Anagaw Mebratie

Coping with shocks in rural Ethiopia

Abstract Using survey data and event history interviews undertaken in Ethiopia, we investigate which shocks trigger which coping responses and why. Relatively covariate natural and economic shocks trigger reductions in savings and in food consumption, while relatively idiosyncratic health shocks prompt reductions in savings and a reliance on borrowing. Surprisingly, across all shocks, households do not rely on gifts from family and friends, highlighting the need for formal protection systems. We argue that the insensitivity of food consumption to health shocks does not imply insurability but indicates that it is not a viable response to such a shock.

Firm heterogeneity and development: A meta-analysis of FDI productivity spillovers

We analyse the rich literature on FDI spillovers analysing econometric studies published over 1983–2010 and dealing with national studies in 30 developing countries and emerging markets. We find that these studies ignore two sources of heterogeneity: exports and – especially – R&D. Our meta-analysis corrects for differences in research design (including regional effects, sample size and level of aggregation). We observe positive and significant effects for heterogeneity in terms of labour quality, size and export. This robustness contrasts with contradictory findings for foreign ownership where 63% of the coefficients are insignificant or negative.

Healthcare-seeking behaviour in rural Ethiopia: evidence from clinical vignettes

Objectives To investigate the determinants of healthcare-seeking behaviour using five context-relevant clinical vignettes. The analysis deals with three issues: whether and where to seek modern care and when to seek care. Setting This study is set in 96 villages located in four main regions of Ethiopia. The participants of this study are 1632 rural households comprising 9455 individuals. Primary and secondary outcome measures Probability of seeking modern care for symptoms related to acute respiratory infections/pneumonia, diarrhoea, malaria, tetanus and tuberculosis. Conditional on choosing modern healthcare, where to seek care (health post, health centre, clinic and hospital). Conditional on choosing modern healthcare, when to seek care (seek care immediately, the next day, after 2 days, between 3 days to 1 week, a week or more). Results We find almost universal preference for modern care. Foregone care ranges from 0.6% for diarrhoea to 2.5% for tetanus. There is a systematic relationship between socioeconomic status and choice of providers mainly for adult-related conditions with households in higher consumption quintiles more likely to seek care in health centres, private/Non-Government Organization (NGO) clinics as opposed to health posts. Delays in care-seeking behaviour are apparent mainly for adult-related conditions and among poorer households. Conclusions The analysis suggests that the lack of healthcare utilisation is not driven by the inability to recognise health problems or due to a low perceived need for modern care.

Impact of Ethiopian pilot community-based health insurance scheme on health-care utilisation: a household panel data analysis

Summary Background In recent years, there has been a proliferation of community-based health insurance (CBHI) schemes designed to provide financial protection against the costs of health care and expand access to modern health-care services to the informal and rural sectors. In 2011, a pilot CBHI scheme was introduced in Ethiopia. This study aims to rigorously evaluate the effect of the scheme on access to health-care services and financial protection. Methods The study was conducted in 12 CBHI pilot districts and four control districts in four mail regions (Tigray, Amhara, Oromiya, and SNNPR) of Ethiopia. The control areas were selected on the basis of the same criteria used to select the intervention districts. In these districts, sample households were randomly selected before the introduction of the pilot scheme. The participants of the study were people in the informal sector. The sample covers 1203 randomly selected households from intervention districts and 429 households from non-intervention districts. About 41% (489 of 1203) of the sample households from the CBHI districts were members of the scheme. This study investigates the effect of CBHI on the outcomes of interest. The primary outcomes of the study are outpatient visits and inpatient days spent in modern health-care providers. In order to properly address the proposed issues, this study uses a mixed approach (quantitative and qualitative). The econometrics models used in the analysis include ordinary least-square and fixed-effect regressions. Moreover, for the sake of sensitivity checks, propensity-score-adjusted fixed-effect estimates were also employed. Findings The multivariate analysis provides robust evidence that the pilot scheme increases outpatient care services from modern providers. The mean number of outpatient care use per insured household member (0·19) was higher by 0·074 visits than the visits per non-insured household member (0·11; p=0·01). On the other hand, there was no significant difference in the size of inpatient care use that could be attributed to the pilot scheme (p=0·63). Among different groups of the population, the benefit of the scheme in terms of creating access to care is more pronounced for the rich than for the poor. Interpretation CBHI intervention could play a supportive role in creating access to cheaper outpatient care instead of relatively expensive inpatient care for the population in the informal sector. Funding The Netherlands Organisation for Scientific Research, grant number W07.45.103.00.

Foreign Direct Investment, Black Economic Empowerment and Labour Productivity in South Africa

The impact of foreign direct investment (FDI) on domestically owned firms in developing countries has been widely debated in the literature. It has been argued that FDI provides access to advanced technologies and other intangible assets, which may spill over to the host country and allow domestic firms to improve their performance. While there is a substantial literature on this issue, for obvious reasons, little is known about the effect of FDI on domestic firms in the African context. Noting this gap, this paper uses two-period (2003 and 2007) firm level panel data from South Africa to examine the impact of FDI on the labour productivity of domestic firms. A key policy change during this time period was the passage of the broad-based black economic empowerment act (BB-BEE) and we also examine the effect of the interaction between foreign firm ownership and BEE on labour productivity. Regardless of the empirical specification, we find no spillover effects and no evidence that a greater degree of BEE compliance by foreign firms influences labour productivity.

Uptake of health insurance and the productive safety net program in rural Ethiopia

Due to lack of well-developed insurance and credit markets, rural families in Ethiopia are exposed to a range of covariate and idiosyncratic risks. In 2005, to deal with the consequences of covariate risks, the government implemented the Productive Safety Net Program (PSNP), and in 2011, to mitigate the financial consequences of ill-health, the government introduced a pilot Community Based Health Insurance (CBHI) Scheme. This paper explores whether scheme uptake and retention is affected by access to the PSNP. Based on household panel data and qualitative information, the analysis shows that participating in the PSNP increases the probability of CBHI uptake by 24 percentage points and enhances scheme retention by 10 percentage points. A large proportion of this effect may be attributed to explicit and implicit pressure applied by government officials on PSNP beneficiaries. Whether this is a desirable approach is debatable. Nevertheless, the results suggest that membership in existing social protection programs may be leveraged to spread new schemes and potentially accelerate poverty reduction efforts.

Subjective expectations of medical expenditures and insurance in rural Ethiopia

Little is known about perceptions of medical expenditure risks despite their presumed relevance to health insurance demand. This paper reports on a unique elicitation of subjective probabilities of medical expenditures from rural Ethiopians who are offered the opportunity to purchase health insurance. We find that expectations are positively correlated with past expenses to a degree that exceeds the serial correlation in realized expenditures, suggesting overestimation of persistence and underestimation of the potential gains from insurance. Despite the fact that forecast expenditures do predict realized expenditures to some extent, there is no evidence that expectations influence the decision to take out health insurance, although plans to insure are positively related to the perceived dispersion of medical expenses.