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Ethnicity and Networks in African Trade

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  • Marcel Fafchamps

Abstract

This paper investigates the role of ethnicity 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. 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 in tsut and information sharing. Women accumulate working capital slower than men, including in Benin where women represent 80% of surveyed traders. This does not suggest the presence of discrimination. Agricultural trade appears open to all, irrespective of gender, ethnicity, or religion.

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Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2002-20.

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Date of creation: 2002
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Handle: RePEc:csa:wpaper:2002-20

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Cited by:
  1. 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. 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.
  3. repec:hal:wpaper:halshs-00585968 is not listed on IDEAS
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.

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