The evidence suggests potential roles for both reductions in marginal costs and in markups through entry of new firms. Figure 2 shows a plot and linear best fit line of the change in price in a economy between 2011 and 2017 and the change in the number of firms. Changes in prices in this figure are real, adjusted for inflation by subtracting off the change in the local PPP price index. Several economies including Burkina Faso, Cameroon, Cote d’Iovire, Mali, and Zambia experienced substantial declines in price and also increases in the number of firms by 2 to 4, amounting to economically meaningful declines in concentration. Other economies including Lesotho, Mauritius, and Sierra Leone experienced substantial reductions in prices without changes in market structure, suggesting a role for reductions in marginal cost.

To the extent that prices in Africa remain high, another important question is whether this is due to higher barriers to entry or to widespread cartel conduct across the continent. To summarize the candidate hypotheses, Figure 3 reports average values by continent of four proxies for market competitiveness. The first (upper left-hand) panel shows that the effectiveness of anti-monopoly policy, according to a survey of experts (Schwab, 2019), is highest on average in Europe and North America and the second lowest in Africa (though in South America it is lower). This fact is often used to suggest that insufficient antitrust could explain high prices in Africa (e.g., World Bank, 2016; Cherif et al., 2020). A different pattern emerges however in the second (clockwise, upper right-hand) panel, which shows the share of consumption sold under a known private cartel (Connor, 2020). Here, less than 10 percent of cement consumption is sold under a known cartel in the average African economy, while more than 90 percent of cement consumption is sold under a cartel in Europe.<sup>9</sup> Taken at face value, this result suggests Africa is less cartelized than other continents. Of course, cartels in Africa could be unknown because of less effective anti-monopoly policy leading to fewer investigations so these data are not conclusive.

The bottom two panels of Figure 3 show averages of two more variables suggesting alternative hypotheses. Africa is in the middle of other continents in terms of procedures to start a new business, as reported by the Doing Business Indicators (World Bank, 2020a). There are more procedures in Africa compared to Europe and North America, suggesting entry barriers might play a role in higher prices. However, this evidence is also not conclusive. Hallward-Driemeier and Pritchett (2015) show that there is zero correlation between this de-jure measure of the number of procedures required to start a business and the de-facto time business owners report to get an operating license in another survey. The last (lower

> 9Almost all variation in these data is cross-sectional, as most economies with cartels have them in 2011 and 2017. Two economies that change cartel status between years do have prices that move as expected. Between 2011 and 2017 Indonesia removes a cartel and prices fall ($129 _/t →_ $106 _/t_ ), while the Philippines gain a cartel and prices rise ($113 _/t →_ $122 _/t_ ).

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