nep-dev New Economics Papers
on Development
Issue of 2011‒05‒07
fifteen papers chosen by
Mark Lee
Towson University

  1. Does Pervasive Corruption Matter For Firm's Demand for Good Governance in Developing Countries? By Gaoussou Diarra; Sébastien Marchand
  2. The Scorecard on Development, 1960-2010: Closing the Gap? By Mark Weisbrot; Rebecca Ray
  3. Property Rights, Institutions and Fuel Wood Demand, by Source, in Rural Ethiopia By Abebe Damte; Steven F. Koch
  4. Drought and Civil War in Sub-Saharan Africa By Mathieu Couttenier; Raphael Soubeyran
  5. India Chronic Poverty: Towards Solutions and New Compacts in a Dynamic Context By Aasha Kapur Mehta; Shashanka Bhide; Amita Shah; Anand Kumar; Andrew Shepherd
  6. Evaluating public per-student subsidies to low-cost private schools : regression-discontinuity evidence from Pakistan By Barrera-Osorio, Felipe; Raju, Dhushyanth
  7. Beyond baseline and follow-up : the case for more t in experiments By McKenzie, David
  8. Diagnosing development bottlenecks : China and India By Li, Wei; Mengistae, Taye; Xu, Lixin Colin
  9. Income shocks and adolescent mental health By Baird, Sarah; de Hoop, Jacobus; Ozler, Berk
  10. The Decline in Inequality in Latin America: How Much, Since When and Why By Nora Lustig; Luis F. López Calva; Eduardo Ortiz-Juarez
  11. Child Labour and Inequality By D'Alessandro, Simone; Fioroni, Tamara
  12. Do Schooling Years Improve the Earning Capacity of Lower Income Groups? By Mamoon, Dawood
  13. Simulating the impacts of cash transfers on poverty and school attendance: The case of Cambodia By Meng, Channarith; Pfau, Wade Donald
  14. China's Rising Demand for "Green Cities": Evidence from Cross-City Real Estate Price Hedonics By Siqi Zheng; Jing Cao; Matthew E. Kahn
  15. Does Government Investment in Local Public Goods Spur Gentrification? Evidence from Beijing By Siqi Zheng; Matthew E. Kahn

  1. By: Gaoussou Diarra (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Sébastien Marchand (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: This paper investigates empirically the relationships between the corruption climate and the demand for good governance by focusing on firms' behaviors in developing countries. The concept of demand for good governance is conceived in terms of a firm's willingness to comply with regulatory norms measured through the firm's perception of the level of public accountability as well as the firm's behavior in terms of corruption practices. While there is a growing theoretical literature on the importance of externality mechanisms of corruption phenomena, little empirical evidences has been highlighted. This paper contributes to fill this gap by using firm-level data from the World Bank Enterprise Survey. We show that when corruption is found to be a very important constraint for a firm's business, its willingness to comply decreases and the probability of the firm's corrupting officials increases. These results support arguments according to which the demand for good governance is likely to be influenced by the perception of the existence of pervasive corruption. Moreover, the results are conditioned on countries' institutional features and the type of regulation. Some evidence is also found for firms' environmental overcompliance.
    Keywords: Corruption; Compliance; Regulation; Firms
    Date: 2011–04–22
  2. By: Mark Weisbrot; Rebecca Ray
    Abstract: This paper is the third installment in a series (the first and second editions were in 2001 and 2005) that traces a long-term growth failure in most of the world's countries.
    Keywords: development, globalization, GDP,
    JEL: F1 F2 F33 F34 I12 I18 O47 O54 O57 E6 E52
    Date: 2011–04
  3. By: Abebe Damte (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: This study examines the relationship between property rights, defined by land tenure security, the strength of local-level institutions, and household demand for fuel wood, as measured by the source from which fuel wood is collected. A multinomial regression model is applied to survey data collected in rural Ethiopia. Results from the discrete choice model indicate that active local-level institutions reduce the dependency on community forests, but, otherwise, increase household dependency on open access forests. However, property rights do not increase demand for fuel wood collected from private forests. The results suggest that there is a need to bring more open access forests under the management of the community and increase the quality of community forestry management in order to realize improvements in forest conservation.
    Keywords: Property rights, institutions, fuel wood rural, Ethiopia
    Date: 2011–04
  4. By: Mathieu Couttenier; Raphael Soubeyran
    Abstract: In this paper, we show that drought has a positive effect on the incidence of civil war over the 1945-2005 period in Sub-Saharan Africa. We use the Palmer Drought Severity Index which is a richer measurement of drought than the measures used in the literature (rainfall and temperature) as it measures the accumulation of water in the soil in taking into account the temperature and the geological characteristics of the soil. We show that the risk of civil war increases by more than 42% from a “normal” climate to an “extremely drought” climate. Surprisingly, only 2.5% of this effect is channeled through economic growth.
    Date: 2010–10
  5. By: Aasha Kapur Mehta; Shashanka Bhide; Amita Shah; Anand Kumar; Andrew Shepherd
    Abstract: This report is a call to policy makers and concerned citizens to use this talisman, to redeem the pledges made by the Constituent Assembly and to recognise the fact that the numbers and proportions of those in poverty are so large and the extent of chronic poverty so high that this represents the biggest development challenge facing India. As such, the fight to end chronic poverty, to strengthen ways to escape it and to prevent entry into it must be placed at the top of the policy agenda. URL: [ ublication_files/India%20Chronic%20Pover ty%20Report.pdf].
    Keywords: India, chronic poverty, MDGs, policy agenda, poor, reduction, estimates, development challenge, GDP, PPP, popualtion
    Date: 2011
  6. By: Barrera-Osorio, Felipe; Raju, Dhushyanth
    Abstract: This study estimates the causal effects of a public per-student subsidy program targeted at low-cost private schools in Pakistan on student enrollment and schooling inputs. Program entry is ultimately conditional on achieving a minimum stipulated student pass rate (cutoff) in a standardized academic test. This mechanism for treatment assignment allows the application of regression-discontinuity (RD) methods to estimate program impacts at the cutoff. Data on two rounds of entry test takers (phase 3 and phase 4) are used. Modeling the entry process of phase-4 test takers as a sharp RD design, the authors find evidence of large positive impacts on the number of students, teachers, classrooms, and blackboards. Modeling the entry process of phase-3 test takers as a partially-fuzzy RD design given treatment crossovers, they do not find evidence of significant program impacts on outcomes of interest. The latter finding is likely due to weak identification arising from a small jump in the probability of treatment at the cutoff.
    Keywords: Tertiary Education,Education For All,Primary Education,Teaching and Learning,Secondary Education
    Date: 2011–04–01
  7. By: McKenzie, David
    Abstract: The vast majority of randomized experiments in economics rely on a single baseline and single follow-up survey. If multiple follow-ups are conducted, the reason is typically to examine the trajectory of impact effects, so that in effect only one follow-up round is being used to estimate each treatment effect of interest. While such a design is suitable for study of highly autocorrelated and relatively precisely measured outcomes in the health and education domains, this paper makes the case that it is unlikely to be optimal for measuring noisy and relatively less autocorrelated outcomes such as business profits, household incomes and expenditures, and episodic health outcomes. Taking multiple measurements of such outcomes at relatively short intervals allows the researcher to average out noise, increasing power. When the outcomes have low autocorrelation, it can make sense to do no baseline at all. Moreover, the author shows how for such outcomes, more power can be achieved with multiple follow-ups than allocating the same total sample size over a single follow-up and baseline. The analysis highlights the large gains in power from ANCOVA rather than difference-in-differences when autocorrelations are low and a baseline is taken. The paper discusses the issues involved in multiple measurements, and makes recommendations for the design of experiments and related non-experimental impact evaluations.
    Keywords: Scientific Research&Science Parks,Science Education,Statistical&Mathematical Sciences,Disease Control&Prevention,Economic Theory&Research
    Date: 2011–04–01
  8. By: Li, Wei; Mengistae, Taye; Xu, Lixin Colin
    Abstract: Although it had a a lower income level than India in 1980, China's 2006 per capita gross domestic product stands more than twice that of India's. This paper investigates the role of the business environment in explaining China's productivity advantage using recent firm-level survey data. The analysis finds that China has better infrastructure, more skilled workers, and more labor-hiring flexibility than India, but a worse access to finance and higher regulatory burden. Infrastructure appears to be a key constraint for India: it lags significantly behind China, yet it has important indirect effects for the effectiveness of labor flexibility. Labor flexibility is also likely a major constraint for India, as evident in the predominance of small firms, the importance of firm size in accounting for India's disadvantage in productivity, and the complementarity of proxies of labor flexibility with infrastructure and access to finance. Interestingly, regulatory uncertainty has adverse effects in India but not in China. The empirical analysis suggests that it is important to consider country-specific growth bottlenecks and the indirect effects of policy reforms.
    Keywords: Environmental Economics&Policies,Labor Policies,Labor Markets,Banks&Banking Reform,E-Business
    Date: 2011–04–01
  9. By: Baird, Sarah; de Hoop, Jacobus; Ozler, Berk
    Abstract: In this paper, the authors investigate the effect of positive income shocks on the mental health of adolescent girls using experimental evidence from a cash transfer program in Malawi. They find that the provision of monthly cash transfers had a strong beneficial impact on the mental health of school-age girls during the two-year intervention. Among baseline schoolgirls who were offered unconditional cash transfers, the likelihood of suffering from psychological distress was 38 percent lower than the control group, while the same figure was 17 percent if the cash transfers offers were made conditional on regular school attendance. The authors find no impact on the mental health of girls who had already dropped out of school at baseline. The beneficial effects of cash transfers were limited to the intervention period and dissipated quickly after the program ended.
    Keywords: Health Monitoring&Evaluation,Disease Control&Prevention,Health Systems Development&Reform,Mental Health,Population Policies
    Date: 2011–04–01
  10. By: Nora Lustig (Department of Economics, Tulane University); Luis F. López Calva (Poverty in the Latin America and the Caribbean Vicepresidency, World Bank); Eduardo Ortiz-Juarez (RBLAC-UNDP, Mexico and World Bank)
    Abstract: Between 2000 and 2009, the Gini coefficient declined in 13 of 17 Latin American countries for which comparable data exist. The decline was statistically significant and robust to changes in the time interval, inequality measures and data sources. In depth country studies for Argentina, Brazil, Mexico and Peru suggest that there are two phenomena which underlie this trend: (i) a fall in the premium to skilled labor (as measured by returns to education); and (ii) higher and more progressive government transfers. The fall in the premium to skills results from a combination of supply and demand factors and, in Argentina and, to a lesser extent, in Brazil, from more active labor market policies as well.
    Keywords: Income inequality, wage gap, government transfers, Latin America
    JEL: O15 H53 J48
    Date: 2011–04
  11. By: D'Alessandro, Simone; Fioroni, Tamara
    Abstract: This paper focuses on the evolution of child labour, fertility and human capital in an economy with two production sectors and two types of workers endowed with two different levels of human capital. Adults allocate their time endowment between work and child rearing and choose the time allocation of children between schooling and work. The heterogeneity between low and high skilled workers allows for an endogenous analysis of inequality generated by child labour. We show that the persistence of child labour can be explained through the competition between children and low-skilled workers. This persistence, in turn, can easily induce an increase in the inequality and an average impoverishment within the country.
    Keywords: J13; J24; J82; K31
    JEL: J13
    Date: 2011–04–22
  12. By: Mamoon, Dawood
    Abstract: The paper analyses the relationship between the popular Barro and Lee (2001) ‘Average years of Schooling’ with income inequality, wage inequality, and income deciles and income percentiles for the sample of developed and developing countries. The results suggest that countries where students complete higher numbers of years of schooling on average also perform better on relative incomes meaning that increase in average income comes from improvements in the earning capacity of the lower income groups or unskilled labor. The paper also finds that an educated population means that there is redistribution of income from the rich to the poor creating thriving middle class.
    Keywords: Education; Inequality
    JEL: D31 D33 A2
    Date: 2011–04–26
  13. By: Meng, Channarith; Pfau, Wade Donald
    Abstract: Using the Cambodia Socioeconomic Survey 2004 and employing micro-static simulation techniques, we measure the potential impacts of cash transfer programs for children to identify targeted groups that will have the most effect on poverty and school attendance. We conclude that the largest impacts occur by targeting poor children. If this proves to be too administratively costly, then targeting children in rural areas or targeting all children living in the ten poorest provinces will also yield significant poverty reduction. With regard to improving school attendance, the same targeted groups generally provide the biggest impacts as well, though the impacts on school attendance tend to be smaller than on poverty reduction.
    Keywords: cash transfer; poverty; school attendance; Cambodia
    JEL: I38 H53 H52
    Date: 2011–04
  14. By: Siqi Zheng; Jing Cao; Matthew E. Kahn
    Abstract: With the decline of the traditional hukou system, migrants in China have a broad set of cities to choose from. Within an open system of cities, compensating differentials theory predicts that local real estate prices will reflect the marginal valuation of non-market local public goods. More polluted cities will feature lower real estate prices. But, local pollution may be caused by booming local industries. To address such endogeneity concerns, we estimate hedonic regressions using an instrumental variable strategy based on “imports” of pollution from nearby sources. By documenting the importance of spatial emissions patterns, our study highlights how real estate prices in one city are affected by Pigouvian externalities originating in another location. On average, a 10% decrease in imported neighbor pollution is associated with a 1.8% increase in local home prices.
    JEL: Q53 R31
    Date: 2011–04
  15. By: Siqi Zheng; Matthew E. Kahn
    Abstract: In Beijing, the metropolitan government has made enormous place based investments to increase green space and to improve public transit. We examine the gentrification consequences of such public investments. Using unique geocoded real estate and restaurant data, we document that the construction of the Olympic Village and two recent major subway systems have led to increased new housing supply in the vicinity of these areas, higher local prices and an increased quantity of nearby private chain restaurants.
    JEL: H41 Q51 R41
    Date: 2011–04

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