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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.

Suggested Citation

  • Marcel Fafchamps, 2002. "Ethnicity and Networks in African Trade," CSAE Working Paper Series 2002-20, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2002-20
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    File URL: https://ora.ox.ac.uk/objects/uuid:4b73382b-8816-4614-b87c-c049102df5b4
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    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P - Political Economy and Comparative Economic Systems

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