nep-dev New Economics Papers
on Development
Issue of 2010‒03‒20
seventeen papers chosen by
Mark Lee
Towson University

  1. The trend of the Gini coefficient of China By Jiandong Chen; Dai Dai; Ming Pu; Wenxuan Hou; Qiaobin Feng
  2. How can asset accumulation strategies be meaningful for adivasis in Southern India? By Shoba Arun; Samuel Annim; Thankom Arun
  3. The Health Consequences of Mozambican Civil War : an Anthropometric Approach By Patrick Domingues
  4. Crisis, Food Security, and Conditional Cash Transfers in Nicaragua By Seth R. Gitter; Natalia Caldes
  5. Poverty and inequality trends in South Africa using different survey data By Derek Yu
  6. Financial Constraints and Innovation: Why Poor Countries Don't Catch Up By Gorodnichenko, Yuriy; Schnitzer, Monika
  7. The Great Leap Forward: The Political Economy of Education in Brazil, 1889-1930 By André Carlos Martínez Fritscher; Aldo Musacchio; Martina Viarengo
  8. Educational attainment and selection into the labour market: The determinants of employment and earnings in Indonesia By Margherita Comola; Luiz de Mello
  9. Household Out-Of-Pocket Healthcare Expenditure in India Levels, Patterns and Policy Concerns By William Joe; Udaya S. Mishra
  10. Has Kenyan Farmersâ Access to Markets and Services Improved? Panel Survey Evidence, 1997-2007. By Chamberlin, Jordan; Jayne, T.S.
  11. Transmission of World Food Price Changes to African Markets and its Effect on Household Welfare By Minot, Nicholas
  12. Characteristics Associated with Prime-Age Mortality in Eastern and Southern Africa: Evidence from Zambia and Kenya By Chapoto, Antony; Jayne, T.S.; Kirimi, Lillian; Kadiyala, S.
  13. The Redistributive Effects of Political Reservation for Minorities: Evidence from India By Aimee Chin; Nishith Prakash
  14. The Returns to English-Language Skills in India By Mehtabul Azam; Aimee Chin; Nishith Prakash
  15. "Determining Gender Equity in Fiscal Federalism-- Analytical Issues and Empirical Evidence from India" By Lekha S. Chakraborty
  16. Aid Allocation by German NGOs: Does the Degree of Public Refinancing Matter? By Axel Dreher; Peter Nunnenkamp; Susann Thiel; Rainer Thiele
  17. Does Relative Position Matter in Poor Societies? Evidence from a Survey Experiment in Rural Ethiopia By Akay, Alpaslan; Martinsson, Peter; Medhin, Haileselassie

  1. By: Jiandong Chen; Dai Dai; Ming Pu; Wenxuan Hou; Qiaobin Feng
    Abstract: A literature review indicates that the main problem in calculating the Gini coefficient of Chinese residents’ income is the shortcomings of the data sources. Though many studies have tried to overcome these limitations through decomposing the nationwide Gini ratio by urban and rural areas, the final results have been underestimated, due to the overlap term or residual in the decomposition. This paper analyses the effects of the overlap term on calculating the overall Gini coefficient through a statistical approach, and estimates Chinese Gini ratios since economic reform and open door policies were adopted. Based on decomposing the Chinese Gini coefficient from 1978 to 2006, the authors find that the key factor of income inequality comes from income disparity between rural and urban inhabitants. The authors investigate the features of this income inequality between rural and urban areas. Furthermore, statistical approaches are employed to evaluate the effects of the development of urbanisation and rural-to-urban average income on the income inequality of the whole nation. The results show that accelerating the pace of urbanisation is the key issue to improving Chinese income disparity. On the basis of the above analysis, the paper proposes related policies for policy-makers.
    Date: 2010
  2. By: Shoba Arun; Samuel Annim; Thankom Arun
    Abstract: This paper is motivated by the observation that type and combination of assets play a significant role in reducing incidences of shocks by asset-poor households. Asset-based strategies treat assets not just as resources, but also as an agency to transform such resources to improve livelihood choices and tackle risks and shocks. Focusing on the case of adivasi households in the South Indian state of Kerala, we find that the type, number and combinations of specific assets (primarily social and physical capital) yield varied magnitudes of household resilience to both idiosyncratic and covariate shocks. Thus, social policies for specific social groups need to focus on the nature of asset and their combination, rather than welfare-based considerations.
    Date: 2010
  3. By: Patrick Domingues (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: Survivors are the ones who bear the burden of reconstruction, thus the examination of the costs of civil conflicts to survivors health is crucial for the design of post-war economic policies. This paper investigates this question for the Mozambican civil war, using an original geo-referenced event dataset. I find that women exposed to the conflict during the early years of life have a weaker health, reflected by a lower height for age z-score (HAZ). Using the Infancy Childhood Puberty curves, a concept given by the medical literature studying the human growth process, I point out that this negative effect depends both on the age of entry into civil war and on the number of months spent in conflict. Furthermore, this study indicates that months of civil war before a woman's birth also have a negative impact on her health highlighting the importance of the prenatal conditions.
    Keywords: Civil war, health, nutrition, anthropometry.
    Date: 2010–01
  4. By: Seth R. Gitter (Department of Economics, Towson University); Natalia Caldes (ETSIA- Universidad Politécnica de Madrid)
    Abstract: Nicaragua’s Red de Protección Social (RPS), is part of a wave of conditional cash transfer programs that provide substantial cash payments to households if certain requirements are met such as school attendance, visits to health care facilities, and participation in nutritional seminars. Utilizing the experimental design of RPS we test the impacts of the program on food expenditures and variety in consumed food bundles by examining the influences of initial poverty and an exogenous shock to coffee prices on coffee producing communities. Through cash payments, RPS was able to increase food consumption and variety. Additionally, nutrition education programs provided by RPS appear to have been successful, as household expenditure share on food increased (although not significantly), while Engel’s law suggests that food share should decrease with a conditional cash monetary transfer. Results also show that coffee price shocks tended to decrease both the variety and expenditures on cereals and vegetables. Moreover, the shock to coffee prices seems to have had a greater impact on the consumption of households relatively better off pre-program. Finally, RPS impacts on food security appear to remain constant across households even when there are differences in initial poverty or the exogenous shock to coffee prices.
    Date: 2010–03
  5. By: Derek Yu (Department of Economics, University of Stellenbosch)
    Abstract: There is an abundance of literature adopting the monetary approach (i.e., using per capita income or expenditure variables) to derive poverty and inequality trends for South Africa since the transition. The most commonly used data sets used for these analyses are the censuses and the Income Expenditure Surveys (IESs) conducted by Statistics South Africa (Stats SA). However, in some recent studies, alternative data sources were used, namely the All Media Products Survey (AMPS) by the South African Advertising Research Foundation (SAARF), as well as the National Dynamic Income Study (NIDS), which is conducted by Southern African Labour and Development Research Unit (SALDRU). Some of the data sets are problematic in a particular year or in more than one year, which in turn makes the comparison of poverty and inequality results across the years difficult. Examples of these problems are as follows: the serious decline of income and expenditure between the 1995 and 2000 IES; the high proportion of households with zero or unspecified income in the censuses; too few household expenditure bands in the General Household Surveys (GHSs). In addition, in the various studies mentioned above, different poverty lines were used in the poverty analysis, with the most commonly used poverty line values being R250 per month in 1996 Rand, US$1 a day, US$2 a day, as well as R211 per month and R322 per month in 2000 Rand (i.e., the two official poverty lines proposed by Woolard and Leibbrandt (2006). This paper aims to consistently apply the same poverty lines (i.e., the proposed official poverty lines mentioned above) across all the available survey data, in order to explore the poverty and inequality trends over the years, and to find out if these trends are consistent across different surveys during the period under investigation. The data quality problems mentioned above are addressed (if possible), before the poverty and inequality trends are derived.
    Keywords: South Africa, Household survey, Poverty, Inequality, Missing data, Imputation
    JEL: I32
    Date: 2010
  6. By: Gorodnichenko, Yuriy (University of California, Berkeley); Schnitzer, Monika (University of Munich)
    Abstract: This paper examines micro-level channels of how financial development can affect macroeconomic outcomes like the level of income and export intensity. We investigate theoretically and empirically how financial constraints affect a firm's innovation and export activities, using unique firm survey data which provides direct measures for innovations and firm-specific financial constraints. We find that financial constraints restrain the ability of domestically owned firms to innovate and export and hence to catch up to the technological frontiers. This negative effect is amplified as financial constraints force export and innovation activities to become substitutes although they are generally natural complements.
    Keywords: innovation, productivity, financial constraint, export, technology frontier, BEEPS
    JEL: O3 O16 F1 G3
    Date: 2010–02
  7. By: André Carlos Martínez Fritscher (Banco de México); Aldo Musacchio (Harvard Business School, Business, Government and the International Economy Unit); Martina Viarengo (CEP, London School of Economics)
    Abstract: Brazil at the turn of the twentieth century offers an interesting puzzle. Among the large economies in the Americas it had the lowest level of literacy in 1890, but by 1940 the country had surpassed most of its peers in terms of literacy and had done a significant improvement of its education system. All of this happened in spite of the fact that the Constitution of 1891 included a literacy requirement to vote and gave states the responsibility to spend on education. That is to say, Brazilian states had a significant improvement in education levels and a significant increase in expenditures on education per capita despite having institutions that limited political participation for the masses (Lindert, 2004; Engerman, Mariscal and Sokoloff, 2009) and having one of the worst colonial institutional legacies of the Americas (Acemoglu, Johnson, and Robison, 2001; Easterly and Levine, 2003; and Engerman and Sokoloff, 1997, 2002). This paper explains how state governments got the funds to pay for education and examines the incentives that politicians had to spend on education between 1889 to 1930. Our findings are threefold. First, we show that the Constitution of 1891, which decentralized education and allowed states to collect export taxes to finance expenditures, rendered states with higher windfall tax revenues from the export of commodities to spend more on education per capita. Second, we prove that colonial institutions constrained the financing of education, but that nonetheless the net effect of the increase in commodity exports always led to a net increase in education expenditures. Finally, we argue that political competition after 1891 led politicians to spend on education, Since only literate adults could vote, we show that increases in expenditures (and increases in revenues from export taxes) led to increases in the number of voters at the state level.
    Date: 2010–03
  8. By: Margherita Comola; Luiz de Mello
    Abstract: This paper uses household survey (Sakernas) data from 2004 to estimate the determinants of earnings in Indonesia, a country where non-salaried work is widespread and where earnings data are available for salaried employees only. We deal with the selection bias by estimating a full-information maximum likelihood system of equations, where earnings are observed for salaried employees, and selection into the labour market is modelled in a multinomial setting. We also deal with reverse causality between educational attainment and earnings by instrumenting years of schooling in both the multinomial selection and the earnings equations. Our identification strategy, following Duflo (2001), uses information on exposure to a large-scale school construction programme implemented in the 1970s. Duflo recognizes that schooling may affect an individual's probability of working as a salaried employee, which creates a simultaneity bias, but does not directly deal with this issue. We find that the parameters of the earnings equation estimated under multinomial selection differ from standard OLS estimates, which ignore the selection bias, and from a binomial selection procedure "à la Heckman" (1979). In particular, the estimated parameters that vary the most are those related to the variables with the strongest impact on individual selection into the different labour-market statuses. We also find that workers with higher educational attainment are most likely to find a job as salaried employees, and that non-salaried work is as an alternative to inactivity.
    Date: 2010
  9. By: William Joe; Udaya S. Mishra
    Abstract: This paper uses the most recent wave of Consumer Expenditure Survey 2004-05 to examine the distribution of Out of Pocket (OOP) healthcare payments in India. [WP 418].
    Keywords: Healthcare Expenditure, Consumer, Drugs Expenditure, Progressivity, Poverty, India, poor,
    Date: 2010
  10. By: Chamberlin, Jordan; Jayne, T.S.
    Abstract: Tegemeo Institute of Agricultural Policy and Development
    Keywords: kenya, agriculture, food security, market access, Agricultural and Food Policy, Community/Rural/Urban Development, Food Security and Poverty, International Development, Marketing, q18, q11, q12,
    Date: 2009–10
  11. By: Minot, Nicholas
    Abstract: Paper to be presented at the Comesa policy seminar âFood price variability: Causes, consequences, and policy options" on 25-26 January 2010 in Maputo, Mozambique under the Comesa-MSU-IFPRI African Agricultural Markets Project (AAMP)
    Keywords: Africa, food security, food prices, global markets, Agricultural and Food Policy, Demand and Price Analysis, Food Security and Poverty, International Development, International Relations/Trade, q11, q13, q17, q18,
    Date: 2010–01
  12. By: Chapoto, Antony; Jayne, T.S.; Kirimi, Lillian; Kadiyala, S.
    Abstract: Campaigns to prevent the spread of HIV require accurate knowledge of the characteristics of those most likely to contract the disease. Studies conducted in Sub-Saharan Africa during the 1980s generally found a positive correlation between socioeconomic characteristics such as education, income, and wealth and subsequent contraction of HIV. As the disease has progressed, the relationship between socioeconomic status and HIV contraction may have changed, although there is little evidence to support this. An emerging strand of the literature on the AIDS epidemic in Africa posits that poverty is increasingly associated with the spread of the disease. However, this conclusion is somewhat contentious, as other recent studies find mixed evidence of a poverty-AIDS connection. This study attempts to shed light on these issues by reporting findings from two linked studies on the socioeconomic characteristics of prime-age individuals (defined as ages 15 to 59) dying of disease-related causes in Zambia and Kenya.
    Keywords: africa, hiv/aids, food security, Zambia, Kenya, Consumer/Household Economics, Food Security and Poverty, International Development, q10,
    Date: 2009–09
  13. By: Aimee Chin (University of Houston & NBER); Nishith Prakash (Dartmouth College, Institute for the Study of Labor (IZA) & Centre for Research and Analysis of Migration (CReAM))
    Abstract: We examine the impact of political reservation for disadvantaged minority groups on poverty. To address the concern that political reservation is endogenous in the relationship between poverty and reservation, we take advantage of the state-time variation in reservation in state legislative assemblies in India that arises from national policies that cause reservations to be revised and the time lags with which the revised reservations are implemented due to the timing of state elections. Using data on sixteen major Indian states for the period 1960-1992, we find that increasing the share of seats reserved for Scheduled Tribes significantly reduces poverty while increasing the share of seats reserved for Scheduled Castes has no impact on poverty. Political reservation for Scheduled Tribes has a greater effect on rural poverty than urban poverty, and appears to benefit people near the poverty line as well as those far below it.
    Keywords: Affirmative Action, Poverty, Minorities, India.
    JEL: I38 J15 J78
    Date: 2010–03
  14. By: Mehtabul Azam (World Bank, Institute for the Study of Labor (IZA)); Aimee Chin (University of Houston & NBER); Nishith Prakash (Dartmouth College, Institute for the Study of Labor (IZA) & Centre for Research and Analysis of Migration (CReAM))
    Abstract: India's colonial legacy and linguistic diversity give English an important role in its economy,and this role has expanded due to globalization in recent decades. It is widely believed that there are sizable economic returns to English-language skills in India, but the extent of these returns is unknown due to lack of a microdata set containing measures of both earnings and English ability. In this paper, we use a newly available data set - the India Human Development Survey, 2005 to quantify the effects of English-speaking ability on wages. We find that being fluent in English (compared to not speaking any English) increases hourly wages of men by 34%, which is as much as the return to completing secondary school and half as much as the return to completing a Bachelor's degree. Being able to speak a little English significantly increases male hourly wages 13%. There is considerable heterogeneity in returns to English. More experienced and more educated workers receive higher returns to English. The complementarity between English skills and education appears to have strengthened over time. Only the more educated among young workers earn a premium for English skill, whereas older workers across all education groups do.
    Keywords: English Language, Human Capital, India.
    JEL: J31 J24 O15
    Date: 2010–03
  15. By: Lekha S. Chakraborty
    Abstract: Despite the policy realm’s growing recognition of fiscal devolution in gender development, there have been relatively few attempts to translate gender commitments into fiscal commitments. This paper aims to engage in this significant debate, focusing on the plausibility of incorporating gender into financial devolution, with the Thirteenth Finance Commission of India as backdrop. Given the disturbing demographics--the monotonous decline in the juvenile sex ratio, especially in some of the prosperous states of India--there can be no valid objection to using Finance Commission transfers for this purpose. A simple method for accomplishing this could be to introduce some weight in favor of the female population of the states in the Commission’s fiscal devolution formula. The message would be even stronger and more appropriate if the population of girl children only--that is, the number of girls in the 0–6 age cohort--is adopted as the basis for determining the states’ relative shares of the amount to be disbursed by applying the allotted weight. A special dispensation for girls would also be justifiable in a scheme of need-based equalization transfers. While social mores cannot be changed by fiscal fiats, particularly when prejudices run deep, a proactive approach by a high constitutional body like the Finance Commission is called for, especially when the prejudices are blatantly oppressive. Indeed, such action is imperative. The intergovernmental transfer system can and should play a role in upholding the right to life for India’s girl children. That being said, it needs to be mentioned that it is not plausible to incorporate more gender variables in the Finance Commission’s already complex transfer formula. In other words, inclusion of a "gender inequality index" in the formula may not result in the intended results, as the variables included in the index may cancel one another out. Accepting the fact that incorporating gender criteria in fiscal devolution could only be the second-best principle for engendering fiscal policy, the paper argues that newfound policy space for the feminization of local governance, coupled with an engendered fiscal devolution to the third tier, can lead to public expenditure decisions that correspond more closely to the revealed preferences ("voice") of women. With the 73rd and 74th constitutional amendments, this policy space is favorable at the local level for conducting gender responsive budgeting.
    Keywords: Fiscal Decentralization; Federalism; Fiscal Transfers; Gender
    JEL: H77 J16
    Date: 2010–03
  16. By: Axel Dreher; Peter Nunnenkamp; Susann Thiel; Rainer Thiele
    Abstract: Using a new dataset for 41 German non-governmental organizations (NGOs), we analyze the allocation of NGO aid across recipient countries in a Tobit regression framework. By identifying for each NGO the degree of public refinancing, we address the largely unresolved issue of whether financial dependence on the government impairs the targeting of NGO aid. It turns out that German NGOs are more active in poorer countries, while they do not complement official aid by working under difficult local conditions. Beyond a certain threshold, rising financial dependence weakens their poverty orientation and provides an incentive to engage in “easier” environments. In addition, we find that the NGOs follow the state as well as NGO peers when allocating aid. This herding behavior is, however, hardly affected by the degree of public refinancing.
    Keywords: NGO aid; aid allocation; public refinancing
    JEL: F35
    Date: 2010–01–14
  17. By: Akay, Alpaslan; Martinsson, Peter; Medhin, Haileselassie
    Abstract: We investigated attitudes toward positionality among rural farmers in northern Ethiopia, using a tailored two-part survey experiment. On average, we found positional concerns neither in income per se, nor in income from aid projects among the farmers. These results support the claim that positional concerns are correlated with absolute level of income of a country.
    Keywords: Ethiopia, relative income, positional concern
    JEL: C90 D63
    Date: 2010–02–22

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