With the objective of increasing knowledge on commodities markets and promoting cutting edge technologies for economic development, Africa House and our partner organizations, the Development Research Institute (DRI) and the Center for Technology and Economic Development (CTED), have established an agreement with the Ethiopia Commodity Exchange (ECX) to conduct a rigorous research agenda to evaluate ECX. Professors and PhD students from the Departments of Economics, Mathematics, and Computer Science at NYU and NYU-Abu Dhabi will analyze the impact of ECX in the Ethiopian economy, assess its institutional design and technology systems, and measure the performance of the market.
Mr. Bemnet Aschenaki, Chief Strategy Officer of ECX, and Prof. Yaw Nyarko, Director of Africa House and CTED and Co-Director of DRI, presented the objectives and scope of the partnership in a press conference at ECX offices in Addis Ababa. Mr. Aschenaki expressed the need of an independent evaluation of the exchange in order to understand its current value, identify the areas of improvement, and shape the future of the exchange. Prof. Nyarko remarked that the transfer of knowledge and local capacity building are key components of the agreement.
Established in 2008, ECX was conceived as a set of mechanisms and rules designed to address issues that limit the development of the agricultural sector, such as high transaction costs, information asymmetries, coordination failures, lack of contract enforcement, among others. The research team will study the performance of the exchange vis-à-vis its initial objectives by generating theoretical and empirical research outputs. The analysis of the Ethiopian experience will provide tools for other Sub-Saharan African countries to consider the development of commodity exchanges.
The research topics are organized into three broad categories:
- Impact on the welfare of different stakeholders, in particular small-scale producers
- Intermediation and institutional design
- Technology and diffusion of information