Myths about Roads and Transportation in Africa

Large investments in road infrastructure continue to be high on the agenda of many African countries, only a few of which have actually amended their investment strategy. In many cases, there seems to be a preference for a status quo that can easily be explained by political-economy factors driving policies in the sector. After presenting data on the state of roads in sub-Saharan Africa (length, density, condition), this article demonstrates how most countries’ transport strategies are based on certain misperceptions and recommends better prioritization of investments, better procurement and contract management, better projects implementation and better monitoring to improve the developmental impact of recent road investments.

That’s the abstract of a new article by Beuran et al. in the Development Policy Review. Given that I have done a bit of work on market participation and market access, I think roads are probably one of the most important investments the public sector can undertake in sub-Saharan Africa. Continue reading

New Working Paper: Contract Farming and Food Security

That’s the title of a new working paper which my PhD student Lindsey Novak and I have just finished working on this past week, and in which we ask whether smallholder participation in agricultural value chains via contract farming leads to better food security.

In case you are not familiar with contract farming, it is the economic institution wherein a processing firm contracts the production of some agricultural commodity out to a grower (in developing countries, growers are typically smallholder households). In the literature, contract farming agreements are also known as grower-processor contracts, or as outgrower schemes, and because it is halfway between spot markets (i.e., growers selling their output at market after harvest) and vertical integration (i.e., processors growing, transporting, processing, and so on), contract farming has been referred to as a vertical coordination contract (i.e., it allows coordinating the actions of agents upstream and downstream).

There is now a good amount of evidence that participation in contract farming increases the income of smallholders who choose to participate as growers. I myself published an article in World Development in 2012 in which I asked whether participation in contract farming improved welfare via increased incomes.

In this paper, we use the same data I used in my 2012 article to look at a longer causal chain and ask whether participation in contract farming leads to improved food security in the form of shorter hungry seasons (i.e., the length of time a household goes without eating three meals a day). Why wouldn’t increased incomes not necessarily lead to shorter hungry seasons? Because the income from participating in contract farming materializes immediately around harvest time, and the hungry season occurs in the months leading to harvest, i.e., almost one year after harvest. Because it is not always possible to save, and because of self-control problems, it is not immediately obvious that a greater income will improve food security almost a year later. Continue reading

‘Metrics Monday: Data Cleaning

I spent a few days last week attending the annual meetings of the Agricultural and Applied Economics Association (AAEA) in San Francisco as well as a one-day pre-conference on agricultural value chains in developing countries. At that pre-conference, I happened to be sitting with Ben Wood, who co-manages 3ie’s replication program, and in light of his experience with replication in economics, he suggested I write a post about data cleaning.

Why data cleaning? Because most students will typically have very little experience with that thankless task, which happens because most econometrics classes usually present students with nice, picture-perfect data sets for applied problem sets (and that’s when those classes actually have students estimate stuff instead of just memorizing the properties of various estimators). Continue reading