Business, Brokers and Borders: The Structure of West African Trade Networks

Abstract

The objective of this paper is to show how a formal approach to networks can make a significant contribution to the study of cross-border trade in West Africa. Building on the formal tools and theories developed by Social Network Analysis, we examine the network organization of 136 large traders in two border regions between Niger, Nigeria, and Benin. In a business environment where transaction costs are extremely high, we find that decentralized networks are well adapted to the various uncertainties induced by long-distance trade. We also find that long-distance trade relies both on the trust and cooperation shared among local traders, and on the distant ties developed with foreign partners from a different origin, religion or culture. Studying the spatial structure of trade networks, we find that in those markets where trade is recent and where most of the traders are not native of the region, national borders are likely to exert a greater influence than in those regions where trade has pre-colonial roots. Combining formal network analysis and ethnographic studies, we argue, can make a significant contribution to the current revival of interest in cross-border trade in the policy field.

Keywords: Social networks; trade; border markets; brokerage; West Africa

JEL Classification: D85, F14, L14, P25