|
on Development |
| By: | Marc Labie (Centre Emile Bernheim, CERMi, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and Faculté Warocqué, Université Mons-Hainaut.); Pierre-Guillaume Méon (Centre Emile Bernheim, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and DULBEA, Université Libre de Bruxelles, Brussels.); Ariane Szafarz (Centre Emile Bernheim, CERMi, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and DULBEA, Université Libre de Bruxelles, Brussels.) |
| Abstract: | This paper studies how high-powered incentives may affect credit officers’ discriminatory practices in microfinance institutions. Using an agency model applied to a non-profit MFI, we argue that incentive contracts may help align the officer’s behavior with the MFI’s mission. However, since incentives are costly, and the MFI’s budget is limited, even a benevolent institution faces a trade-off between fighting discrimination and raising outreach. Welfare maximization may not imply full eradication of discriminatory practices. A non discriminating welfare-maximizing MFI may thus prefer paying smaller incentives, and letting its credit officer discriminate to some extent. |
| Keywords: | Microfinance, Discrimination, Credit Officers, Incentives. |
| JEL: | O16 D82 J33 L31 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:09-017&r=dev |
| By: | Nobuhiro Mizuno (Graduate School of Economics, Kyoto University) |
| Abstract: | Some recent empirical studies found positive effects of economic liberalization on democratization. Based on these findings, this paper explains why the sequence of economic liberalization and democratization is related to the effects of the two reforms on economic performance. Since economic liberalization increases the probability of democratization and democratization leads to income redistribution, in an economy with large inequality between the elite and the poor, the elite do not implement economic liberalization, and democratization occurs first. In such an economy, the effects of economic liberalization and democratization are lower because of distortions caused by large-scale income redistribution. |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:673&r=dev |
| By: | Bhandari, Amit Kumar (Indian Institute of Social Welfare and Business Management) |
| Abstract: | Financial inclusion is the broad based delivery of banking and other financial services at affordable cost to the poorest sections of society. In India, financial inclusion emphasizes to include maximum number of people under formal financial systems. The most important part of financial services in a region is typically measured by number of people who have access to bank accounts. The present study investigates the drive to financial inclusion in the form of the growth in bank accounts of scheduled commercial banks and the changes in below poverty line population. The result suggests that the growth in bank accounts is not significantly associated with the reduction in below poverty line population across states. Providing banking services to maximum number of people is unsuccessful as a poverty reduction strategy. As a poverty reduction strategy, developing inclusive financial systems should give priority, which is financially and socially sustainable. |
| Keywords: | banking, financial inclusion, poverty |
| JEL: | G24 G21 I32 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4132&r=dev |
| By: | Ederington, Josh (University of Kentucky); Minier, Jenny (University of Kentucky); Troske, Kenneth (University of Kentucky) |
| Abstract: | Gary Becker's theory of discrimination argues that increasing competition will reduce discrimination in the labor market. We use the Colombian trade liberalization episode over the period 1984–91 to investigate this claim on plant-level data in three ways. First, we examine whether women are concentrated in exporting plants. Second, we examine whether the increase in foreign competition due to unilateral trade liberalization disproportionately drove discriminating plants out of the market. Finally, we investigate whether trade liberalization affected hiring decisions (and thus gender segregation) by Colombian firms. |
| Keywords: | discrimination, trade, competition |
| JEL: | J7 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4131&r=dev |
| By: | Woojin Kang |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:0906&r=dev |
| By: | Md. Shafiul Azam; Katsushi Imai |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:0905&r=dev |
| By: | Wassie Berhanu; Bichaka Fayissa |
| Abstract: | The long-term effects of shocks are examined in the context of a traditional pastoral community. The impacts are empirically examined in connection with the micro-level poverty trap hypothesis and the associated minimum poverty threshold estimates reported in previous studies. We argue that these estimates cannot be taken as definitive and the core explanations behind them are incongruent with the institutional realities of the pastoral community for which they are reported. The reality is that shocks have implied long-term community-wide deprivation with a lasting effect of deterioration in the indigenous capacity to cushion those who slide into permanent destitution. This is evident in the empirically identified increasing loss of confidence in the indigenous social support structures. The findings rather highlight the need for policy interventions to focus on system level community-wide development issues rather than the commonly emphasized individual targeting implied by such exercises as asset-based poverty threshold estimates. |
| Keywords: | Shocks; Poverty Trap; Pastoralism; Social Capital; Ethiopia |
| JEL: | D62 I32 O13 Q18 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:mts:wpaper:200903&r=dev |
| By: | Grun, Rebekka E. |
| Abstract: | This paper examines how households trade off migration and savings when subject to exogenous violence. The authors propose that households under violence decide jointly on migration and saving, because a higher asset-stock is more difficult to carry to a new place. When confronted with exogenous violence, households are expected to consider migration, and reduce their assets, both in order to reduce their exposure to violence, and to make migration easier. In some cases, after a migration decision has been taken, savings can increase as a function of violence to ensure a minimum bundle to carry. Empirical evidence from rich Colombian micro-data supports the conceptual framework for violence that carries a displacement threat, such as guerrilla attacks. |
| Keywords: | Access to Finance,,Economic Theory&Research,Adolescent Health,Youth and Governance |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4918&r=dev |
| By: | Andriamananjara, Soamiely; Brenton, Paul; von Uexkull, Jan Erik; Walkenhorst, Peter |
| Abstract: | This study discusses potential economic implications for Nigeria of an Economic Partnership Agreement with the European Union. It uses the World Bank’s Tariff Reform Impact Simulation Tool to assess the effects of preferential tariff liberalization with respect to the European Union. The results suggest that the impact of an Economic Partnership Agreement on total imports into Nigeria will be slight. This is in part because the Agreement will likely allow the most protected sectors to be excluded from liberalization, and also because where substantial tariffs are involved much of the increase in imports from the European Union will occur at the expense of other suppliers of imports. It is this trade diversion, arising from the discriminatory nature of the EPA, which generates a negative welfare impact of the tariff reforms. One way for Nigeria to limit these losses is to pursue non-preferential trade liberalization before implementing an EPA. The paper looks at the large number of import bans in Nigeria and argues that the positive impact on welfare of removing these import bans is likely to be substantial. Their removal would undermine a major reason for cross border smuggling and pave the way for a return to normal regional trade flows. The paper shows how an Economic Partnership Agreement presents an opportunity for accelerating the reforms that are needed to support a strategy to increase regional and global trade integration. Such an agreement is more likely to have positive and significant impacts when integrated into a comprehensive strategy toward competitiveness and alleviation of the supply constraints that have stifled the impact of previous trade agreements. Key issues that should be addressed include liberalization and regulatory strengthening of services sectors to ensure that all firms in Nigeria have access to efficiently produced backbone services and initiatives to address the country’s poor trade logistics performance. |
| Keywords: | Free Trade,Trade Policy,Currencies and Exchange Rates,Debt Markets,Trade Law |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4920&r=dev |
| By: | Yamauchi, Futoshi; Yohannes, Yisehac; Quisumbing, Agnes |
| Abstract: | This paper examines the impacts of disasters on dynamic human capital production using panel data from Bangladesh, Ethiopia, and Malawi. The empirical results show that the accumulation of biological human capital prior to disasters helps children maintain investments in the post-disaster period. Biological human capital formed in early childhood (long-term nutritional status) plays a role of insurance with resilience to disasters by protecting schooling investment and outcomes, although disasters have negative impacts on investment. In Bangladesh, children with more biological human capital are less affected by the adverse effects of floods, and the rate of investment increases with the initial human capital stock in the post-disaster recovery process. In Ethiopia and Malawi, where droughts are rather frequent, exposure to highly frequent droughts in some cases reduces schooling investment but the negative impacts are larger among children embodying less biological human capital. Asset holdings prior to the disasters, especially the household's stock of intellectual human capital, also helps maintain schooling investments at least to the same degree as the stock of human capital accumulated in children prior to the disasters. |
| Keywords: | Natural Disasters,Hazard Risk Management,Access to Finance,Economic Theory&Research,Health Monitoring&Evaluation |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4910&r=dev |
| By: | Beine, Michel; Docquier, Frederic; Schiff, Maurice |
| Abstract: | This paper examines the relationship between international migration and source country fertility. The impact of international migration on source country fertility may have a number of causes, including a transfer of destination countries'fertility norms and an incentive to acquire more education. It provides provide a rigorous test of the diffusion on of fertility norms using original and detailed data on migration. The results provide evidence of a significant transfer of fertility norms from migrants to their country of origin: a one percent decrease in the fertility norm to which migrants are exposed reduces home country fertility by about 0.3 percent for origin countries. |
| Keywords: | Population Policies,Gender and Social Development,Reproductive Health,Human Migrations&Resettlements,Anthropology |
| Date: | 2009–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4925&r=dev |
| By: | Makdissi, Paul; Wodon, Quentin |
| Abstract: | Under price ceilings and quality floors for agricultural inputs in cash crop sectors in developing countries where credit markets are weak, imperfect information on the ability of farmers to pay for their inputs at the end of the cropping season may lead the decentralized production of those inputs by risk averse private input providers to be inefficient. A coordinating agency and/or subsidies for new farmers could help to produce and distribute more agricultural inputs, thereby increasing the profits for input providers while also enabling more farmers to produce the crops that are key to their livelihood. |
| Keywords: | Rural Poverty Reduction,Economic Theory&Research,Crops&Crop Management Systems,Access to Finance,Rural Development Knowledge&Information Systems |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4922&r=dev |
| By: | Calderon, Cesar |
| Abstract: | The goal of the paper is to provide a comprehensive assessment of the impact of infrastructure development on growth in African countries. Based on econometric estimates for a sample of 136 countries from 1960-2005, the authors evaluate the impact on per capita growth of faster accumulation of infrastructure stocks and of enhancement in the quality of infrastructure services for 39 African countries in three key infrastructure sectors: telecommunications, electricity, and roads.<BR>Using an econometric technique suitable for dynamic panel data models and likely endogenous regressors, the authors find that infrastructure stocks and service quality boost economic growth. The growth payoff of reaching the infrastructure development of the African leader (Mauritius) is 1.1 percent of GDP per year in North Africa and 2.3 percent in Sub-Saharan Africa, with most of the contribution coming from more, rather than better, infrastructure. Across Africa, infrastructure contributed 99 basis points to per capita economic growth, versus 68 points for other structural policies. Most of the contribution came from increases in stocks (89 basis points), versus quality improvements (10 basis points). The findings show that growth is positively affected by the volume of infrastructure stocks and the quality of infrastructure services; simulations show that our empirical findings are significant statistically and economically. Identifying areas of opportunity to generate productivity growth, the authors find that African countries are likely to gain more from larger stocks of infrastructure than from enhancements in the quality of existing infrastructure. The payoffs are largest for telephone density, electricity-generating capacity, road-network length, and road quality. |
| Keywords: | Transport Economics Policy&Planning,Infrastructure Economics,E-Business,Private Participation in Infrastructure,Non Bank Financial Institutions |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4914&r=dev |
| By: | Foster, Vivien; Steinbuks, Jevgenijs |
| Abstract: | This paper documents the prevalence of in-house generation of electric power by firms in Sub-Saharan Africa and attempts to identify the underlying causes. The analysis is based on two data sources. The UDI World Electric Power Plants Data Base (WEPP), a global inventory of electric power generating units, provides a detailed inventory of in-house generation at the country level. The World Bank's Enterprise Survey Database captures business perceptions of the obstacles to enterprise growth for 8,483 currently operating firms in 25 African countries. Overall, so-called own generation by firms-which has been on the rise in recent years-accounts for about 6 percent of installed generation capacity in Sub-Saharan Africa (equivalent to at least 4,000 MW of installed capacity). However, this share doubles to around 12 percent in the low-income countries, the post-conflict countries, and more generally on the Western side of the continent. In a handful of countries own generation represents more than 20 percent of capacity. Rigorous empirical analysis shows that unreliable public power supplies is far from being the only or even the largest factor driving generator ownership. Firm characteristics have a major influence-in particular, the probability of owning a generator doubles in large firms relative to small ones. Our model predicts that the prevalence of own generation would remain high (at around 20 percent) even if power supplies were perfectly reliable, suggesting that other factors, such as emergency back-up and export regulations, play a critical role in the decision to own a generator. |
| Keywords: | Energy Production and Transportation,Infrastructure Economics,Power&Energy Conversion,E-Business,Energy Technology&Transmission |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4913&r=dev |
| By: | Bell, Clive; Koukoumelis, Anastasios |
| Abstract: | An AIDS epidemic threatens Ethiopia with a long wave of premature adult mortality, and thus with an enduring setback to capital formation and economic growth. The authors develop a two-sector model with three overlapping generations and intersectorally mobile labor, in which young adults allocate resources under rational expectations. They calibrate the model to the demographic and economic data, and perform simulations for the period ending in 2100 under alternative assumptions about mortality with and without the epidemic. Although the epidemic does not bring about a catastrophic economic collapse, which is hardly possible in view of Ethiopia's poverty and high background adult mortality, it does cause a permanent, downward displacement of the path of output per head, amounting to 10 percent in 2100. An externally funded program to combat the disease is socially very profitable. |
| Keywords: | Population Policies,Economic Theory&Research,,Access to Finance,Adolescent Health |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4919&r=dev |
| By: | Khandker, Shahidur R. |
| Abstract: | Seasonal poverty in Bangladesh, locally known as monga, refers to seasonal deprivation of food during the pre-harvest season of Aman rice. An analysis of household income and expenditure survey data shows that average household income and consumption are much lower during monga season than in other seasons, and that seasonal income greatly influences seasonal consumption. However, lack of income and consumption smoothing is more acute in greater Rangpur, the North West region, than in other regions, causing widespread seasonal deprivation. The analysis shows that agricultural income diversification accompanied by better access to micro-credit, irrigation, education, electrification, social safety net programs, and dynamic labor markets has helped reduce seasonality in income and poverty in regions other than Rangpur in the recent past. Hence, government policies should promote income diversification through infrastructure investments and provide income transfers to the targeted poor to contain income seasonality and poverty in this impoverished part of Bangladesh. |
| Keywords: | Rural Poverty Reduction,Safety Nets and Transfers,Economic Theory&Research,Inequality |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4923&r=dev |
| By: | Yepes, Tito; Pierce, Justin; Foster, Vivien |
| Abstract: | The paper's objective is to explain factors underlying Africa's weak infrastructure endowment and to identify suitable infrastructure goals for the region based on benchmarking against international peers. The authors use a dataset covering the stocks of key infrastructure-including information and communication technology (ICT), power, roads, and water-across 155 developing countries over the period 1960 to 2005. The paper also examines subregional differences within Africa. They make use of regression techniques to control for a comprehensive set of economic, demographic, geographic, and historic conditioning factors, as well as adjusting for potential endogeneities. Results show that Africa lags behind all other regions of the developing world in its infrastructure endowment, except in ICT. By far the largest gaps arise in the power sector, with generating capacity and household access to electricity at half the levels observed in South Asia. While it is often assumed that Africa's infrastructure deficit is largely a reflection of its relatively low income levels, the authors find that African countries have much more limited infrastructure than income peers in other parts of the developing world. Countries that face the most challenging environment, with low population density, weak governance, and history of conflict, have the poorest infrastructure endowments. At the outset of the data series, Africa was doing significantly better than other developing regions for road density, generation capacity, and fixed-line telephones, but Africa's relative position has deteriorated over time. The most dramatic loss of ground has come in electrical generating capacity, which has stagnated since 1980. |
| Keywords: | Transport Economics Policy&Planning,Urban Slums Upgrading,Urban Services to the Poor,Banks&Banking Reform,Infrastructure Regulation |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4912&r=dev |
| By: | Abe, Kazutomo; Wilson, John S. |
| Abstract: | The world economic crisis of 2008 presents clear challenges to prospects for economic growth in developing countries. This is particularly true for emerging economies in East Asia that have relied to a great extent over the past decade on export-led growth. What steps to facilitate trade promise a relatively strong return on investment for East Asia to help sustain trade and growth? The authors examine how port infrastructure affects trade and the role of transport costs in driving exports and imports for the region. They find that port congestion has significantly increased the transport costs to East Asia from both of the United States and Japan. The analysis suggests that cutting port congestion by 10 percent could cut transport costs in East Asia by up to 3 percent. This translates into a 0.3 to 0.5 percent across-the-board tariff cut. In addition, the estimates suggest that the trade cost reduction of investment in port infrastructure in East Asia that translates into higher consumer welfare would far outweigh the cost for physical expansion of the ports in the region. |
| Keywords: | Transport Economics Policy&Planning,Common Carriers Industry,Transport and Trade Logistics,Economic Theory&Research,Ports&Waterways |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4911&r=dev |
| By: | Das Gupta, Monica; Gostin, Lawrence |
| Abstract: | Aid to developing countries has largely neglected the population-wide health services that are core to communicable disease control in the developed world. These mostly non-clinical services generate"pure public goods"by reducing everyone's exposure to disease through measures such as implementing health and sanitary regulations. They complement the clinical preventive and treatment services which are the donors'main focus. Their neglect is manifested, for example, in a lack of coherent public health regulations in countries where donors have long been active, facilitating the spread of diseases such as avian flu. These services can be inexpensive, and dramatically reduce health inequalities. Sri Lanka spends less than 0.2% of GDP on its well-designed population-wide services, which contribute to the country's high levels of health equity and life expectancy despite low GDP per head and civil war. Evidence abounds on the negative externalities of weak population-wide health services. Global public health security cannot be assured without building strong national population-wide health systems to reduce the potential for communicable diseases to spread within and beyond their borders. Donors need greater clarity about what constitutes a strong public health system, and how to build them. The paper discusses gaps in donors'approaches and first steps toward closing them. |
| Keywords: | Health Monitoring&Evaluation,Health Systems Development&Reform,Disease Control&Prevention,Population Policies,Gender and Health |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4907&r=dev |
| By: | Yamauchi, Futoshi; Yohannes, Yisehac; Quisumbing, Agnes |
| Abstract: | This paper examines the impacts of natural disasters on schooling investments with special focus on the roles of ex-ante actions and ex-post responses using panel data from Bangladesh, Ethiopia, and Malawi. The importance of ex-ante actions depends on disaster risks and the likelihood of public assistance, which potentially creates substitution between the two actions. The findings show that higher future probabilities of disasters increase the likelihood of holding more human capital and/or livestock relative to land, and this asset-portfolio effect is significant in disaster prone areas. The empirical results support the roles of both ex-ante and ex-post responses (public assistance) in coping with disasters, but also show interesting variations across countries. In Ethiopia, public assistance plays a more important role than ex-ante actions to mitigate the impact of shocks on child schooling. In contrast, households in Malawi rely more on private ex-ante actions than public assistance. The Bangladesh example shows active roles of both ex-ante and ex-post actions. These observations are consistent with the finding on the relationship between ex-ante actions and disaster risks. The results also show that among ex-ante actions, human capital accumulated in the household prior to disasters helps mitigate the negative effects of disasters in both the short and long runs. |
| Keywords: | Natural Disasters,Hazard Risk Management,Disaster Management,,Economic Theory&Research |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4909&r=dev |
| By: | Staatz, John M.; Boughton, Duncan H.; Donovan, Cynthia |
| Abstract: | This paper provides a systematic definition of food security, focusing on its different dimensions; examines the nature and magnitude of the different dimensions of food insecurity in developing countries; discusses the difficult tradeoffs that policy makers face in trying to address food securityâs multiple dimensions simultaneously; and explores promising new approaches to address food insecurity. The geographic focus is on Sub-Saharan Africa and South Asia, where the majority of the worldâs food insecure people live. |
| Keywords: | food security, hunger, poverty, food policy, economic development, Agricultural and Food Policy, Food Security and Poverty, International Development, O13, O19, Q18, |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:midasp:49227&r=dev |
| By: | Turvey, Calum G.; Kong, Rong; Belltawn, Burgen |
| Abstract: | This paper presents preliminary results on the possible demand for weather insurance in China. Results from 1,564 farm households from Western and Central China between October 2007 and October 2008 suggest that the greater risk for farmers is drought followed by excessive rain. Heat is less critical as a risk but more significant than cool weather. Results suggest a strong interest in precipitation insurance with 50% and 44% of respondents indicating strong interest in the product. Supplementary results indicate that interest is equal between planting, cultivating, and harvesting. Furthermore results suggest that farmers are willing to adopt new ideas, and where possible already take action to self insure through diversification and other means, The results are encouraging. Examples and discussion of how weather insurance can be implemented is included in the text. |
| Keywords: | weather insurance, rainfall insurance, China, Agricultural and Food Policy, Agricultural Finance, International Development, Risk and Uncertainty, |
| Date: | 2009–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49362&r=dev |
| By: | Betz, Michael |
| Abstract: | Raising the incomes of agricultural households is central to reducing poverty in Uganda. In many areas of the country agriculture has encroached into marginal or fragile lands, leaving little room for the expansion of agricultural lands (Kraybill, Bashaasha, and Betz 2009). Additionally, soil degradation has become a barrier to agricultural productivity (Pender et al. 2004), especially in the Eastern region of the country. Farmers now look for alternatives that will increase output without further depleting soil fertility or expanding into fragile lands. Agricultural extension is the primary government mechanism through which developing country governments attempt to improve the knowledge and methods that farmers use to increase output; However, many extension programs throughout Sub-Saharan Africa have the reputation of being largely ineffective (Dejene 1989; Gautam 2000). This study estimates an agricultural production function for 3 farm sizes to determine whether agricultural extension has differential effects on farms of different size. Extension is found to have a positive and significant relationship with the value of output produced for small and large farms, but has not significant relationship with the value of output for medium size farms. This result has distinct policy implications for the design and implementation of agricultural extension programs in Uganda and other parts of Sub-Saharan Africa. |
| Keywords: | Uganda, Africa, agriculture, extension, productivity, NAADS, Agricultural and Food Policy, Farm Management, International Development, Production Economics, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49471&r=dev |
| By: | Kandpal, Eeshani; McNamara, Paul E. |
| Abstract: | In this paper, we use quantile regressions on data from the 2005-06 wave of the Indian National Family Health Survey to study the determinants of child body-mass-index, height-for-age, and hemoglobin at different points of the conditional distribution. Our results show that only considering the conditional mean of the entire distribution can yield misleading results. In light of compelling evidence on sex-selective abortion and infanticide, we use a Heckman correction for our quantile regression to control for the âunderreportingâ of female births documented by Rose (1999). We find that household maternal health and education have larger effects at the lower end of the distribution than on the upper end, for all three child nutritional indicators. Results show that iron supplements are less effective at increasing hemoglobin levels in the worst-off children. We argue that policy interventions must account for socioeconomic diversity or have little hope of meeting their target. |
| Keywords: | Food Consumption/Nutrition/Food Safety, International Development, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49415&r=dev |
| By: | Majumdar, Shibalee; Partridge, Mark D. |
| Abstract: | Impact of Economic Growth on Income Inequality: A Regional Perspective Shibalee Majumdar and Mark Partridge Egalitarianism refers to the doctrine of the equality of mankind and the desirability of political, economic and social equality. In this paper, we are going to refer to the concept of economic equality. Theory shows that income inequality is a condition that prevails along with economic growth. According to the utilitarian view, income inequality must exist along with economic growth in order to maximize social welfare. This is in sharp contrast to the egalitarian view according to which, all members of the society should have equal access to all economic resources in terms of economic power, wealth and contribution. Kuznets (1955) introduced the inverted U-shaped Kuznets curve that showed that in an economic system, at the initial level of low economic growth, income inequality is low and as growth occurs, income inequality increases till a threshold, after which, income inequality decreases with increased economic growth. In the United States, income inequality remained stable till the 1970s but then began to increase as earnings increased. This has been called the great U-turn by Harris, et. al (1986). Partridge et. al (1996) notes that while Kuznets held the manufacturing sector as the main driver of the economic growth, the current economic growth is being spearheaded by the services sector. While one school of research shows how income inequality might harm economic growth, empirical studies show that in the United States, a positive linkage between economic growth and income inequality has existed since the 1970s. The causality between economic growth and income inequality is an important one. The relationship may differ depending on regions or size of an economy. Fallah and Partridge (2007) show that the impact of inequality on economic growth is opposite in rural and urban settings. Most of the research dealing with the inequality-growth relationship has either looked at the impact of inequality on economic growth (Fallah and Partridge, 2007) or the impact of various socio-economic variables on inequality. Though there has been some research on finding out the causality between economic growth and wage inequality, research assessing whether economic growth affects income inequality, and that too whether the degree of the impact varies between rural and urban regions, are few. The aim of this paper is to see how economic growth affects income inequality. Does improved economic growth lead to a more redistributive system of social welfare or does the polarization become more acute? Does the impact of economic growth on income inequality differ between metropolitan and non-metropolitan areas? Does inequality vary depending on the nature of the agglomeration or the demographic composition of a region? The empirical equation is: ginicsy = gcsy-1 + educsy + popcsy + lcsy + ethcsy + immigcsy + strcsy + Ïcs + Ïy + ε where, gini denotes the gini coefficient, g denotes per capita income, edu denotes educational attainment, pop denotes population density, l denotes labour market size, eth denotes ethnic diversity, immig denotes international immigration, str denotes the structural change index, Ïcs denotes state fixed effects and Ïy denotes time fixed effects. The subscripts c, s and y denotes county, state and year, respectively. A lagged value of the per capita income is used in order to avoid any endogeneity issues. The analysis for this paper will be done at the county-level. For the dependant variable and all explanatory variables except the per capita income, a panel will be constructed using county-level data for two decades, 1990 and 2000. The gini coefficient will be calculated using the income data from the U.S. Census Bureau. Data on per capita income, educational attainment, population density and international migration can be obtained from the U.S. Census Bureau. The ethnic diversity measure will be calculated using the population data from the U.S. Census Bureau. The structural change index will be calculated by using data from the Bureau of Economic Analysis, Regional Economic Information System. The aim of the paper is to find out whether per capita income (representing economic growth) has an impact on the gini coefficient (representing income inequality), and to show whether this impact varies between rural and urban areas. The expected results are as follows. Economic growth may have a negative impact on income inequality since economic growth is often positively associated with higher investments, higher employment-generating processes and higher employment, hence giving greater access to jobs and income to a larger number of people. The degree of the impact may vary between rural and urban areas because of the following reasons. A higher population density in the urban area may lead to greater job competition and hence lead to lower access to jobs than in rural areas. International immigration is usually higher in urban areas than in rural areas. The greater influx of immigrants, as well as often seen, the willingness of the immigrants to work at lower wages may lead to lower access to jobs for the locals. This should hold true for the low-skilled jobs. For the high-skilled jobs on the other hand, educational attainment of the people will play a more important role on their ability to get jobs in the urban areas than in the rural areas. However, growth may reduce income inequality in the urban areas because higher population density results in more personal contacts, better networking and access to information, and hence more opportunities to access more and better jobs. If the results show that economic growth has a negative impact on income inequality, it will be possible to comment on the causality of the inequality-growth relationship. More so, if it is seen that economic growth has a stronger impact in decreasing income inequality in the urban areas than in the rural areas, it will show that the higher wages and more diverse job opportunities in the urban areas have a greater spillover effect than in the rural areas. The policy implication such a result may have is that higher investments will have to be made in educational and vocational training in order to generate a stream of skilled labourers, which in turn will add to economic growth and thus will lead to lower income inequality and better social cohesion. |
| Keywords: | Regional development, income inequality, spatial relation, Community/Rural/Urban Development, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49270&r=dev |
| By: | Chen, Xi; Zhang, Xiaobo |
| Abstract: | Xi Chen acknowledges generous Doctoral Research Grant from the Institute for the Social Sciences at Cornell University and precious data set provided by the Development Strategy and Governance Division at IFPRI. Conference Travel Grant provided by the Department of Applied Economics and Management at Cornell is also acknowledged. We are grateful to Ravi Kanbur for invaluable comments, guidance and encouragement. This paper also benefited from helpful discussion and invaluable comments from Robert Frank, David Sahn, Marc Rockmore, and seminar participants in the Department of Economics at Cornell. Due to time limit, I have not incorporated all helpful comments and suggestions in this early draft paper. The views expressed herein and any remaining errors are the authorâs and do not represent any official agency. |
| Keywords: | Blood Donation, Social Status, Poverty, Inequality, Relative Deprivation, Rural China, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Demand and Price Analysis, Health Economics and Policy, Institutional and Behavioral Economics, International Development, Labor and Human Capital, Political Economy, Production Economics, Public Economics, Research Methods/ Statistical Methods, Risk and Uncertainty, I32, J22, D13, D63, |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49411&r=dev |
| By: | Lerman, Zvi; Sedik, David J. |
| Abstract: | Farms in Tajikistan currently face a severe debt crisis that has been caused by a combination of two factors typical of such situations in many countries: (a) the inability of the farms to make a profit under current conditions and (b) continued lending by the banks to cotton producers regardless of reduced payment capacity and lack of credit-worthiness. The paper traces the accumulation of farm debt in Tajikistan to pervasive government intervention in both financing and production decisions, which has led to soft budget constraints and moral hazard behavior. The purpose of the paper is to inform the debate around the issue of cotton farm debt in Tajikistan by studying the experience of other countries that had to contend with farm debt overhangs in the 1980s and the 1990s. Five CIS transition countries (Belarus, Kazakhstan, Moldova, Russia, and Ukraine) and one market economy (Israel) are studied using time series of aggregate financial reports of the farm sectors. The comparative analysis shows that the farm debt issue is not strictly a transition economy phenomenon. The problem can occur in market economies (e.g., Israel) if the state pursues policies directed toward the expansion of farm production without heed to creditworthiness of the farms and if the farm structure is incompatible with profitability and efficiency criteria. The basic reasons that led to debt accumulation in CIS and in Israel remain valid to this day, and the policy solutions implemented in these countries are relevant for Tajikistan. |
| Keywords: | Farm debt, transition economies, Tajikistan, CIS, Israel, farm restructuring, agricultural reforms, Agricultural Finance, Institutional and Behavioral Economics, Q140, P210, P320, G300, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49253&r=dev |
| By: | Liverpool, Saweda Onipede. L.; Winter-Nelson, Alex |
| Abstract: | Despite recent traces of economic growth, Ethiopia remains one of the poorest countries in the world. Though about 80% of its population is engaged in agriculture, agricultural productivity remains low and extremely vulnerable to climatic conditions. The adoption and use of modern technologies is generally accepted as a potential vehicle out of poverty for many but adoption rates in the country remain low with the nature of the adoption process largely unstudied (Spielman et al, 2007). This paper studies the impact of social networks in the technology adoption process in rural Ethiopia. In particular it tests for the presence of social learning effects. In addition to geographic networks, it considers the role played by other networks with more purposeful interactions such as a householdâs friends. The study explores the differential impacts of social networks by network type, technology and the asset poverty status of households. |
| Keywords: | social learning, persistent poverty, technology adoption, Ethiopia, Food Security and Poverty, International Development, Research and Development/Tech Change/Emerging Technologies, O31, O33, Q12, Q13, |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49357&r=dev |
| By: | Villoria, Nelson |
| Abstract: | This paper explores the impacts of China's growth in the international markets of agricultural products. These impacts are important because they are related to two different ongoing discussions about the role of China in the world economy. One of these discussions have to do with China as a source of price inflation while the other has to do with China as an engine of growth for developing countries, in this case, through increased export opportunities. Our results suggest that China has been a source of aggregated mild price inflation in the largest developed economies that occupy the first ranks as food importers. This is probably related to a more intense pressure on world food supplies. When we look at the counterfactual exports of selected exporters, we find that few countries in Latin America (Brazil, Peru), and in Asia (Malaysia, Indonesia), have benefited from China's increased food demand. |
| Keywords: | gravity, China, food prices, International Development, International Relations/Trade, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49398&r=dev |
| By: | Hernandez, Emilio; Sam, Abdoul; Gonzalez-Vega, Claudio; Chen, Joyce |
| Abstract: | The impact of public and private transfers on credit markets has not been sufficiently studied and understanding any spill over effects caused by these transfers may be useful for policy makers. This paper estimates the impact of Conditional Cash Transfers (CCTs) and remittances received by poor households in rural Nicaragua on their decision to request a loan. We find that, on average, CCTs did not affect the request of credit while remittances increased it, controlling for potential endogeneity. We argue the reduction in income risk provided by remittances changes borrowersâ expected marginal returns to a loan and/or their creditworthiness, as perceived by lenders. The successful enforcement of the use of CCTs on long-term investments seems to have avoided externalities on the use of short-term credit these households have access to and their creditworthiness. |
| Keywords: | International Development, D14, F22, O15, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49319&r=dev |
| By: | Awokuse, Titus O. |
| Abstract: | In recent decades, the potential contribution of agriculture to economic growth has been a subject of much controversy among development economists. While some contend that agricultural development is a precondition to industrialization, others strongly disagree and argue for a different path. Taking advantage of recent developments in time series econometric methods, this paper re-examines the question of whether agriculture could serve as an engine of growth. Results from the empirical analysis provide strong evidence indicating that agriculture is an engine of economic growth. Furthermore, we find that trade openness has a positive effect on GDP growth. |
| Keywords: | Agriculture, Economic growth, ARDL, developing countries, Agricultural and Food Policy, Community/Rural/Urban Development, C23, O11, 041, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49762&r=dev |
| By: | Ahmed, Syud Amer; Diffenbaugh, Noah S.; Hertel, Thomas W.; Ramankutty, Navin; Rios, Ana R.; Rowhani, Pedram |
| Abstract: | Climate volatility will increase in the future, with agricultural productivity expected to become increasingly volatile as well. For Tanzania, where food production and prices are sensitive to the climate, rising climate volatility can have severe implications for poverty. We develop and use an integrated framework to estimate the poverty vulnerabilities of different socio-economic strata in Tanzania under current and future climate. We find that households across various strata are similarly vulnerable to being impoverished when considered in terms of their stratumâs populations, with poverty vulnerability of all groups higher in the 21st Century than in the late 20th Century. When the contributions of the different strata to the national poverty changes are taken into account, the rural and urban households with diversified income sources are found to account for the largest poverty changes due to their large shares in initial total poverty. |
| Keywords: | climate, volatility, poverty vulnerability, Tanzania, Environmental Economics and Policy, Food Security and Poverty, International Development, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49358&r=dev |
| By: | Kandpal, Eeshani |
| Abstract: | The Indian Integrated Child Development Services (ICDS) aims to improve the physical and psychological well-being of children younger than ve. However, previous evaluations nd that ICDS fails to signicantly impact child stunting and that program placement is faulty. My results contradict the lack of a signicant treatment eect, but are consistent with problematic program placement. Previous analyses of ICDS used probit to study placement, but the dis- tribution of state-wise ICDS coverage is negatively skewed violating the normality assumption of probit. To address this, I use beta regression to study placement and compare results with probit analysis. In addition, using Propensity Score Matching (PSM) I nd evidence of a sig- nicant, positive average and quantile treatment eects on stunting. Data are from the most recent Indian Family and Health Survey (NFHS-3). |
| Keywords: | Food Consumption/Nutrition/Food Safety, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49578&r=dev |
| By: | Naschold, Felix |
| Abstract: | Although identifying the existence and the nature of household-level poverty traps would have important implications for the design of poverty reduction policies empirical evidence is still scant. A small, but growing empirical literature has begun testing for poverty traps as thresholds in non-linear welfare dynamics. Employing a variety of quantitative methods it has produced a variety of conclusions. This paper uses a uniquely long household panel from three villages in rural India to examine whether the detection of poverty traps may be contingent on the quantitative method used to model household welfare dynamics. It then employs a novel semiparametric panel data estimator that combines the advantages of the existing methods. Since in the context of dynamic poverty traps we are primarily concerned with expected, structural well-being it measures household welfare in assets. Structural immobility in these Indian villages is pervasive. Household asset holdings are stagnant over time. Absent any structural changes, the currently poor are likely to remain poor, suggesting a strong type of poverty trap that is qualitatively different from a dynamic thresholds-type poverty trap. While all types of households face static asset holdings, higher castes, larger landholders and more educated households are significantly less likely to be poor. |
| Keywords: | Household Welfare Dynamics, Semiparametric Estimation, Penalized Splines, India, Panel Data, Asset Poverty, International Development, I32, C14, O12, |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49396&r=dev |
| By: | Ulimwengu, John; Funes, Jose; Headey, Derek; You, Liang |
| Abstract: | Given its vast land resources and favorable water supply, the Democratic Republic of Congoâs (DRC) natural agricultural potential is immense. However, the economic potential of the sector is handicapped by one of the most dilapidated transport systems in the developing world (World Bank, 2006). Road investments are therefore a high priority in the governmentâs investment plans, and those of its major donors. Whilst these are encouraging signs, very little is known about how the existing road network constrains agricultural and rural development, and how these new road investments would address these constraints. To inform this issue the present paper primarily employs GIS-based data to assess the impact of market access on agricultural and rural development (ARD). Compared to existing work, however, the paper makes a number of innovations to improve and extend the generic techniques used to estimate the importance of market access for ARD. First, the DRC road network data is augmented with survey-based data from Minten and Kyle (1999) on agricultural transport times to calculate improved âmarket accessâ measures for the DRC. Second, we follow Dorosh et al (2009) in estimating the long run relationship between market access and agricultural production, although we also investigate the relationship with household wealth. Finally, we run simulations of how proposed infrastructure investments would affect market access, and how market access would in turn affect agricultural production and household wealth. |
| Keywords: | Infrastructure, market access, road and river transport, agricultural production, poverty., Agricultural and Food Policy, Crop Production/Industries, Food Security and Poverty, Production Economics, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49292&r=dev |
| By: | Wolff, Hendrik; Chong, Howard; Auffhammer, Maximilian |
| Abstract: | This paper examines the consequences of data error in data series used to construct aggregate indicators. Using the most popular indicator of country level economic development, the Human Development Index (HDI), we identify three separate sources of data error. We propose a simple statistical framework to investigate how data error may bias rank assignments and identify two striking consequences for the HDI. First, using the cutoff values used by the United Nations to assign a country as âlowâ, âmediumâ, or âhighâ developed, we find that currently up to 45% of developing countries are misclassified. Moreover, by replicating prior development/macroeconomic studies, we find that key estimated parameters such as Gini coefficients and speed of convergence measures vary by up to 100% due to data error. |
| Keywords: | Measurement Error, International Comparative Statistics, International Development, O10, C82, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49763&r=dev |
| By: | Menon, Jayant (Asian Development Bank) |
| Abstract: | Viet Nam has experienced spectacular economic growth over the past decade, in part the result of massive foreign direct investment (FDI) inflows. Although much has been written on the impacts of FDI in developing countries, previous studies have generally ignored macroeconomic consequences in cost-benefit assessments. These macroeconomic aspects can be particularly important in transitional economies like Viet Nam, where some of the tools for macroeconomic stabilization may be blunt or unavailable. First, capital inflow growth needs to be accommodated by real exchange rate appreciation. In dollarized economies like Viet Nam, the nominal exchange rate cannot be relied upon to deliver it, so inflation usually results. In these economies, it is also difficult for the central bank to conduct open market operations to sterilize large capital inflows or mop up excess liquidity. Again, this could feed inflation. The combination of a young and inexperienced banking system and an investment-hungry state-owned enterprises (SOE) sector only exacerbates the situation, and increases the risk of imbalances that could result in crisis. |
| Keywords: | capital inflow; macroeconomic adjustment; FDI; real exchange rate; Viet Nam |
| JEL: | F21 F32 F49 |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbrei:0027&r=dev |
| By: | Kilby, Christopher (Department of Economics and Statistics, Villanova School of Business, Villanova University); Axel Dreher (University of Goettingen) |
| Abstract: | The typical identification strategy in aid effectiveness studies assumes donor motives do not influence the impact of aid on growth. We call this homogeneity assumption into question, first constructing a model in which donor motives matter and then testing the assumption empirically. |
| Keywords: | Growth, Aid, Politics |
| JEL: | F35 O40 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:vil:papers:5&r=dev |
| By: | Melissa Siegel; Matthias Lücke |
| Abstract: | We estimate a multinomial logit model to explain the choice of transfer channel (formal services vs. informal operators or personal transfers) by 1139 pairs of migrants and recipients of remittances in Moldova in 2006. Explanatory variables include socioeconomic characteristics of the migrant and other household members, the pattern of migration (destination country, legal status, duration) and financial information (average amount and frequency of payments). Key reasons not to use a formal transfer channel include an emphasis on low transfer cost (rather than speed, convenience, or security), a migrant’s irregular legal status in the host country, and short migration spells |
| Keywords: | migration, remittances, Moldova, transfer channel, money transfer operator, financial sector development |
| JEL: | F22 F24 O16 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1515&r=dev |
| By: | Barry Eichengreen; Poonam Gupta |
| Abstract: | The positive association between the service sector share of output and per capita income is one of the best-known regularities in all of growth and development economics. Yet there is less than complete agreement on the nature of that association. Here we identify two waves of service sector growth, a first wave in countries with relatively low levels of per capita GDP and a second wave in countries with higher per capita incomes. The first wave appears to be made up primarily of traditional services, the second wave of modern (financial, communication, computer, technical, legal, advertising and business) services that are receptive to the application of information technologies and increasingly tradable across borders. In addition, there is evidence of the second wave occurring at lower income levels after 1990. But this change in the second wave is not equally evident in all economies: it is most apparent in democracies, in countries that are open to trade, and in those that are relatively close to the major global financial centers. This points to both political and economic conditions that can help countries capitalize on the opportunities afforded by an increasingly globalized post-industrial economy. |
| JEL: | O0 O1 O10 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14968&r=dev |
| By: | Abhijit Banerjee; Esther Duflo; Maitreesh Ghatak; Jeanne Lafortune |
| Abstract: | This paper studies the role played by caste, education and other social and economic attributes in arranged marriages among middle-class Indians. We use a unique data set on individuals who placed matrimonial advertisements in a major newspaper, the responses they received, how they ranked them, and the eventual matches. We estimate the preferences for caste, education, beauty, and other attributes. We then compute a set of stable matches, which we compare to the actual matches that we observe in the data. We find the stable matches to be quite similar to the actual matches, suggesting a relatively frictionless marriage market. One of our key empirical findings is that there is a very strong preference for within-caste marriage. However, because both sides of the market share this preference and because the groups are fairly homogeneous in terms of the distribution of other attributes, in equilibrium, the cost of wanting to marry within-caste is low. This allows caste to remain a persistent feature of the Indian marriage market. |
| JEL: | D10 J12 O12 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14958&r=dev |