A Two-Step Econometric Estimation of Covariates of Side Selling: The Case of Coffee Cooperatives in Southwest Ethiopia

Despite their apparent economic benefit to smallholder farmers, cooperatives are vulnerable to the problem of side selling. Using cross-sectional household data and Cragg’s regression model, we identified the determinants of side selling by coffee cooperative farmers in southwest Ethiopia. The bootstrapping technique was applied to extract average partial effects from the model coefficients. Certified, elder and educated farmers who have off-farm income and trust in the cooperative leadership have been found to side-sell significantly less. Nonetheless, cooperative group size and late payment favoured more side selling. Based on these findings, possible interventions are highlighted for improving cooperative members’ commitment and the performance of coffee cooperatives in the region.     

Meat lottery: a spectacle in transition from Ethiopia to Israel

ABSTRACT

Meat is a key idiom in the lives of the Ethiopian Jews, both private and collective. This paper focuses on meat lottery as a unique praxis in Ethiopia and in the move of the Beta Israel (Ethiopian Jews) community, from Ethiopia to Israel. Based on ethnographic fieldwork, the egalitarian divide of meat to be consumed by all partners and its accompanied lottery ritual is described and analyzed, directing the gaze to its socio-cultural and symbolic meanings. Beyond the mitigating aspects of the lottery from a social perspective, i.e. circumventing potential rivalries in the distribution of the meat of a single animal among several partners, it is connected at heart with the notions of sacrifice and transformation.     

Growth and Chronic Poverty: Evidence from Rural Communities in Ethiopia

This article employs a computable general equilibrium model for Sandinista Nicaragua to argue that a foreign exchange constrained economy does not necessarily fall prey to the inflation‐devaluation‐inflation vicious cycle characteristic of more mature Keynesian economies. It is seen that when the economy is shocked by a devaluation, prices do not rise proportionately. Output increases and the distribution of income can actually improve. These results support Sandinista policy of raising wages along with devaluation, a policy widely criticised as counterproductive. When the model is structured to account for the combined effects of Sandinista policies, however, including rising government expenditure and multiple effective exchange rates, a host of macroeconomic problems experienced by the regime arise. Stagflation sets in, income distribution deteriorates and the incentives for export production seriously diminish.     

Decentralization and initiative: TVA returns to its roots

The Tennessee Valley Authority, a federal corporation established by Congress in 1933, is charged with the integrated regional development of the Tennessee Valley's resources, including flood control, navigation, reforestation and proper use of marginal lands, electricity generation, and agricultural and economic development. TVA's early leaders, especially David E. Lilienthal and Gordon R. Clapp, articulated a doctrine of “grass roots democracy” and “decentralization” that protected TVA from rival federal bureaucracies and provided greater flexibility and freedom in carrying out TVA's multi-purpose mission. This doctrine also led to innovations in the professionalization of TVA' s highly skilled and diverse workforce. Clapp, a recognized leader in public administration, promoted employee initiative, easy access to top management, multi-disciplinary teamwork, labor/management collaboration, and partnerships with states and localities that took account of local needs and values. The development of joint cooperative councils and conferences, along with other initiatives, were visible manifestations of this “democratic method of administration.”

In the aftermath of Clapp's chairmanship that ended in 1954, TVA placed principal emphasis on expanding its electric power system and moved to a more traditional bureaucratic structure of tight control, accountability, and discipline. The crisis of survival that developed in the 1980s had its roots in a growing isolation, rigidity, and decline of professional excellence that was an outgrowth of this new bureaucracy. The current TVA chairman, Marvin T. Runyon, is leading a recovery effort to restore TVA's competitiveness. This effort recalls the vision and values of “grass roots democracy” and “decentralization” espoused by Clapp and Lilienthal. Although coming to TVA with no prior experience in the public sector, Runyon's emphasis on customer service and satisfaction, quality products, teamwork, creative problem solving, employee empowerment, and being “the best” recalls the professionalism and professionalization of the public administrators who led TVA in its early years.     

The Fiscal Effects of Aid in Ethiopia: Evidence from CVAR Applications

ABSTRACT

This article explores the fiscal effects of aid in Ethiopia using the Cointegrated Vector Auto-Regressive (CVAR) methodology to model complex long-run and short-run dynamics. We use national data for 1961–2010, including a measure of aid capturing flows through the budget as measured by the recipient. The data suggests three main conclusions on the long-run equilibrium. First, government long-term spending plans are based on domestic sources, treating aid as an additional source of revenue. Second, both grants and loans are positively related to tax revenue. Third, aid is positively associated with spending, with a particularly strong relation between capital expenditure and grants. Overall, our results show that aid in Ethiopia had beneficial fiscal effects.     

Economic Benefits of Rural Feeder Roads: Evidence from Ethiopia

We estimate households’ willingness-to-pay for rural feeder roads in Ethiopia. Using purposefully collected data, we compare the economic behaviour of households by remoteness to estimate the benefits of access to feeder roads. Although we cannot definitively assert a causal relationship, we cautiously estimate that gravel roads have internal rates of return of 12–35 per cent. These results suggest that rural feeder roads may have relatively high rates of return even in unfavourable settings where (a) small-scale farmers have low levels of marketed agricultural surplus, (b) non-farm earning opportunities are negligible, and (c) motorised transport services are not guaranteed.     

Non-linearities in returns to participation in Grameen Bank programs

Abstract

This paper studies the benefits of participation in micro-finance programs, where benefits are measured in terms of the ability to smooth the effect of seasonal shocks that cause consumption fluctuations. It is shown that although membership in these programs is an effective instrument in combating inter-seasonal consumption differences, there is a threshold level of length of participation beyond which benefits begin to diminish. Returns from membership are modelled using an Euler equation approach. Fixed effects non-linear least squares estimation of parameters using data from 24 villages of the Grameen Bank suggests that returns to participation, as measured by the ability to smooth seasonal shocks, begin to decline after approximately two years of membership. This implies that membership alone no longer has a mitigating marginal effect on seasonal shocks to per capita consumption after four years of participation. Such patterns suggest that the ability to smooth consumption as a function of length of membership, need not accrue indefinitely in a linear fashion.     

Social Networks and Factor Markets: Panel Data Evidence from Ethiopia

We investigate the role of an indigenous social network in Ethiopia, the iddir, in facilitating factor market transactions among smallholder farmers. We use detailed longitudinal household survey data and employ fixed effects estimation approaches to identify the effect of iddir membership on factor market transactions among farmers. We find that joining an iddir network improves households’ access to land, labour and credit transactions. Our findings also hint that iddir networks may crowd-out borrowing from local moneylenders (locally referred as ‘Arata Abedari’), a relatively expensive credit source. These results suggest that non-market institutions can play crucial roles in facilitating market transactions.     

Self-employment earnings and returns to education in rural Peru

This article estimates the returns to education for households who derive part of their income from household based non-farm self-employment ventures in rural Peru. While education is an individual level variable, earnings are observed at the household level. This asymmetry complicates both the estimation and the interpretation of the returns to education. This article is the first jointly to incorporate three channels through which education affects household earnings. Education affects earnings through the marginal productivity of labour (worker effect), labour allocation across activities (between-activity allocative effect) and its production externality effect (spillover effect). The results suggest that the between-activity allocative effects of education dominate the returns. This article also makes novel use of economic geography to proxy for the role that access to markets plays in determining these returns. In particular, altitude is a strong predictor of activity choice and the returns to education in this mountainous country.     

Heterogeneity in the Intrahousehold Allocation of International Remittances: Evidence from Philippine Households

This article shows that heterogeneity in the intrahousehold allocation of remittances sent by temporary international migrant workers exists among households in the Philippines, and may be attributable to the absence of the spouse, suggesting moral hazard, and to the gender and educational attainment of the household head, indicating differences in preferences. GLM estimates and post-estimation tests reveal that male heads spend more on alcohol and tobacco, that the presence of a female decision-maker in a household increases allocations to goods that improve the welfare of the children, and that household heads with less formal education allocate more to education.     

Diversification and livelihood sustainability in a semi-arid environment: A case study from southern Ethiopia

This paper examines the recently growing adoption of non-pastoral livelihood strategies among the Borana pastoralists in southern Ethiopia. A large portion of the current non-pastoral participation is in petty and natural resource-based activities. Pastoral and crop production functions are estimated using the Cobb-Douglas model to analyse the economic rationale behind the growing pastoralist shift to cultivation and other non-pastoral activities. The low marginal return to labour in traditional pastoralism suggests the existence of surplus labour that can gainfully be transferred to non-pastoral activities. An examination of the pastoralist activity choices reveals that the younger households with literacy and more exposure to the exchange system display a more diversified income portfolio preference. The findings underscore the importance of human capital investment and related support services for improving the pastoralist capacity to manage risk through welfare-enhancing diversified income portfolio adoption.     

Achieving zero hunger: implementing a human rights approach to food security in Ethiopia

A human rights approach to food security seeks to empower vulnerable groups to claim their rights. It also reinforces a government’s obligations to respect, protect and fulfil the right to food. Furthermore, it encourages the integration of the right to food into the design and implementation of food security policies. This article examines the human rights approach to food security, with specific reference to Ethiopia. It assesses the historical causes of Ethiopia’s food insecurity, and examines the legislative and policy measures that the country has adopted over the last three decades in order to achieve food security. Food insecurity in the country is largely explained by the absence of government accountability. In 1973 and 1984, the hunger caused by drought was transitioned to famine not because of overall unavailability of food in the country, but because the government failed to provide food aid to the starved people and concealed the occurrence of famines from the international donors. Despite designing some food security policies over the last three decades, the country has not yet adopted sufficient legislative and judicial measures to enforce the right to food. This article argues that Ethiopia should introduce a framework law on the right to food to end hunger in the context of achieving national food security.     

The Disease Environment,Schooling, and Development Outcomes: Evidence from Ethiopia

The disease environment could help explain underdevelopment in Africa. This article shows that local malaria risk is associated with worse local development outcomes. Combining an Ethiopian household survey with satellite-derived topographical information, the article shows that malaria incidence is correlated with village elevation, slope and their interaction; that is, malaria is sensitive to elevation in flatlands, where the habitat is suitable for mosquito breeding, but not in steeper lands. Using topography as a predictor of the disease environment, education levels are found to be negatively correlated with malaria. I find suggestive evidence that some other outcomes are related to malaria risk. Finally, the performance of topography predictors is assessed against other climate-based predictors of malaria.     

Large-scale land acquisitions,state authority and indigenous local communities: insights from Ethiopia

The convergence of diverse global factors – food price volatility, the increased demand for biofuels and feeds, climate change and the financialisation of commodity markets – has resulted in renewed interest in land resources, leading to a rapid expansion in the scope and scale of (trans)national acquisition of arable land across many developing countries. Much of this land is on peripheral indigenous peoples’ territories and considered a common property resource. Those most threatened are poor rural people with customary tenure systems – including indigenous ethnic minority groups, pastoralists and peasants – who need land most. In Ethiopia large areas have been leased to foreign and domestic capital for large-scale production of food and agrofuels, mainly in lowland regions where the state has historically had limited control. Much of the land offered is classified by the state and other elites as ‘unused’ or ‘underutilised’, overlooking the spatially extensive use of land in shifting cultivation and pastoralism. This threatens the land rights and livelihoods of ethnic minority indigenous communities in these lowlands. This article argues that recent large-scale land acquisitions are part of state strategy for enforcing political authority over territory and people. It examines the implications of such strategy for indigenous ethnic minority groups, focusing particularly on the Benishangul-Gumuz region.     

Econometric studies of household saving behaviour in developing countries: A survey

This article surveys recent attempts to measure and analyze household savings behaviour in developing economies. Studies of the relationships between savings and current income, permanent income, wealth, interest rates, the price level, household demographic characteristics, occupation, income distribution, direct taxation, and other factors are reviewed and evaluated.     

Informal Employment in Developing Economies: Multiple Heterogeneity

This paper contributes to the literature on the nature of informal employment in developing economies. Drawing on the model with essential heterogeneity, it offers a list of scenarios describing the behavioural patterns which informal workers follow. The list nests not only classical patterns of a rationed formal sector versus an integrated labour market, but also different patterns of rationing. Using non-parametric techniques and data from a few African economies with different levels of development, the paper proposes empirical case studies fitting various informality schemes. Developing economies show disparate patterns of allocation of workers and various patterns of rationing.     

From aid negotiation to aid effectiveness: the case of food and nutrition security in Ethiopia

This paper looks at aid ownership through the lens of negotiations that take place between a country and its development partners (DPs). Based on the case of Ethiopian food security policies, it combines a structural analysis of the negotiation capital of both parties with an actor-oriented analysis of the institutional setting through which negotiations take place. First, it shows that the growing influence donors have come to have in the shaping of Ethiopian public policies results from the relative loss of legitimacy the government has experienced after the 2005 political crisis and its greater need for external economic assistance. Second, the more recent creation of a negotiation platform between the Government of Ethiopia (GoE) and its DPs has allowed the GoE to enhance donor’s alignment with its development policies and regain some control over its development agenda, while giving them more room to contribute to several food and nutrition security policy reforms which have been positively evaluated. The paper stresses the need for donors to better recognise the centrality of politics in any aid intervention.     

Observing FDI spillover transmission channels: evidence from firms in Uganda

Abstract

We observe and analyse three intra-industry foreign direct investment (FDI) spillover transmission channels using unique firm-level data collected from on-site interviews and observations regarding domestic and foreign firms operating in Uganda in 2015. Our main results are: (1) the spillover effects mainly depend on the channel(s) by which they occur (the competition channel is most important while spillover benefits through the worker mobility and the imitation channels are less prevalent) and (2) both positive and negative spillover effects occur within the same channel and, moreover, effects differ by channel for the same case. These are novel and challenging findings that have not yet been recognised in theoretical and empirical research on FDI spillovers. Our results suggest that long-term pecuniary spillover effects are predominantly stimulated via the competition channel and show that only limited short-term and long-term technological spillover effects occur through the imitation and the movement of workers channels. These channels are not only less prevalent, but also appear to be constrained by competition-determined spillovers. We are confident that these directions for future research will have a high pay-off because, as shown by this exploratory fieldwork, a more complete picture of the spillover effects is reached when the channels are considered simultaneously.