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Econ
omic
s 17
2Is
sues
in A
frica
n E
cono
mic
Dev
elop
men
t
Pro
fess
or T
ed M
igue
lD
epar
tmen
t of E
cono
mic
sU
nive
rsity
of C
alifo
rnia
, Ber
kele
y
Econ
omic
s 17
2Is
sues
in A
frica
n E
cono
mic
Dev
elop
men
t
Lect
ure
23 –
Apr
il 17
, 200
7
Eco
nom
ics
172:
Lec
ture
23
3
Eco
nom
ics
172:
Lec
ture
23
4
Out
line:
(1)
Trad
e ru
les
and
deve
lopm
ent:
the
case
of c
otto
n(2
)“T
he Il
lusi
on o
f Sus
tain
abili
ty” i
n A
frica
n de
velo
pmen
t(3
)W
hich
way
forw
ard
on fo
reig
n ai
d?
Eco
nom
ics
172:
Lec
ture
23
5
•Fo
reig
n ai
d is
onl
y on
e pa
rt of
the
over
all r
elat
ions
hip
betw
een
rich
coun
tries
and
poo
r cou
ntrie
s
•A
cces
s to
oth
er c
ount
ries’
mar
kets
thro
ugh
trade
is
anot
her i
mpo
rtant
asp
ect o
f the
rela
tions
hip
•Th
ere
has
been
asy
mm
etry
in tr
ade
liber
aliz
atio
n:
ther
e ha
ve b
een
maj
or e
fforts
to li
bera
lize
glob
al tr
ade
in p
rodu
cts
rich
coun
tries
are
goo
d at
(e.g
., m
anuf
actu
res)
and
less
at l
iber
aliz
ing
prod
ucts
poo
r co
untri
es a
re g
ood
at (e
.g.,
agric
ultu
re, t
extil
es).
Ther
e ar
e hu
ge ri
ch c
ount
ry s
ubsi
dies
to th
eir f
arm
ers
Trad
e, a
id, a
nd d
evel
opm
ent
Eco
nom
ics
172:
Lec
ture
23
6
•Fo
r exa
mpl
e, a
gric
ultu
ral p
rodu
cers
in th
e w
ealth
y O
EC
D c
ount
ries
need
to b
e he
avily
sub
sidi
zed
to
surv
ive:
ann
ual s
ubsi
dies
abo
ut U
S$3
30 B
illio
n –
six
times
wha
t ric
h co
untri
es g
ive
poor
cou
ntrie
s in
de
velo
pmen
t aid
eac
h ye
ar (S
ourc
e: W
orld
Ban
k G
loba
l Eco
nom
ic P
rosp
ects
200
4)
Trad
e, a
id, a
nd d
evel
opm
ent
Eco
nom
ics
172:
Lec
ture
23
7
•D
oes
the
curr
ent w
orld
trad
e sy
stem
pro
mot
e or
hin
der
econ
omic
dev
elop
men
t in
Afri
ca?
•O
ppon
ents
of t
he c
urre
nt w
orld
trad
e re
gim
e ha
ve
poin
ted
to th
e ca
se o
f cot
ton
as a
n ex
ampl
e w
here
tra
de ru
les
have
hin
dere
d A
frica
n de
velo
pmen
t
Cot
ton
as a
lens
into
inte
rnat
iona
l tra
de
Eco
nom
ics
172:
Lec
ture
23
8
•Te
ns o
f mill
ions
of A
frica
ns (i
n B
enin
, Bur
kina
Fas
o,
Tanz
ania
, etc
.) re
ly o
n co
tton
as a
cas
h cr
op, b
ut th
e w
orld
mar
ket i
s di
stor
ted
by U
S$4
bill
ion
annu
al
subs
idie
s by
the
U.S
. gov
ernm
ent t
o 25
,000
farm
ers
–Th
ree
times
ann
ual U
SA
ID a
ssis
tanc
e to
Afri
ca–
This
floo
ding
of t
he m
arke
t by
U.S
. far
mer
s le
ads
the
wor
ld m
arke
t pric
e to
dro
p, p
erha
ps b
y 10
-20%
(d
epen
ding
on
the
mod
el)
–In
200
3 w
orld
pric
e U
S$0
.42,
US
farm
ers
US
$0.7
2
Cot
ton
as a
lens
into
inte
rnat
iona
l tra
de
Eco
nom
ics
172:
Lec
ture
23
9
•Te
ns o
f mill
ions
of A
frica
ns (i
n B
enin
, Bur
kina
Fas
o,
Tanz
ania
, etc
.) re
ly o
n co
tton
as a
cas
h cr
op, b
ut th
e w
orld
mar
ket i
s di
stor
ted
by U
S$4
bill
ion
annu
al
subs
idie
s by
the
U.S
. gov
ernm
ent t
o 25
,000
farm
ers
–Th
ree
times
ann
ual U
SA
ID a
ssis
tanc
e to
Afri
ca–
This
floo
ding
of t
he m
arke
t by
U.S
. far
mer
s le
ads
the
wor
ld m
arke
t pric
e to
dro
p, p
erha
ps b
y 10
-20%
(d
epen
ding
on
the
mod
el)
–In
200
3 w
orld
pric
e U
S$0
.42,
US
farm
ers
US
$0.7
2
•B
razi
l has
alre
ady
won
sev
eral
roun
ds o
f leg
al b
attle
s ag
ains
t US
pol
icy
in th
e W
TO
Cot
ton
as a
lens
into
inte
rnat
iona
l tra
de
Eco
nom
ics
172:
Lec
ture
23
10
Map
of A
frica
Eco
nom
ics
172:
Lec
ture
23
11
•M
inot
and
Dan
iels
(200
2) u
se h
ouse
hold
dat
a to
si
mul
ate
wha
t wou
ld h
appe
n to
farm
ers
in B
enin
if th
e co
tton
pric
e ro
se 1
0-20
%.
•C
otto
n m
akes
up
90%
of a
gric
ultu
ral e
xpor
ts in
Ben
in,
and
60-7
0% o
f tot
al e
xpor
ts•
They
est
imat
e th
at n
atio
nal p
over
ty ra
te w
ould
fall
7%
Mic
ro-e
vide
nce
on c
otto
n pr
ices
and
pov
erty
Eco
nom
ics
172:
Lec
ture
23
12
Eco
nom
ics
172:
Lec
ture
23
13
•M
inot
and
Dan
iels
(200
2) u
se h
ouse
hold
dat
a to
si
mul
ate
wha
t wou
ld h
appe
n to
farm
ers
in B
enin
if th
e co
tton
pric
e ro
se 1
0-20
%.
•C
otto
n m
akes
up
90%
of a
gric
ultu
ral e
xpor
ts in
Ben
in,
and
60-7
0% o
f tot
al e
xpor
ts•
They
est
imat
e th
at n
atio
nal p
over
ty ra
te w
ould
fall
7%
•M
eatu
dist
rict i
n Ta
nzan
ia is
ano
ther
cot
ton
grow
ing
regi
on. F
arm
ers
–an
d th
e ow
ners
of t
he lo
cal c
otto
n gi
nner
y, th
e on
ly fa
ctor
y in
the
dist
rict –
are
hard
hit
whe
n co
tton
pric
es fa
ll, a
s th
ey d
id in
the
late
-199
0s--
We
disc
usse
d ea
rlier
how
the
lack
of s
avin
gs
inst
rum
ents
mak
es it
har
d fo
r hou
seho
lds
to in
sure
ag
ains
t the
se s
orts
of p
rice
shoc
ks in
Mea
tu--
60%
hou
seho
lds
grow
cot
ton
as th
e m
ain
cash
cro
p
Mic
ro-e
vide
nce
on c
otto
n pr
ices
and
pov
erty
Eco
nom
ics
172:
Lec
ture
23
14
•If
the
inte
rnat
iona
l tra
de s
yste
m is
tilte
d ag
ains
t poo
r co
untri
es (e
.g.,
cotto
n), a
nd tr
aditi
onal
fore
ign
aid
has
not b
een
succ
essf
ul (a
ccor
ding
to E
aste
rly),
wha
t is
the
way
forw
ard?
•W
hat c
an ri
ch c
ount
ry d
onor
s or
gov
ernm
ents
do
to
help
poo
r cou
ntrie
s ac
hiev
e ec
onom
ic d
evel
opm
ent?
Are
alte
rnat
ive
“sus
tain
able
” pro
ject
s vi
able
?
Eco
nom
ics
172:
Lec
ture
23
15
•If
the
inte
rnat
iona
l tra
de s
yste
m is
tilte
d ag
ains
t poo
r co
untri
es (e
.g.,
cotto
n), a
nd tr
aditi
onal
fore
ign
aid
has
not b
een
succ
essf
ul (a
ccor
ding
to E
aste
rly),
wha
t is
the
way
forw
ard?
•W
hat c
an ri
ch c
ount
ry d
onor
s or
gov
ernm
ents
do
to
help
poo
r cou
ntrie
s ac
hiev
e ec
onom
ic d
evel
opm
ent?
•O
ne c
urre
ntly
pop
ular
app
roac
h is
to fo
cus
on
“sus
tain
able
” loc
ally
run
NG
O d
evel
opm
ent p
roje
cts
to
achi
eve
thes
e ob
ject
ives
Are
alte
rnat
ive
“sus
tain
able
” pro
ject
s vi
able
?
Eco
nom
ics
172:
Lec
ture
23
16
•Th
e st
ruct
ure
of fo
reig
n ai
d pr
ogra
ms
is a
lso
impo
rtant
•Th
ere
has
rece
ntly
bee
n a
stro
ng p
ush
tow
ards
“fi
nanc
ial s
usta
inab
ility
” in
loca
l dev
elop
men
t / h
ealth
pr
ojec
ts, a
nd a
gain
st c
ontin
ued
subs
idie
s fo
r dru
gs
Kre
mer
and
Mig
uel (
2004
) on
finan
cial
sus
tain
abilit
y
Eco
nom
ics
172:
Lec
ture
23
17
•Th
e st
ruct
ure
of fo
reig
n ai
d pr
ogra
ms
is a
lso
impo
rtant
•Th
ere
has
rece
ntly
bee
n a
stro
ng p
ush
tow
ards
“fi
nanc
ial s
usta
inab
ility
” in
loca
l dev
elop
men
t / h
ealth
pr
ojec
ts, a
nd a
gain
st c
ontin
ued
subs
idie
s fo
r dru
gs–
Cos
t rec
over
y fro
m b
enef
icia
ries
–H
ealth
edu
catio
n–
Loca
l “ow
ners
hip”
of p
roje
cts
Kre
mer
and
Mig
uel (
2004
) on
finan
cial
sus
tain
abilit
y
Eco
nom
ics
172:
Lec
ture
23
18
•Th
e st
ruct
ure
of fo
reig
n ai
d pr
ogra
ms
is a
lso
impo
rtant
•Th
ere
has
rece
ntly
bee
n a
stro
ng p
ush
tow
ards
“fi
nanc
ial s
usta
inab
ility
” in
loca
l dev
elop
men
t / h
ealth
pr
ojec
ts, a
nd a
gain
st c
ontin
ued
subs
idie
s fo
r dru
gs–
Cos
t rec
over
y fro
m b
enef
icia
ries
–H
ealth
edu
catio
n–
Loca
l “ow
ners
hip”
of p
roje
cts
•C
ontra
st w
ith th
e st
anda
rd p
ublic
fina
nce
appr
oach
th
at a
dvoc
ates
ong
oing
sub
sidi
es to
ove
rcom
e ex
tern
aliti
es, a
ligni
ng p
rivat
e an
d so
cial
out
com
es
Kre
mer
and
Mig
uel (
2004
) on
finan
cial
sus
tain
abilit
y
Eco
nom
ics
172:
Lec
ture
23
19
•C
ost-s
harin
g ha
s be
en w
idel
y ad
voca
ted
for p
oor
coun
tries
(WB
199
3)
•25
of 5
0 G
roup
1, 2
sch
ools
free
trea
tmen
t in
2001
25 o
f 50
Gro
up 1
, 2 s
choo
ls c
ost-s
harin
g in
200
1
(1) C
ost-s
harin
g an
d de
wor
min
gta
ke-u
p
Eco
nom
ics
172:
Lec
ture
23
20
•C
ost-s
harin
g ha
s be
en w
idel
y ad
voca
ted
for p
oor
coun
tries
(WB
199
3)
•25
of 5
0 G
roup
1, 2
sch
ools
free
trea
tmen
t in
2001
25 o
f 50
Gro
up 1
, 2 s
choo
ls c
ost-s
harin
g in
200
1
•20
01 ta
ke-u
p ra
te in
free
trea
tmen
t sch
ools
was
75%
, in
cos
t-sha
ring
scho
ols
only
18%
•Th
us a
ttem
pts
to p
rom
ote
cost
reco
very
see
m li
kely
to
redu
ce tr
eatm
ent a
nd le
ad to
wor
se o
utco
mes
for t
he
untre
ated
, as
wel
l
(1) C
ost-s
harin
g an
d de
wor
min
gta
ke-u
p
Eco
nom
ics
172:
Lec
ture
23
21
•N
o si
gnifi
cant
impa
ct o
f hea
lth e
duca
tion
on a
ny w
orm
pr
even
tion
beha
vior
s (e
.g.,
hand
was
hing
, wea
ring
shoe
s, p
layi
ng in
Lak
e V
icto
ria)
–N
o im
pact
for o
lder
girl
s–
No
impa
ct in
nei
ghbo
ring
scho
ols
•Th
ere
has
been
rapi
d de
prec
iatio
n of
hea
lth e
duca
tion
know
ledg
e in
sev
eral
oth
er e
xper
imen
tal s
tudi
es
(2) H
ealth
edu
catio
n im
pact
s
Eco
nom
ics
172:
Lec
ture
23
22
•P
eopl
e st
rive
for c
onsi
sten
cy in
wor
ds a
nd d
eeds
Ver
bal c
omm
itmen
ts b
ind
peop
le to
follo
w th
roug
h,
and
give
them
a s
ense
of “
owne
rshi
p”ov
er th
e pr
ojec
t
(3) V
erba
l com
mitm
ents
and
take
-up
Eco
nom
ics
172:
Lec
ture
23
23
•P
eopl
e st
rive
for c
onsi
sten
cy in
wor
ds a
nd d
eeds
Ver
bal c
omm
itmen
ts b
ind
peop
le to
follo
w th
roug
h,
and
give
them
a s
ense
of “
owne
rshi
p”ov
er th
e pr
ojec
t
•A
rand
om s
ubsa
mpl
ein
the
2001
Pup
il Q
uest
ionn
aire
w
ere
aske
d w
heth
er th
ey w
ould
take
the
drug
s
(3) V
erba
l com
mitm
ents
and
take
-up
Eco
nom
ics
172:
Lec
ture
23
24
•P
eopl
e st
rive
for c
onsi
sten
cy in
wor
ds a
nd d
eeds
Ver
bal c
omm
itmen
ts b
ind
peop
le to
follo
w th
roug
h,
and
give
them
a s
ense
of “
owne
rshi
p”ov
er th
e pr
ojec
t
•A
rand
om s
ubsa
mpl
ein
the
2001
Pup
il Q
uest
ionn
aire
w
ere
aske
d w
heth
er th
ey w
ould
take
the
drug
s
•V
erba
l com
mitm
ent h
ad n
o ef
fect
–1
perc
enta
ge p
oint
dro
p in
ado
ptio
n (n
ot s
tatis
tical
ly
sign
ifica
nt),
basi
cally
no
effe
ct
(3) V
erba
l com
mitm
ents
and
take
-up
Eco
nom
ics
172:
Lec
ture
23
25
•W
hat t
ypes
of d
evel
opm
ent p
roje
cts
are
likel
y to
be
mos
t suc
cess
ful?
•W
hat r
ole
shou
ld d
onor
s lik
e th
e W
orld
Ban
k an
d IM
F pl
ay in
fore
ign
aid?
Wra
ppin
g up
: wha
t sho
uld
aid
look
like
?
Eco
nom
ics
172:
Lec
ture
23
26
Eco
nom
ics
172:
Lec
ture
23
27
•W
hat t
ypes
of d
evel
opm
ent p
roje
cts
are
likel
y to
be
mos
t suc
cess
ful?
•W
hat r
ole
shou
ld d
onor
s lik
e th
e W
orld
Ban
k an
d IM
F pl
ay in
fore
ign
aid?
•S
houl
d fo
reig
n ai
d bu
dget
s be
incr
ease
d / d
ecre
ased
?
•D
oes
fore
ign
aid
do m
ore
harm
than
goo
d?
Wra
ppin
g up
: wha
t sho
uld
aid
look
like
?
Eco
nom
ics
172:
Lec
ture
23
28
•S
ub-S
ahar
an A
frica
is th
e w
orld
’s m
ost e
thno
-lin
guis
tical
ly d
iver
sity
con
tinen
t•
14 o
f the
wor
ld’s
15
mos
t div
erse
cou
ntrie
s ar
e in
A
frica
(the
one
exc
eptio
n is
Indi
a)
Nex
t top
ic: e
thni
c di
vers
ity a
nd d
evel
opm
ent
Eco
nom
ics
172:
Lec
ture
23
29
•S
ub-S
ahar
an A
frica
is th
e w
orld
’s m
ost e
thno
-lin
guis
tical
ly d
iver
sity
con
tinen
t•
14 o
f the
wor
ld’s
15
mos
t div
erse
cou
ntrie
s ar
e in
A
frica
(the
one
exc
eptio
n is
Indi
a)
•W
hat l
angu
age
shou
ld b
e ch
osen
as
the
natio
nal
lang
uage
of s
uch
dive
rse
coun
tries
? (L
aitin
1992
)
Nex
t top
ic: e
thni
c di
vers
ity a
nd d
evel
opm
ent
Eco
nom
ics
172:
Lec
ture
23
30
Lang
uage
Reg
ion
(mai
n co
untri
es)
Sw
ahili
Eas
t Afri
ca (T
anza
nia)
Chi
chew
aS
outh
-eas
t Afri
ca (M
alaw
i)Li
ngal
aC
entra
l Afri
ca (C
ongo
)W
olof
Wes
t Afri
ca (S
eneg
al)
Hau
saW
est A
frica
/ S
ahel
(Nig
eria
)
Ling
ua fr
anca
sin
Afri
ca
Eco
nom
ics
172:
Lec
ture
23
31
•D
raw
back
s to
reta
inin
g th
e E
urop
ean
colo
nial
la
ngua
ge a
s th
e of
ficia
l lan
guag
e:
(1) S
choo
l lea
rnin
g m
ay s
uffe
r whe
n ch
ildre
n ar
e ta
ught
in a
lang
uage
that
they
do
not k
now
wel
l
Sho
uld
the
colo
nial
lang
uage
be
reta
ined
?
Eco
nom
ics
172:
Lec
ture
23
32
•D
raw
back
s to
reta
inin
g th
e E
urop
ean
colo
nial
la
ngua
ge a
s th
e of
ficia
l lan
guag
e:
(1) S
choo
l lea
rnin
g m
ay s
uffe
r whe
n ch
ildre
n ar
e ta
ught
in a
lang
uage
that
they
do
not k
now
wel
l
(2) L
angu
age
is a
n im
porta
nt c
ompo
nent
of n
atio
nal
iden
tity
(3) O
ther
s?
Sho
uld
the
colo
nial
lang
uage
be
reta
ined
?
Eco
nom
ics
172:
Lec
ture
23
33
•Fo
r nex
t tim
e: re
adin
gs fr
om w
eek
14 (e
thni
c an
d lin
guis
tic d
ivis
ions
)
Eco
nom
ics
172:
Lec
ture
23
34
Whi
tebo
ard
#1
Eco
nom
ics
172:
Lec
ture
23
35
Whi
tebo
ard
#2
Eco
nom
ics
172:
Lec
ture
23
36
Whi
tebo
ard
#3
Eco
nom
ics
172:
Lec
ture
23
37
Whi
tebo
ard
#4
Eco
nom
ics
172:
Lec
ture
23
38
Whi
tebo
ard
#5
Eco
nom
ics
172:
Lec
ture
23
39
Map
of A
frica
Eco
nom
ics
172:
Lec
ture
23
40
Map
of A
frica