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This book is open access under a CC BY 4.0 license.

The book examines the methodological challenges in analyzing the effectiveness of development policies. It presents a selection of tools and methodologies that can help tackle the complexities of which policies work best and why, and how they can be implemented effectively given the political and economic framework conditions of a country. The contributions in this book offer a continuation of the ongoing evidence-based debate on the role of agriculture and participatory policy processes in reducing poverty. They develop and apply quantitative political economy approaches by integrating quantitative models of political decision-making into existing economic modeling tools, allowing a more comprehensive growth-poverty analysis. The book addresses not only scholars who use quantitative policy modeling and evaluation techniques in their empirical or theoretical research, but also technical experts, including policy makers and analysts from stakeholder organizations, involved in formulating and implementing policies to reduce poverty and to increase economic and social well-being in African countries.

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Open Access

Policy Support Through Modeling and Evaluation: Methodological Challenges and Practical Solutions

A critical challenge for all policymakers wrestling with economic development and poverty reduction in Africa—as well as everywhere else in the world—is how to assess which programs and policies actually work. A corollary to this challenge is to identify, among the programs that do work, those that provide the best value for money. Methodological challenges include the development of adequate quantitative economic modelling tools for a comprehensive growth poverty analysis in an economywide framework. An even greater challenge, however, is for the knowledge and insights generated from economic modeling to find their way into the decision making process. In this context, the present volume contains a selection of tools and methodologies that can help to tackle the complexities of the analysis of policy processes and outcomes under the implementation of the CAADP agenda. The contributions go beyond the state-of-the-art methods and tools applied for quantitative policy impact analyses, as they also examine the process behind the choice of policies and the factors that determine the likelihood of their adoption and implementation.
Ousmane Badiane, Christian Henning, Eva Krampe

Modeling Economic Policies


Open Access

Macro-economic Models: Comparative Analysis of Strategies and Long Term Outlook for Growth and Poverty Reduction Among ECOWAS Member Countries

The Common Agricultural Policy of ECOWAS (ECOWAP) was adopted in January 2005, following a close consultation among member states and regional professional organizations. The adoption came <2 years after the launch of the Comprehensive Africa Agriculture Development Program (CAADP) under the New Partnership for Africa’s Development (NEPAD), an initiative of the African Union. In March 2005, ECOWAS organized, in Bamako, Mali, the Regional Implementation Planning Meeting for CAADP in West Africa. The meeting reviewed the objectives, targets, and principles of CAADP and their alignment with ECOWAP, and confirmed the latter as the political as well as institutional framework for the implementation of the former in the West Africa region. In May 2005, ECOWAS and the NEPAD Secretariat developed a joint ECOWAP/CAADP action plan for the period 2005–2010 for the development of the agricultural sector.
Ousmane Badiane, Sunday P. Odjo, Fleur Wouterse

Open Access

Macro-economic Models: How to Spend Uganda’s Expected Oil Revenues? A CGE Analysis of the Agricultural and Poverty Impacts of Spending Options

With the recent discovery of crude oil reserves along the Albertine Rift, Uganda is set to establish itself as an oil producer in the coming decade. Total oil reserves are believed to be two billion barrels, with recoverable reserves estimated at 0.8–1.2 billion barrels. This is comparable to the level of oil reserves in African countries such as Chad (0.9 billion barrels), Republic of the Congo (1.9 billion barrels), and Equatorial Guinea (1.7 billion barrels) but far short of Angola (13.5 billion) and Nigeria (36.2 billion) (World Bank 2010). Using a conservative reserve scenario of 800 million barrels, peak production, likely to be reached by 2017, is estimated by the World Bank to range from 120,000 to 140,000 barrels per day, with a production period spanning 30 years. A more optimistic scenario in this study is based on 1.2 billion barrels and sets peak production at 210,000 barrels per day (see Wiebelt et al. 2011). Although final stipulations of the revenue sharing agreements with oil producers are not yet known, government revenue from oil will be substantial. One estimate, based on an average oil price of US$75 per barrel, puts revenues at approximately 10–15% of GDP at peak production (World Bank 2010). The discovery of crude oil therefore has the potential to provide significant stimulus to the Ugandan economy and to enable it to better address its development objectives, provided oil revenues are managed in an appropriate manner.
Manfred Wiebelt, Karl Pauw, John Mary Matovu, Everist Twimukye, Todd Benson

Open Access

Micro-econometric and Micro-Macro Linked Models: Impact of the National Agricultural Advisory Services (NAADS) Program of Uganda—Considering Different Levels of Likely Contamination with the Treatment

An important problem in causal inference and estimation of treatment effects is identifying a reliable comparison group (control observations) against which to compare those that have been exposed to the treatment (treated observations). It is common knowledge that the estimate obtained by the difference in the values of the indicator of interest associated with the two groups could be biased due to lack of overlap in the covariate distributions or common support between the treated and control observations (Dehejia and Wahba 2002; Imbens and Wooldridge 2009). This is especially problematic with non-experimental control observations (Dehejia and Wahba 2002) in which case combining propensity score matching and regression methods has been suggested to yield more consistent estimates of the treatment effect than using either method alone (Imbens and Wooldridge 2009). Matching removes self-selection bias due to any correlation between the observable (pre-treatment) covariates and the dependent variable, while regression isolates the effect of change in the covariates on change in the dependent variable over the period of the treatment. Using the combined approach, this paper discusses the effect of using different sets of control groups on estimates of treatment effects of the agricultural extension system in Uganda, the National Agricultural Advisory Services (NAADS) program.
Samuel Benin, Ephraim Nkonya, Geresom Okecho, Joseé Randriamamonjy, Edward Kato, Geofrey Lubade, Miriam Kyotalimye

Open Access

Micro-econometric and Micro-Macro Linked Models: Modeling Agricultural Growth and Nutrition Linkages: Lessons from Tanzania and Malawi

While growth is necessary for poverty reduction, the extent to which poverty declines depends on its level and structure as well as characteristics of the poor. Agricultural growth in particular has been shown to be effective at reducing poverty in developing countries. For this reason there is also a perception that agricultural growth improves food and nutrition security outcomes, whether through home-production-for-own-consumption or household income channels. However, evidence in this regard is more mixed. Drawing on economywide modeling analyses, this paper explores methods for analyzing the complex linkages between (agricultural) growth, poverty, and food and nutrition security outcomes in developing country contexts. We find that the structure of growth and linkages between poor or malnourished households and the economy indeed strongly influence welfare outcomes. However, modeling analyses still fall short in accurately characterizing the “utilization” dimension of food security; for example, improvements in health or education associated with growth may improve the responsiveness of nutrition to higher agricultural productivity or household incomes. Some areas for model development and further research are identified.
Karl Pauw, James Thurlow, Olivier Ecker

Open Access

Micro-econometric and Micro-Macro Linked Models: Sequential Macro-Micro Modelling with Behavioral Microsimulations

Analyzing the poverty and distributional impact of macro events requires understanding how shocks or policy changes on the macro level affect household income and consumption. It is clear that this poses a formidable task, which of course raises the question of the appropriate methodology to address such questions. This paper presents one possible approach: A sequential methodology that combines a macroeconomic model with a behavioral micro-simulation. We discuss the merits and shortcomings of this approach with a focus on developing country applications with a short to medium run time horizon.
Jann Lay

Modeling Policy Processes


Open Access

Modeling and Evaluation of Political Processes: A New Quantitative Approach

This chapter develops the eCGPE as a theoretical framework and an empirically applicable tool for defining, evaluating and designing efficient participatory and evidence-based policy processes. The eCGPE is a sequential dynamic political economy equilibrium model that incorporates five modules that model legislative decision making, the transformation of policies into socioeconomic outcomes, interest mediation via voting and lobbying, political belief formation and policy learning. In contrast to existing political economy models, which highlight the biased incentives of politicians as a main cause of persisting inefficient policies, the CGPE approach explicitly incorporates the lack of adequate political knowledge as another important source of inefficient policy choices.
Christian Henning, Johannes Hedtrich

Open Access

A Network Based Approach to Evaluate Participatory Policy Processes: An Application to CAADP in Malawi

This chapter proposes a network-based framework to analyze and evaluate participatory and evidence-based policy processes. Four network based performance indicators are derived by incorporating a network model of political belief formation into a political bargaining model of the Baron–Grossmann–Helpman type. The application of our approach to the CAADP reform in Malawi delivers the following results: (i) beyond incentive problems, i.e. the lack of governmental accountability and government capture, political performance is limited due to a lack of adequate political knowledge and lack of political ownership. (ii) Changing participation structures implies a trade-off between different aspects of political performance, for example, we found a trade-off between political ownership and the use of political knowledge, shifting constitutional power from the government to the parliament in Malawi. Analogously, increasing political influence of donors implies a more efficient use of political knowledge but results in a simultaneous decrease of political ownership. (iii) There is no blueprint model for designing effective participation structures, hence, the identified causal relationships between structure and performance depend on the specific social, political and economic framework conditions found in Malawi.
Christian Henning, Eva Krampe

Open Access

The Formation of Elite Communication Networks in Malawi: A Bayesian Econometric Approach

This chapter presents an empirical approach towards analyzing the determinants of elite communication networks. Such an analysis allows for the evaluation of real-world participatory policy processes in terms of their informing and distorting nature. A case in point is the participatory policy process leading to the launch of the Comprehensive Africa Agriculture Development Programme (CAADP) in Malawi. Network data were collected via face-to-face interviews with Malawi’s political elite. In this approach, we use an extended binary regression framework, which can deal with missing values inevitably occurring within survey data. In fact, model parameters are estimated using an adaptation of the Bayesian estimation scheme for binary probit models based on the Markov Chain Monte Carlo (MCMC) methodology. Empirical results suggest that (i) homophily in policy interests is not a significant basis for tie choice, (ii) knowledge is an important but not leading determinant of communication, and (iii) the structural embeddedness of organizations within the network mainly determines the formation of ties. Overall, we summarize that, although the policy network formation underlying participatory structures in Malawi clearly discriminates between types of non-governmental organizations, it is not distorted in favor of specific social groups.
Christian Aßmann, Eva Krampe, Christian Henning

Open Access

Voter Behavior and Government Performance in Malawi: An Application of a Probabilistic Voting Model

This chapter integrates existing political economy approaches that explain the impact of voter behavior on government performance and advanced empirical voter studies that focus on voter behavior to derive theoretical hypotheses that will be empirically tested by estimating a probabilistic voter model for Malawi. In particular, we provide a theory that relates the relative importance of different voting motives for different social voter groups to induced electoral incentives for politicians and subsequently to government performance. Based on our theoretical model, we derive indices of government accountability and capture that are defined in political equilibrium and measure the government’s incentives to implement policies that serve pure self-interest or special interests at the expense of the general public. Based on the estimated model, we calculate theoretically derived indices of government accountability and capture. Moreover, we derive indices that measure the relative importance of different policy- and non-policy-oriented voting motives for a number of socioeconomic groups. Further, we evaluate the relationship between the relative importance of different voting motives and government performance (i.e., accountability and capture).
Christian Henning, Laura Seide, Svetlana Petri

Open Access

Whither Participation? Evaluating Participatory Policy Processes Using the CGPE Approach: The Case of CAADP in Malawi

In this chapter, we apply the CGPE model to analyzing the performance of policy processes with respect to the production of efficient policy choices. Within the CGPE approach participation of stakeholder organizations is modeled in two ways. First, as classical lobbying influence and second as informational influence within a model of political belief formation. An empirical application of the CGPE model to CAADP reforms in Malawi delivered the following results: (i) inefficient agricultural policies mainly result from lack of adequate political knowledge, while biased political incentives play only a minor rule. (ii) Policy beliefs of political practitioners differ significantly from economic models. Hence, our analyses imply a cleavage between the world of economic modeling and the world of political practice. (iii) As Bayesian estimation combining objective knowledge of scientific models with the subjective wisdom of practitioners results in a compromise of both worlds, we conclude that adequate political knowledge does not yet exist in the scientific system or in political praxis and must be created in the political process. (iv) Therefore, the only effective political therapy corresponds to the application of adequate tools that facilitate interactive communication and policy learning among stakeholders and economic modelers.
Christian Henning, Johannes Hedtrich, Ligane Massamba Sène, Eva Krampe

Concluding Remarks


Open Access

Strategic Analysis and Knowledge Support Systems (SAKSS): Translating Evidence into Action

As many sub-Saharan African countries have committed to the continent-wide goals of the Comprehensive African Agriculture Development Programme (CAADP) of the Africa Union and New Partnership for Africa’s Development (NEPAD), policymakers are challenged with designing and implementing national agricultutal strategies and policies that will allow them to achieve these goals. This chapter introduces the concept of a Strategic Analysis and Knowledge Support System (SAKSS) as a framework by which evidence can be used to inform and strengthen the effectiveness of agricultural strategies in Africa, and in particular, CAADP. The framework describes a range of ‘strategic analysis’ options and the kind of tools and approaches needed to ensure effective ‘knowledge support systems’ for promoting evidenced-based dialogue and decisionmaking, including practical approaches on how to go about setting up such systems at country level.
Michael E. Johnson

Open Access

Lessons Learned and Future Challenges

The contributions of this book can be understood as a continuation of the ongoing evidenced-based debate on the role of agriculture and participatory policy processes in reducing poverty. In this context, the economic modelling approaches presented in this book provide new insights into the agricultural versus nonagricultural growth nexus. Besides growth-poverty linkages, these particularly include nutrition-growth-poverty linkages and policy-growth linkages to identify key sectors and key policies within an effective Pro-Poor-Growth-strategy. In contrast to existing approaches, the political process has been explicitly integrated into this quantitative analyses. Thus, the derived CGPE approach allows a more comprehensive growth-poverty analysis, including not only the impact of biased political incentives, but also the lack of adequate political knowledge and ownership, respectively, as a source of low political performance. Political knowledge is reflected by policy beliefs which in turn are formed by political agents through communication and observational learning processes organized in policy networks. Effective participatory policy processes are characterized by policy network structures implying stakeholder influence that reflects both, the size of the society groups represented and the specific political knowledge of the stakeholder organizations. Apart from stakeholders, voters also play an important role in determining effective participatory policy processes. Voter behavior, i.e. the importance of policy versus non-policy voting motives, significantly determines both, governmental incentives and lobbying influence. While non-policy voting implies policy failure due to government capture and low government accountability, policy voting limits government performance depending on the extent to which voters’ policy beliefs are biased. Future challenges correspond to three areas: (1) modelling complex policy-growth linkages via policy impact functions (2) designing effective communication between science and political practice that allow an effective policy learning and (3) modelling voter behavior, especially the formation of voter beliefs in a political mass communication processes.
Christian Henning, Ousmane Badiane
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