AGOA rules: The intended and unintended consequences of special fabric provisions
Lawrence Edwards, Robert Z. Lawrence, 20 November 2013
Preferential import policies that allow developing markets to export to advanced economies are intended to dynamically promote development rather than just provide basic gains from trade. This column argues that the Africa Growth and Opportunities Act achieves the latter but not the former, distorting incentives along the value-added chain. While beneficial, preferential trade deals are not a panacea and are certainly not a replacement for pro-development policies.
The US and EU often claim credit for granting duty-free quota-free access to products from the least developed countries. Such preferential treatment is of interest not only because it might provide one-time benefits in the form of higher incomes and increased employment, but also because trade is often associated with dynamic benefits that lead to faster growth and development.
Topics: Development, International trade
Tags: Africa, development, quotas, tariffs
Imran Rasul, Daniel Rogger, 19 November 2013
Around the world, civil service reform is viewed as necessary to deliver public services effectively and to foster development. However, evidence is thin on how the management of bureaucrats affects the provision of public services. This column presents new evidence from Nigeria linking completion rates of government projects to bureaucractic management practices. Greater autonomy is associated with higher completion rates, whereas performance monitoring and incentive schemes seem to backfire. The most effective private-sector management practices may not be suited to public sector bureaucracies.
Since its inception in the 1850s, the British Civil Service has become a cornerstone of the executive branch of the UK government, translating the policy programme of the government into practice.
Topics: Development, Institutions and economics, Politics and economics
Tags: Africa, bureaucracy, civil service, incentives, Management, monitoring, Nigeria
Democracy in Africa
Thorvaldur Gylfason, 17 November 2013
Based on statistical measures of different degrees of democracy vs. autocracy, this article briefly reviews the progress of democracy around the world during the past 212 years, and places democratic developments in Africa since 1960 in that context. Democracy is positively associated with education, which in turn is associated with lower fertility and greater longevity. Democracy is also associated with reduced corruption. Together, these effects suggest democracy should be good for growth – a hypothesis that is borne out by the data.
A man’s admiration for absolute government is proportionate to the contempt he feels for those around him.
― Alexis de Tocqueville
Until the second half of the 19th century, there were so few democratic states around the world that they could be counted on the fingers of one hand.
Topics: Development, Economic history, Politics and economics
Tags: Africa, anocracy, autocracy, Corruption, democracy, education, fertility, growth, life expectancy
African polygamy: Past and present
James Fenske, 9 November 2013
Several theories link polygamy to poverty. Polygamy is concentrated in west Africa and has declined in recent decades. Geographic variation in women’s agricultural productivity does not predict differences in the prevalence of polygamy, but historical inequality and exposure to the slave trade do. Although contemporary female education does not reduce polygamy, areas with more educational investment in the past have less polygamy today. Conflict and lower rainfall lead to small increases in polygamy, whereas lower child mortality leads to a large decrease. National policies appear to have little effect.
Polygamy and poverty are both widespread in sub-Saharan Africa.1 Several arguments have been made suggesting this correlation is causal.
Topics: Development, Economic history, Poverty and income inequality
Tags: Africa, fertility, growth, polygamy, Poverty, slave trade
National institutions and subnational development in Africa
Stelios Michalopoulos, Elias Papaioannou, 11 October 2013
During the ‘Scramble for Africa,’ the arbitrary design of colonial borders partitioned many ethnicities across two or more contemporary African states. This column presents recent research that exploits this quasi-experiment to study the effect of institutions on development. The overall effect of institutions is insignificant; but this masks considerable heterogeneity driven by diminishing government influence in remote areas. These findings conflict with previous cross-country work in economics, but support arguments put forward by the African historiography.
Few issues have received more inquiry in the social sciences than "what are the fundamental determinants of comparative development?" The institutional view asserts that the ultimate causes of underdevelopment are poorly performing institutional structures, such as lack of constraints on the executive, poor property-rights protection, as well as inefficient legal and court systems (s
Topics: Development, Economic history, Institutions and economics
Tags: Africa, Culture, institutions, politics and economics
Who benefits from aid for trade?
Philipp Hühne, Birgit Meyer, Peter Nunnenkamp, 31 July 2013
One of the few areas where multilateral trade talks are making progress is the so-called Aid-for-Trade Initiative designed to remove frictional barriers to trade such as in transportation, communication and energy infrastructure. This column discusses research suggesting that both donors and recipients benefit from the aid. Aid-for-Trade, however, seems to best promote the exports of middle-income countries rather than, for instance, sub-Saharan African ones.
Donors are widely believed to use aid as a means to foster their own commercial interest (e.g., Berthélemy 2006, Hoeffler and Outram 2011).
Topics: Development, International trade
Tags: Africa, aid, East Asia, Latin America
Climate, ecosystem resilience, and the slave trade
James Fenske, Namrata Kala, 11 June 2013
The slave trade continues to shape modern Africa. This column analyzes environmental shocks to the supply side of the trans-Atlantic slave trade and their long-term effects. During warm periods, African ports exported fewer slaves because lower agricultural productivity raised slavers' costs. These temperature fluctuations had long-run impacts, and ports that experienced a warmer period during the decades when the slave trade was most active appear more developed today.
The slave trade is important if we want to understand Africa’s modern development. Higher participation in the trade is associated with worse modern economic outcomes, including lower GDP per capita, lower trust, and greater ethnic fractionalisation (Nunn 2008; Nunn and Wantchekon 2011; Whatley and Gillezeau 2011).
Topics: Development, Frontiers of economic research
Tags: Africa, slave trade
Why reforms fail: Political-economy forces and agriculture in Africa
M. Ataman Aksoy, Bernard Hoekman, 15 May 2013
Increasing agricultural productivity and expanding the agribusiness industry in sub-Saharan Africa is critical for poverty reduction, food security and economic growth. Numerous recent national, regional and G20-level programmes have been initiated to that effect. This column discusses new research showing that political economy forces have a major bearing on the success or failure of agricultural reform programmes. To be successful, policymakers must bear in mind the extent to which existing elites are affected by the redistribution associated with increasing returns for rural producers.
There are many hypotheses on why some nations fail and others become successful (see Acemoglu and Robinson 2012). While the debate rages on, an area of agreement is that the strength of institutions and their ability to adjust to shocks is an important factor.
Tags: Africa, growth
Are education policies reaching the marginalised in Africa?
Maria Kuecken, Marie-Anne Valfort, 9 March 2013
Are African education policies reaching the marginalised? This column reports results from a cross-country analysis, finding that the sharing of textbooks has a positive effect only for the most privileged students. For the average student, textbook access has no impact on academic outcomes. Indeed, less privileged students perform poorly due to a combination of low parent and teacher expectation, poor health, and routine classroom disruptions. It is these factors that reduce the effectiveness of policies like the improvement of access to textbooks. For education to be truly for all, educational reforms must target the least privileged students.
Do policies to improve educational quality perpetuate the marginalisation of children with low socioeconomic status in African schools? New research provides an answer: it reveals that these policies have no impact on academic achievement, the exception being for students with the highest socioeconomic standing.
Topics: Development, Education
Tags: Africa, Inequality, schools
Alberto Alesina, Stelios Michalopoulos, Elias Papaioannou, 4 February 2013
A large body of research has shown ethnic diversity to have a negative impact on development. This column suggests that it is the unequal concentration of wealth across ethnic lines that is detrimental for development rather than diversity per se. It shows that ethnic inequality, measured using ethno-linguistic maps and satellite images of light density at night, is associated with lower GDP per capita, worse living conditions, and lower levels of education.
Rising inequality is increasingly a concern – spurred on by the Occupy Wall Street movement and the recent evidence. The idea that inequality spurs conflict leading to under-development dates back at least to Thomas Hobbes and Karl Marx.
Tags: Africa, ethnic inequality, satellite images