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Patterns of correlation in innovation and contractual practices among manufacturing firms in Ethiopia and Sudan are documented. Network data that indicate whether any two firms in the utilized sample do business with each other, buy inputs from a common supplier, or sell output to a common client are used for the analysis. Only limited support is found for the commonly held idea that firms that are more proximate in a network sense are more likely to adopt similar practices. Indeed, for certain practices, adoption decisions appear to be local strategic substitutes: if one firm in a given location uses a certain practice, nearby firms are less likely to do so. These results suggest that the diffusion of technology and new business practices may play a more limited role in spurring growth in Africa's manufacturing sector than is often assumed in the present policy discussion.

Business practices --- Macroeconomics and Economic Growth --- Manufacturing firms --- Networks --- Technology diffusion --- Africa

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Using detailed geographical and household survey data from Nepal, this article investigates the relationship between isolation and subjective welfare. This is achieved by examining how distance to markets and proximity to large urban centers are associated with responses to questions about income and consumption adequacy. Results show that isolation is associated with a significant reduction in subjective assessments of income and consumption adequacy, even after controlling for consumption expenditures and other factors. The reduction in subjective welfare associated with isolation is much larger for households that are already relatively close to markets. These findings suggest that welfare assessments based on monetary income and consumption may seriously underestimate the subjective welfare cost of isolation, and hence will tend to bias downward the assessment of benefits to isolation-reducing investments such as roads and communication infrastructure.

Air --- Consumption --- Economic Theory and Research --- Externalities --- Health Monitoring and Evaluation --- Health, Nutrition and Population --- Inequality --- Macroeconomics and Economic Growth --- Mobility --- Poverty Reduction --- Road --- Roads --- Transport --- Transport costs --- Transport Economics, Policy and Planning --- Travel time --- Travel times --- True

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Surveys of the operation of agricultural traders in two Sub-Saharan African countries suggest that their performance would benefit from policies aimed at increasing their asset base, reducing transaction risk, promoting more sophisticated business practices, and reducing physical marketing costs. Drawing on original surveys of agricultural traders, Fafchamps and Gabre-Madhin examine how traders operate in two Sub-Saharan African countries, Benin and Malawi. They find the following: • The largest transaction costs for traders are search and transport. Search methods rely principally on personal visits by the trader, which raises search costs. And since enterprises are very small, transport represents a large share of marketing costs. • Brand recognition, grading, and quality certification are nonexistent. • Brokers and agents are not organized in commodity exchanges. • Quantities are not pooled for transport and storage so as to achieve returns to scale. • Interseasonal and interregional arbitrage is not feasible for most traders, who prefer to operate day to day in a small territory. This information provides some important insights into how agricultural trade could be improved. It suggests possible policy interventions in four main areas: increasing traders' asset base, reducing transaction risk, promoting more sophisticated business practices, and reducing physical marketing costs. This paper-a product of Rural Development, Development Research Group-is part of a larger effort in the group to understand the operation of commodity markets in rural areas. The study was funded by the Bank's Research Support Budget under the research project "Markets for Agricultural Inputs in Sub-Saharan Africa" (RPO 683-48). The authors may be contacted at marcel.fafchamps@economics.oxford.ac.uk or e.gabre-madhin@cgiar.org.

Agriculture --- Economic aspects.

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This paper investigates whether social structure helps or hinders factor allocation using unusually rich data from The Gambia. Evidence indicates that land available for cultivation is allocated unequally across households; and that factor transfers are more common between neighbors, co-ethnics, and kinship related households. Does this lead to the conclusion that land inequality is due to flows of land between households being impeded by social divisions? To answer this question, a novel methodology that approaches exhaustive data on dyadic flows from an aggregate point of view is introduced. Land transfers lead to a more equal distribution of land and to more comparable factor ratios across households in general. But equalizing transfers of land are not more likely within ethnic or kinship groups. In conclusion, ethnic and kinship divisions do not hinder land and labor transfers in a way that contributes to aggregate factor inequality. Labor transfers do not equilibrate factor ratios across households. But it cannot be ruled out that they serve a beneficial role, e.g., to deal with unanticipated health shocks.

Allocative Efficiency --- Communities and Human Settlements --- Culture and Development --- Factor Markets --- Indigenous Peoples --- Inequality --- Land Markets --- Poverty Reduction --- Social Division --- Social Networks

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"Internal migration plays an important role in moderating regional differences in well-being. This paper analyzes migrants' choice of destination, using Census and Living Standard Surveys data from Nepal. The paper examines how the choice of a migration destination is influenced by income differentials, distance, population density, social proximity, and amenities. The study finds population density and social proximity to have a strong significant effect: migrants move primarily to high population density areas where many people share their language and ethnic background. Better access to amenities is significant as well. Differentials in expected income and consumption expenditures across districts are found to be relatively less important in determining migration destination choice as their effects are smaller in magnitude than those of other determinants. The results of the study suggest that an improvement in amenities (such as the availability of paved roads) at the origin could slow down out-migration substantially. "--World Bank web site.

Amenity migration --- Migration, Internal