nep-dev New Economics Papers
on Development
Issue of 2010‒11‒13
nineteen papers chosen by
Mark Lee
Towson University

  1. The Effect of Content on Global Internet Adoption By Nicholas Economides; V. Brian Viard
  2. Explaining the Cross-National Time Series Variation in Life Expectancy: Income, Women’s Education, Shifts, and What Else? By Lant Pritchett; Martina Viarengo
  3. Progress in Health around the World By David Canning
  4. Human Development in the Middle East and North Africa By Djavad Salehi-Isfahani
  5. The disconnect between indicators of sustainability and human development By Ricardo Fuentes-Nieva; Isabel Pereira
  6. Assets, Shocks, and Poverty Traps in Rural Mozambique By Lena Giesbert; Kati Schindler
  7. Who Does What in a Household after Genocide?: Evidence from Rwanda By Kati Schindler
  8. Antiretroviral Therapy and Demand for HIV Testing: Evidence from Zambia By Nicholas Wilson
  9. Early Childhood Stimulation Interventions in Developing Countries: A Comprehensive Literature Review By Baker-Henningham, Helen; López Bóo, Florencia
  10. Efficient Development Portfolio Design for Sub Saharan Africa By Zon, Adriaan van; Wiebe, Kirsten
  11. Maximizing Human Development By Merwan Engineer; Ian King
  12. The Global Crisis and the Impact on Remittances to Developing Asia.. By Jha , Shikha; Sugiyarto, Guntur; Vargas-Silva, Carlos
  13. Crime and Remittance Transfers.. By Vargas-Silva, Carlos
  14. The Impact of Transitory Income on Birth Weights: Evidence from a Blackout in Zanzibar By Alfredo Burlando
  15. Divide and Rule or the Rule of the Divided? Evidence from Africa By Stelios Michalopoulos; Elias Papaioannou
  17. Remittances and Poverty: Panel Evidence from High Remittance Economies By Hassan, Gazi
  18. Trade Liberalization and Institutional Quality: Evidence from Vietnam By Dang, D Anh
  19. The Role of Land Certification in Reducing Gender Gaps in Productivity in Rural Ethiopia By Bezabih, Mintewab; Holden, Stein

  1. By: Nicholas Economides (Stern School of Business, NYU); V. Brian Viard (Faculty of Laws, University College London)
    Abstract: We test the effect of content availability on Internet adoption across countries. Controlling for the endogeneity of content with respect to the installed base of Internet users and a host of demographic, economic and infrastructure factors, content has a statistically and economically significant effect. Since content is more easily and quickly altered than these other factors, our results suggest that policies promoting content creation will positively affect Internet diffusion even in the short run. Our results also suggest that, given its ubiquity, Internet content is a useful tool to affect social change across countries. Content has a greater effect on adoption in countries with more disparate languages, consistent with its use to overcome linguistic isolation, and in countries with international Internet gateways, suggesting the importance of infrastructure to deliver content.
    Keywords: Internet, technology adoption, economic development, two-sided markets,network effects, technology diffusion, language, content
    JEL: O30 O57 L86 L96
    Date: 2010–11
  2. By: Lant Pritchett (Kennedy School of Government at Harvard University); Martina Viarengo (London School of Economics and Kennedy School of Government at Harvard University)
    Abstract: This paper examines the variation across countries and evolution over time of life expectancy. Using historical data going back to the beginning of the 20th century several basic facts about the relationship between national income and life expectancy are established. The paper shows that even by examining the augmented Preston curve there is no indication that the Preston curve is “breaking down” and no indication from over 100 years of data that a very strong relationship between national income and life expectancy will not persist, particularly over the ranges of income of primary interest to the Human Development Report. Empirical findings show that there are actually fewer “puzzles” than might appear while trying to reconcile the strong cross-sectional association with the time evolution of life expectancy in specific countries and most of the existing “puzzles” come from using either very short time-horizons or very small moves in income per capita when the Preston curve is a long-run phenomena. The paper also discusses the phenomena of the cross-national convergence, with the life expectancy of the poorer countries increasing, in absolute terms, faster than those of the rich countries and how the findings about the augmented Preston curve relate to discussions of health policy.
    Keywords: economic development, economic growth, health, life expectancy, mortality.
    JEL: I10 O1 O40 J11
    Date: 2010–10
  3. By: David Canning (Harvard School of Public Health)
    Abstract: Health is a key component of the human development index. This paper looks at how health is measured, how the level of health across countries is converging, and which countries are outliers to this global trend. We argue that conceptually health measures should account for illness as well as mortality. However, in practice we show that population mortality and illness measures tend to move closely together, allowing us to use life expectancy as a reasonable proxy for population health. Overall health is improving, and over the last 40 years life expectancy has been converging, with larger gains taking place in countries that initially had lower levels of life expectancy. We show, however, that a detailed analysis gives a more complex picture. Rather than a long term pattern of global convergence we see two distinct groups of countries in the data, clustering around different long run levels of life expectancy. We consider outliers from the general picture found in cross-country analysis. HIV/AIDS plays a large role in explaining the poor health performance of some countries particularly in Sub-Saharan Africa. HIV/AIDS has meant that from 1990 on the process of convergence in health has stopped and is being reversed. Finally we argue that health improvements do not have to wait for national income to rise. Many countries have experienced large health gains without prior income gains, and in countries not affected by HIV/AIDS the last 40 years have largely been a success story in terms of achievements in health.
    Keywords: health, life expectancy, human development.
    JEL: I10 I30
    Date: 2010–10
  4. By: Djavad Salehi-Isfahani (Virginia Tech and Brookings Institution)
    Abstract: Middle East and North African countries (MENA) have achieved much to be proud of in human development. Falling child mortality and fertility have transformed family structures in most MENA countries. Despite important advances in health, education, and income, there are certain aspects human development in which MENA countries have not progressed as far. There are inequalities in human development regionally, within each country and for specific demographic groups, most importantly for youth and women. In this paper I review the record of human development in the MENA region to highlight areas in which the region has been more successful, as well those in which human development has lagged in absolute terms or relative to economic growth. I draw attention to certain important characteristics of the region that distinguish it from other developing regions, in particular the presence of oil income and delayed demographic transition.
    Keywords: Human development, Middle East and North Africa, Youth.
    JEL: O15 N35 J13 J16 J21 J24
    Date: 2010–10
  5. By: Ricardo Fuentes-Nieva (Regional Bureau for Africa at UNDP); Isabel Pereira (Human Development Report Office ay UNDP)
    Abstract: This paper presents an initial review of the theoretical and measurement discussions of sustainability and its relation to human development. As we show in this paper, there is an overall consensus about the importance of sustaining development and well-being over time, but in reality different development paradigms lead to different definitions and measures of sustainability. We review some of those measures, among which the Adjusted Net Savings (a green national accounting measure calculated by the World Bank and rooted in a weak concept of sustainability), the Ecological Footprint (calculated by the Global Footprint Network and rooted in a strong concept of sustainability, where environment is considered a critical resource), and the carbon dioxide emissions (a simple environmental indicator, used in international debate of climate change). Our analysis shows conflicting conclusions when studying the correlations between these indicators of sustainability and existing human development indicators, namely HDI, which emphasizes the need for further analysis to understand what “sustainable human development” means. Nevertheless, as we show here, over time there has been a close link between higher economic performance and energy consumption, which has been mostly based in the use of fossil fuels.
    Keywords: sustainability, human development, measurement, energy.
    JEL: O13 Q56 Q59
    Date: 2010–10
  6. By: Lena Giesbert; Kati Schindler
    Abstract: Using a micro-level approach to poverty traps, this paper explores welfare dynamics among households in post-war rural Mozambique. Conceptually, the paper builds on an asset-based approach to poverty and tests empirically, with household panel data, for the existence of a poverty trap. Findings indicate that there is little differentiation in productive asset endowments over time and that rural households gravitate towards a single equilibrium, which is at a surprisingly low level. The analysis shows that shocks and household coping behavior help to explain the observed poverty dynamics. The single low-level equilibrium points to an overall development trap in the rural farm-based economy. This is attributed to the long-term impact of the civil war, which has consolidated unfavorable economic conditions in rural areas and limited new economic opportunities outside of the agricultural sector.
    Keywords: Asset-based approach, Mozambique, poverty trap, shocks, violent conflict
    JEL: D31 I32 O12 O18
    Date: 2010
  7. By: Kati Schindler
    Abstract: This paper investigates the determinants of intra-household time allocation in post-war Rwanda. A decade after the 1994 genocide, Rwanda still bears the demographic impact of the war, in which at least 800,000 people died and the majority of casualties were adult males. The paper explores two unique features: exogenous variation in household types and large variation in regional cohort-specific sex ratios. Results indicate that, first, exposure to violence and male death can be a trigger of change in gender roles. Second, there is little flexibility to negotiate responsibilities within the household. Third, the local marriage market impacts the division of labor. Young, unmarried women engage more intensely in typical female activities when the shortage of men is severe. Conforming to the female gender role may be a strategy to improve their chances to marry.
    Keywords: Conflict, gender roles, Rwanda, time allocation
    JEL: J12 J22 O12
    Date: 2010
  8. By: Nicholas Wilson (Williams College)
    Abstract: This paper examines the effects of antiretroviral therapy (ART) on demand for HIV testing and of ART-induced testing on demand for risky sexual behavior. I provide a model of sexual behavior decision-making under uncertainty and estimate the structural parameters of the model using nationally representative survey data from Zambia on HIV testing decisions before and after the introduction of ART. The empirical results indicate that although the introduction of ART increased demand for HIV testing, the ART allocation process limited the prevention benefit of ART-induced testing. Simulation results show that eliminating this prevention inefficiency while holding the supply of ART constant would increase the prevention impact of ART-induced testing more than four-fold. More generally, the analysis indicates that existing studies which examine "universal" testing or quasi-experimental testing programs understate the efficacy of standard voluntary counseling and testing programs.
    Keywords: HIV/AIDS, Beliefs, Selection, Rationing, Zambia
    JEL: D45 I18 O12
    Date: 2010–10
  9. By: Baker-Henningham, Helen (University of the West Indies, Mona); López Bóo, Florencia (Inter-American Development Bank)
    Abstract: This report reviews the effectiveness of early childhood stimulation interventions in developing countries. The report aims to answer the questions: What works in terms of early stimulation for young children in developing countries? For whom and under what conditions do these programs work and why do they work. The report is divided into several sections. Firstly, a brief discussion of the importance of early stimulation for young children in developing countries is provided. Secondly, the methods used to identify and characterize studies are provided and a review of randomized or quasi-experimental trials is presented. Thirdly, a review of the evidence for who benefits most from early interventions is presented followed by a review of program characteristics that affect the success of interventions and an examination of potential mechanisms through which interventions achieve their effects. Finally, recommendations for practice and future research are provided.
    Keywords: child development, early stimulation, mothers, parenting, developing countries
    JEL: J13 J18 J24
    Date: 2010–10
  10. By: Zon, Adriaan van (UNU-MERIT, Maastricht University); Wiebe, Kirsten (UNU-MERIT)
    Abstract: We use Financial Optimum Portfolio Theory to obtain Optimum Development (Policy) Portfolios for Sub Saharan African (SSA) Countries. We estimate a model linking public expenditures on health, education and general government expenditures to the Human Development Index (HDI). Given the uncertainty of the estimated impact parameters, we obtain optimum expenditure portfolios and use them to measure the effectiveness of actual public spending. Actual HDI performance is in part due to pure chance, but significant improvements in HDI performance could be realized through the reallocation of public spending towards health and education. For some SSA countries we find that a double dividend exists, since an expansion of public expenditures may lead to both a rise in HDI performance and a fall in its corresponding variance. We also find that HDI shortfalls due to chance are uncorrelated with governance indicators, while inefficient spending and good governance are negatively correlated.
    Keywords: Human Development Index, Public spending, Optimum Portfolio Theory
    JEL: H50 I00 O20
    Date: 2010
  11. By: Merwan Engineer; Ian King
    Abstract: The Human Development Index (HDI) is widely used as an aggregate measure of overall human well being. We examine the allocations implied by the maximization of this index, using a standard growth model — an extended version of Mankiw, Romer, andWeil’s (1992) model — and compare these with the allocations implied by the golden rule in that model. We find that maximization of the HDI leads to the overaccumulation of both physical and human capital, relative to the golden rule, and consumption is pushed to minimal levels. We then propose an alternative specification of the HDI, which replaces its income component with a consumption component. Maximization of this modified HDI yields a “human development golden rule” which balances consumption, education and health expenditures, and avoids the more extreme implications of the existing HDI.
    Keywords: Economic growth, Human Development Index, Planning
    Date: 2010
  12. By: Jha , Shikha; Sugiyarto, Guntur; Vargas-Silva, Carlos
    Abstract: Remittances to Asia plunged during the 1997 Asian financial crisis, but the drop was temporary as the flows were increasing once again after just one year. The current crisis, however, is fundamentally different in that even the main remittance-sending countries have been adversely affected. The global nature of this crisis raises several questions such as whether the remittances slowdown will also last for a short time or developing Asia should prepare for a long period of remittance stagnation. This study examines remittances data of several Asian countries to shed light on such questions. The results suggest that while remittance flows to key recipients in the region have slowed down, there has not been a sharp drop. Furthermore, there is no indication that the remittance flows will slow down further, suggesting that the flows should be back on a higher growth path in a few years. It is unlikely, however, to see the same growth rates of the past, given that an important share of that growth during the last two decades was due to better recording of remittances and an increased use of wire transfers on the part of migrants. The study also provides policy options to deal with the future outlook of remittances.
    Date: 2010–03
  13. By: Vargas-Silva, Carlos
    Abstract: This article examines the determinants of remittance transfers, specifically focusing on the impact of crimes on remittances. Using the 2003 Quality of Life Survey of Colombia, we find that both domestic and international transfers are negatively affected by crime. That is, because crime may have an adverse effect on household assets and the return to investments in the home community, migrants may decrease transfers made for self-interested purposes such as future inheritance or investment. Although results suggest that a portion of transfers are sent for self-interest motives, variables related to the household indicate that altruism is also an important motivation for remitting.
    JEL: F22 D64 J61
    Date: 2009
  14. By: Alfredo Burlando (University of Oregon Economics Department)
    Abstract: Do transitory income shocks affect infant health? I find evidence that birth weights fell following a temporary income reduction caused by an unexpected, month-long blackout in Zanzibar. Relying on 350 household surveys collected during field work, I show that the 2008 blackout reduced labor supply of workers in electricity-dependent jobs by an average of 25%, with no effect on workers in other sectors. The income shock was temporary. Using over 20,000 birth records from a maternity ward, I document a reduction in the average birth weight of children exposed to the blackout while in utero, and an increase in the probability of low birth weight. Supporting a causal interpretation of these results, the reduction in weights is correlated with measures of maternal exposure to the blackout. In particular, reductions in birth weights were largest among children from wards with intermediate levels of employment in electrified sectors. The two causes that are most consistent with these results are a blackout-induced decline in maternal nutrition, and maternal stress. Alternative explanations are examined, including the possible effects of a temporary fertility shift. It is shown that the blackout increased births, but that selection into pregnancy cannot explain the drop in birth weights.
    Keywords: Neonatal health, Birthweights, Nutrition, Fertility, Transitory income, Blackouts, Africa
    JEL: O15 O14 J29 I12
    Date: 2010–10–02
  15. By: Stelios Michalopoulos; Elias Papaioannou
    Abstract: We investigate jointly the importance of contemporary country-level institutional structures and local ethnicity-specific pre-colonial institutions in shaping comparative regional development in Africa. We utilize information on the spatial distribution of African ethnicities before colonization and exploit within ethnicity (across countries) and within-country (across ethnicities) regional variation in economic performance, as proxied by satellite light density at night. The fact that political boundaries across the African landscape partitioned ethnic groups in different countries, thus subjecting identical cultures to different country-level institutions, offers a regression discontinuity framework. After identifying the partitioned ethnicities we document a positive cross-sectional association between national institutions and regional economic development. However, our ethnicity fixed-effects specifications show that differences in countrywide institutional arrangements do not explain differences in regional economic performance within ethnic groups. In contrast, we document that local ethnic traits proxied by tribal pre-colonial political institutions and class stratification exert even today a significant effect on regional development. The positive within country effect of pre-colonial institutions also obtains in regions of partitioned ethnicities along the national boundaries.
    Keywords: Africa, Borders, Ethnicities, Development, Institutions
    JEL: O10 O40 O43 N17 Z10
    Date: 2010
  16. By: Shafaeddin, Mehdi
    Abstract: Reviewing the experience of developing countries in recent years as well as successful industrialization in developed countries in previous centuries, the author explains that trade liberalization is necessary for industrialization if: it is regarded as a part and parcel of a dynamic and flexible trade and industrial policies; undertaken in the right time, gradually and selectively. More importantly, trade policy is to be an ingredient of a comprehensive set of industrial and development policies and measures to enhance the capabilities of firms for establishing industries, making them efficient and upgrading them. By contrast, if it is undertaken, pre-maturely, rapidly and uniformly, i.e. across-the-board, as advocated by Neo-liberals and proponents of “Washington Consensus”, it will lead to de-industrialization and unemployment; it will lock the country in specialization in production and exports of primary commodities and at best natural resource-based products, and/or labour intensive stage of assembly operation. He further, discusses changes needed in WTO rules and practices of International Financial Institutions to make them “development friendly”.
    Keywords: Trade liberalization; development; experience of developing countries
    JEL: O1 F11 F1 O14
    Date: 2010–04
  17. By: Hassan, Gazi
    Abstract: The growth effects of remittances are controversial, but their welfare effects are less so. This paper provides evidence on the effect of remittances on poverty in an unbalanced panel of 40 high remittances economies. The endogeneity issue, driven by the possibility that remittances and poverty may have bidirectional causality, is tackled by a system estimation technique using the seemingly unrelated regression estimator (SURE) that not only allows both to be jointly determined but also allows the error terms of the simultaneous equations to be contemporaneously correlated. Using bootstraps, heteroskedasticty robust standard errors of the SURE regressions are reported and the estimates show that remittances significantly reduce poverty. On the other hand, remittances decline with the wake of widespread poverty. There is consistent evidence that remittances also decline with increases in health index of the general population. However, improvements in the health outcomes of poor people are associated with more remittances. Finally, there is some limited evidence that remittances rise with increases in educational attainments of the general population, but fall as the poor people become more educated.
    Keywords: Remittances; Poverty; Panel Data; Seemingly Unrelated Regression (SURE).
    JEL: C15 C33 I32
    Date: 2010–10–31
  18. By: Dang, D Anh
    Abstract: Recent cross-country research shows that there is a causal relationship between trade liberalization and quality of institutions. The literature on cross-country studies has been criticized because differences in legal systems and other institutions across countries are difficult to control for. An in-depth case study of a particular country’s experience can provide a useful complement to cross-country regressions. Using the unique dataset from provincial competitiveness survey and a natural experiment from joining the World Trade Organization, I find that variations in economic institutions across provinces in Vietnam can be explained by trade liberalization. To overcome endogeneity problems, I use minimum distance from each province to main economic centres as an instrument for trade liberalization. The instrumental variable approach shows that the direction of influence is from greater openness to better institutions. The results hold after controlling for various additional covariates. It is also robust to various alternative measures of institutions. I also find that trade liberalisation has greater short term impacts on institutional quality in the Northern provinces.
    Keywords: Trade liberalization; institutions; Vietnam
    JEL: O43 F1
    Date: 2010–04–14
  19. By: Bezabih, Mintewab; Holden, Stein
    Abstract: The importance of providing secure land rights to smallholder farmers in developing countries is now widely recognized. In line with this, our paper analyzes the impact of land certification on boosting productivity of female-headed households in Ethiopia, which are believed to be systematically more tenure insecure than their male counterparts. Based on parametric and semi-parametric analyses, the impact of certification on plot-level productivity is positive and significant. However, certification has different impacts on male and female productivity: male-headed households gain significantly and women gain only modestly. Hence, the results indicate that, while certification is clearly beneficial to farm-level productivity, it does not necessarily lead to more gains for female-headed households.
    Keywords: productivity, female-headed households, land certification
    JEL: D2 Q12 Q15
    Date: 2010–11–03

This nep-dev issue is ©2010 by Mark 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.