Research

Publications

Value-Added in African Exports and Rules of Origin (with Bernard Hoekman, Marcelo Olarreaga, Marco Sanflippo & Rohit Ticku)

Published in "World Economy",  23 May 2025,  https://doi.org/10.1111/twec.13725, and

Robert Schuman Center for Advanced Studies Research Paper No. 2024/56, 2024. IGC blogpost

Rules of origin (ROO) are criteria determining when goods are eligible for trade preferences. A common feature of ROO is to require that products embody a minimum share of value originating in the exporting country or group of beneficiary countries. Using disaggregated trade data we estimate the levels of restrictiveness of ROO that maximise the domestic or regional value-added embedded in African preferential exports. We uncover significant heterogeneity in estimates of such ROO, ranging from a 26 percent domestic content rule for Uganda and Kenya to 78 percent in South Africa. Building on these results, we use firm-level trade and domestic transactions data for Uganda to assess the restrictiveness of ROO in the EU and African Continental Free Trade Area (AfCFTA). We find that both ROO regimes require levels of domestic content in Uganda’s exports that are too high. A reduction of ROO requirements would increase the total domestic value-added embedded in Uganda’s preferential exports to the EU and within AfCFTA.

Work in progress

Financial Constraints to Exporting: Evidence from Rwanda’s Export Growth Fund (with Lauren Bergquist, Jie Bai, and Ignacio Marra de Artiñano)

Initial results of the Diff-in-Diff estimation, technical appendix

Export-led growth has long been seen as a key to unlocking structural transformation. In pursuance of this goal, governments often enact industrial policies to encourage firms to overcome barriers to exporting. In this project, we evaluate Rwanda’s Export Growth Fund (EGF), which provides large subsidized loans to exporters and potential exporters at preferential interest rates. We aim to generate exogenous variation in loan take-up through a randomized door-to-door marketing campaign.

Information Constraints in Supplier Linkages in Rwanda  (with Lauren Bergquist, Jie Bai, Vittorio Bassi, and Ignacio Marra de Artiñano)

IGC policy brief of initial survey results.

In low-income countries multinational firms often do not source from local suppliers, importing a very high share of their inputs. Large corporations are often unaware of local supplier availability and cannot easily verify their reliability. In this project, we aim to examine the key constraints that prevent large firms from sourcing domestically in Rwanda. We will focus on the role of information constraints related to: (i) identifying reliable suppliers and (ii) assessing their quality standards. Our final aim is to conduct a randomized controlled trial (RCT) of a firm-matching platform to connect multinational buyers established in Rwanda with local suppliers.

Striving for quality - the impact of certification on firm performance and quality upgrading  (with Lauren Bergquist, Jie Bai, Vittorio Bassi, and Ignacio Marra de Artiñano)

Quality certifications are critical for firms in low-income countries to access profitable markets, but obtaining certification is often challenging, especially for smaller enterprises lacking resources or expertise. The impact of certification remains uncertain: does it drive quality improvements or merely signal existing quality? How does it affect firm performance, suppliers, and buyers? Certification may enhance sales and market entry or lead to supplier switching and reduced consumer choice by creating barriers. This study investigates these questions in Rwanda using two steps. First, we link firm certification data with administrative tax data to conduct a difference-in-difference analysis of certification’s impact. Second, we plan a RCT in partnership with the Rwanda Standards Board (RSB) to evaluate a technical assistance program aimed at facilitating firm certification, providing robust evidence on these issues.

Estimating the impact of digital trade rules on services exports in Rwanda and Uganda  (with Martina Ferracane, Erik van der Marel, and Tomas Rogaler)

Digital trade is transforming economies, yet gaps remain in understanding its development in contexts like Uganda and Rwanda, despite ambitious digital transformation initiatives in both countries. Rwanda’s Ministry of ICT has launched a program aligned with its National Strategy for Transformation (NST2), while Uganda’s Digital Transformation Roadmap emphasizes regulations for fostering e-commerce. This project aims to assess the regulatory landscape, identify key challenges, and provide recommendations to strengthen digital trade policies. Combining desk research and interviews with stakeholders, it seeks to bridge academic insights and policy developments to support effective digital transformation

The use of high-frequency decentralized data: Constructing a consumption panel using transaction-level data from Mobile Money and Bank Transfers (with Sevi Mora)

Related application in Spain and general idea.

This project leverages Rwanda’s comprehensive electronic transaction data—including mobile money (MoMo) and bank transfers—to create a highly granular and real-time economic dataset. By merging transaction records across all mobile money providers and banks, the study aims to generate a representative consumption and income panel, offering insights into income distribution, consumption trends, and policy impacts. This approach addresses key gaps in low-income countries, which often lack timely economic measurements, by capturing informal transactions typically missed in traditional surveys. Rwanda’s widespread use of mobile money (92% of the population) and robust payment infrastructure provide an ideal setting for this groundbreaking work. The project seeks to improve national accounts, develop new economic indicators, and inform policymaking while establishing a model that could be scaled to other developing economies.

Working Papers from my PhD

Investment, misallocation, and markets for land - evidence from Uganda - Job market paper

Low levels of agricultural investment and misallocation of productive inputs are key determinants of Africa’s low agricultural productivity. In this paper we study the joint impact of land rental and sales markets on both land allocation and investment incentives using panel data for Uganda and exploit exogenous regional variation in market frictions. We find that a lower degree of market frictions increases the efficiency of the land distribution and that lower frictions allow farmers to partially substitute land rentals through land purchases. We further show that long-term investments in land are more frequent on owner-operated than rented land which highlights the implicit role of the sales market for investments. Building on this, we develop a dynamic structural model to quantify the impact of land market frictions and the investment gap between owner-operated and rented land. We find that reduced misallocation through the rental market increases productivity by around six percent. Lower frictions in the land sales market, however, increase misallocation and thereby decrease productivity by around eight percent. At the same time, higher investment incentives cause larger capital accumulation increasing output and consumption. Under the complete markets scenario, the effect of misallocation via the rental market and higher investment incentives under a frictionless sales market amplify each other which almost doubles aggregate consumption.

Weather shocks and financial constraints to agricultural climate adaptation

Along increasing average temperatures, the rising frequency of extreme weather events is one of the major threats of climate change - in particular for agriculture. In this paper we develop a dynamic heterogeneous-agents model of a farming economy in which farmers have

rational expectations about the arrival of weather shocks. Farmers can invest in adaptive capital which mitigates damage in the case of an adverse one-period event in the future. Investments in adaptive capital can be financed by credit whose availability depends on individual ownership of semi-exogenous land used as collateral. We use the model to quantify different shock scenarios in terms of their impact on investment, productivity and the welfare distribution. We find that the presence of a collateral constraint has substantial distortionary effects on investments and welfare in particular for low productive farmers who rely strongly on external borrowing. At the same time, our results suggest that the aggregate welfare impact depends on price effects that shift relative income changes between farm operators and land investors which has differential effects for low and high productive farmers. In the most extreme scenario that we consider, this leads to a 0.3 percentage point lower welfare reduction under incomplete credit markets relative to the frictionless economy.

Further publications

• Promoting serivces-led transformation and exports in Africa, (with Richard Newfamer and Andrew Wormer), WTO's "LDC Trade Priorities - Looking Forward" Series, 2024, link.

• Non-economic objectives: how they are driving trade policy and impacting low-income countries, (with Nathalie Raschka), EUI, RSC, Policy Paper, 2024/01, Global Governance Programme, 2024, link, IGC blogpost.

• Growth and Resilience through Trade: New Post-Pandemic Policies; World Bank Rwanda Country Economic Economic Memorandum: Pathways to Sustainable and Inclusive Growth in Rwanda, lead author, 2024. link.

• Towards catalysing an action programme for the Coalition of Trade Ministers on Climate: Four suggested action points, (with Richard Newfarmer, 2024, IGC policy brief and blogpost.

• The use of climate-economy models in Rwanda's Finance Ministry and public institutions. The challenges in building analytical capability,(with Didace Irafasha). LSE Grantham Institute and Coalition of Finance Ministers on Climate Synthesis Report, forthcoming. Link.