Are Borders Barriers? The Impact of International and Internal Ethnic Borders on Agricultural Markets in West Africa

Posted: 22 Jul 2010

See all articles by Jenny C. Aker

Jenny C. Aker

Tufts University - The Fletcher School of Law and Diplomacy; Center for Global Development

Michael W. Klein

Tufts University - The Fletcher School of Law and Diplomacy; National Bureau of Economic Research (NBER)

Stephen A. O'Connell

Swarthmore College - Economics Department; University of Oxford - Centre for Study of African Economics

Muzhe Yang

Lehigh University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 9, 2010

Abstract

This paper addresses two important economic issues for Africa: the contribution of national borders and ethnicity to market segmentation and integration between and within countries. Market pair regression analysis provides evidence of higher conditional price dispersion for both a grain and a cash crop between markets separated by the Niger-Nigeria border than between two markets located in the same country. A regression discontinuity analysis also confirms a significant price change at the international border. The international border effect is lower, however, if the cross-border markets share a common ethnicity. Ethnicity is also linked to higher price dispersion within Niger; we find a significant intranational border effect between markets in different ethnic regions of the country. This suggests that ethnic similarities diminishing international border effects could enhance international market integration, and ethnic differences could contribute to intranational market segmentation in sub-Saharan Africa. We provide suggestive evidence that the primary mechanism behind the internal border effect is related to the role of ethnicity in facilitating access to credit in agricultural markets. We argue that the results are not driven by differences in price volatility or observables across borders.

Keywords: Africa, border effects, agriculture, regression discontinuity design

JEL Classification: O1, Q1

Suggested Citation

Aker, Jenny C. and Klein, Michael W. and O'Connell, Stephen A. and Yang, Muzhe, Are Borders Barriers? The Impact of International and Internal Ethnic Borders on Agricultural Markets in West Africa (April 9, 2010). Available at SSRN: https://ssrn.com/abstract=1646622

Jenny C. Aker (Contact Author)

Tufts University - The Fletcher School of Law and Diplomacy ( email )

Medford, MA 02155
United States

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
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Michael W. Klein

Tufts University - The Fletcher School of Law and Diplomacy ( email )

Medford, MA 02155
United States
617-627-2718 (Phone)
617-627-3712 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Stephen A. O'Connell

Swarthmore College - Economics Department ( email )

Swarthmore, PA 19081
United States
610-328-8107 (Phone)
610-328-7352 (Fax)

HOME PAGE: http://www.swarthmore.edu/SocSci/soconne1/

University of Oxford - Centre for Study of African Economics

Wellington Square
Oxford OX1 3JP
United Kingdom

Muzhe Yang

Lehigh University - Department of Economics ( email )

621 Taylor Street
Bethlehem, PA 18015
United States

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