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Exploring Africa's success stories

21.10.2010
Conventional wisdom has long been negative on Africa. Historically, it has been seen as a failing continent, plagued by deep-rooted problems — poverty, corruption, war, and disease.

But after four decades of relative stagnation, Africa has been growing rapidly. Since the 1990s, many African countries have seen economic and political improvements, more transparent elections, increased democracy and freedom of press. But these successes are not well understood.

In 2007, the National Bureau of Economic Research (NBER), the leading nonprofit economics research organization in the United States, set out to change that and put Brown economist David Weil at the helm. With a $4-million grant from the Bill & Melinda Gates Foundation, NBER launched the African Successes project. Instead of looking at what's wrong with Africa, the project is identifying and analyzing African successes, with the hope that the studies and data will help countries sustain and transfer their momentum.

NBER commissioned 40 original research projects to encourage collaboration among economists and to bolster the group of researchers working on African development. The project specifically wanted non-African specialists to learn more about the continent, with the goal of making Africa a more popular field for applied economics.

While co-directing the African Successes project, Weil is currently working on two of its 40 research initiatives — some of his first scholarly work on the continent.

"One of the project's missions is bring in people who haven't previously worked on or in Africa to study the new things that are happening there," said Weil, professor of economics. "I haven't done a lot of work in Africa before this, but part of being a co-director is leading and showing people that they can do it too."

Weil's first project examines the health impacts of a large-scale anti-malaria campaign in Zambia, which has become a model in sub-Saharan Africa. The initiative, which involved mass distribution of insecticide-treated mosquito nets, preventative treatment for pregnant women, indoor residual spraying, rapid diagnostic testing, and artemisinin-based combination therapy, contributed to decreasing the death rate from malaria in Zambia by 60 percent since 2003.

In their working paper, Weil and his collaborators analyze data on health inputs and outcomes to measure the program's impact on overall population health. Using the national Health Management Information System, they specifically studied data for children under the age of 5 and focused on two anti-malaria measures — bed nets and house spraying. They found that 100,000 bed nets distributed in Zambia's rural areas led to a reduction of about 900 hospitalized malaria patients under age 5, and to a reduction of approximately 100 child deaths. Spraying had about half the effect. Weil cautions that these conclusions are extremely tentative, since it's difficult to establish causality when it comes to health improvements. He hopes to expand this line of research in the future, to study effects of malaria control on wages, education, labor supply, economic growth, and fertility.

Weil's second project under African Successes looks at the impact of an enormously popular cellphone-based money transfer system in Kenya, called M-Pesa ("M" stands for mobile and "Pesa" means money in Swahili). Launched in 2007 by Kenya's major cell phone company, M-Pesa allows individuals to deposit, send, and withdraw funds using mobile phones. Here's how it works: A young man working in Nairobi wants to send 1,000 shillings to his mother in their far-away village. Prior to M-Pesa, he would take a 15-hour bus ride to give his mom the money in person. Now, he can pay 1,000 shillings at an M-Pesa outlet, where the clerk will send him a text message informing him that the money has been deposited in his account. The young man can then text his mother, telling her that the money is available, so she can visit her local M-Pesa outlet and receive the cash. There are approximately 18,000 M-Pesa outlets in Kenya — compared to only 1,000 bank branches. Fast, cheap, and safe, M-Pesa has already revolutionized the country's financial system.

"A large fraction of the NGO community is sitting there, staring at this thing as it grows at Internet speed, and saying, 'My God, is this the beginning of something? Is this the beginning of banking for the poor? Is this going to be a vehicle through which people can get insurance or microloans?' You can just imagine a million things that this can change," Weil said.

Weil's research is looking at the impact of M-Pesa in Kenya and using it to study other economic issues, such as discount rates — that is, how much people value getting money now, versus getting a larger amount in the future.

"It's such an interesting thing and it's happening so quickly, so a lot of people are attracted to it. It fits very nicely into the African Success project. It's a success. It's new. And it's happening now, so it's something economists should be studying."

Deborah Baum | EurekAlert!
Further information:
http://www.brown.edu

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