American trade policy towards Sub Saharan Africa –- a meta analysis of AGOA

Twelve econometric studies investigating the impact of agoa presented in this paper have reported 174 different estimates. In testing for publication bias and whether there is a genuine empirical impact of agoa we resort to a meta-analysis. The meta-analysis provides us with a formal means of testing for publication bias and an empirical effect. The result shows significant publication bias in the selected studies. However, in a few cases the test for a genuine effect is passed successfully. The results of the meta-analysis indicates that agoa increased the trade of beneficiaries by 13.2%

American trade policy towards Sub Saharan Africa –- a meta analysis of AGOA

Twelve econometric studies investigating the impact of agoa presented in this paper have reported 174 different estimates. In testing for publication bias and whether there is a genuine empirical impact of agoa we resort to a meta-analysis. The meta-analysis provides us with a formal means of testing for publication bias and an empirical effect. The result shows significant publication bias in the selected studies. However, in a few cases the test for a genuine effect is passed successfully. The results of the meta-analysis indicates that agoa increased the trade of beneficiaries by 13.2%.Trade preference regimes; African Growth and Opportunity Act (AGOA); Publication bias; Meta-Regression Analysis; Funnel plot; Study effect

Essays on trade preferences of the USA and exports of developing countries

The African Growth and Opportunity Act (AGOA) and the Caribbean Basin Trade Protection Act (CBTPA) of the USA are trade preference programmes offering reduced tariffs to African countries. We investigate the impact of the preferences on the exports of the recipients in this thesis. Using annual data on mirror exports, macroeconomic, social, cultural and religious variables, we evaluate the impact of the preferences in three different ways—(1) difference-in-differences, (2) quantile and (3) matching estimators. As part of our review of the empirical evidence, we conduct a meta-analysis to summarise the quantitative AGOA literature. This is augmented with a meta-regression to investigate the presence of publication bias. In chapter 3, the first of the three empirical chapters, the question asked is, “has there been an observed increase in the exports of AGOA and CBTPA recipients to the USA compared to their exports to the rest of the world?” The identification of the impact consists of modelling the selection in exporting that occurs and accounting for the zero trade occurring at the HS-6 digit level of disaggregation. One result is that, the impact of the preference varies with the level of product aggregation. The two remaining chapters focus on the AGOA preference and is identified due to the exogenous provision of the preference. Chapter 4 adopts a matching approach while chapter 5 is based on a quantile regression. The matching estimates providing the mean impacts are negative for exports to the USA compared to the counter-factual. In Chapter 5, we show that, the impact of the preference on the recipients is unequal—oil exporters are the largest gainers. We decompose the impact by using the Oaxaca-Blinder decomposition found in Machado and Mata (2005) for quantile regressions. We find that, the gains to AGOA recipients are confined to the top half of the export distribution—implying that the gains from AGOA are unequal and thus heterogeneous in their impact on the recipients

Agri-food trade in GTAP-HET: Returns to scale in agriculture, and the Melitz model

Agricultural protection is almost always a highly sensitive issue in bi- and multi-lateral trade negotiations. The reasons for this are usually political, but it always means there is a high demand among policy makers for analytical tools which can assess the often complex impacts of liberalisation on farm viability, land use change, and consumer food prices. Since their inception, Computable General Equilibrium (CGE) models have made a rich contribution to this analysis. However, when standard assumptions of constant returns to scale and perfect competition are used, this can limit the ability of such models to answer the questions being asked by policy makers. Put simply, these questions often amount to “what are the opportunities, and what are the threats?” If returns to scale are not constant, or if other sources of productivity variation are present in a domestic farming system, the same liberalising policy may represent an opportunity to one farmer, and a threat to another, even if the two are producing the same commodity in the same country. Combining the macroeconomic width and rigour of a CGE model with the heterogeneity of domestic farm systems represents an exciting frontier in agri-food trade policy analysis. This paper will present the current evidence on returns to scale in agricultural sectors in selected countries – drawing on fixed and variable cost share data from the USDA, and European national Farm Business Surveys collated in the Farm Accountancy Data Network (FADN). Where the evidence for increasing returns to scale is clear, it follows that there is a clear case for the importance of making use of the Melitz model, or some alternative to the standard constant returns to scale assumption

Simulating the Impact of the Global Economic Crisis and Policy Responses on Children in Ghana

Like many countries in sub-Saharan Africa, Ghana is experiencing the impact of the global crisis and the uncertain economic outlook. Indeed, as Ghana’s economy is among the most open in Africa, it is expected that the country has been and will continue to be severely affected by the crisis, although strong export prices of its main exports (gold and cocoa) may at least partially counteract the effects associated with the crisis. The main goal of this paper is to understand the potential impacts of the 2008/9 global crisis on different dimensions of child poverty (monetary, hunger, school participation, child labour and access to health services) in Ghana and to support the policy-maker in designing the most appropriate policy response to counteract the negative effects of the crisis. As timely data are not available, a combined macro-micro economic model to predict the impact of the global crisis on children was developed. Simulations suggest that the financial crisis would increase monetary poverty and hunger across all regions of Ghana, eroding many of the gains made over the past few years. Indeed, in comparison with the year preceding the crisis, instead of a reduction of four percentage points in child monetary poverty in 2011 predicted in the absence of crisis, the simulations indicate a 6.6 percentage point increase, with a continuous increasing pattern over the period of study. The global crisis is also predicted to severely deepen hunger among children, which is simulated to increase up to 6.6 percentage points in 2011 beginning with a sharp increase already in 2009. For both monetary poverty and hunger, the impact of the crisis differs across all regions, with the Eastern, Volta and Greater Accra regions predicted to be the most affected. Children’s participation in schooling and labour, as well as their access to health services, are forecast to be much less affected by the crisis, although it is found to reverse predicted increases in enrolment and health access (with substitution toward more modern types of health services) and forecasted reductions in child labour. Finally, alternative policy options have been simulated: a cash transfer programme targeted to poor children is found to be generally more effective in protecting children than food subsidies. Indeed, with a total budget equivalent to 1% of 2008 GDP, a cash transfer – equivalent to an individual annual amount of 19.8 Cedis – would cut the predicted increase in monetary poverty by over two percentage points in 2011. Although Ghana might be in a position to rapidly implement a cash transfer programme building on the existing Livelihood Empowerment against Poverty (LEAP) programme, other interventions (or mix of policies) might be more cost-effective in the short run. A combination of a universal or regionally targeted cash transfer programmes for children aged 0 to 5 years old, together with a school-feeding programme in poorer regions, might represent an effective way to intervene quickly to improve child well-being.Global economic crisis, child poverty, hunger, education, child labour, health, West and Central Africa, Ghana, social protection

American trade policy towards Sub Saharan Africa –- a meta analysis of AGOA

Twelve econometric studies investigating the impact of agoa presented in this paper have reported 174 different estimates. In testing for publication bias and whether there is a genuine empirical impact of agoa we resort to a meta-analysis. The meta-analysis provides us with a formal means of testing for publication bias and an empirical effect. The result shows significant publication bias in the selected studies. However, in a few cases the test for a genuine effect is passed successfully. The results of the meta-analysis indicates that agoa increased the trade of beneficiaries by 13.2%

The impact of trade preferences on exports of developing countries: the case of the AGOA and CBI preferences of the USA

In this paper we study the impact of AGOA and CBTPA preferences on Sub-Saharan Africa and Caribbean Basin beneficiaries respectively. The identification of the impact consists of modelling the selection in exporting that occurs and accounting for the zero trade occurring at the HS-6 digit level of disaggregation used in the paper. The AGOA impact has in the literature been found to be driven mainly by apparel and textiles and oil and energy related products. We find evidence corroborating this, we do also find a strong impact of the AGOA and CBTPA preferences for the beneficiary countries in non apparel and textile products. Another result is that the strength of the estimated impact in several cases increases with the level of product aggregation. Finally, not controlling for zero trade flows and the choice of panel data estimator significantly biases the estimated impact. A large sample size as in our case in most cases attenuates this bias and increases consistency

Is the impact of AGOA heterogeneous?

The literature reports the mean impact of trade preferences. The literature on the agoa impact is no exception. The mean impact can be sensitive to heterogeneity in the adoption of preferences by recipients. Nonetheless, the choice of countries included in the sample can play a role in determining the level of the impact. A small increase at the bottom of the distribution is more likely to present a large impact (in percentage terms) compared to the top 20\% -- 5\%. In this paper, we investigate the gains to developing countries focusing on where they lie on the export distribution. This way, heterogeneity can be controlled for and the impact at various percentiles of the distribution can be estimated. We carry out a quantile regression on a sample of countries selected by matching countries on an estimated propensity score as well as the full sample for comparison. Secondly, we decompose the impact using methodology in the spirit of the Oaxaca-Blinder decomposition found in Machado and Mata (2005) for quantile regressions. We find that gains to agoa recipients is confined to the top 5\% of the export distribution. On the contrary the gains to the recipients from exporting to the EU is mainly at the bottom 25\% and the median. There is an unambiguous decline in their exports to the rest of the world relative to the counter-factual countries they are compared with. The decomposition exercise supports the quantile results and shows that both coefficient and the covariate differences between the two groups explain the difference in the total change at the various quantiles

A skeptics view of the AGOA preferences of the USA: A propensity score matching approach

Majority of the agoa impact literature have mainly resorted to regression analysis. In this paper, a change towards constructing a counter-factual set of countries is adopted. In doing this, the propensity score matching framework is used in estimating the average treatment effect on the treated (ATT) of the agoa policy on recipient countries. The results show that countries exporting to the USA did increase their shares of agoa exports while reducing their share under the most favoured nation tariffs. The exports levels on the other hand, are not significant in most cases. In comparing the shares of exports to the USA to those of the EU and rest of the world, an unambiguous decrease in the share of exports to the rest of the world is observed. However, the shares of exports to the USA and EU in most cases increased. The contribution of the paper is in providing a consistent and robust matching framework to study the agoa trade preferences

A matching approach to study the impact of agoa on Sub-Saharan African countries

The impact of the USA's agoa preferences on SSA countries is studied using a matching approach. The results indicate that agoa beneficiaries have exported less to the USA compared to their matched controls. However, this has not been the case for their exports to the EU which has seen a higher share of exports relative to the control group. In addition, the results show that, in the short--run the SSA countries reduce exports to the EU in order to take advantage of agoa. Thus, due to capacity constraints these countries switched exports from the EU to the USA market. China, OECD, European and other developed countries are excluded from the control group used in the analysis. We therefore do not expect the strengths of these economies to be driving any of our result