Does ethnic diversity decrease economic interactions? Evidence from exchange networks in rural Gambia

As the end of the year is approaching, a little summary of my research work during 2014. 

This year I spent a lot of time in the field collecting the data for the follow-up survey of the Gambia Networks Project. We are currently cleaning the new data and looking forward to have a panel data of economic networks of our beloved villages. 

In the meantime, I kept working on the papers that use the baseline data. In a new working paper, joint with my Maestro Jean-Louis Arcand, we present evidence that ethnic diversity does not reduce economic interaction in rural Gambian villages:   

Using a unique dataset collected in 59 rural Gambian villages, we study how ethnic heterogeneity is related to the structure of four economic exchange networks: land, labor, inputs and credit. We find that different measures of village-level ethnic fragmentation are mostly uncorrelated with network structure. At a more disaggregated level, household heads belonging to ethnic minorities are not less central than those from the predominant ethnicity in any of the networks and, at the dyadic level, the fact that two households share ethnicity is not an economically significant predictor of link formation. Our results indicate that, in the particular setting of our study, the structure of the exchange networks is better defined by other variables than ethnicity, and that ethnic heterogeneity is unlikely to be a driver for sub-optimal economic exchanges. We argue that our findings can be interpreted in a causal way as the current distribution of ethnic groups in rural Gambia is largely influenced by specific historical features of the British colonial administration. Moreover, the network structure of our data allow us to include fixed effects at different levels as well as to precisely measure kinship ties, a confounding variable often omitted in previous studies

Missing Links, Missing Markets: Evidence of the Transformation Process in the Economic Networks of Gambian Villages

As the end of the year is approaching, a little summary of my research work of 2014.

After more than four years of work, I am very proud that eventually "missing links, missing markets", one of the papers from the Gambia Networks Project, will be published in 2015 at World Development:

The aim of this paper is to contribute to the empirical analysis of the transformation process in traditional rural societies using a network perspective. A unique database collected in 60 villages in rural Gambia is used to study the ways in which households with links outside the village (a proxy for market connections) behave in the locally available exchange networks for land, labor, inputs, and credit. The econometric results at different levels of disaggregation provide suggestive evidence of substitutability between internal and external economic interactions, particularly in the case of reciprocal exchanges.

Here the original post about the paper, here Marc Bellemare's review.

Multilateral determinants of regionalism revisited

As the end of the year is approaching, a little summary of my research work of 2014.

In June, with Katerina Gradeva we published our "revisit" of the almost classic paper "Multilateral determinants of regionalism" (Mansfield and Reinhardt, 2003), and we found little support for the original results:

The idea that some features of the multilateral trading system create incentives for countries to join preferential trade agreements (PTAs) is among the first and most influential explanations for the wave of regionalism in the last decades. Until recently, only a few empirical studies have explored this hypothesis and their results have been accepted by many researchers and policy-makers to be a fact. In this study we revisit the question of whether multilateral events are important determinants of regionalism. We use an extended dataset and implement several empirical specifications in the analysis. Unlike previous work, our results provide little support for the relevance of variables such as the number of GATT/WTO members, ongoing trade negotiation rounds, and trade disputes as predictors of PTA formation.