The effects of market organization on conspiracies in restraint of trade

Mindful of the market structure-conduct-performance paradigm fundamental to industrial organization research, this paper uses laboratory experimental techniques to study the impact of conspiratorial opportunities on market performance. We compare ‘posted-offer’ markets where sellers (but not buyers) are all conspiratorial opportunities with observations from three control groups: (1) posted-offer markets without conspiratorial opportunities, (2) ‘double-auction’ markets with conspiratorial opportunities and (3) posted-offer markets with true single-seller monopolists. The basic conclusions generated by our experimental design are: (1) seller conspiracies in posted-offer markets tend to raise prices (but not profits) relative to similarly organized markets without conspiracies, (2) posted-offer conspiracies tend to generate higher prices (but not profits) than double-auction conspiracies, and (3) posted-offer monopolies tend to generate higher profits (but not prices) then posted-offer conspiracies.     

Perceptions of service delivery and happiness

An important task for students of development is to monitor progress in bringing basic services to all South Africans, one of the major objectives of the Reconstruction and Development Programme (RDP). This article reports on a subjective indicator study which began in February 1995, nine months after the April 1994 elections. The study, commissioned by Information Update, a Human Sciences Research Council research publication, inquired into personal happiness and assessments of local public services including access to water, education, electricity, health care, roads and transport. Over 5 700 South Africans were polled during 1995 in three nationally representative sample surveys. Secondary data analysis showed that perceived improvements to local services were closely associated with increases in happiness among all sectors of the population, including rural dwellers and the poor. The article discusses the policy implications of this finding for future voting behaviour and efficient local government.     

Is the emergence of new sovereign wealth funds a fashion phenomenon?

The paper deals with the important financial policy issue of the decision for a country to establish a sovereign wealth fund (SWF). Using a large-scale database, we analyze the economic, political and institutional factors that should be considered in such a decision. In particular, we test if the emergence of SWFs and more specifically of a specific type of SWFs can be explained by the following factors: the excess foreign exchange reserves due to natural resources rents or persistent current account surpluses; the volatility of commodity prices; the appreciation of the real exchange rate leading to the “Dutch Disease” effect and the governance of the country. The results suggest that countries with excess foreign exchange reserves, which are dependent on a commodity and which suffer from an appreciation of the real exchange rate are more likely to create a fund. We also find that commodity-based funds tend to be established in low democratic countries. Finally, our results suggest that the factors driving SWFs creation are different depending on the origin of the funding (commodity or non-commodity) and the macroeconomic objective(s) assigned to the fund. Our results may be of interest for policymakers debating whether or not it can be optimal for the country to establish a SWF.     

Labor‐saving technologies and structural transformation in northern Ghana

Labor‐saving technologies played a fundamental role historically in the structural transformation of agrarian economies. We focus on an emerging labor‐saving trend in Ghana, use of motorized tricycles (MTs), which provide an affordable alternative to manually transferring crops from plots to homestead. A household survey collected in 2017 in northern Ghana is used to shed light on how the time savings made available by using MTs may be converted into activities that enhance agricultural productivity and/or diversify the household away from agriculture. Detailed information collected on the agricultural production and agro‐processing behavior of 1,400 households allows us to examine the above transformative channels. Ordinary least squares and instrumental variable regressions are applied to quantify the effect of MTs on related outcomes. We find households are able to diversify their farming activities into selling processed agricultural goods with the time savings provided through MT adoption. Policies aimed to foster the diffusion of MTs elsewhere in Ghana may expedite structural change and, hence, economic growth.     

Monitoring quality of life in cities: The Durban case

South Africans were promised a better life for all in the run-up to the first democratic elections in 1994. Local governments throughout South Africa are seeking to improve service delivery to underdeveloped areas in line with the new policy. The seven councils of the Durban Metropolitan Area have a vision for the city, to be realised by the year 2015, that residents will live in acceptably serviced housing and will enjoy a generally high quality of life that can be sustained. To monitor performance towards achieving this vision, the Urban Strategy Department of the Durban Metropolitan Council initiated a project to guide budget allocations and measure the impact of local government actions on residents' perceptions of quality of life. This article reports on results from the pilot study for the project, which included a sample survey of 300 residents and in-depth interviews with a cross-section of 60 residents. The baseline study revealed vast differences in living conditions, access to services and life satisfaction across neighbourhoods. Satisfaction with housing and the neighbourhood, as indicated by disinclination to move, were major factors contributing to life satisfaction of Durban residents.     

Nutrition and signaling in slave markets: a new look at a puzzle within the antebellum puzzle

Between 1800 and 1860, mean adult stature of (U.S.) white males declined by nearly an inch, while real output grew substantially, creating the “Antebellum Puzzle.” In contrast, male slaves did not experience a comparable decrease in heights. To explain this puzzle within a puzzle, we show that the benefit of the marginal nutrient exceeded the cost throughout the antebellum era. As a result, it paid for slave owners to engage in the supplemental feeding of slaves, which increased their stature. While this is consistent with a productivity explanation of increased stature, we also argue that informational asymmetries played an important role in the market for slaves. Slave owners had an incentive to signal that their slaves were high-productivity laborers by supplying them with additional food, which positively impacted slave heights. We provide evidence that, distinct from a productivity explanation, signaling mattered in the trend of slave heights.