The Economy of Affection and Local Enterprises in Africa: Empirical Evidence from a Network Study in Burkina Faso and Senegal

by Tomomi Tokuori 

Abstract

This paper, based on the results of a quantitative and qualitative survey, investigates the role that networks play in the construction sector in Burkina Faso and Senegal. The aim of this study is to uncover the effects of the economy of affection among African owned-enterprises through a comparative study of networks. The results indicate that the networks embedded in the economy of affection have both costs and benefits to actors in the construction sector in Burkina Faso as well as Senegal. Moreover, the degree of those costs is likely to vary according to socio-cultural attributes. Through its informal institutions, the economy of affection facilitates business transactions and fosters networking. At the same time, it encourages relatives and friends to become dependent on the entrepreneurs and limits their chance of succeeding. They become, if not parasites, at least a burden that entrepreneurs have to cope with. These extra expenses may be compared with the legally imposed social expenditures that modern corporations in Japan and Western countries have to carry.

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Tomomi Tokuori is a doctoral student at the graduate school of Economics and Business Administration of Hokkaido University. She is also a visiting researcher at the Hokkaido Development Engineering Center in Japan.