nep-dev New Economics Papers
on Development
Issue of 2009‒01‒10
28 papers chosen by
Jeong-Joon Lee
Towson University

  1. Finding Missing Markets (and a disturbing epilogue): Evidence from an Export Crop Adoption and Marketing Intervention in Kenya By Nava Ashraf; Xavier Giné; Dean Karlan
  2. The bang for the birr: Public expenditures and rural welfare in Ethiopia By Mogues, Tewodaj; Ayele, Gezahegn; Paulos, Zelekawork
  3. Linkages between land management, land degradation, and poverty in Sub-Saharan Africa: The case of Uganda By Nkonya, Ephraim; Pender, John; Kaizzi, Kayuki C.; Kato, Edward; Mugarura, Samuel; Ssali, Henry; Muwonge, James
  4. Pakistan's cotton and textile economy: Intersectoral linkages and effects on rural and urban poverty By Cororaton, Caesar B.; Orden, David
  5. Accelerating Africa's food production in response to rising food prices: Impacts and requisite actions By Diao, Xinshen; Fan, Shenggen; Headey, Derek; Johnson, Michael; Nin Pratt, Alejandro; Yu, Bingxin
  6. The Philippines: Shadow WTO Agricultural Domestic Support Notifications By Cororaton, Caesar B.
  7. The effects of alternative free trade agreements on Peru: Evidence from a global computable general equilibrium model By Bouet, Antoine; Mevel, Simon; Thomas, Marcelle
  8. Higher fuel and food prices: Economic impacts and responses for Mozambique By Arndt, Channing; Benfica, Rui; Maximiano, Nelson; Nucifora, Antonio M.D.; Thurlow, James
  9. The impact of agricultural extension and roads on poverty and consumption growth in fifteen Ethiopian villages: By Dercon, Stefan; Gilligan, Daniel O.; Hoddinott, John; Woldehan, Tassew
  10. Social learning, selection, and HIV infection: Evidence from Malawi By Yamauchi, Futoshi; Ueyama, Mika
  11. The impact of Ethiopia's Productive Safety Net Programme and its linkages: By Gilligan, Daniel O.; Hoddinott, John; Taffesse, Alemayehu Seyoum
  12. Aid effectiveness and capacity development: Implications for economic growth in developing countries By Sanyal, Prabuddha; Babu, Suresh
  13. Anatomy of a crisis: The causes and consequences of surging food prices By Headey, Derek; Fan, Shenggen
  14. Credit constraints, organizational choice, and returns to capital: Evidence from a rural industrial cluster in China By Ruan, Jianqing; Zhang, Xiaobo
  15. It's a small world after all: Defining smallholder agriculture in Ghana By Chamberlin, Jordan
  16. What determines adult cognitive skills?: Impacts of preschooling, schooling, and post-schooling experiences in Guatemala By Behrman, Jere R.; Hoddinott, John; Maluccio, John A.; Soler-Hampejsek, Erica; Behrman, Emily L.; Martorell, Reynaldo; Ramírez-Zea, Manuel; Stein, Aryeh D.
  17. Migration and technical efficiency in cereal production: Evidence from Burkina Faso By Wouterse, Fleur S.
  18. Food and financial crises: Implications for agriculture and the poor By von Braun, Joachim
  19. Does Fertilizer Use Respond to Rainfall Variability? Panel Data Evidence from Ethiopia By Alem, Yonas; Bezabih, Mintewab; Kassie, Menale; Zikhali, Precious
  20. The role of poverty reduction strategies in achieving the millennium development goals By Bezemer, Dirk; Eggen, Andrea
  21. Fast heuristics for a dynamic paratransit problem By Cremers, Marloes; Klein Haneveld, Wim; Vlerk, Maarten van der;
  22. Schooling and Adolescent Reproductive Behaviour in Developing Countries By Cynthia B. Lloyd
  23. Exploring the Relationship Between Military Spending and Human Rights Performance in South Asia By Krishna Chaitanya Vadlamannati
  24. Employment Growth in Rural India: Distress Driven? By Vinoj Abraham
  25. Micro, Small and Medium Enterprises in India: Unfair Trade By Keshab Das
  26. Navigating the trilemma: capital flows and monetary policy in China By Reuven Glick; Michael Hutchison
  27. Price Points and Price Rigidity By Daniel Levy; Dongwon Lee; Haipeng Chen; Robert Kauffman; Mark Bergen
  28. Rural finance reform in China By Chen Xiang Liu

  1. By: Nava Ashraf (Harvard Business School and Jameel Poverty Action Lab); Xavier Giné (The World Bank); Dean Karlan (Economic Growth Center, Yale University)
    Abstract: In much of the developing world, many farmers grow crops for local or personal consumption despite export options which appear to be more profitable. Thus many conjecture that one or several markets are missing. We report here on a randomized controlled trial conducted by DrumNet in Kenya that attempts to help farmers adopt and market export crops. DrumNet provides smallholder farmers with information about how to switch to export crops, makes in-kind loans for the purchase of the agricultural inputs, and provides marketing services by facilitating the transaction with exporters. The experimental evaluation design randomly assigns pre-existing farmer self-help groups to one of three groups: (1) a treatment group that receives all DrumNet services, (2) a treatment group that receives all DrumNet services except credit, or (3) a control group. After one year, DrumNet services led to an increase in production of export oriented crops and lower marketing costs; this translated into household income gains for new adopters. However, one year after the study ended, the exporter refused to continue buying the cash crops from the farmers because the conditions of the farms did not satisfy European export requirements. DrumNet collapsed in this region as farmers were forced to sell to middlemen and defaulted on their loans. The risk of such events may explain, at least partly, why many seemingly more profitable export crops are not adopted.
    Keywords: Field Experiment, Export Crop, Food Safety Standards
    JEL: O12 Q17 F13
    Date: 2008–12
  2. By: Mogues, Tewodaj; Ayele, Gezahegn; Paulos, Zelekawork
    Abstract: "During the past decade and a half, Ethiopia's approach to promoting development and improving the lives of the country's rural population has been driven by a government strategy called Agricultural Development–Led Industrialization (ADLI). This strategy's main goal is to encourage fast, broad-based development within the agricultural sector in order to power economic growth. While ADLI considers regulatory, trade, market, and other policies to be key engines of agricultural growth, it also focuses on increasing public expenditure in agriculture and road infrastructure, as well as in social sectors that are perceived as contributing to agricultural productivity. Thus, Ethiopia's public expenditure policy is at the heart of the policy measures emerging from ADLI. Given budget constraints, it is essential to examine the relative contributions that different types of public investments make to welfare. An improved understanding of investment outcomes will have important implications for expenditure policy, especially in terms of the portfolio composition of public resources. This research report explores and compares the impacts of different types of public spending on rural household welfare in Ethiopia. Most previous studies examining the link between public expenditure and development outcomes either explore how the size of overall public expenditure or public investment affects growth or poverty, or they correlate spending in one economic sector with outcomes in that sector or with broader measures of welfare. Both types of studies can provide useful input into policymaking decisions. However, there is a striking lack of research aimed at examining how the composition of public spending affects key development outcomes—a particularly policy-relevant question. This study fills that gap. It compares the impact of different types of public spending through a three-stage analysis. The first stage assesses the impact of access to different sector-specific services on rural household consumption and the productivity of households' private assets, differentiating these effects by geographic region. The second stage determines the contribution of different types of public spending to key sector-specific outcomes. The final stage of the analysis draws on the first two to estimate the effect on rural welfare of a unit increase in public spending across different sectors." from text
    Keywords: Public investments, Public spending, Rural welfare,
    Date: 2008
  3. By: Nkonya, Ephraim; Pender, John; Kaizzi, Kayuki C.; Kato, Edward; Mugarura, Samuel; Ssali, Henry; Muwonge, James
    Abstract: "Agriculture is vital to the economies of Sub-Saharan Africa: two-thirds of the region's people depend on it for their livelihoods. Nevertheless, agricultural productivity in most of the region is stagnant or declining, in large part because of land degradation. Soil erosion and soil nutrient depletion degraded almost 70 percent of the region's land between 1945 and 1990; 20 percent of total agricultural land has been severely degraded. If left unchecked, land degradation could seriously threaten the progress of economic growth and poverty reduction in Africa. Within this context, most African countries strive to achieve poverty reduction and sustainable land management. In designing policies to achieve these objectives concurrently, a clear understanding of their linkage is crucial. Nonetheless, the relationships between poverty and land management are complex, context specific, and resource specific, and empirical evidence to demonstrate their linkage has been limited. This analysis seeks to improve the understanding of this linkage by examining how poverty (broadly defined to include limited access to capital, infrastructure, and services) influences land-management practices, land degradation, crop productivity, and household incomes. In particular, the study focuses on how factors susceptible to policy initiatives—such as education, agricultural technical assistance, and credit— affect households' land management decisions. Uganda was chosen to serve as a case study of these issues, for several reasons. Of all Sub-Saharan African nations, Uganda has some of the most severe soil nutrient depletion in Africa: about 1.2 percent of nutrient stock stored in the topsoil is depleted by farmers each year. Also, the country contains a wide variety of agroecological zones (AEZs), making it an appropriate microcosm of Sub-Saharan Africa. The Ugandan government has also been conducting ambitious poverty-reduction and conservation efforts, and a study such as this one serves to measure those efforts. Working with the Uganda Bureau of Statistics (UBOS), the authors drew on Uganda's 2002–03 National Household Survey, as well as a specific survey conducted to collect poverty, land management, and land-degradation data at the household and plot levels." from text
    Keywords: Poverty, Land management, Soil degradation,
    Date: 2008
  4. By: Cororaton, Caesar B.; Orden, David
    Abstract: "Pakistan's economy relies heavily on its cotton and textile sectors. The cotton-processing and textile industries make up almost half of the country's manufacturing base, while cotton is Pakistan's principal industrial crop, supplying critical income to rural households. Altogether, the cotton-textile sectors account for 11 percent of GDP and 60 percent of export receipts. The future of this vital component of the national economy is uncertain, however. These industries face the challenges of unstable world prices and increased competition resulting from global liberalization of the multilateral textile and clothing trade. At the same time, Pakistan's macroeconomic situation is volatile. Given such challenges and volatility, this study investigates what the future might hold for Pakistan's cotton and textile industries and its implications for rural and urban poverty reduction in the country. The study uses a computable general equilibrium (CGE) model calibrated to a 2001–02 social accounting matrix of the Pakistan economy to conduct experimental simulations of possible economic changes. The CGE model results are linked to the nation-wide 2001–02 Pakistan Household Integrated Economic Survey to examine the implications the simulated developments have for Pakistani poverty. Simulation 1 examines the effects of a doubling of foreign capital inflows, as occurred from 2002 to 2006, before a subsequent financial crisis emerged in 2008. Simulation 2 analyzes the counterfactual effects of an increase in world prices of cotton lint and yarn and/or textiles which would have offset declines experienced in the late 1990s and early 2000s. Pakistan's strong textile association motivates Simulation 3, which examines the effects of a 5-percent increase in government production subsidies to the industry. Simulation 4 uses a dynamic-recursive version of the model to analyze the short- and long-run effects of a 5-percent increase of total factor productivity (TFP) in cotton, lint and yarn, and textile production." from text
    Keywords: Textile industry, Rural-urban linkages, Poverty reduction,
    Date: 2008
  5. By: Diao, Xinshen; Fan, Shenggen; Headey, Derek; Johnson, Michael; Nin Pratt, Alejandro; Yu, Bingxin
    Abstract: "In Africa the global food crisis threatens the livelihoods of millions of people who because of high rates of poverty, hunger, malnutrition, and food dependency are already exceptionally vulnerable. In better circumstances, Africa's agricultural sector would respond to rising prices by increasing food supply. But such a response is impossible without significant new policy actions on both the production and marketing of African agriculture. This paper assesses the likely impacts of two strategic policy options: doubling African staples production, and improving “market access” through regional integration and lowering transaction costs. Using an economywide multimarket model for 17 African economies and econometrically estimated parameters describing the relationships between growth and poverty and between public spending and growth, we assess the impacts of these two strategic options on Africa's food markets and its broader economic development. Doubling staples production significantly increases food security, reduces consumer food prices by roughly 25 percent, reduces producer prices by 10 percent (thus raising farm revenue), accelerates agricultural growth rates, facilitates broader economic growth through new agroprocessing and export opportunities, and lifts more than 100 million Africans out of poverty. Key policy actions are needed to move from this strategic vision to implementation. The first set of actions requires investing $38 billion from 2009 to 2013, or $7.5 billion per year, in a well-designed package of modern agricultural inputs and provisions. The second requires improving and extending transport infrastructure, especially major transport corridors and rural feeder roads. The third requires reducing tra*de barriers, which still remain much higher in agriculture than in other sectors. All of these actions are technically and financially feasible, but their timely implementation requires urgent initiatives by both national and international policymakers." from authors' abstract
    Keywords: Food prices, Green Revolution, Staple foods, Agricultural productivity, Market access, infrastructure, economic modeling,
    Date: 2008
  6. By: Cororaton, Caesar B.
    Abstract: "The objective of this paper is to review the agricultural trade and domestic policies of the Philippines and to provide an assessment of the types and levels of domestic support relative to the rules of the World Trade Organization (WTO). Changes in trade protection and support in the Philippines, including tariff structure, quantitative restrictions, and domestic support, are discussed and analyzed. The paper also discusses the pattern of public expenditure on agriculture in the Philippines, including major agricultural productivity-enhancing programs. The present structure of protection and support favors the agricultural sector. Trade protection is higher in agriculture relative to manufacturing. There is a quantitative restriction on rice imports and a tariff rate quota in several agricultural commodities. The green box payments and the special and differential treatment constitute the major domestic support for agriculture. These support payments are relatively substantial and will continue to be sizable in the future to support the government's food sufficiency policy. However, the trade-distorting market price support for rice and corn is significantly below the de minimis limit that applies to the Philippines under the WTO Uruguay Round Agreement on Agriculture." from author's abstract
    Keywords: Philippine agriculture, Agricultural support, WTO support, WTO compliance, Notification of domestic support, trade,
    Date: 2008
  7. By: Bouet, Antoine; Mevel, Simon; Thomas, Marcelle
    Abstract: "By using a global computable general equilibrium model, this report analyzes the impact of various pending free trade agreements for Peru. In December 2007, a Peru–United States free trade agreement (FTA) was finally ratified by the U.S. Congress, replacing the Andean Trade Promotion and Drug Eradication Act, which awarded Peru and other Andean countries nonreciprocal preferential tariffs. A Peru–European Union (EU27) FTA is also being negotiated in the context of Peru's participation in the integration of the Andean Community (CAN). Finally, as of October 2008 Peru is concluding negotiations for a free trade agreement with China, its third major trading partner after the United States and the EU27. Although these agreements are expected to improve market access, their impact on the economic welfare of the beneficiary countries is dependent on the countries' structure of current tariffs and trade and the extent to which the new agreements result in trade diversion versus trade creation. The analysis shows that specific features of Peru's trade and tariff structures make the country a better candidate for a South-South FTA with China than for North-South FTAs with the United States or the EU27." from authors' abstract
    Keywords: WTO, Free Trade Agreement, trade liberalization, CGE Modeling,
    Date: 2008
  8. By: Arndt, Channing; Benfica, Rui; Maximiano, Nelson; Nucifora, Antonio M.D.; Thurlow, James
    Abstract: "Rising world prices for fuel and food represent a negative terms-of-trade shock for Mozambique. The impacts of these price increases are analyzed using various approaches. Detailed price data show that the world price increases are being transmitted to domestic prices. Short-run net benefit ratio analysis indicates that urban households and households in the southern region of the country are more vulnerable to food price increases. Rural households, particularly in the northern and central parts of Mozambique, often benefit because they sell more food goods than they consume (i.e., net seller). Long-term analysis using a computable general equilibrium model of Mozambique indicates that the fuel price shock dominates rising food prices from both macroeconomic and poverty perspectives. Here again, negative impacts are greater in urban areas than in rural areas. The importance of agricultural production response in general, and export response in particular, are highlighted in this discussion. Policy analysis reveals difficult trade-offs between short-run mitigation and long-run growth. Improved agricultural productivity has powerful positive impacts, but remains difficult to achieve and may not address the immediate impacts of higher prices. " from authors' abstract
    Keywords: Price transmission, Terms-of-trade shocks, food security, Food prices, Development strategies,
    Date: 2008
  9. By: Dercon, Stefan; Gilligan, Daniel O.; Hoddinott, John; Woldehan, Tassew
    Abstract: "This paper investigates whether public investments that led to improvements in road quality and increased access to agricultural extension services led to faster consumption growth and lower rates of poverty in rural Ethiopia. Estimating an instrumental variables model using Generalized Methods of Moments and controlling for household fixed effects, we find evidence of positive impacts with meaningful magnitudes. Receiving at least one extension visit reduces headcount poverty by 9.8 percentage points and increases consumption growth by 7.1 percent. Access to all-weather roads reduces poverty by 6.9 percentage points and increases consumption growth by 16.3 percent. These results are robust to changes in model specification and estimation methods." from authors' abstract
    Keywords: Public investment, roads, agricultural extension, income growth, Poverty,
    Date: 2008
  10. By: Yamauchi, Futoshi; Ueyama, Mika
    Abstract: "This paper examines social learning regarding HIV infection, using HIV test results and sibling death data from Malawi. In the analysis, we compare hypotheses on social learning, selection. and common factors. Empirical results show that young women are less likely to be HIV-infected if they observed prime-age deaths among their siblings, whereas HIV infection is found to be positively related to prime-age sibling deaths among older women. This supports the social-learning hypothesis. Notably, schooling reinforces the social-learning effect of sibling deaths on HIV infection in women regardless of age. The above findings are robust to age (cohort) effects and unobserved location factors." from authors' abstract
    Keywords: Social learning, HIV infection, AIDS (Disease) Africa, Sub-Saharan, siblings,
    Date: 2008
  11. By: Gilligan, Daniel O.; Hoddinott, John; Taffesse, Alemayehu Seyoum
    Abstract: "This paper assesses the impact of Ethiopia's Productive Safety Nets Programme (PSNP), the largest social protection program in Sub-Saharan Africa outside of South Africa. Using Propensity Score Matching techniques, we find that the program has little impact on participants on average, due in part to transfer levels that fell far below program targets. Beneficiary households that received at least half of the intended transfers experienced a significant improvement in food security by some measures. However, households with access to both the PSNP and packages of agricultural support were more likely to be food secure, to borrow for productive purposes, use improved agricultural technologies, and operate their own nonfarm business activities. For these households, there is no evidence of disincentive effects in terms of labor supply or private transfers. However, estimates show that beneficiaries did not experience faster asset growth as a result of the programs. " from authors' abstract
    Keywords: Productive Safety Net Programme, Impact evaluation, food security, Public works, Social protection,
    Date: 2008
  12. By: Sanyal, Prabuddha; Babu, Suresh
    Abstract: "Although adequate country capacity is considered to be one of the critical missing factors in development outcomes, a lack of understanding of how capacity contributes to economic development and of how to account for the contribution of capacity development to economic growth remains a challenge. The purpose of this paper is to provide an understanding of how capacity strengthening as an input in the development process affects economy-wide growth. In this paper, we present a stylized model for understanding the relationship between capacity strengthening and economic growth in an endogenous growth framework. Endogenous growth theory provides a starting point for combining individual, organizational, and enabling environmental issues as part of attaining the capacity-strengthening goal. Our results indicate that although donors can play an important role in aiding countries to develop their existing capacities or to generate new ones, under certain conditions, the potential also exists for uncoordinated and fragmented donor activities to erode country capacities. From the policy exercises, we demonstrate that improving economy-wide learning unambiguously increases the rate of growth of output, technology, capital stock, and capacity. Moreover, a donor's intervention has the maximum impact on the above variables when the economy's capacity is relatively low. In contrast, donor intervention can lead to “crowding-out effects” when the economy's capacity is moderately high. Under such a situation, the economy never reaches a new steady state. Our results not only lend support to diminishing returns to aid but also to an S model of development aid and country capacity relationship. " from authors' abstract
    Keywords: Capacity strengthening, Development aid, economic growth, Learning,
    Date: 2008
  13. By: Headey, Derek; Fan, Shenggen
    Abstract: "Although the potential causes and consequences of recent increases in international food prices have attracted widespread attention, many existing appraisals are superficial and/or piecemeal. This paper attempts to provide a more comprehensive review of these issues based on the best and most recent research, and includes fresh theoretical and empirical analysis. We first analyze the causes of the current crisis by considering how well standard explanations hold up against relevant economic theory and important stylized facts. Some explanations, especially rising oil prices, the depreciation of the US dollar, biofuel demand, and some commodity-specific explanations, hold up much better than some others. We then provide an appraisal of the likely macro- and microeconomic impacts of the crisis in developing countries. We observe a large gap in the effects of macro and micro factors, and note that when these factors are used to identify the most vulnerable countries, the results often point in different directions. We conclude with a brief discussion of what ought to be learned from this crisis." from authors' abstract
    Keywords: Food prices, global food crisis, oil prices, Biofuels, poverty impacts, macroeconomic impacts,
    Date: 2008
  14. By: Ruan, Jianqing; Zhang, Xiaobo
    Abstract: "Traditional economic theory posits that a well-functioning capital market is a necessary condition for industrialization and economic growth. In reality, micro and small enterprises are ubiquitous because entrepreneurs can undertake low-return activities with minimal barriers to entry. Using a cashmere sweater cluster in China as an example, this paper shows that organizational choice can overcome the prohibitive cost of investment. When facing credit constraints, firms are more likely to concentrate in divisible production technologies in the form of industrial clusters. Within clusters, a vertically-integrated production process can be decomposed into many small incremental stages that are more accessible for the small entrepreneurs widely available in rural China, thereby supporting industrialization even in the absence of a well-functioning capital market. The observed rate of returns to capital is closely related to the organizational choice under credit constraints." from authors' abstract
    Keywords: Industrialization, Entrepreneurship, Credit, Capital markets, organizational choice, Non-farm development,
    Date: 2008
  15. By: Chamberlin, Jordan
    Abstract: "Strategies for boosting the agricultural economies of developing countries usually focus on small farms, attempting, for example, to link smallholders with markets through production chain development. However, such strategies often fail to differentiate between different types of small farmers or to investigate the distribution of assets within the group—efforts that are important because unequal distributions of assets can restrict pro-poor growth. Further, strategies to develop production chains favor some small farmers over others (i.e., those already participating in targeted chains and those with relatively more productive assets). Using landholding size as an organizational filter, we performed a basic descriptive analysis of smallholder traits in Ghana, using data from the 2005–2006 Ghana Living Standards Survey (GLSS5). We found strong inequalities in landholding distributions within Ghana's small-farm sector in all regions of the country. Using a classification of smallholders we derived based on landholding size, we examined a variety of small-farm traits and found that many of the broadly perceived defining characteristics of smallholder agriculture—such as low input use and low market engagement—are negatively correlated with landholding size. The crowding of farms at the smaller end of the small-farm spectrum in Ghana suggests that rural development strategies based on expanding existing market chains will face challenges in connecting with the bulk of small producers, who are less well endowed than average statistics indicate." from authors' abstract
    Keywords: small farms, Smallholder production, Agricultural development,
    Date: 2008
  16. By: Behrman, Jere R.; Hoddinott, John; Maluccio, John A.; Soler-Hampejsek, Erica; Behrman, Emily L.; Martorell, Reynaldo; Ramírez-Zea, Manuel; Stein, Aryeh D.
    Abstract: "Most investigations into the importance and determinants of adult cognitive skills assume that (1) they are produced primarily by schooling, and (2) schooling is statistically predetermined or exogenous. This study uses longitudinal data collected in Guatemala over 35 years to investigate production functions for adult cognitive skills—that is, reading-comprehension skills and nonverbal cognitive skills—as being dependent on behaviorally determined preschooling, schooling, and post-schooling experiences. We use an indicator of whether the child was stunted (child height-for-age Z-score < –2) as our representation of preschooling experiences, and we use tenure in skilled occupations as our representation of post-schooling experiences. The results indicate that assumptions (1) and (2) lead to a substantial overemphasis on schooling and an underemphasis on pre- and post-schooling experiences. The magnitudes of the effects of these pre- and post-schooling experiences are large. For example, the impact on reading-comprehension scores of not being stunted at age 6 is equivalent to the impact of four grades of schooling. These findings also have other important implications. For example, they (1) reinforce the importance of early life investments; (2) point to limitations in using adult schooling to represent human capital in the cross-country growth literature; (3) support the importance of childhood nutrition and work complexity in explaining the “Flynn effect,” or the substantial increases in measured cognitive skills over time; and (4) lead to doubts about the interpretations of studies that report productivity impacts of cognitive skills without controlling for skill endogeneity." from authors' abstract
    Keywords: Human capital, cognitive skills, Stunting, work experience, Development, Education, Gender, Health and nutrition,
    Date: 2008
  17. By: Wouterse, Fleur S.
    Abstract: "This paper uses data envelopment analysis and new data from Burkina Faso to test the impact of intercontinental and continental migration on technical efficiency in the production of two cereals—millet and sorghum—by rural households. Econometric evidence supports our theoretical expectation that the impact of emigration varies by migrant destination. I find evidence of a positive relation between continental migration and technical efficiency and a negative relation between intercontinental migration and technical efficiency. In an imperfect market environment, continental migration is associated with greater efficiency because it removes a male labor surplus; explanations for the negative relationship between intercontinental migration and technical efficiency should be sought in a surplus of female labor supply. Overall, findings suggest that migration does not lead to a transformation of cereal production from traditional to modern, because in an imperfect market environment, liquidity received in the form of remittances cannot compensate for labor shortfalls." from authors' abstract
    Keywords: Migration, Rural households, Data envelopment analysis, Science and technology, Agricultural innovation, Cereal production, Institutional change, Innovation systems,
    Date: 2008
  18. By: von Braun, Joachim
    Abstract: "High food prices from 2007 through mid-2008 had serious implications for food and nutrition security, macroeconomic stability, and political security. The unfolding global financial crisis and economic slowdown have now pushed food prices to lower levels. Yet the financial crunch has also decreased the availability of capital at a time when accelerated investment in agriculture is urgently needed. The food and financial crises will have strong and long-lasting effects on emerging economies and poor people. A synchronized response is needed to ease the burden on the poor and allow agriculture to face new challenges and respond to new opportunities. Three sets of complementary policy actions should be taken: (1) promote pro-poor agricultural growth, (2) reduce market volatility, and (3) expand social protection and child nutrition action. Agriculture requires strategic investment action, and the food-insecure poor need a bailout now." from Text
    Keywords: food security, Nutrition security, Pro-poor growth, Agricultural growth, Food prices, Social protection, Global financial crises,
    Date: 2008
  19. By: Alem, Yonas (Department of Economics, School of Business, Economics and Law, Göteborg University); Bezabih, Mintewab (Department of Economics, University of Portsmouth, UK); Kassie, Menale (Department of Economics, School of Business, Economics and Law, Göteborg University); Zikhali, Precious (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In this paper we use farmers' actual experiences with changes in rainfall levels and their responses to these changes to assess if patterns of fertilizer use are responsive to changes in rainfall patterns. Using plot and farm level panel data from the central Highlands of Ethiopia matched with corresponding village level rainfall data; results show that both the current year’s decision to adopt and the intensity of fertilizer adoption is positively associated with higher rainfall levels experienced in the previous year. Furthermore, we find a concave relationship between previous season rainfall levels and fertilizer adoption, indicating that too much rainfall discourages adoption. Abundant rainfall in the previous year could depict relaxed liquidity constraints and increased affordability of fertilizer, which makes rainfall availability critical in severely credit constrained environments. In light of similar existing literature, the major contribution of the study is its use of plot level panel data, which permits us to investigate the importance of plot characteristics in fertilizer adoption decisions.<p>
    Keywords: Fertiliser adoption; Rainfall; Highlands of Ethiopia; Panel data
    JEL: O12 O33 Q12 Q16 Q54
    Date: 2009–01–05
  20. By: Bezemer, Dirk; Eggen, Andrea (Groningen University)
    Abstract: We provide a literature overview of the linkages between Poverty Reduction Strategy Papers (PRSPs) and the Millenium Development Goals (MDGs) and use novel data to examine their relation. We find that introduction of a PRSP is associated with progress in four of the nine MDG indicators we study. PRSP are effective in respect of implementing defined policies (immunization, school enrolment) but not broader measures of MDG achievement (mortality, literacy, gender equality). Less speedy PRSP development and better quality of formulated policy actions in a PRSP are both helpful in achieving child health targets. Setting clearly defined targets and indicators improves progress in education targets. We discuss these findings in the context of other PRSP assessments in the literature and propose future research avenues.
    Date: 2008
  21. By: Cremers, Marloes; Klein Haneveld, Wim; Vlerk, Maarten van der; (Groningen University)
    Abstract: In a previous paper we developed a non-standard two-stage recourse model for the dynamic day-ahead paratransit planning problem. Two heuristics, which are frequently applied in the recourse model, contain many details which leads to large CPU times to solve instances of relatively small size. In this paper we simplify both heuristics to decrease CPU time considerably while maintaining the quality of the obtained solutions as much as possible. Numerical experiments on (semi-)realistic instances, inspired by practice, show that our recourse model with fast heuristics provides acceptable solutions within reasonable time.
    Date: 2008
  22. By: Cynthia B. Lloyd
    Abstract: Recent DHS data is used to document trends in schooling and adolescent reproductive behaviors among adolescents and then to explore the potential implications of rising school attendance rates for adolescent reproductive health. This exploratory analysis includes (1) comparisons of various aspects of adolescent reproductive behavior between students and the non-enrolled, (2) a review of the evidence on the links between school exit and marriage timing and (3) an assessment of the relative contribution of school girl pregnancy to overall pregnancy rates and non-enrolled among adolescents. [Paper presented at the Forum 9 conference].
    Keywords: schooling, girls, women, boys, adolescents, non-enrolled, reproductive behaviors, pregnancy, pregnant, adult, school, marriage
    Date: 2008
  23. By: Krishna Chaitanya Vadlamannati
    Abstract: The relationship between military spending and human rights is one of the most prominent issues in political economy. Yet, the linkage between the two is empirically underdeveloped. Seeking to fulfill this existing gap in the literature, the effects of militarization on human rights performance in six South Asian economies for the period 1980 – 2006 is examined.
    Keywords: south asia, military, human rights economies
    Date: 2009
  24. By: Vinoj Abraham
    Abstract: The 61st round of NSS shows that there is a turnaround in employment growth in rural India after a phase of ‘jobless growth’. Paradoxically, this employment growth occurred during a period of wide spread distress in agriculture sector that include low productivity, price instability and stagnation leading to indebtedness. Under the typical neoclassical tradition, this trend would have predicted further contraction of employment in the rural economy. However, further probing reveals that employment growth in the rural areas is probably a response to the crisis that is gripping the agriculture sector. [WP No. 404].
    Keywords: NSSO, rural India, jobless, growth, rural economy, employment, agriculture sector, productivity, instability, stagnation, price
    Date: 2009
  25. By: Keshab Das
    Abstract: This paper attempts a critical review of the performance and policy concerning the micro, small and medium enterprises (MSMEs) in globalizing India since the early 1990s whence economic reforms were formally introduced. With an explicit accent upon participating in the global market sphere, the government policies have reoriented focus towards enhancing exports, competitiveness and efforts to be part of global value chains or global production networks.
    Keywords: India, unfair trade, micro small, enterprises, global value chains, exports,industrial clusters, credit
    Date: 2009
  26. By: Reuven Glick; Michael Hutchison
    Abstract: In recent years China has faced an increasing trilemma—how to pursue an independent domestic monetary policy and limit exchange rate flexibility, while at the same time facing large and growing international capital flows. This paper analyzes the impact of the trilemma on China’s monetary policy as the country liberalizes its goods and financial markets and integrates with the world economy. It shows how China has sought to insulate its reserve money from the effects of balance of payments inflows by sterilizing through the issuance of central bank liabilities. However, we report empirical results indicating that sterilization dropped precipitously in 2006 in the face of the ongoing massive buildup of international reserves, leading to a surge in reserve money growth. We estimate a vector error correction model linking the surge in China’s reserve money to broad money, real GDP, and the price level. We use this model to explore the inflationary implications of different policy scenarios. Under a scenario of continued rapid reserve money growth (consistent with limited sterilization of foreign exchange reserve accumulation) and strong economic growth, the model predicts a rapid increase in inflation. A model simulation using an extension of the framework that incorporates recent increases in bank reserve requirements also implies a rapid rise in inflation. By contrast, model simulations incorporating a sharp slowdown in economic growth lead to less inflation pressure even with a substantial buildup in international reserves.
    Keywords: Monetary policy - China
    Date: 2008
  27. By: Daniel Levy; Dongwon Lee; Haipeng Chen; Robert Kauffman; Mark Bergen
    Abstract: We study the link between price points and price rigidity, using two datasets containing over 100 million observations. We find that (i) 9 is the most frequently used price-ending for the penny, dime, dollar and ten-dollar digits, (ii) 9-ending prices are between 24%-73% less likely to change in comparison to non-9-ending prices, (iii) the average size of the price change is higher if it ends with 9 in comparison to non-9-ending prices, and (iv) the most common price changes are multiples of dimes, dollars, and ten-dollars. We conclude that price points might constitute a substantial source of retail price rigidity.
    Date: 2008–10
  28. By: Chen Xiang Liu
    Abstract: China’s current financial structure does not give sufficient support to rural areas, leaving many farmers and rural businesses without the capital they need to develop. Rural finance is the weakest point in the country’s entire financial system. Low profits for rural financial institutions, a lack of rural financial products and services and the difficulty many farmers experience in securing loans are the main problems plaguing the rural financial system. Accelerating rural financial reform and making it easier for rural people to access capital are key parts of the country’s effort to reform its overall financial system, to resolve “Three Rural Issues (San Nong)(1)” (Agriculture, Countryside, Farmers), and to create “new socialist countryside”. The main objectives of this paper are to (i) examine the current status of rural finance’s demand and supply and identify existing issues and constraints; (ii) evaluate ongoing rural financial reform and explore suitable roadmaps to develop a well-functioning and sustainable rural finance system, which would address the diverse needs of “new socialist countryside” construction. (1) San nong literally means three “nong”. The word “nong” in Chinese is combined with other words to form phrases such as nongye (agriculture), nongcun (villages or countryside), and nongmin (farmers or peasants).
    Keywords: banks, microcredit institutions, agricultural insurance, informal finance
    JEL: G21 G22 Q14
    Date: 2008

This nep-dev issue is ©2009 by Jeong-Joon Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.