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Ethnicity and Networks in African Trade

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Author Info
Marcel Fafchamps (Centre for the Study of African Economies)

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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 on trust 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 EconWPA in its series Development and Comp Systems with number 0409022.

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Length: 53 pages
Date of creation: 22 Sep 2004
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Handle: RePEc:wpa:wuwpdc:0409022

Note: Type of Document - pdf; pages: 53
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Web page: http://129.3.20.41

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O - Economic Development, Technological Change, and Growth
P - Economic Systems

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-40, December. [Downloadable!] (restricted)
    Other versions:
  2. Spagnolo, Giancarlo, 1999. "Social relations and cooperation in organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 1-25, January. [Downloadable!] (restricted)
  3. Himbara, David, 1994. "The failed Africanization of commerce and industry in Kenya," World Development, Elsevier, vol. 22(3), pages 469-482, March. [Downloadable!] (restricted)
  4. Fafchamps, Marcel & Minten, Bart, 1998. "Relationships and traders in Madagascar," MTID discussion papers 24, International Food Policy Research Institute (IFPRI). [Downloadable!]
  5. Ghosh, Parikshit & Ray, Debraj, 1996. "Cooperation in Community Interaction without Information Flows," Review of Economic Studies, Blackwell Publishing, vol. 63(3), pages 491-519, July. [Downloadable!] (restricted)
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  6. Ethan Ligon & Jonathan P. Thomas & Tim Worrall, 1997. "Informal Insurance Arrangements in Village Economies," Keele Department of Economics Discussion Papers (1995-2001) 97/08, Department of Economics, Keele University, revised Oct 2000. [Downloadable!]
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  7. Fafchamps, Marcel, 2000. "Ethnicity and credit in African manufacturing," Journal of Development Economics, Elsevier, vol. 61(1), pages 205-235, February. [Downloadable!] (restricted)
  8. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June. [Downloadable!] (restricted)
  9. Herschel I. Grossman & John B. Van Huyck, 1989. "Sovereign Debt as a Contingent Claim: Excusable Default, Repudiation, and Reputation," NBER Working Papers 1673, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Barrett, Christopher B., 1997. "Food marketing liberalization and trader entry: Evidence from Madagascar," World Development, Elsevier, vol. 25(5), pages 763-777, May. [Downloadable!] (restricted)
  11. Marcel Fafchamps, 2002. "Returns to social network capital among traders," Oxford Economic Papers, Oxford University Press, vol. 54(2), pages 173-206, April.
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  12. Basu, Kaushik, 1986. "One Kind of Power," Oxford Economic Papers, Oxford University Press, vol. 38(2), pages 259-82, July. [Downloadable!] (restricted)
  13. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June. [Downloadable!] (restricted)
  14. Fafchamps, Marcel, 1997. "Trade credit in Zimbabwean manufacturing," World Development, Elsevier, vol. 25(5), pages 795-815, May. [Downloadable!] (restricted)
  15. Marris, Peter, 1971. "African Businessmen in a Dual Economy," Journal of Industrial Economics, Blackwell Publishing, vol. 19(3), pages 231-45, July. [Downloadable!] (restricted)
  16. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June. [Downloadable!] (restricted)
  17. Borjas, George J & Bronars, Stephen G, 1989. "Consumer Discrimination and Self-employment," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 581-605, June. [Downloadable!] (restricted)
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  18. repec:bep:thetop:v:2:y:2002:i:1:p:1045-1045 is not listed on IDEAS
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  19. Ellison, Glenn, 1994. "Cooperation in the Prisoner's Dilemma with Anonymous Random Matching," Review of Economic Studies, Blackwell Publishing, vol. 61(3), pages 567-88, July. [Downloadable!] (restricted)
  20. Fafchamps, Marcel, 1996. "The enforcement of commercial contracts in Ghana," World Development, Elsevier, vol. 24(3), pages 427-448, March. [Downloadable!] (restricted)
  21. Fafchamps, Marcel & Minten, Bart, 2001. "Property Rights in a Flea Market Economy," Economic Development and Cultural Change, University of Chicago Press, vol. 49(2), pages 229-67, January.
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  22. Fafchamps, Marcel & Minten, Bart, 2001. " Social Capital and Agricultural Trade," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 83(3), pages 680-85, August. [Downloadable!] (restricted)
  23. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-50, October. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Margherita Comola, 2008. "The network structure of informal arrangements: Evidence from rural Tanzania," PSE Working Papers 2008-74, PSE (Ecole normale supérieure). [Downloadable!]
  2. Steven N. Durlauf & Marcel Fafchamps, 2004. "Social Capital," NBER Working Papers 10485, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Alice Nicole Sindzingre, 2007. "Poverty traps: a perspective from development economics," EconomiX Working Papers 2007-26, University of Paris West - Nanterre la Défense, EconomiX. [Downloadable!]
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