nep-dev New Economics Papers
on Development
Issue of 2011‒05‒24
eighteen papers chosen by
Mark Lee
Towson University

  1. On the Move Livelihood Strategies in Northern Ghana By Francesca Marchetta
  2. Spatial Unemployment Differentials in Colombia By Ana Maria DIAZ ESCOBAR
  3. Remittances, Migrants’Education and Immigration Policy: Theory and Evidence from Bilateral Data By Frédéric DOCQUIER; Hillel RAPOPORT; Sara SALOMONE
  4. A Global View of Productivity Growth in China By Chang-Tai Hsieh; Ralph Ossa
  5. Tajik Labour Migrants and their Remittances: Is Tajik Migration Pro-Poor? By Kazuhiro Kumo
  6. Human Development Rankings Based on the Pareto Dominance: Illustrations Using Cross-country Panel Data 1980-2007 By Maki Michinaka
  7. Antitrust Law and the Promotion of Democracy and Economic Growth By Niels Petersen
  8. Rural Electrifi cation in Rwanda – An Impact Assessment Using Matching Techniques By Gunther Bensch; Jochen Kluve; Jörg Peters
  9. Is it what you inherited or what you learnt ? Intergenerational linkage and interpersonal inequality in Senegal By Lambert, Sylvie; Ravallion, Martin; van de Walle, Dominique
  10. Political economy studies: are they actionable ? some lessons from Zambia By Beuran, Monica; Raballand, Gael; Kapoor, Kapil
  11. Success and failure of African exporters By Cadot, Olivier; Iacovone, Leonardo; Pierola, Denisse; Rauch, Ferdinand
  12. Migration and Land Rental as Risk Response in Rural China By Ward, Patrick S.; Shively, Gerald E.
  13. Ties that Bind: The Kin System as a Mechanism of Income-Hiding between Spouses in Rural Ghana By Castilla, Carolina
  14. Complete the Incompleteness of Land Reform: Household Level Evidence from West Bengal By Deininger, Klaus; Jin, Songqing; Yadav, Vandana
  15. Impacts of Land Rental Markets on Rural Poverty in Kenya By Jin, Songqing; Jayne, T.S.
  16. Contraceptive use among illiterate women in India: does proximate illiteracy matter? By Husain, Zakir; Dutta, Mousumi; Ghosh, Sriparna
  17. Contextual Assessment of Women Empowerment and Its Determinants: Evidence from Pakistan By Khan, Safdar Ullah; Awan, Rabia
  18. A Quantitative General Equilibrium Approach to Migration, Remittances and Brain Drain By Cespedes, Nikita

  1. By: Francesca Marchetta (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: The households who live in the rural areas of Northern Ghana base their subsistence on natural resources, which are threatened by the progressive desertification and increased frequency of extreme weather events in the region. We draw on a field work and on extensive secondary data sources to analyze how the rural population successfully adapted its livelihood strategies to cope with the economic, institutional and environmental changes which occurred over the last two decades. The field work evidences significant differences across communities in the adaptation strategies, which depend closely on the available portfolio of assets. The analysis evidences serious concerns about the environmental consequences of some of the observed changes in livelihood strategies, strengthening the case for public policies aimed at promoting a sustainable development in the region.
    Keywords: Livelihood Strategies;agriculture;Non Farm Activities;Internal migration;sustainable development;Rural Areas
    Date: 2011–05–06
  2. By: Ana Maria DIAZ ESCOBAR (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: This paper studies the geographic distribution of unemployment rates in Colombian urban areas. It introduces measures of spatial correlation and spatial econometric techniques to analyze the dependence in local unemployment rates across municipalities. Results suggest that Colombian municipalities have experienced a polarization process between 1993 and 2005, as municipalities' unemployment rates have followed different evolutions relative to the National average. This process has been accompanied by the creation of unemployment clusters, that is to say, municipalities had very similar unemployment outcomes to those of their neighbors. This analysis uses a spatial Durbin model to explore the influence of various factors in determining differences in regional unemployment rates. According to our findings differences in labor demand, immigration rates, and urbanization are factors behind observed municipal unemployment disparities.
    Keywords: local labor markets, unemployment di erential, polarization, clustering, spatial econometrics, spatial Durbin model
    JEL: R23 C14 C23 C31
    Date: 2011–04–27
  3. By: Frédéric DOCQUIER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Hillel RAPOPORT (Department of Economics, Bar-Ilan University, EQUIPPE and Center for International Development, Harvard University); Sara SALOMONE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Tor Vergat University)
    Abstract: We investigate the relationship between remittances and migrants' education both theoretically and empirically, using original bilateral remittance data. At a theoretical level we lay out a simple model of remittances interacting migrants' human capital with two dimensions of immigration policy: restrictiveness, and selectivity. The model predicts that the relationship between remittances and migrants' education will be inversed-U shaped, with the increasing segment being longer (resp. shorter) for more restrictive (resp. selective) immigration policies. These predictions are then tested empirically using bilateral remittance and migration data and proxy measures for the restrictiveness and selectivity of immigration policies at destination. The results strongly support the theoretical analysis, suggesting that immigration policies determine the sign and magnitude of the relationship between remittances and migrants' education.
    Keywords: Remittances, Migration, Brain Drain, Immigration Policy
    JEL: F24 F22 O15 J61
    Date: 2011–03–31
  4. By: Chang-Tai Hsieh; Ralph Ossa
    Abstract: We revisit a classic question in international economics: how does a country's productivity growth affect worldwide real incomes through international trade? We first identify the channels through which productivity shocks transmit in a model featuring inter-industry trade as in Ricardo (1817), intra-industry trade as in Krugman (1980), and firm heterogeneity as in Melitz (2003). We then estimate China's productivity growth at the industry level and use our model to quantify what would have happened to real incomes throughout the world if nothing but China's productivity had changed. We find that average real income in the rest of the world increased by a cumulative 0.48% from 1992-2007 due to China's productivity growth. This represents 2.2% of the total income gains to the world.
    Keywords: Productivity growth, China
    JEL: F1 F4 O4
    Date: 2011–02
  5. By: Kazuhiro Kumo
    Abstract: For the four years since 2006, Tajikistan, a former Soviet republic, has led the world in the receipt of foreign remittance as a proportion of GDP. Needless to say, key reasons for this are the low income levels in Tajikistan and the country's special relationship with Russia, which is enjoying rapid economic growth. Yet while interest in the relationship between migration and foreign remittance has existed for a long time, not many studies have looked at this region. This paper used household survey forms from two points in time to profile households in Tajikistan and international labour migration by Tajiks, and examined the relationship between household income levels in Tajikistan, the poorest of the former Soviet republics, and foreign remittance being received from international labour migrants and the likelihood of migrants being supplied. It found no correlation between household income levels and amounts of money received from abroad, which suggests that altruistic models of the relationship between migration and remittance do not apply. Moreover, it also found that households with high incomes are more likely to supply migrants, indicating that international labour migration from Tajikistan may not be conductive to reducing poverty in that country.
    JEL: O15 P46 R23
    Date: 2011–03
  6. By: Maki Michinaka
    Abstract: This paper aims (a) to propose two types of human development rankings, a maximal order ranking (MAXOR) and a minimal order ranking (MINOR), and (b) to examine the characteristics of these rankings by using the ranking results derived from the balanced and unbalanced cross-country panel datasets for the period 1980 to 2007. As a means of illustration, I compare these ranking characteristics and results to those of the human development index (HDI), one of the most prevalent human development measurement tools. The MAXOR and MINOR ranking results have a high correlation with the HDI ranking. However, unlike the HDI, the MAXOR and MINOR do not have to undergo aggregation or indexation when their rankings are being generated. Consequently, they successfully eliminate some of the arbitrariness that is implicit in other existing rankings. The MAXOR and MINOR ranking results are comparatively vaguer than those of other typical rankings such as the HDI in that multiple observations are often ranked identically. However, this vagueness also presents the possibility that these rankings will gain wide acceptance. From 1980 to 2007, the number of rank groups and the distributions of the countries of the MAXOR and MINOR were relatively robust to changes in the total number of countries. This means that a rank order for a specific country in the MAXOR or MINOR shows its relative position against all other countries, regardless of the year in which the country is set and the number of countries. In this sense, these rankings are more appropriate for tracing the historical transition of each country compared to other typical rankings.
    Keywords: multidimensional poverty measurement, Pareto dominance, ranking, Human Development Index (HDI)
    Date: 2011–04
  7. By: Niels Petersen (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: There is a considerable debate in the legal literature about the purpose of antitrust institutions. Some argue that antitrust law merely serves the purpose of economic growth, while others have a broader perspective on the function of antitrust, maintaining that the prevention of economic concentration is an important means to promote democratization and democratic stability. This contribution seeks to test the empirical assumptions of this normative debate. Using panel data of 154 states from 1960 to 2007, it analyzes whether antitrust law actually has a positive effect on democracy and economic growth. The paper finds that antitrust law has a strongly positive effect on the level of GDP per capita and economic growth. However, there is no significant positive effect on the level of democracy. It is suggested that these results might be due to the current structure of existing antitrust laws, which are designed to promote economic efficiency rather than to prevent economic concentration.
    Date: 2011–01
  8. By: Gunther Bensch; Jochen Kluve; Jörg Peters
    Abstract: Rural electrifi cation is believed to contribute to the achievement of the Millennium Development Goals (MDGs) via various channels. In this paper, we investigate the impacts of electrification on the household’s lighting usage, home studying, energy expenditures and income. We use household data that we collected in rural Rwanda in villages with and without access to mini-grids. To account for self-selection processes in the connection decision we use households from the electrified villages to estimate the probability to connect for all households – including those in the non-electrified villages. Based on these propensity scores we identify counterfactual households to determine the impacts of electrification on the outcome indicators. We find some indication for positive effects on home studying and income, but particularly on lighting usage. We conclude by highlighting the potentially profound changes in social life of rural people induced by improved lighting and call for research on impacts beyond the MDGs.
    Keywords: Rural electrification; ex-ante impact assessment; poverty; matching
    JEL: O12 O13 O18 O22
    Date: 2010–12
  9. By: Lambert, Sylvie; Ravallion, Martin; van de Walle, Dominique
    Abstract: Institutional features of the African setting -- large extended families and imperfect credit and land markets -- matter to the equity and efficiency roles played by intergenerational linkages. Using original survey data on Senegal that include an individualized measure of consumption, this paper studies the role played by land inheritance, other bequests and parental background as influences on an adult's economic welfare and economic activities. Although intergenerational linkages are evident, the analysis finds a seemingly high degree of mobility across generations, associated with the shift from farm to non-farm sectors and the greater economic activity of women. Male-dominated bequests of land and housing bring little gain to mean consumption and play little role in explaining inequality, although they have effects on the sector of activity. Inheritance of non-land assets and the education and occupation of parents (especially the mother) and their choices about children's schooling are more important to adult welfare than property inheritance. Significant gender inequality in consumption is evident, although it is almost entirely explicable in terms of factors such as education and (non-land) inheritance. There are a number of other pronounced gender differences, with intergenerational linkages coming through the mother rather than the father.
    Keywords: Population Policies,Gender and Law,Agricultural Knowledge&Information Systems,Rural Development Knowledge&Information Systems,Gender and Health
    Date: 2011–05–01
  10. By: Beuran, Monica; Raballand, Gael; Kapoor, Kapil
    Abstract: In recent years, the number of studies looking at the effect of politics on economic outcomes has flourished. For developing economies, these studies are useful to better understand why long overdue reforms are not implemented. The studies analyze the overall context within which reforms are being implemented and the underlying incentive framework. However, it seems difficult to make such studies actionable, especially in sectors where donors have a heavy presence that can sometimes distort incentives in addition to the reluctance from some governments to amend the existing systems in place. This paper focuses on some conclusions emerging from the political economy diagnostics carried out in Zambia in various sectors in recent years. Based on interviews of World Bank task managers, the paper attempts to assess the relevance of these studies for the implementation of projects and the policy dialogue and draws lessons on how they have influenced the implementation of the World Bank's support to programs in various sectors in Zambia as well as the main challenges for this type of exercise.
    Keywords: Environmental Economics&Policies,Political Economy,Governance Indicators,Debt Markets,Public Sector Corruption&Anticorruption Measures
    Date: 2011–05–01
  11. By: Cadot, Olivier; Iacovone, Leonardo; Pierola, Denisse; Rauch, Ferdinand
    Abstract: Using a novel dataset with transactions level exports data from four African countries (Malawi, Mali, Senegal and Tanzania), this paper uncovers evidence of a high degree of experimentation at the extensive margin associated with low survival rates, consistent with high and middle income country evidence. Consequently, the authors focus on the questions of what determines success and survival beyond the first year and find that survival probability rises with the number of firms exporting the same product to the same destination from the same country, pointing towards the existence of cross-firm synergies. Accordingly the evidence is consistent with the hypothesis that those synergies may be driven by information spillovers. More intuitively and consistently with multi-product firms models, the analysis also finds that firms more diversified in terms of products, but even more in terms of markets, are more likely to be successful and survive beyond the first year.
    Keywords: Markets and Market Access,Microfinance,Economic Theory&Research,Debt Markets,E-Business
    Date: 2011–05–01
  12. By: Ward, Patrick S.; Shively, Gerald E.
    Abstract: Households in developing countries take various actions to smooth income or consumption as a means of managing or responding to risk. One of the principal means of smoothing income is through the diversification of income sources, including non-farm employment and rural-urban migration. An important consumption smoothing strategy involves the accumulation and depletion of assets. We examine migration and land rental market participation as responses to risk in rural China. Using a longitudinal data set comprised of households in nine provinces in China from 1991 through 2006, we are able to test for the effect of various manifestations of underlying idiosyncratic and covariate income risk on household responses. We find that covariate risks increase land rental market participation, but decrease participation in migration. Idiosyncratic income risks do not affect household rental market participation, perhaps suggesting that intra-village risk sharing is sufficient for households to smooth consumption after experiencing idiosyncratic shocks. Because the death of a household reduces a household's redundant labor, these idiosyncratic labor shocks significantly lower the likelihood that a household will participate in migration.
    Keywords: China, risk, consumption smoothing, income smoothing, International Development, Labor and Human Capital, Risk and Uncertainty, O15, R23, Q15,
    Date: 2011
  13. By: Castilla, Carolina
    Abstract: I present a simple model of intra-household allocation between spouses to show that when the quantity of resources available to the household is not perfectly observed by both spouses, hiding of income can occur even when revelation of the additional resources increases bargaining power. From the model, a test to identify income hiding empirically is derived. For the empirical application, a household survey conducted in Southern Ghana is used. I exploit the variation in the degree of asymmetric information between spouses, measured as the difference between the husbandâs own reporting of farm sales and the wifeâs reporting of his farm sales, to test whether the allocation of resources is consistent with hiding. For identification, the wifeâs clan and the husbandâs bride-wealth payments upon marriage are used as instruments for asymmetric information. My findings indicate that allocations are suggestive of men hiding farm sales income in the form of gifts to extended family members, which are not closely monitored. It is unclear whether hiding has negative consequences in the long run because hiding occurs in the form of gifts, instead of expenditure in alcohol or tobacco. If the gifts represent a form of risk-sharing, then these gifts will return to the household in the future, and hiding is not necessarily inefficient. However, if these gifts are motivated by social pressure then hiding can result on poverty traps caused by kin system. The wifeâs response is also suggestive of hiding. As information asymmetries increase, she reduces her expenditure in non-essential items, such as prepared foods and oil, but increases personal spending. Expenditure in oil is one of the main sources of calories among poor households in the region.
    Keywords: incomplete information, income hiding, non-cooperative family bargaining, Consumer/Household Economics, International Development, D13, D82, J12,
    Date: 2011
  14. By: Deininger, Klaus; Jin, Songqing; Yadav, Vandana
    Abstract: Land reforms were successfully implemented in the state of West Bengal through a special program undertaken in 1978 by the then state government. These reforms brought large amount of land under permanent and inheritable tenancy. We use a survey data of nearly 9000 plots from 2000 households in 142 villages in West Bengal to ascertain that both productivity and long-term investments on such land are significantly lower than the land under ownership. We also find evidence for lower levels of input usage on the tenancy plots as compared to those which are fully owned by the cultivator. Programs to allow land reform beneficiaries to acquire full ownership could thus have significant benefits
    Keywords: Labor and Human Capital, Land Economics/Use, Productivity Analysis,
    Date: 2011
  15. By: Jin, Songqing; Jayne, T.S.
    Abstract: This study uses panel data from 1,142 Kenya smallholder households over four survey periods to examine the determinants of participation in land rental markets and to quantify the impact of renting land on householdsâ crop income and total income. We find that land rental markets in Kenya enhance productivity and are equitable. The results are consistent across different estimation methods and model specifications. Dynamic panel models were used to assess the impact of rental participation on householdsâ crop income and total income. After controlling for the endogeneity of rental market participation and the persistent effects of lagged income, we find that the decision to rent land increased tenant householdsâ net crop (net total) income by 25.1 (6.6) percent. These percentage gains are inversely related to household landholding size. Hence, land rental markets in Kenya appear to play an important role in raising incomes and reducing poverty for land-constrained smallholder farmers.
    Keywords: Land rental market, Kenya, Income, Poverty, Dynamic model, Agricultural and Food Policy, International Development, Land Economics/Use, O12, Q13, Q12, Q15,
    Date: 2011
  16. By: Husain, Zakir; Dutta, Mousumi; Ghosh, Sriparna
    Abstract: Illiterate women comprise a particularly vulnerable section of the community. They lack empowerment, are unable to voice their choice with respect to contraceptive use, and also lack access to health services. However, their lack of literacy may be compensated if their partners are literate. Contraceptive use of such illiterate women (proximate literates), may be higher than that of illiterate women whose partners too are illiterates (isolate illiterates). The study uses the third wave of the Demographic Health Survey data for India (2005-2006).The 34,108 currently married illiterate women for whom data is available in the Individual file was divided into two groups, based on whether their partners were literate. Current use of modern contraceptives was compared between these two groups for socio-economic and demographic correlates. This was followed by multivariate analysis based on a logit model. Current use of modern methods was regressed on a dummy representing whether the partner was literate, along with relevant control variables. The results of the All-India (Rural+Urban) and All-India (Rural) models indicated that literacy of partners did lead to a significantly higher level of use of modern contraceptive methods. For the urban sub-sample, however, the study failed to find any significant transmission of information from the literate partner to the respondents. Disaggregate-level analysis also revealed that such transmission was restricted to only specific situations and communities. The study argued that the results may be explained by: [a] Reluctance of the male partner to share information; [b] Lack of information about family planning methods, even when there is communication; and [c] Presence of alternative channels of information reducing dependence of illiterate women on her partner. There should be an attempt to increase information of both partners through face to face interaction, rather than relying solely on public media. Simultaneously, women should be encouraged to develop contacts outside her household as this can reduce her dependence of partner for family planning related knowledge.
    Keywords: Contraceptives; Literacy; Reproductive Health; India
    JEL: J13 I20 C35
    Date: 2011–05–04
  17. By: Khan, Safdar Ullah; Awan, Rabia
    Abstract: The main objective of this study is to evaluate women empowerment in different contexts of family planning and economic decision making within the household. Further this paper investigates its appropriate determinants sifting through sociology resource control theory and economic bargaining theory by controlling for socio-cultural intervening factors. We examine this empirically by utilizing extensive micro level data information (15,453 households) from ‘Pakistan Social and Living Standards Measurement Survey’ (PSLM) for the year of 2005-06. Results suggest the presence of highly constrained and largely dichotomous empowerment within the household. Interestingly, we find that the number of children however not the sex of a child relevant in enhancing women’s empowerment. Further, the common determinants of empowerment depict varying degree of effectiveness depending on the specific context of empowerment. Moreover, socio-economic, level of education and employment status of a woman depict as effect modifier factors across the empowerment contexts and regions. Furthermore, geographic divisions within Pakistan, significantly explain the contextual empowerment of women.
    Keywords: Contextual empowerment; family planning decision making; economic decision making; socio-cultural; ordered logistic regressions.
    JEL: C42 Z13
    Date: 2011–05
  18. By: Cespedes, Nikita (University of Rochester)
    Abstract: Developing countries have experienced an outstanding outflow of skilled workers (brain- drain) over the last several decades. Additionally, migrants tend to be tied to their country of birth, since they send a large amount of remittances to their relatives. Furthermore, migration is not permanent, since a considerable number of workers return to their country of birth after a migration spell. In this paper we develop a model that is consistent with these facts. We use our model to address some important issues in the migration literature from a theoretical perspective. We study the general equilibrium effects of migration, its long-term effects, and its welfare effects, and we see whether the joint effect of return migration and remittances is strong enough to offset the effects of skilled migration. Finally, we evaluate the effectiveness of policy interventions that attempts to offset the effects of a brain drain.
    Keywords: Migration, General Equilibrium, Brain drain, Remittances, Heterogeneous Agents
    Date: 2011–05

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