Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/csa/wpaper/2018-17.html
   My bibliography  Save this paper

Spatial Inefficiencies in Africa’s Trade Network

Author

Listed:
  • Tilman Graff
Abstract
Are roads in Africa connecting the right places to promote beneficial trade? I assess the efficiency of transport networks for every country in Africa. Using rich data from satellites and online routing services, I simulate optimal trade flows over a comprehensive grid of more than 70,000 links covering the entire continent. I employ a recently established framework from the optimal transport in economics literature to maximise over the space of networks and find the optimal road system for every African state. Where would the social planner ideally build new roads and which roads are superfluous in promoting trade? My simulations predict that the entire continent would gain more than 1.1% of total welfare from better organising its national road systems. Comparing current and optimal networks, I then construct a novel dataset of local network inefficiency for more than 10,000 African grid cells. I analyse roots of the substantial imbalances present in this dataset. I find that colonial infrastructure projects from more than a century ago still persist in significantly skewing trade networks towards a sub-optimal equilibrium. Areas close to former colonial railroads have about 1.7% too much welfare given their position in the network. I also find evidence for regional favouritism, as the birthplaces of African leaders are overequipped with unnecessary roads. Lastly, I uncover a descriptive relationship whereby large transport infrastructure projects from The World Bank are not allocated to regions most in need of additional roads.

Suggested Citation

  • Tilman Graff, 2018. "Spatial Inefficiencies in Africa’s Trade Network," CSAE Working Paper Series 2018-17, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2018-17
    as

    Download full text from publisher

    File URL: https://ora.ox.ac.uk/objects/uuid:233d3bca-3b18-4871-83df-6d321b787544
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dave Donaldson & Richard Hornbeck, 2016. "Railroads and American Economic Growth: A "Market Access" Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 799-858.
    2. Fuchs, Andreas & Dreher, Axel & Hodler, Roland & Parks, Bradley C. & Raschky, Paul, 2015. "Aid on Demand: African Leaders and the Geography of China s Foreign Assistance," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112838, Verein für Socialpolitik / German Economic Association.
    3. Alfred Galichon, 2016. "Optimal transport methods in economics," Post-Print hal-03256830, HAL.
    4. Benjamin Faber, 2014. "Trade Integration, Market Size, and Industrialization: Evidence from China's National Trunk Highway System," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(3), pages 1046-1070.
    5. Dave Donaldson & Adam Storeygard, 2016. "The View from Above: Applications of Satellite Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 171-198, Fall.
    6. Franck, Raphaël & Rainer, Ilia, 2012. "Does the Leader's Ethnicity Matter? Ethnic Favoritism, Education, and Health in Sub-Saharan Africa," American Political Science Review, Cambridge University Press, vol. 106(2), pages 294-325, May.
    7. Axel Dreher & Steffen Lohmann, 2015. "Aid and growth at the regional level," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 31(3-4), pages 420-446.
    8. Nicola Gennaioli & Ilia Rainer, 2007. "The modern impact of precolonial centralization in Africa," Journal of Economic Growth, Springer, vol. 12(3), pages 185-234, September.
    9. Sebastian Galiani & Stephen Knack & Lixin Colin Xu & Ben Zou, 2017. "The effect of aid on growth: evidence from a Quasi-experiment," Journal of Economic Growth, Springer, vol. 22(1), pages 1-33, March.
    10. Pablo Fajgelbaum & Cecile Gaubert, 2018. "Optimal Spatial Policies, Geography and Sorting," NBER Working Papers 24632, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dreher, Axel & Fuchs, Andreas & Langlotz, Sarah, 2019. "The effects of foreign aid on refugee flows," European Economic Review, Elsevier, vol. 112(C), pages 127-147.
    2. Pablo D. Fajgelbaum & Edouard Schaal, 2020. "Optimal Transport Networks in Spatial Equilibrium," Econometrica, Econometric Society, vol. 88(4), pages 1411-1452, July.
    3. Stephan Maurer & Ferdinand Rauch, 2023. "Economic geography aspects of the Panama Canal," Oxford Economic Papers, Oxford University Press, vol. 75(1), pages 142-162.
    4. Stelios Michalopoulos & Elias Papaioannou, 2020. "Historical Legacies and African Development," Journal of Economic Literature, American Economic Association, vol. 58(1), pages 53-128, March.
    5. Stelios Michalopoulos & Elias Papaioannou, 2018. "Spatial Patterns of Development: A Meso Approach," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 383-410, August.
    6. Luke Heath Milsom, 2023. "Moving OpportunityLocal Connectivity and Spatial Inequality," CEPREMAP Working Papers (Docweb) 2303, CEPREMAP.
    7. He, Guojun & Xie, Yang & Zhang, Bing, 2020. "Expressways, GDP, and the environment: The case of China," Journal of Development Economics, Elsevier, vol. 145(C).
    8. Treb Allen & Costas Arkolakis, 2022. "The Welfare Effects of Transportation Infrastructure Improvements," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(6), pages 2911-2957.
    9. Provenzano, Sandro, 2024. "Accountability failure in isolated areas: The cost of remoteness from the capital city," Journal of Development Economics, Elsevier, vol. 167(C).
    10. Dong, Lei & Du, Rui & Kahn, Matthew & Ratti, Carlo & Zheng, Siqi, 2021. "“Ghost cities” versus boom towns: Do China's high-speed rail new towns thrive?," Regional Science and Urban Economics, Elsevier, vol. 89(C).
    11. Andrew Dickens, 2017. "Ethnolinguistic Favoritism in African Politics," Working Papers 1702, Brock University, Department of Economics.
    12. Elena Perra, 2022. "Road to Division: Ethnic Favouritism in the Provision of Road Infrastructure in Ethiopia," Working Papers - Economics wp2022_01.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    13. Provenzano, Sandro, 2024. "Accountability failure in isolated areas: the cost of remoteness from the capital city," LSE Research Online Documents on Economics 120909, London School of Economics and Political Science, LSE Library.
    14. Pauly, Stefan & Stipanicic, Fernando, 2021. "The creation and diffusion of knowledge: Evidence from the Jet Age," CEPREMAP Working Papers (Docweb) 2112, CEPREMAP.
    15. Han, Yi & Wu, Mingqin, 2024. "Inter-regional barriers and economic growth: Evidence from China," Journal of Development Economics, Elsevier, vol. 167(C).
    16. Sanghamitra Bandyopadhyay & Elliott Green, 2016. "Precolonial Political Centralization and Contemporary Development in Uganda," Economic Development and Cultural Change, University of Chicago Press, vol. 64(3), pages 471-508.
    17. Das, Abhiman & Ghani, Ejaz & Grover, Arti & Kerr, William & Nanda, Ramana, 2024. "JUE insight: Infrastructure and Finance: Evidence from India’s GQ highway network," Journal of Urban Economics, Elsevier, vol. 142(C).
    18. Carter, Patrick, 2017. "Aid econometrics: Lessons from a stochastic growth model," Journal of International Money and Finance, Elsevier, vol. 77(C), pages 216-232.
    19. Fajgelbaum, Pablo & Redding, Stephen, 2014. "External integration, structural transformation and economic development: evidence from Argentina," LSE Research Online Documents on Economics 60285, London School of Economics and Political Science, LSE Library.
    20. Juergen Bitzer & Erkan Goeren, 2018. "Foreign Aid and Subnational Development: A Grid Cell Analysis," Working Papers V-407-18, University of Oldenburg, Department of Economics, revised Mar 2018.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:csa:wpaper:2018-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Julia Coffey (email available below). General contact details of provider: https://edirc.repec.org/data/csaoxuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.