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Ethnicity and Networks in African Trade

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  • Fafchamps Marcel

    ()
    (University of Oxford)

Abstract

This paper investigates the role of ethnicity, religion, gender, and networks in domestic agricultural trade in Africa. Using a theoretical model of self-disciplining markets, we begin by demonstrating that statistical discrimination and networks can generate similar patterns of ethnic concentration. The model also predicts that traders who start with an ethnic or network advantage grow faster. We then test these ideas using original survey data collected in Benin, Malawi, and Madagascar. We find no evidence that members of a particular sex or ethnic group are more easily trusted by suppliers and trust clients more easily. In contrast, network effects have a strong and systematic effect on trust and information sharing. We also find some evidence that religion matters, but the effect is not due to discrimination or better networks. Ethnicity also has little effect on start-up networks and working capital but women accumulate working capital slower than men, including in Benin where women represent 80% of surveyed traders. Agricultural trade appears fairly open to all, irrespective of gender, ethnicity, or religion.

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Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 2 (2003)
Issue (Month): 1 (December)
Pages: 1-53

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Handle: RePEc:bpj:bejeap:v:contributions.2:y:2003:i:1:n:14

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Cited by:
  1. Steven N. Durlauf & Marcel Fafchamps, 2004. "Social Capital," NBER Working Papers 10485, National Bureau of Economic Research, Inc.
    • Durlauf, Steven N. & Fafchamps, Marcel, 2005. "Social Capital," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 26, pages 1639-1699 Elsevier.
  2. Margherita Comola, 2010. "The network structure of mutual support links: Evidence from rural Tanzania," Working Papers halshs-00585968, HAL.
  3. Togba, Edith Leadaut, 2012. "Microfinance and households access to credit: Evidence from Côte d’Ivoire," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 473-486.
  4. Abiola Babajide Ph.D, 2012. "Effects of Microfinance on Micro and Small Enterprises (MSEs) Growth in Nigeria," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(3), pages 463-477, July.
  5. Foundjem-Tita, Divine & Speelman, Stijn & D'Haese, Marijke & Degrande, Ann & Van Huylenbroeck, Guido & Van Damme, Patrick & Tchoundjeu, Zac, 2014. "A tale of transaction costs and forest law compliance: Trade permits for Non Timber Forests Products in Cameroon," Forest Policy and Economics, Elsevier, vol. 38(C), pages 132-142.
  6. Baliamoune-Lutz, Mina, 2011. "Trust-based social capital, institutions, and development," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 335-346, August.
  7. Mujawamariya, Gaudiose & Burger, Kees & D'Haese, Marijke F.C., 2012. "Behaviour and performance of traders in the gum arabic supply chain in Senegal: Investigating oligopsonistic myths," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126236, International Association of Agricultural Economists.
  8. Masakure, Oliver & Cranfield, John & Henson, Spencer, 2008. "The Financial Performance of Non-farm Microenterprises in Ghana," World Development, Elsevier, vol. 36(12), pages 2733-2762, December.

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