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221. Seeking Opportunities: Migration as an Income Diversification Strategy of Households in Kakamega District in Kenya

Author:
Lena Giesbert
Publication Date:
09-2007
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
Migration and remittances are widely seen as major components of diversification strategies aimed at coping with risky environments in developing countries. The debate in the literature mainly concentrates on effects of and access to the strategy of migration. Against this background, the paper investigates patterns, determinants and the impact of internal migration on households based on data from a densely populated rural area in Western Kenya. The motivation behind migration is largely economic in kind. Accordingly, remittances account for a substantial share of household incomes. Results derived from a probit model estimation indicate that the likelihood of migration is independent from the wealth position of households. Instead, demographic household factors, education-related variables and migrant networks are of central importance. Migration and remittances are obviously more easily accessible than other opportunities of income diversification beyond farming for households across all levels of wealth, including the poorest households. JEL classification:
Topic:
Economics, Migration, and Regional Cooperation
Political Geography:
Kenya and Africa

222. Boda-bodas Rule: Non-agricultural Activities and Their Inequality Implications in Western Kenya

Author:
Jann Lay, George Michuki M'Mukaria, and  Toman Omar Mahmoud
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
Engagement in non-agricultural activities in rural areas can be classified into survival-led or opportunity-led. Survival-led diversification would decrease inequality by increasing the incomes of poorer households and thus reduce poverty. By contrast, opportunity-led diversification would increase inequality and have a minor effect on poverty, as it tends to be confined to non-poor households. Using data from Western Kenya, we confirm the existence of the differently motivated diversification strategies. Yet, the poverty and inequality implications differ somewhat from our expectations. Our findings indicate that in addition to asset constraints, rural households also face limited or relatively risky high-return opportunities outside agriculture.
Topic:
Agriculture, Economics, and Poverty
Political Geography:
Kenya and Africa

223. Securing Household Income among Small-scale Farmers in Kakamega District: Possibilities and Limitations of Diversification

Author:
Henriette Dose
Publication Date:
02-2007
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
In the debate of sustainable rural livelihoods, diversification is seen as a way to secure incomes and to increase food security. On the basis of a data set on income security, this paper analyses to what extent this applies to small-scale farmers in Kakamega District, Kenya. Using the sustainable rural livelihoods approach, this paper draws the conclusion, that (1) diversification in agricultural production is not sufficient for securing rural livelihoods in Kakamega District; (2) a sufficient income diversification depends heavily on requirements like access to education, infrastructure, as well as investment capital; and (3) small-scale farmers in Kakamega District in most cases lack these requirements, therefore not being able to achieve secure household incomes or increased food security.
Topic:
Security, Agriculture, and Economics
Political Geography:
Kenya and Africa

224. Nigeria's Economic Reforms Progress and Challenges

Author:
Ngozi Okonjo-Iweala and Philip Osafo-Kwaako
Publication Date:
03-2007
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
Following years of economic stagnation, Nigeria embarked on a comprehensive reform program during the second term of the Obasanjo administration. The program was based on the National Economic Empowerment and Development Strategy (NEEDS) and focused on four main areas: improving the macroeconomic environment, pursuing structural reforms, strengthening public expenditure management, and implementing institutional and governance reforms. This paper reviews Nigeria's recent experience with economic reforms and outlines major policy measures that have been implemented. Although there have been notable achievements under the program, significant challenges exist, particularly in translating the benefits of reforms into welfare improvements for citizens, in improving the domestic business environment, and in extending reform policies to states and local governments. Consequently, we argue that the recent reform program must be viewed as the initial steps of a much longer journey of economic recovery and sustained growth. This paper concludes by outlining a number of outstanding issues that future Nigerian administrations must address.
Topic:
Development, Economics, and Government
Political Geography:
Africa and Nigeria

225. Credit Elasticities in Less-Developed Economies: Implications for Microcredit

Author:
Dean Karlan and Jonathan Zinman
Publication Date:
01-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Policymakers often prescribe that microfinance institutions increase interest rates to eliminate reliance on subsidies. This strategy makes sense if the poor are rate insensitive: then microlenders increase profitability (or achieve sustainability) without reducing the poor's access to credit. We test the assumption of price inelastic demand using randomized trials conducted by a consumer lender in South Africa. The demand curves are downward-sloping, and steep for price increases relative to the lender's standard rates. We also find that loan size is far more responsive to changes in loan maturity than to changes in interest rates, which is consistent with binding liquidity constraints.
Topic:
Development, Economics, and Markets
Political Geography:
Africa and South Africa

226. Why Are There So Few Black-Owned Firms in Africa? Preliminary Results from Enterprise Survey Data

Author:
Vijaya Ramachandran and Manju Kedia Shah
Publication Date:
01-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Much of the growth in Sub-Saharan Africa in the past decade has come from extractive industries, rather than from private, entrepreneurial activity. Furthermore, non-extractive activity in the private sector is often dominated by firms owned by ethnic minorities. This paper analyzes the characteristics of the formal private sector in five countries in sub-Saharan Africa, with a particular emphasis on Black African-owned (indigenous) firms. We find that indigenous firms start smaller and grow more slowly; however their rate of growth is positively influenced by whether the owner-entrepreneur has a university degree. We do not find overwhelming evidence that credit is the binding constraint but we do find that indigenous firms get less access to trade credit than firms owned by minority entrepreneurs. Finally, we discuss policy solutions that might enable a larger number of indigenous entrepreneurs to enter and survive in a vibrant, multi-ethnic private sector.
Topic:
International Relations, Development, Economics, and Humanitarian Aid
Political Geography:
Africa

227. Nigeria: Elections and Continuing Challenges

Author:
Robert I. Rotberg
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Nigeria's vital importance for Africa's political development, for U.S. and European interests, and for world order cannot be exaggerated. Nigeria's sheer aggregate numbers—possibly as many as 150 million of the full continent's 800 million—and its proportionate weight in sub-Saharan Africa' s troubled affairs, make the country's continuing evolution from military dictatorship to stable, sustained democracy critical.
Topic:
Democratization and Economics
Political Geography:
Africa, Europe, and Nigeria

228. What's in it for Labour? Private social standards in the cut flower industries of Kenya and Tanzania

Author:
Lone Riisgaard
Publication Date:
08-2007
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
Export of cut flowers from East Africa to Europe is an example of how tightened quality regulations and increasing concern with social and environmental issues have created a highly codified industry. For producers participating in value chains driven by large retailers, adopting social and environmental standards is a requirement and specificities are dictated by the buyers. In this paper focus is on private social standards and the opportunities and challenges they pose for labour organizations, especially trade unions. By incorporating the concept of labour agency, global value chain analysis is widened to encompass not just industrial development but also labour development.
Topic:
Agriculture, Economics, and Emerging Markets
Political Geography:
Kenya, Africa, Tanzania, and East Africa

229. The role of freight transport in economic development: An analysis of the interaction between global value chains and their associated transport chains

Author:
Poul Ove Pedersen
Publication Date:
07-2007
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
The purpose of this paper is first to discuss the paradox that freight transport, which so clearly is an important prerequisite for the processes of regional development and economic internationalisation and globalisation, since the 1970s has almost vanished from mainstream economic geography and development studies, and is most often hardly mentioned in studies of international industrial development and global commodity or value chains. Secondly, the paper discusses the consequences of leaving freight transport out of the value chain analyses and argues that it has had serious consequences for economic development especially in the peripheral parts of the world, not least in Africa, and for our understanding of rural poverty.
Topic:
Development, Economics, Globalization, and Third World
Political Geography:
Africa

230. The Spice Industry in Tanzania: General Profile, Supply Chain Structure, and Food Standards Compliance Issues

Author:
Evelyne Lazaro and Adam Akyoo
Publication Date:
03-2007
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
The fall in the agricultural sector's contribution to Tanzanian export earnings since the early 1990s has increased attention toward new crops with the potential of supplementing the country's traditional export crops. Particular attention has been focused upon identifying crops enjoying price stability, high demand elasticity and low substitutability. Spices fall into this category. Consequently there have been efforts by public agencies and private exporters, both on the mainland and on Zanzibar, to promote the crop. However, access to high value export markets raises issues of supply chain dynamics and conformity with international standards. This paper focuses upon the recent history of the spice industry in Tanzania with reference to these issues. The main conclusions are that Certified Organic standards are the only international standards complied with, and that a very loosely coordinated chain exists alongside a more coordinated one. Macro- and micro-institutional weaknesses need attention if the full potential of the sub-sector is to be realized.
Topic:
Economics, Health, and Industrial Policy
Political Geography:
Africa, Zanzibar, and Tanzania