date: 2015
  10. By: Paul, Saumik; Shonchoy, Abu S.; Dabalen, Andrew
    Abstract: This study examines the significance of food crop diversification as a household risk mitigating strategy to achieve "self-sufficiency" to ensure food security during the civil conflict in Cote d’Ivoire. The main motivation for seeking self-sufficiency stems from the fact that during the period of heightened tension due to conflict, the north–south divide set by the UN peacekeeping line disrupted the agricultural supply chain from the food surplus zone, Savane in the north. While we theoretically predict a positive effect on crop diversification because of interrupted food supply chain, we also consider a negative effect due to the covariate shocks. We find robust and statistically significant empirical outcomes supporting such claims. The baseline outcomes withstand a series of robustness checks. The net effect of conflict on crop diversification is positive but not statistically significant. In addition, we find that increasing vulnerability to poverty and food insecurity during conflict seems to be the underlying factors that motivate farm households to adopt such coping strategies.
    Keywords: Cote D'Ivoire, Agricultural economics, Agricultural products, Internal conflicts, Household, Conflict, Uncertainty, Agricultural production, Developing countries
    JEL: D13 D74 Q1
    Date: 2015–03

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