Jenny C. Aker

Mobile Phones and Economic Development in Africa

We examine the growth of mobile phone technology over the past decade and consider its potential impacts upon quality of life in low-income countries, with a particular focus on sub-Saharan Africa. We first provide an overview of the patterns and determinants of mobile phone coverage in sub-Saharan Africa before describing the characteristics of primary and secondary mobile phone adopters on the continent. We then discuss the channels through which mobile phone technology can impact development outcomes, both as a positive externality of the communication sector and as part of mobile phone-based development projects, and analyze existing evidence. While current research suggests that mobile phone coverage and adoption have had positive impacts on agricultural and labor market efficiency and welfare in certain countries, empirical evidence is still somewhat limited. In addition, mobile phone technology cannot serve as the “silver bullet” for development in sub-Saharan Africa. Careful impact evaluations of mobile phone development projects are required to better understand their impacts upon economic and social outcomes, and mobile phone technology must work in partnership with other public good provision and investment.

Dial 'A' for Agriculture: A Review of Information and Communication Technologies for Agricultural Extension in Developing Countries

Agriculture can serve as an important engine for economic growth in developing countries, yet yields in these countries have lagged far behind those in developed countries for decades. One potential mechanism for increasing yields is the use of improved agricultural technologies, such as fertilizers, seeds and cropping techniques. Public-sector programs have attempted to overcome information-related barriers to technological adoption by providing agricultural extension services. While such programs have been widely criticized for their limited scale, sustainability and impact, the rapid spread of mobile phone coverage in developing countries provides a unique opportunity to facilitate technological adoption via information and communication technology (ICT)-based extension programs. This article outlines the potential mechanisms through which ICT could facilitate agricultural adoption and the provision of extension services in developing countries. It then reviews existing programs using ICT for agriculture, categorized by the mechanism (voice, text, internet and mobile money transfers) and the type of services provided. Finally, we identify potential constraints to such programs in terms of design and implementation, and conclude with some recommendations for implementing field-based research on the impact of these programs on farmers’ knowledge, technological adoption and welfare.

Zap It to Me: The Short-Term Impacts of a Mobile Cash Transfer Program

Conditional and unconditional cash transfers have been effective in improving development outcomes in a variety of contexts, yet the costs of these programs to program recipients and implementing agencies are rarely discussed. The introduction of mobile money transfer systems in many developing countries offers new opportunities for a more cost-effective means of implementing cash transfer programs. This paper reports on the first randomized evaluation of a cash transfer program delivered via the mobile phone. In response to a devastating drought in Niger, households in targeted villages received monthly cash transfers as part of a social protection program. One-third of targeted villages received a monthly cash transfer via a mobile money transfer system (called zap), whereas one-third received manual cash transfers and the remaining one-third received manual cash transfers plus a mobile phone. We show that the zap delivery mechanism strongly reduced the variable distribution costs for the implementing agency, as well as program recipients’ costs of obtaining the cash transfer. The zap approach also resulted in additional benefits: households in zap villages used their cash transfer to purchase a more diverse set of goods, had higher diet diversity, depleted fewer assets and grew more types of crops, especially marginal cash crops grown by women. We posit that the potential mechanisms underlying these results are the lower costs and greater privacy of the receiving the cash transfer via the zap mechanism, as well as changes in intra-household decision-making. This suggests that m-transfers could be a cost-effective means of providing cash transfers for remote rural populations, especially those with limited road and financial infrastructure. However, research on the broader welfare effects in the short- and long-term is still needed.

Payment Mechanisms and Antipoverty Programs: Evidence from a Mobile Money Cash Transfer Experiment in Niger

Cash transfers have become an increasingly important component of social protection policies in both developed and developing countries. While such programs are often implemented electronically in developed countries, in many developing countries with weak financial infrastructure, such transfers are distributed manually, resulting in significant costs to program recipients and the public sector alike. The introduction of mobile money systems in many developing countries offers new opportunities for distributing cash transfers. Using data from a randomized experiment of a mobile money cash transfer program in Niger, we find evidence of benefits of this new system: household diet diversity was 9%–16% higher among households who received mobile transfers, and children ate an additional one-third of a meal per day. These results can be partially attributed to time savings associated with mobile transfers, as program recipients spent less time traveling to and waiting for their transfer. They are also associated with shifts in intrahousehold bargaining power for women. These results suggest that electronic transfers may address key logistical challenges in implementing cash transfer programs in developing countries but that sufficient investment in the payments infrastructure is needed.

West African Experience with the World Rice Crisis, 2007-2008

Rice production in Africa has tended to be low-yielding, geographically dispersed, and uncompetitive against low-cost Asian imports, even when protected by high freight costs and substantial trade barriers. Skyrocketing prices in world markets in 2007-08 were a shock to African consumers, producers, and governments alike. When international rice prices were relatively low, rice imports did not pose economic or political problems for West African governments. Extremely expensive imports reverse that equation. This paper addresses the response to that reversal first by presenting a historical review of trends in the West African rice sector and, second, by assessing the effect of world rice prices on domestic prices, primarily at the consumer level.

Social Networks and Household Welfare in Tanzania: Working Together to Get Out of Poverty

This paper examines empirically the effect of social capital, measured by household membership in community-based organizations and participation in village life, on the welfare of rural households in Tanzania. Using a database that combines standard information on household welfare with multidimensional measures of social capital, the paper attempts to address three challenges in the empirical estimation of the effect of social capital on household welfare: 1) the differential effects of household and village-level social capital; 2) the omitted variable bias associated with models of household expenditures; 3) and the joint endogeneity problem. Our main conclusion is that, controlling for omitted variables and joint endogeneity, household-level social capital is associated with a percentage increase in household per capita expenditures, and that this finding is robust to a variety of specifications and instruments. Preliminary results also suggest that social capital and human capital act as complements: as people acquire more education, the usefulness of these associations and networks for household expenditures is increased. Finally, we find that household-level social capital appears to be associated with a significant decrease in a households probability of being poor, indicating that social capital could be a valid investment for the rural poor in Tanzania.

Cash or Coupons? Testing the Impacts of Cash versus Vouchers in the Democratic Republic of Congo

Despite the increased use of conditional and unconditional cash-transfer programs worldwide, a majority of social protection programs in both developed and developing countries use in-kind transfers and vouchers. This paper reports the results of a randomized evaluation of an unconditional cash transfer and voucher program in the Democratic Republic of Congo, a country that has been plagued by intense civil war for much of the past two decades. In response to the devastating conflict, a number of international organizations have used cash and vouchers to assist internally displaced populations. While the value of the voucher was less than the household’s normal total food expenditures (infra-marginal), voucher households purchased more food items than they would have otherwise had they been provided with cash (extra-marginal). There was also no evidence that cash-transfer households were using their transfers for temptation goods. The differences in purchases did not lead to differential improvements in food security, household coping strategies, or asset ownership between the two groups. However, cash-transfer households were able to save a portion of their transfer, and the cash-transfer program was more cost effective for the implementing agency. These results suggest that unconditional cash transfers can be a more efficient means of improving outcomes for extremely vulnerable populations, even in failed states. However, access to markets for goods and services is a necessary precondition for cash-transfer programs to succeed.

ABC, 123: The Impact of a Mobile Phone Literacy Program on Educational Outcomes

CGD non-resident fellow Jenny Aker and co-authors report on the results from a randomized evaluation of a mobile phone education program (Project ABC) in Niger, in which adult students learned how to use mobile phones as part of a literacy and numeracy class. Overall, students demonstrated substantial improvements in literacy and numeracy test scores. There is also evidence of persistent impacts: six months after the end of the first year of classes, students in the program retained what they had learned better than others. The effects do not appear to be driven by differences in teacher quality or in teacher and student attendance. The results suggest that simple and relatively cheap information and communication technology can serve as an effective and sustainable learning tool for rural populations.

Is Information Power? Using Mobile Phones and Free Newspapers During an Election in Mozambique

Incumbent politicians in African countries have been cementing their positions in recent elections. That was the case of the Mozambican election of 2009, where the ruling party secured 75 percent of the vote, amid low participation and clear challenges of political accountability. We conducted a field experiment implemented nationwide based on three interventions providing information to voters and calling for their participation in the elections: an SMS civic education campaign centered on the elections, an SMS hotline to which citizens were able to report electoral misconduct, and the distribution of a free newspaper door-to-door focusing on voter education. We measure the effects of these treatments by looking at official electoral results, a behavioral measure of political participation, reports by electoral observers, and surveys. We find a clear positive effect of all treatments on voter turnout, close to five percentage points. Some treatments benefited incumbents. We also have evidence that the distribution of the free newspaper led to more accountability-based participation and to a decrease in the incidence of electoral problems. All treatments increased information but caused diverse effects on perceptions about politics.

Droughts, Grain Markets and Food Crisis in Niger

Famines are a common occurrence in the Sahelian region of Sub-Saharan Africa. In 2004, a drought occurred in Niger, resulting in a production shock, higher grain prices and a severe food crisis. Whereas a drought in 2000 resulted in lower per capita grain production relative to 2004, a food crisis did not occur. Similar to the Bangladeshi famine of 1974, the government and the media were quick to blame grain traders for the crisis, arguing that the removal of governmental regulations had led to a market failure during the crisis. Using a dataset that combines information on prices, transaction costs, rainfall, trade flows and food crisis status, we exploit rainfall variation to estimate the impact of drought on grain market performance in Niger during crisis and non-crisis years. Time series tests suggest that grain markets in Niger respond to supply shocks, and that markets are more integrated during drought years. Exploiting the exogenous nature of extreme rainfall in a difference-in-differences framework, we find that drought reduces grain price dispersion across markets. This impact is stronger as a higher percentage of markets are affected by drought, as was the case in 2004/2005. The results suggest that a market failure did not occur in 2005, contrary to media claims. Early warning systems in West Africa should focus on the spatial impact of drought and magnitude of production at the sub-regional level, as well as monitor prices in key forecasting markets. And finally, policies regarding the impact of local purchases and regional trade need to be carefully examined and discussed.