nep-afr New Economics Papers
on Africa
Issue of 2012‒04‒10
twenty-six papers chosen by
Quentin Wodon
World Bank

  1. The fertility transition in South Africa: A retrospective panel data analysis By Laura Rossouw; Rulof Burger; Ronelle Burger
  2. Reducing illegal immigration to South Africa: A dynamic CGE analysis By Heinrich R. Bohlmann
  3. Foreign Aid and Democratic Development in Africa By Dietrich, Simone; Wright, Joseph
  4. Aid and Dutch Disease in Sub-Saharan Africa By Fielding, David; Gibson, Fred
  5. Foreign Aid in Africa: Tracing Channels of Influence on Democratic Transitions and Consolidation By Resnick, Danielle
  6. Working Paper 147 - Gold Mining in Africa: Maximizing Economic Returns for Countries By AfDB
  7. Father’s employment and sons’ stature: the long run effects of a positive regional employment shock in South Africa’s mining industry By Martine Mariotti
  8. The Strategic Location of Regional Headquarters for Multinationals in Africa By John M. Luiz; Busi Radebe
  9. Welfare and Common Property Rights Forestry: Evidence from Ethiopian Villages By Dambala Gelo; Steven F. Koch
  10. Aid, Structural Change and the Private Sector in Africa By Page, John
  11. An overview of the development challenges and constraints of the Niger Basin and possible intervention strategies By Namara, Regassa E.; Barry, Boubacar; Owusu, Eric S.; Ogilvie, A.
  12. A comparative analysis of the technical efficiency of rain-fed and smallholder irrigation in Ethiopia By Godswill, M.; Namara, Regassa; Hagos, Fitsum; Awulachew, Seleshi Bekele; Ayana, M.; Awulachew, Bossio, Deborah
  13. Nominal and Real Exchange Rate Models in South Africa: How Robust Are They? By Balázs Égert
  14. Will the SARB always succeed in fghting inflation with contractionary policy? By Guangling (Dave) Liu
  15. Two Steps Forward, One Step Back: The Limits of Foreign Aid on Malawi.s Democratic Consolidation By Resnick, Danielle
  16. Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment: Evidence from a Randomized Controlled Trial By Jessica Cohen; Pascaline Dupas; Simone G. Schaner
  17. Aid, Growth and Private Capital Flows to Ghana By Osei, Robert Darko
  18. Foreign Aid and Democratic Consolidation in Zambia By Rakner, Lise;
  19. The Changing Dynamics of Foreign Aid and Democracy in Mozambique By Manning, Carrie; Malbrough, Monica
  20. What Impedes Efficient Adoption of Products? Evidence from Randomized Variation in Sales Offers for Improved Cookstoves in Uganda By Levine, David I.; Cotterman, Carolyn
  21. Zap It to Me: The Short-Term Impacts of a Mobile Cash Transfer Program - Working Paper 268 By Jenny Aker, Rachid Boumnijel, Amanda McClelland, and Niall Tierney
  22. Why quality matters : rebuilding trustworthy local government in post-conflict Sierra Leone By Sacks, Audrey; Larizza, Marco
  23. You Can Pick Your Friends, but You Need to Watch Them: Loan Screening and Enforcement in a Referrals Field Experiment By Bryan, Gharad; Karlan, Dean; Zinman, Jonathan
  24. Foreign Assistance and the Food Crisis of 2007.08 By Abbott, Philip
  25. When do donors trust recipient country systems ? By Knack, Stephen
  26. School Governance, Teacher Incentives, and Pupil-Teacher Ratios: Experimental Evidence from Kenyan Primary Schools By Esther Duflo; Pascaline Dupas; Michael Kremer

  1. By: Laura Rossouw (Department of Economics, University of Stellenbosch); Rulof Burger (Department of Economics, University of Stellenbosch); Ronelle Burger (Department of Economics, University of Stellenbosch)
    Abstract: Since 1960 South Africa has seen a steep fall in fertility levels and currently the total fertility rate is the lowest on the African continent. Given the high prevailing levels of fertility in African countries, a better understanding of the factors behind the fertility transition can be valuable not only for South Africa, but also more widely for other African countries. This paper uses the National Income Dynamics Study data to construct a retrospective panel to investigate reasons for the decline in fertility in South Africa since the 1960s. The analysis attributes a large share of the observed fertility decline across birth cohorts to improving education levels and the lower prevalence of marriage. However, a considerable segment of the transition is ascribed to the unobservables. This may include HIV/AIDS, the increased use of contraceptives and changes in intra-household relationships and the social role of women.
    Keywords: South Africa, fertility, education, marriage, social norms
    JEL: J13 J12
    Date: 2012
  2. By: Heinrich R. Bohlmann
    Abstract: South African authorities are attempting to limit inflows of illegal immigrants. Evidence for the United States presented in Dixon et al (2011) suggests that a policy-induced reduction in labour supply from illegal immigrants generates a welfare loss for legal residents. I use a similar labour market mechanism within a dynamic CGE model for South Africa, but take into consideration a number of well-known facts about the local economy. With high unemployment rates among low skilled workers and a legal minimum wage in place, I find a net gain in employment and welfare for legal residents in South Africa when reducing the inflow of illegal immigrants.
    Keywords: Illegal immigration, dynamic CGE modelling
    JEL: J61 C68
    Date: 2012
  3. By: Dietrich, Simone; Wright, Joseph
    Abstract: Over the past two decades, donors increasingly linked foreign aid to democracy objectives in sub-Saharan Africa. Yet systematic research on this topic typically focuses on how aid influences democratic transitions. This study investigates whether and how foreign aid affects the process of democratic consolidation in sub-Saharan Africa by examining two potential mechanisms: (1) the use of aid as leverage to buy political reform, and (2) investment in the opposition. We test these mechanisms using five dependent variables that capture different aspects of democratic consolidation. Using survival analysis for the period from 1991 to 2008, we find that democracy and governance aid has a consistently positive effect on democratic consolidation. Economic aid, on the other hand, has no effect on democratic consolidation.
    Keywords: Africa, democratic consolidation, foreign aid, survival analysis
    Date: 2012
  4. By: Fielding, David; Gibson, Fred
    Abstract: International aid has an ambiguous effect on the macroeconomy of the recipient country. To the extent that aid raises consumer expenditure, there will be some real exchange rate appreciation and a shift of resources away from traded goods production and into non-traded goods production. However, aid for investment in the traded goods sector can mitigate this effect. Also, a relatively high level of productivity in the non-traded goods sector combined with a high level of investment will tend to depreciate the real exchange rate. We examine aid inflows in 26 sub-Saharan African countries, and find a variety of macroeconomic responses. Some of the variation in the responses can be explained by variation in observable country characteristics; this has implications for donor policy.
    Keywords: aid, Dutch disease, Africa
    Date: 2012
  5. By: Resnick, Danielle
    Abstract: How does aid impact democracy in sub-Saharan Africa? Drawing on existing literature, this study elaborates on the various channels, direct and indirect, through which development and democracy aid has influenced transitions to multi-party regimes and democratic consolidation within the region. The study.s findings are at least threefold. First, development aid was effective at promoting democratic transitions during the 1990s in those African countries that were beset by economic crisis, faced domestic discontent, or possessed a high dependence on aid, as well as when major donors took concerted action. Second, development and democracy aid demonstrate disparate effects on key elements of consolidation, including the avoidance of democratic erosion, the enhancement of accountability, and the promotion of competitive party systems. Development aid.s most direct influence is with respect to preventing democratic backsliding, though this is often done in an inconsistent manner. Democracy aid plays a more direct role with respect to enhancing accountability and party systems but, its cumulative impact remains hindered by the dispersion of assistance across different activities and its temporal focus on elections. Third, in some areas of consolidation, the disparate objectives of development and democracy aid create clear trade-offs that remain unresolved.
    Keywords: accountability, Africa, democratic consolidation, foreign aid, party systems
    Date: 2012
  6. By: AfDB
    Date: 2012–04–03
  7. By: Martine Mariotti (Research School of Economics, Australian National University and University of Stellenbosch)
    Abstract: I exploit the sudden increase in employment in 1975, 1976 and 1977 in four former South African homelands to compare the long term adult outcomes of children benefitting from the employment increase to those not subject to it. Using a standard difference in difference approach I find that there was severe malnutrition in the homelands resulting in stunting in African men born during the shock providing support to the foetal origins hypothesis. The employment shock did not affect other long term outcomes such as education and general health, although there is some evidence of an improvement in long term health. This study provides previously unmeasured individual level information on the quality of life in the homelands during apartheid, an era when African living standards were neglected but unmeasured because of a lack of data collection.
    Keywords: apartheid; living standards; stunting; difference-in-difference; foetal origins hypothesis
    JEL: I31 N37
    Date: 2012
  8. By: John M. Luiz; Busi Radebe
    Abstract: >The study investigates the criteria used by multinational companies to identify the locations of their African regional headquarters (RHQs) and the importance that multinational companies assign to the respective regional offices. We find that multinationals do assign value to their RHQs but are always aiming to strike a balance between local responsiveness and global integration. The power of standardization and the introduction of relevant controls have allowed multinational companies to operate as a coherent unit in the different markets where they operate. The dominant criteria used by MNEs to choose their locations for RHQs in Africa are linked to the advantages of agglomeration and the accompanying economies of scale, and a sound institutional framework which provides a predictable business climate. Distance has become less important
    Keywords: FDI and the MNE; Africa; Regional Headquarters; MNEHost Country Relations, Strategic decision making in MNEs
    JEL: F23 O55
    Date: 2012
  9. By: Dambala Gelo; Steven F. Koch
    Abstract: In this study, welfare impacts associated with a unique common-property forestry program in Ethiopia were examined. This program is different from other programs, because it is two-pronged: a community forest is developed and additional support is provided for improved market linkages for the community's forestry products. The treatment effects analysis is based on both matching, which assumes random treatment assignment conditional on the observable data, and instrumental variable (IV) methods, which relax the matching assumptions. Data for the analysis is taken from selected villages in Gimbo district, southwestern Ethiopia. The program was found to raise the welfare of the average program participant households. Correcting for selection into the program led to both increased welfare and less precise estimates, as is common in IV analyses. The analysis results underscore the benefits to be derived from expanding the current forestry management decentralization efforts, although these benefits, given the design of the program, cannot be separated from the benefits to be derived from increasing market access for forestry products. However, the results suggest that placing property rights in the hands of those closest to the forest, combined with improved forest product market linkages, offers one avenue for both rural development and environmental improvement
    Keywords: community forestry, treatment effects, IV, matching and Ethiopia
    JEL: Q23 Q28
    Date: 2012
  10. By: Page, John
    Abstract: This paper argues that official development assistance (foreign aid) is partly responsible for the lack of structural change in Africa. Africa.s development partners have devoted too few resources and too little attention to two critical constraints to private investment, infrastructure and skills, focusing instead on easily understood, but potentially low impact regulatory reforms. A new aid strategy, one that catalyses private investment in high value added sectors, is needed. Support for strategic interventions to push non-traditional exports, support industrial agglomerations, build firm capabilities, and strengthen regional integration should anchor a new donor agenda to create good jobs and sustain growth.
    Keywords: aid, structural change, private sector, industry, exports
    Date: 2012
  11. By: Namara, Regassa E.; Barry, Boubacar; Owusu, Eric S.; Ogilvie, A.
    Keywords: River basin development / Poverty / Social aspects / Climate change / Agriculture sector / Water governance / West Africa / Niger River Basin
    Date: 2011
  12. By: Godswill, M.; Namara, Regassa; Hagos, Fitsum; Awulachew, Seleshi Bekele; Ayana, M.; Awulachew, Bossio, Deborah
    Keywords: Rainfed farming / Irrigated farming / Efficiency / Irrigation schemes / Small scale systems / Cropping patterns / Crop production / Economic aspects / Statistical analysis / Ethiopia
    Date: 2011
  13. By: Balázs Égert
    Abstract: This paper addresses difficulties in modelling exchange rates in South Africa. Real exchange rate models of earlier research seem to be sensitive to the sample period considered, alternative variable definition, data frequency and estimation methods. Alternative exchange rate models proposed in this paper including the stock-flow approach and variants of the monetary model are not fully robust to data frequency and alternative estimation periods, either. Nevertheless, adding openness to the stock-flow approach and augmenting the monetary model with share prices and the country risk premium improves significantly the fit of the models around the large (nominal and real) depreciation episodes of 2002 and 2008. Interestingly, real commodity prices do not help explain the large depreciations. While these models do a reasonably good job in-sample, their out-of-sample forecasting properties remain poor.
    Keywords: exchange rate, real exchange rate, nominal exchange rate, commodity, Balassa-Samuelson, productivity, monetary model, stock-flow approach, openness, country risk
    JEL: E31 F31 O11 P17
    Date: 2012
  14. By: Guangling (Dave) Liu
    Abstract: The conventional view is that a monetary policy shock has both supply-side and demand-side effects, at least in the short run. Barth and Ramey (2001) show that the supply-side effect of a monetary policy shock may be greater than the demand-side effect. We argue that it is crucial for monetary authorities to understand whether an increase in expected future inflation is due to supply shocks or demand shocks before applying contractionary policy to forestall inflation. We estimate a standard New Keynesian dynamic stochastic general equilibrium model with the cost channel of monetary policy for the South African economy to show that whether the South African Reserve Bank should apply contractionary policy to fight inflation depends critically on the nature of the disturbance. If an increase in expected future inflation is mainly due to supply shocks, the South African Reserve Bank should not apply contractionary policy to fight inflation, as this would lead to a persistent increase in inflation and a greater loss in output. Our estimation results also show that, with a moderate level of cost-channel effect and nominal rigidities, a New Keynesian dynamic stochastic general equilibrium model with the cost channel of monetary policy is able to mimic the price puzzle produced by an estimated vector autoregressive model.
    Keywords: Monetary policy, price puzzle, inflation targeting, New Keynesian model, Bayesian analysis
    JEL: E52 E31 E58 E12
    Date: 2012
  15. By: Resnick, Danielle
    Abstract: Since the era of one-party rule, Malawi.s relationship with the donor community has proved erratic and contentious. During the second term of Malawi.s current president, Bingu wa Mutharika, this trend has continued apace, with important implications for the consolidation of the country.s nascent democracy. Donors providing democracy aid have assisted with the conduct of elections and improved the technical capacity of parliamentarians. However, inconsistency across programme cycles, the concentration of funding around elections, and a reluctance to support political parties hinders the size of democracy aid.s long-term impact. Development aid, particularly general budget support, has tended to further sideline the role of parliament and indirectly has provided the incumbent party with an electoral advantage through support for the country.s fertilizer input subsidy programme. To prevent an erosion of democracy caused by violations of civil liberties, donors often have threatened to withhold aid to Malawi. Yet, they frequently only proceed with these threats when concurrent concerns exist over economic governance, including corruption and management of the exchange rate.
    Keywords: democratic consolidation, donor relations, foreign aid, general budget support, Malawi
    Date: 2012
  16. By: Jessica Cohen; Pascaline Dupas; Simone G. Schaner
    Abstract: In response to parasite resistance to older malaria medicines, the global health community is considering making new, more effective malaria treatments called Artemisinin Combination Therapies (ACTs) available over-the-counter at heavily subsidized rates throughout Africa. While this may go a long way toward reducing under-treatment (thereby saving lives in the short-run), it is also likely to increase over-treatment, wasting subsidy dollars and contributing to drug resistance (thereby making lives harder to save in the long-run). We use data from a randomized controlled trial conducted with over 2,700 households in rural Kenya to study behavioral responses to changes in ACT prices and quantify this tradeoff. We find that ACT use increases by 59 percent in the presence of an ACT subsidy over 90 percent. However, only 56 percent of those buying such a highly subsidized ACT at retail sector drug shops test positive for malaria. We show that this share increases (without substantially compromising access) to 81 percent when the over-the-counter ACT subsidy is somewhat reduced and resources are redirected towards a subsidy for rapid malaria tests. While most of the targeting benefits come from reducing the ACT subsidy, making diagnostic tests available over-the-counter more than doubles the rate at which illnesses are tested for malaria. This high take up rate suggests that subsidizing rapid tests may have great scope to improve targeting and treatment outcomes in the longer run.
    JEL: D61 H23 I18 O1
    Date: 2012–03
  17. By: Osei, Robert Darko
    Abstract: This study provides an analysis of the aid-private capital flows-growth nexus for Ghana. It is premised on the argument that Ghana.s new status as a middle income country plus the start of oil production is bound to result in a reduction in ODA inflows in the long term. However in the short to medium term ODA will remain an important component in the country.s fiscals as well as an important tool for leveraging government policy. One of the key questions that the study addresses is how aid can be used as to reinforce the country.s growth in a way that reduces its chances of being a victim of the .oil curse.. The study makes two key observations about the economy of Ghana. First, it notes that although the structure of the economy has changed over the years, the observed change has not been of the developmentally transformative type. Production within the economy still takes place on the lower end of the technology scale and the country.s exports is still dominated by primary products. Second, it notes that revenue from oil can at best replace foreign aid in the long run. However in the short to medium term, Ghana will have the complement of both oil and aid. It there behoves on the country that aid is used in an efficient and creative way so as to help improve productivity and production in agriculture and manufacturing. The study concludes by making two suggestions as to how aid can be used to help transform the economy. The first suggestion is to tackle the structural deficiency in the country.s fiscals in a decisive way. The second is the need to properly prioritize public investments so as to maximize their returns.
    Keywords: aid, oil production, structural change
    Date: 2012
  18. By: Rakner, Lise;
    Abstract: The study examines Zambia.s evolving aid relationship in relation to the country.s democratic trajectory. The impact of aid in terms of democratic consolidation is linked to the development of the party system, the efficacy of key democratic institutions, and accountability in relation to tolerance of participation by the media and civil society in the political process. The study suggests that there are many good reasons for so-called traditional donors to phase out aid to Zambia. Zambia has recorded economic growth for the most part of this decade, but poverty levels still stand at near 70 per cent and both equity issues and poor human development indicators provide reasons for concern. The study cautions against an aid exit at a time when economic growth and new foreign partners may strengthen the executive office vis-à-vis civil society, opposition and agencies of restraint. The study argues for an enhanced emphasis on democracy assistance that may strengthen stakeholders and institutions with capacity to hold the executive to account for their policy actions in terms of development.
    Keywords: Zambia, aid, democracy, political parties, civil society
    Date: 2012
  19. By: Manning, Carrie; Malbrough, Monica
    Abstract: This study explores the effects of foreign aid on democracy in Mozambique during the last decade. Aid for democracy built on historic relationships forged between donors and the government during the wartime humanitarian emergency. Foreign aid played an important role in Mozambique.s transition from war to peace and from single-party rule to multiparty politics in the early 1990s. Since 2000, aid has shifted markedly toward general budget support and away from project support. Emphasis has moved from building central government institutions to bolstering local governance, and from a focus on democracy to good governance.
    Keywords: Mozambique, foreign aid, democracy, local governance, budget support, project support
    Date: 2012
  20. By: Levine, David I.; Cotterman, Carolyn
    Abstract: Many people do not purchase products that would appear to benefit them. For example, the price of an efficient cookstove can be less than a few months’ savings on fuel. If liquidity constraints, present bias, and poor information on fuel savings and stove durability are barriers, then combining a free trial, time payments, and the right to return the stove at any time should increase sales. In a randomized trial, this offer increases uptake of an efficient charcoal-burning stove in Kampala, Uganda, from 4% to 46%. We provide additional evidence that both liquidity constraints and imperfect information were important barriers.
    Keywords: Economics, JEL C93, D91, L15, L81, M31, D12, D82
    Date: 2012–03–27
  21. By: Jenny Aker, Rachid Boumnijel, Amanda McClelland, and Niall Tierney
    Abstract: Conditional and unconditional cash transfers often help improve development outcomes, yet their costs to program recipients and implementing agencies are rarely discussed. Mobile money transfer systems in many developing countries now offer more cost-effective implementation of cash transfer programs. This paper reports on the first randomized evaluation of a cash transfer program delivered via the mobile phone. In response to a devastating drought in Niger, the trial provided households in targeted villages monthly cash transfers as part of a social protection program. One-third of targeted villages received a monthly cash transfer via a mobile money transfer system (called zap); one-third received manual cash transfers; and the remaining one-third received manual cash transfers plus a mobile phone. The authors show that the zap-based program strongly reduced the variable distribution costs for the implementing agency, as well as program recipients’ costs of obtaining the cash transfer. The zap approach also resulted in additional benefits: more diverse purchasing, a greater diversity of diet, fewer depleted assets, and a greater diversity of crops grown, especially marginal cash crops grown by women. The authors suggest that the lower costs and greater privacy of the zap mechanism—as well as changes in intra-household decision-making—explain the advantage. Their research suggests that mobile transfers could be a cost-effective means of providing cash transfers for remote rural populations, especially those with limited road and financial infrastructure.
    Keywords: Africa, cash transfers, intra-household bargaining, information technology, mobile money
    JEL: O1
    Date: 2011–09
  22. By: Sacks, Audrey; Larizza, Marco
    Abstract: A broad consensus has emerged among practitioners and researchers that failure to build accountable and legitimate institutions is a critical risk factor associated with vicious circles of repeated violence. Despite this consensus, very few studies have tested the extent to which local government performance and decentralized service provision shape citizens'beliefs toward political authorities. This paper contributes to fill this gap by examining the antecedents of trustworthy local government authorities in a post-conflict and fragile setting, Sierra Leone. Taking advantage of a unique longitudinal survey, the National Public Services, it examines the impact of sub-national variation in local government performance on citizens'beliefs about the trustworthiness of local government authorities. To test the hypothesis, it uses multilevel models to exploit variation over time and within and across sub-national units in Sierra Leone. The results suggest that improvements in the quality of decentralized service delivery, as well as perceptions of local councillors'honesty, are positively associated with perceptions of local government officials as trustworthy political authorities. These findings speak to the possibility that local service provision can play a role in shaping the relationships between citizens and the state and in overcoming the root causes of fragility and conflict.
    Keywords: Health Monitoring&Evaluation,Population Policies,E-Government,Public Sector Corruption&Anticorruption Measures,E-Government
    Date: 2012–04–01
  23. By: Bryan, Gharad (London School of Economics and Innovations for Poverty Action); Karlan, Dean (Yale University and MIT); Zinman, Jonathan (Dartmouth College and MIT)
    Abstract: We examine a randomized trial that allows separate identification of peer screening and enforcement of credit contracts. A South African microlender offered half its clients a bonus for referring a friend who repaid a loan. For the remaining clients, the bonus was conditional on loan approval. After approval, the repayment incentive was removed from half the referrers in the first group and added for half those in the second. We find large enforcement effects, a $12 (100 Rand) incentive reduced default by 10 percentage points from a base of 20%. In contrast, we find no evidence of screening.
    JEL: C93 D12 D14 D82 O12 O16
    Date: 2012–01
  24. By: Abbott, Philip
    Abstract: Dramatically increased international agricultural commodity prices from 2007 to mid-2008 brought food inflation and greater incidence of poverty and malnutrition to developing countries. Higher food prices in 2011 threaten to repeat that crisis. The international community responded strongly to these concerns in 2008 and 2009, promising greater financial support for food aid, safety nets, and agricultural development. The focus of international dialogue differed somewhat from the priorities of national governments, and the objectives of national governments mostly targeting short-run responses to both food security and agriculture prevailed. But a long-run trend of declining foreign assistance to agriculture appears to have reversed.Nevertheless, foreign assistance was small relative to promises made by donors, increased grain and fertilizer import costs, budgetary costs of mitigating policy responses, an investment costs needed to accelerate agricultural production. Both food aid and agricultural development projects have in the past come under the criticisms found in the aid effectiveness debate. Issues to be addressed if renewed efforts toward agricultural development and food aid are to be effective are explored here. High returns to agricultural research require that enabling institutions are developed. National ownership and governance of initiatives that share donor objectives focusing on poverty and long-run development are critical to success.
    Keywords: foreign assistance, food crisis, agricultural development, food aid, safety nets, aid effectiveness, international commodity prices
    Date: 2012
  25. By: Knack, Stephen
    Abstract: The 2005 Paris Declaration on Aid Effectiveness sets targets for increased use by donors of recipient country systems for managing aid. The target is premised on a view that country systems are strengthened when donors trust recipients to manage aid funds, but undermined when donors manage aid through their own separate parallel systems. This study provides an analytical framework for understanding donors'decisions to trust or bypass country systems. Empirical tests are conducted using data from three OECD-DAC surveys designed to monitor progress toward Paris Declaration goals. Tests show that a donor's use of the recipient country's systems is positively related to: (1) the donor's share of aid provided to the recipient (a proxy for the donor's reputational stake in the country's development); (2) perceptions of corruption in the recipient country (a proxy for the trustworthiness or quality of the country's systems); and (3) public support for aid in the donor country (a proxy for the donor's risk tolerance). Findings are robust to corrections for potential sample selection, omitted variables or endogeneity bias.
    Keywords: Gender and Health,Development Economics&Aid Effectiveness,Disability,Coastal and Marine Environment,Microfinance
    Date: 2012–04–01
  26. By: Esther Duflo; Pascaline Dupas; Michael Kremer
    Abstract: We examine a program that enabled Parent-Teacher Associations (PTAs) in Kenya to hire novice teachers on short-term contracts, reducing class sizes in grade one from 82 to 44 on average. PTA teachers earned approximately one-quarter as much as teachers operating under central government civil-service institutions but were absent one day per week less and their students learned more. In the weak institutional environment we study, civil-service teachers responded to the program along two margins: first, they reduced their effort in response to the drop in the pupil-teacher ratio, and second, they influenced PTA committees to hire their relatives. Both effects reduced the educational impact of the program. A governance program that empowered parents within PTAs mitigated both effects. Better performing contract teachers are more likely to transition into civil-service positions and we estimate large potential dynamic benefits of contract teacher programs on the teacher workforce.
    JEL: D71 I21 M51 O15
    Date: 2012–03

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