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

Using social network analysis, this paper studies the structure of trade networks that developed across West African borders. The first part aims to understand the centralization of cross-border trade networks. 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 study the trade-offs faced by traders between embeddedness and brokerage and 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. In the second part, we study the spatial structure of trade networks and the influence of national borders on the development of social ties. The paper shows that the spatial form of trade networks is constrained by the historical origin of the traders engaged in cross-border activities. 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.