The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the World Bank, its Executive Directors, or the countries they represent. Acknowledgements: We would like to thank Anke Höffler for research assistance in section 2 and Chris Adam, Janine Aron, Kees Burger, Bill Kinsey, Remco Oostendorp, Ritva Reinikka, Francis Teal, Steve Younger and three referees for comments. Abstract: Africa has had slow growth and a massive exodus of capital. In many respects it has been the most capital-hostile region. We review and interpret the aggregate-level and microeconomic literatures to identify the key explanations for this performance. There is a reasonable correspondence of the two sets of evidence, pointing to four factors as being important. These are a lack of openness to international trade; a high-risk environment; a low level of social capital; and poor infrastructure. These problems are to a substantial extent attributable to government behaviour and the paper includes a review of the political economy literature which addresses that behaviour

preliminary draft. I have benefitted from the comments of participants at a number of seminars. Financial support from the National Science Foundation is gratefully Virtually all models of the household have the minimal implication that the equilibrium allocation of resources is Pareto efficient. Within many African households, agricultural production is simultaneously carried out on many plots controlled by different members of the household. Pareto efficiency implies that variable factors should be allocated efficiently across these plots. This paper provides a simple test of this weak implication of household models using an extremely detailed agronomic panel data set from Burkina Faso. I find that plots controlled by women have significantly lower yields than similar plots within the household planted with the same crop in the same year, but controlled by men. The yield differential is attributable to significantly higher labor and fertilizer inputs per acre on plots controlled by men. These results contradict the Pareto efficiency of resource allocation within the household. Production function estimates imply that about six percent of output is lost due to the misallocation of variable factors across plots within the household. The paper concludes with suggestions for a new model of intra-household allocations consistent with the empirical results

Households in the west African semi-arid tropics, as in much of the developing world, face substantial risk-- an inevitable consequence of engaging in rainfed agriculture in a drought-prone environment. It has long been hypothesized that these households keep livestock as a buffer stock to insulate their consumption from fluctuations in income. This paper has the simple goal of testing that hypothesis. Our results indicate that livestock transactions play less of a consumption smoothing role than is often assumed. Livestock sales compensate for at most thirty percent, and probably closer to twenty percent of income shortfalls due to village-level shocks alone. We discuss possible explanations for these results and suggest directions for future work.

The rural non-farm sector has traditionally been viewed as a low-productivity sector which produces low quality goods. It is often expected to wither away as a country develops. Recent years have seen a shift away from this position towards recognition that the rural non-farm sector can, and often does, contribute to economic growth, rural employment, poverty reduction, and a more spatially balanced population distribution. This paper reviews the literature on the conceptual and empirical underpinnings of this more recent perspective, focussing on the experience in developing countries. The paper documents the size and heterogeneity of the sector, pointing to evidence that in many countries the sector is expanding rather than declining. The issues associated with measuring the sector's economic contribution are discussed, followed by empirical assessments for several countries and regions. The distributional impact of non-farm earnings is examined and it is found that a pro-poor impact, while by no means inevitable, can be considerable. The sector's trajectory over time, in different settings, is reviewed and the scope for, and experience of, various policy interventions is discussed.

This paper is a review of the post-war literature on income distribution and development. It argues that the literature has cycled from one consensus to another, responding to emerging policy issues and new analysis. On the basis of the review, the paper identifies five areas that will command the attention of analysts in the coming two decades: ((i) country case studies rather than cross-country regression analysis, (ii) the phenomenon of increasing inequality, (iii) different levels of disaggregation, particularly distribution between broadly defined groups, (iv) intra-household allocation and (v) alternative modes of redistribution in face of inequality increasing tendencies.

this paper. This work was made possible by support provided in part by the US Agency for International Development (USAID) Agreement No. LAGA -00-96-90016-00 through the Broadening Access and Strengthening Input Market Systems Collaborative Research Support Program (BASIS CRSP). All views, interpretations, recommendations, and conclusions expressed in the paper are those of the authors and not necessarily those of the supporting or cooperating institutions

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This article investigates the economic efficiency of farm households, with an application to The Gambia. The efficiency analysis is conducted not at the farm level but at the household level, thus capturing the importance of off-farm activities. Output-based measures of technical, allocative, and scale efficiency are generated using nonparametric measurements. An econometric analysis of factors affecting the efficiency indexes is then conducted using a Tobit model. Technical efficiency is fairly high indicating that access to technology is not a severe constraint for most farm households. The cost of scale inefficiency is modest. Allocative inefficiency by contrast is found to be important for the majority of farm households. On the basis of the Tobit results, imperfections in markets for financial capital and nonfarm employment contribute to significant allocative inefficiency.

Are the household characteristics that are good for transition to a more diversified market-oriented development process in Vietnam also important for reducing poverty? Or are there tradeoffs? The determinants of both poverty incidence and participation in rural off-farm activities are modeled as functions of household and community characteristics using comprehensive national household surveys for 1993 and 1998. Despite some common causative factors such as education and region of residence, the processes determining poverty and inhibiting diversification are clearly not the same. Participation in the emerging rural non-farm market economy will be the route out of poverty for some, but certainly not all, of Vietnam's poor.

This paper analyses post-war coping strategies by farm households in developing countries. The analysis is based on a portfolio model of activity choices in war-affected rural Sub-Saharan Africa. A case study using farm household survey data estimates the determinants of agricultural coping strategies in post-war Mozambique. Post-war coping strategies differ from pre- and mid-crisis coping strategies. War-affected households are forced to adopt very risky coping strategies that re-enforce their vulnerability. Households choose between market and non-market forms of exchange and even consider exiting markets entirely. Post-war reconstruction policy should focus on re-capitalizing households, providing public goods and establishing markets. Acknowledgements I am very grateful for helpful comments from Tony Addison, Valpy FitzGerald, Pramila