nep-dev New Economics Papers
on Development
Issue of 2011‒08‒02
28 papers chosen by
Mark Lee
Towson University

  1. Estimating the depth of microfinance programme outreach: empirical findings from rural Pakistan By Asad K. Ghalib
  2. What’s wrong and right with microfinance – missing an angle on responsible finance? By David Hulme; Thankom Arun
  3. The Effects of Conflict on Fertility in Rwanda By Kati Schindler; Tilman Brück
  4. Rock, scissors, paper: the problem of incentives and information in traditional Chinese state and the origin of Great Divergence By Ma, Debin
  5. Gendered impacts of the 2007-08 food price crisis: Evidence using panel data from rural Ethiopia By Kumar, Neha; Quisumbing, Agnes R.
  6. Do men and women accumulate assets in different ways?: Evidence from rural Bangladesh By Quisumbing, Agnes R.
  7. Was the global food crisis really a crisis?: Simulations versus self-reporting By Headey, Derek
  8. Flexible insurance for heterogeneous farmers: Results from a small-scale pilot in Ethiopia By Hill, Ruth Vargas; Robles, Miguel
  9. Agriculture's role in the Indian enigma: Help or hindrance to the undernutrition crisis? By Headey, Derek; Chiu, Alice; Kadiyala, Suneetha
  10. Potential collusion and trust: Evidence from a field experiment in Vietnam By Torero, Maximo; Viceisza, Angelino
  11. Insurance motives to remit: Evidence from a matched sample of Ethiopian internal migrants By de Brauw, Alan; Mueller, Valerie; Woldehanna, Tassew
  12. Adoption of weather index insurance: Learning from willingness to pay among a panel of households in rural Ethiopia By Hill, Ruth Vargas; Hoddinott, John; Kumar, Neha
  13. Beyond fatalism: An empirical exploration of self-efficacy and aspirations failure in Ethiopia By Bernard, Tanguy; Dercon, Stefan; Taffesse, Alemayehu Seyoum
  14. Growth, Colonization, and Institutional Development: In and Out of Africa By Bertocchi, Graziella
  15. Estimating the rate of return to education in Sudan By Nour, Samia
  16. Education, training and skill development policies in Sudan: Macro-micro overview By Nour, Samia
  17. Angus Maddison and Development Economics By Szirmai, Adam
  18. Assessment of skill and technology indicators at the macro-micro levels in Sudan By Nour, Samia
  19. The importance (impact) of knowledge at the macro-micro levels in Sudan By Nour, Samia
  20. Assessment of industrial performance and the relationship between skill, technology and input-output indicators in Sudan By Nour, Samia
  21. Political economy of the mining sector in Ghana By Ayee, Joseph; Soreide, Tina; Shukla, G. P.; Le, Tuan Minh
  22. Who uses bottled gas ? evidence from households in developing countries By Kojima, Masami; Bacon, Robert; Zhou, Xin
  23. Civil society, public action and accountability in Africa By Devarajan, Shantayanan; Khemani, Stuti; Walton, Michael
  24. Improving Aid Effectiveness in Aid-Dependent Countries : Lessons from Zambia. By Monica Beuran; Gaël Raballand; Julio Revilla
  25. The microfinance of reproduction and the reproduction of microfinance: understanding the connections between microfinance, empowerment, contraception and fertility in Bangladesh in the 1990s. By Duvendack, Maren; Palmer-Jones, Richard
  26. Conditional Cash Transfers in Brazil: Treatment Evaluation of the “Bolsa Família” Program on Education By Elke Schaffland
  27. Chemical Fertilizer and Migration in China By Avraham Ebenstein; Jian Zhang; Margaret S. McMillan; Kevin Chen
  28. Prospective Analysis of a Wage Subsidy for Cape Town Youth By James A. Levinsohn; Todd Pugatch

  1. By: Asad K. Ghalib
    Abstract: Microfinance has emerged on the global scale as a key strategy to reduce poverty and promote development. Most of the relevant literature, however, tends to concentrate on breadth as opposed to depth of programme outreach. This paper is based on a primary household survey of 1,132 respondents in the Punjab Province of Pakistan to assess which category of the poor is being served by microfinance institutions. Are they the very poor, middle poor or less poor households? In order to make comparisons, borrower (treatment) and non-borrower (control) households are interviewed and, by employing Principal Component Analysis (PCA), each household is allocated a specific poverty score in relation to all other households in the sample. Once the poverty index is obtained, sampled households are ranked in order of varying poverty levels. Comparisons are later made between borrower and non-borrower households to estimate programme outreach. The paper concludes with findings that the depth of poverty outreach is significantly lower than what has been hitherto proclaimed by service providers and reflects on policy implications to enhance depth (as opposed to breadth) of programme outreach to address the needs of the poorest of the poor, in order to contribute meaningfully and effectively towards combating poverty.
    Date: 2011
  2. By: David Hulme; Thankom Arun
    Abstract: Microfinance as the best way of tackling poverty is under attack. It has been accused of failing to help the poor, of treating its clients badly, of charging high interest rates and of encouraging poor people to take on excessive debt burdens. The authors examine these issues, and find that microfinance institutions (MFIs) can have significant positive impacts, including democratisation of banking services, provision of secure savings facilities for poor people, and social benefits, particularly for women. The paper looks at the way forward for microfinance, suggesting some changes that need to be implemented by MFIs, banking authorities and governments.
    Date: 2011
  3. By: Kati Schindler; Tilman Brück
    Abstract: The aim of this paper is to study the short and long-term fertility effects of mass violent conflict on different population sub-groups. The authors pool three nationally representative demographic and health surveys from before and after the genocide in Rwanda, identifying conflict exposure of the survivors in multiple ways. The analysis finds a robust effect of genocide on fertility, with a strong replacement effect for lost children. Having lost siblings reduces fertility only in the short term. Most interesting is the continued importance of the institution of marriage in determining fertility and in reducing fertility for the large group of widows in Rwanda.
    Keywords: conflict, demography, fertility, gender, genocide, Rwanda
    JEL: J13 O12
    Date: 2011
  4. By: Ma, Debin
    Abstract: This article posits that the political institution of imperial China – its unitary and centralized ruling structure – is an essential determinant to China‘s long-run economic trajectory and its early modern divergence from Western Europe. Drawing on institutional economics, I demonstrate that monopoly rule, a long time-horizon and the large size of the empire could give rise to a path of low-taxation and dynastic stability in imperial China. But fundamental incentive misalignment and information asymmetry problems within its centralized and hierarchical political structure also constrained the development the fiscal and financial capacity of the Chinese state. Based on a reconstruction of two millennia records of incidences of warfare, this paper develops a narrative to show that the establishment and consolidation towards a single unitary monopoly of political power was an endogenous historical process. Using data series on warfare and government revenue for 17-19th century, I illustrate the Qing imperial rule as an epitome of the traditional Chinese political economy.
    JEL: O53 N0
    Date: 2011–07
  5. By: Kumar, Neha; Quisumbing, Agnes R.
    Abstract: This paper provides empirical evidence on the gendered impact of the 2007–08 food price crisis using panel data on 1,400 households from rural Ethiopia that were initially surveyed before the onset of the crisis, in 1994–95, 1997, and 2004, and after food prices spiked, in 2009. It investigates whether female-headed households are more likely to report experiencing a food price shock, and whether female-headed households experiencing a shock are more (or less) likely to adopt certain coping strategies, controlling for individual, household, and community characteristics. Our findings suggest that female-headed households are more vulnerable to food price changes and are more likely to have experienced a food price shock in 2007–08. Because female-headed households are also resource poor and have a larger food gap compared with male-headed households, they cope by cutting back on the number of meals they provide their households during good months and eating less preferred foods in general. Our findings that land—particularly better quality land—has a protective effect against food price shocks also highlight the role of strengthening land rights of the poor, particularly poor women, to enable them to cope better with food price increases.
    Keywords: coping mechanisms, food price crisis, Gender,
    Date: 2011
  6. By: Quisumbing, Agnes R.
    Abstract: This paper examines asset dynamics for husband-owned, wife-owned, and jointly owned assets, using unique longitudinal survey data from rural Bangladesh. Nonparametric and parametric methods are used to examine the shape of the dynamic asset frontier, the number of equilibria, and whether land and nonland asset stocks converge to such equilibria. The paper also investigates the differential impact of negative shocks and positive events on husbands', wives', and jointly owned assets. Husbands' and wives' asset stocks are drawn down for different kinds of shocks, with husbands' assets being liquidated in response to death of a household member and dowry and wedding expenses, and both husbands' and wives' assets being negatively affected by illness shocks. The paper concludes by drawing out implications for the design of gender-sensitive social protection mechanisms.
    Keywords: Asset dynamics, Gender, Poverty traps,
    Date: 2011
  7. By: Headey, Derek
    Abstract: Estimates by the U.N. Food and Agriculture Organization (FAO), the U.S. Department of Agriculture (USDA), and the World Bank concerning the welfare impact of the 2007/08 global food crisis conclude that between 75 million and 160 million people were thrown into hunger or poverty. However, these simulation-based approaches suffer from inherent deficiencies as well as insufficient coverage of the largest developing countries, especially China and India. This paper therefore assesses the usefulness of an alternative to simulation-based approaches, self-reported food insecurity data from the Gallup World Poll (GWP), a survey conducted before, during, and after the 2007/08 crisis. While these data are still less than ideal, we show that trends in self-reported food insecurity are statistically explained by both food inflation (positively) and economic growth (negatively). This validation motivates us to employ the GWP data as a barometer for the welfare impacts of the global food crisis. Our findings suggest that while there was tremendous variation in trends across countries, global self-reported food insecurity fell from 2005 to 2008, with the most plausible lower- and upper-bound estimates ranging from 60 million to 250 million fewer food-insecure people over that period. These results are clearly driven by rapid economic growth and very limited food price inflation in the world's most populous countries, particularly China and India. Hence, self-reported indicators of food insecurity reveal a trend opposite that of simulation-based approaches.
    Keywords: global food crisis, Hunger, Poverty, self-reported indicators,
    Date: 2011
  8. By: Hill, Ruth Vargas; Robles, Miguel
    Abstract: We analyze the effectiveness of a new approach in providing weather index–based insurance products to low-income populations. The approach is based on the concept of providing multiple weather securities that pay a fixed amount if the event written on the security (that monthly rainfall at a nearby weather station falls below a stated cutoff) comes true. A theoretical model is developed to outline the conditions in which weather securities could outperform crop-specific weather index–based insurance policies. Data collected during both an experimental game and real purchases of such insurance policies among farmers in southern Ethiopia suggest that the securities are well understood and can fit heterogeneous farmer needs. This paper documents (1) heterogeneity of rainfall risk among farmers, (2) the understanding of securities and transmission of information about weather securities among members of endogenously formed risk-sharing groups, and (3) the nature of purchasing decisions and manner in which they are made.
    Keywords: Arrow securities, weather index insurance,
    Date: 2011
  9. By: Headey, Derek; Chiu, Alice; Kadiyala, Suneetha
    Abstract: In recent decades India has achieved one of the fastest economic growth rates in the world, yet its progress against both child and adult undernutrition has been sluggish at best. While this Indian variant of the so-called Asian enigma presents many puzzles, one of the puzzles pertains to agriculture's role. In this paper we reassess agriculture's role in the Indian enigma by exploring two key pathways, an income–consumption pathway and an employment–time use pathway, linking agricultural conditions to nutrition outcomes. On the income–consumption front, we assess whether rising incomes are improving diets and how agriculture and income growth are influencing the Indian diet. In terms of time use, we explore whether agricultural livelihoods hinder childcare practices and the health status of mothers. We conclude with a brief overview of nonagricultural constraints to improved nutrition and some analysis of the implications of our findings for agricultural policies in India.
    Keywords: adult and child undernutrition, Agricultural growth, Rural development,
    Date: 2011
  10. By: Torero, Maximo; Viceisza, Angelino
    Abstract: We conduct framed trust games using contract dairy farmers in Vietnam as first movers to assess the impact of potential collusion on trust. Disaggregated analysis suggests that female farmers are more likely to trust overall, but are also more responsive to the addition of a third party and potential collusion. A third party induces them to trust at higher levels, but potential collusion between the trustee and the third party also induces them to trust at lower levels. Our findings corroborate well with existing studies on gender differences in decision making, which suggest that women's social preferences are more context-specific than men's.
    Keywords: collusion, field experiment, Gender, trust game,
    Date: 2011
  11. By: de Brauw, Alan; Mueller, Valerie; Woldehanna, Tassew
    Abstract: Migration and remittances can be used by rural households as a means of insurance, investment, and income augmentation. Ample attention has been given to studying international remittance flows, since for many countries such transfers comprise a significant fraction of income. Remittance flows from internal migrants are relatively understudied, particularly in Africa, where remittance rates are poor. We use a unique matched migrant sample to study what drives the low remittance rates in Ethiopia. Descriptive statistics suggest remitters are positively selected in terms of wealth characteristics compared with the average tracked migrant. Limited skill transferability and liquidity largely explain low remittance rates in Ethiopia. Weaker evidence suggests migrants are additionally motivated to remit as a form of self-insurance against own shocks to income and investments towards future inheritable assets.
    Keywords: Insurance, Migration, Remittances,
    Date: 2011
  12. By: Hill, Ruth Vargas; Hoddinott, John; Kumar, Neha
    Abstract: In this paper we examine which farmers would be early entrants into weather index insurance markets in Ethiopia, were such markets to develop on a large scale. We do this by examining the determinants of willingness to pay for weather insurance among 1,400 Ethiopian households that have been tracked for 15 years as part of the Ethiopia Rural Household Survey. This provides both historical and current information with which to assess the determinants of demand. We find that educated, rich, and proactive individuals were more likely to purchase insurance. Risk aversion was associated with low insurance take-up, suggesting that models of technology adoption can inform the purchase and spread of weather index insurance. We also assess how willingness to pay varied as two key characteristics of the contract were varied and find that basis risk reduced demand for insurance, particularly when the price of the contract was high, and that provision of insurance through groups was preferred by women and individuals with lower levels of education.
    Keywords: index-insurance, Risk, Willingness to pay (WTP),
    Date: 2011
  13. By: Bernard, Tanguy; Dercon, Stefan; Taffesse, Alemayehu Seyoum
    Abstract: Fatalism is considered pervasive, especially in many poor communities. In this paper, we explore whether fatalistic beliefs have implications for the attitudes and behavior of poor rural households toward investment in the future. To explore the idea of fatalism, we draw inspiration from theories in psychology focusing on the role of locus of control and self-efficacy and also from the theoretical framework of aspiration failure as developed in recent economic literature. Using survey data from rural Ethiopia, we find evidence of fatalistic beliefs among a substantial group of rural households, as well as indicators consistent with narrow aspirations gap and low self-efficacy. We also find that such beliefs consistently correlate with lower demand for credit, in terms of loan size, repayment horizon, and productive purposes.
    Keywords: aspirations, aspirations failure, aspirations gap, aspirations window, fatalism, self-efficacy,
    Date: 2011
  14. By: Bertocchi, Graziella (University of Modena and Reggio Emilia)
    Abstract: This essay investigates the determinants of the growth performance of Africa. I start by illustrating a broader research agenda which accounts not only for basic economic and demographic factors, but also for the role of history and institutional development. After reporting results from standard growth regressions, I analyze the role of Africa’s peculiar history, which has been marked by its colonization experience. Next I discuss the potential growth impact of state fragility, a concept which reflects multiple facets of the dysfunctions that plague the continent. The last topic I address is the influence, in and out of Africa, of the slave trades. The essay ends with critical conclusions and suggestions for further research.
    Keywords: growth, Africa, history, colonization, institutions, state fragility, slavery
    JEL: O43 N17 H11
    Date: 2011–07
  15. By: Nour, Samia (UNU-MERIT, Maastricht University, and Khartoum University)
    Abstract: This paper examines the rate of return to education in Sudan. One advantage and interesting element in our analysis in this paper is that we explain three stylised facts on the rate of return to education using new primary data in Sudan: first, positive but low rate of return to education and correlations between education, experience, its square and wages for men and women defined by gender, second, positive and significant rate of return to education and correlations between education, experience, its square and wages defined by firm size and industry at the micro level across industrial firms and third, an increase in skill levels and firm size leads to improved relationship between actual education, required education, experience, its square and wages at the micro level across industrial firms. Our paper is relevant and consistent with the recent growing interest in the literature that confirms the importance of investment in education and rate of return to education. Different from the Sudanese literature that estimates the return to human capital at the macro level, we investigate the rate of return to education using new primary data at the micro level. A novel element of our analysis is that we use new primary survey data at the micro level obtained from the university survey (2009) and the firm survey (2010), we present a new contribution and fill the gap in the Sudanese literature by estimating first the rate of return to education for men and women and explaining differences defined by gender and second for industrial firms and explaining differences defined by firm size and industry, since these issues are not adequately discussed in the Sudanese literature. Our findings indicate the importance of investment in education to facilitate enhancing educational attainment and improvement of the rate of return to education in Sudan.
    Keywords: Education, returns to education, gender, industry, Sudan
    JEL: J01 J16 J21 J24 J31 I21
    Date: 2011
  16. By: Nour, Samia (UNU-MERIT, Maastricht University, and Khartoum University)
    Abstract: This paper discusses the education, training and skill development policies in Sudan using a combination of new secondary and primary data. A novel element in our paper is that we use new primary macro and micro (firm) surveys data to discuss and compare the macro and micro perspectives concerning policies implemented to improve skill upgrading through enhancing the educational system, provision of training and transfer of knowledge. Different from the Sudanese literature, an interesting element in our analysis is that we discuss both the supply and demand sides of educational policies and we provide a more comprehensive analysis by explaining the low commitment to the standardised international adequacy, equity and efficiency criterion related to the supply and demand sides of education and training policies in Sudan. We provide a new contribution and fill important gap in the Sudanese literature by explaining that the regional disparity in the demand for education (share in enrolment in education) is most probably due to economic reasons (per capita income and poverty rate), demographic reasons (share in total population) and other reasons (degree of urbanization) in Sudan. We find that the increase in the incidence of high poverty rate and low per capita income seem to be the most important factor limiting the demand for education, notably, the demand for primary education, especially for females in Sudan. The major policy implication from our findings is that poverty eradication is key for the achievement of universal access to primary education and gender equality and therefore, fulfillment of the second and third United Nations Millennium Development Goals in Sudan by 2015. We recommend further efforts to be made to improve quality, increase firm commitment to the standardised international adequacy, equity and efficiency criterion in the provision of education and training, increase incentives at tertiary and technical education, enhance consistency of education, training and skill development policies and encourage collaboration between public and private sectors.
    Keywords: Education, training, supply, demand, adequacy, efficiency, equity, skill development, Sudan
    JEL: H52 I20 I21 I28 M53 O15
    Date: 2011
  17. By: Szirmai, Adam (UNU-MERIT, and Maastricht Graduate School of Governance, Maastricht University)
    Abstract: This paper was prepared for the Angus Maddison Memorial conference, held in November 2010 at the International Institute of Social History in Amsterdam. The paper reflects on Angus Maddison's contributions to development economics. It focuses on the following issues: 1. quantification in development economics and the framework of proximate and ultimate causality in growth and development; 2 the debate about levels of GDP per capita in the middle of the eighteenth century; 3 Maddison versus the Malthusians; 4 measurement of Chinese Economic Performance in the long run; 5. the impact of Western expansion on the non-Western world and 6. the role of institutions in economic development.
    Keywords: Economic Growth, Development Economics, GDP per capita, China, Western Expansion, Institutions
    JEL: N10 O10
    Date: 2011
  18. By: Nour, Samia (UNU-MERIT, Maastricht University, and Khartoum University)
    Abstract: In this paper we examine skill and technology indicators at the macro and micro levels in Sudan. Different from the Sudanese literature, a novel element in our analysis is that we use new primary data from the macro and firm surveys and we provide a new contribution and fill the gap in the Sudanese literature by examining five hypotheses on the causes and consequences of low skill and technology indicators at the macro and micro levels in Sudan. We verify our first hypothesis that the interaction between the deficient educational system -caused by low quality of education- and the high share of unskilled workers leads to poor provision of training; low skill levels; skills mismatch; low transfer of knowledge/external schooling effect; weak technology indicators and dependence on foreign technologies at the micro level. We confirm our second hypothesis that the poor local technology indicators/indigenous capability to build the local technology and heavy dependence on foreign technology can be attributed to lack of R&D activities/efforts, due to a lack of funding, low skill levels, weak linkages, lack of networks systems and collaboration between universities and industry/firms, low transfer of knowledge and a lack of entrepreneur perspective. We support our third hypothesis that the transfer of knowledge/external schooling effects is successful at the micro level but unsuccessful at the macro level due to low educational qualifications and deficient educational and training systems. We confirm our fourth hypothesis that skill and technology indicators are significantly determined by firm size and industry. We support our fifth hypothesis concerning the consistency of upskilling plans at the macro-micro levels. Finally, one advantage and interesting element in our analysis is that we provide a new contribution to the Sudanese literature, since we explain the causes, consequences and interaction between the low skill and technology indicators and the transfer of knowledge. We recommend further efforts to be made to improve skill and technology indicators and transfer of knowledge at the macro and micro levels which are all essential for economic growth and development in Sudan.
    Keywords: Skill, technology, firm size, industry, Sudan
    JEL: J24 L25 O12 O15 O30
    Date: 2011
  19. By: Nour, Samia (UNU-MERIT, Maastricht University, and Khartoum University)
    Abstract: In this paper we provide a new contribution and fill the gap in the Sudanese literature by investigating the importance (impact) of tacit and codified sources of knowledge at the micro and macro levels in Sudan using new primary data from the firm survey (2010) at the micro level and secondary data at the macro level respectively. Our results at the macro level are consistent with the notion that tacit knowledge and codified sources of knowledge are positively and significantly correlated and complementary with both schooling years and GDP growth (economic growth rate). Moreover, we find that at the macro level codified knowledge and the number of FTER show significant positive correlations with technology (patents). Furthermore, our results at the macro level show significant positive complementary relationships between codified knowledge and the number of FTER, which we interpret as a complementary relationship between tacit knowledge and codified knowledge. Moreover, at the micro (firm) level, we illustrate the importance of tacit knowledge, and we illustrate that tacit knowledge is positively and significantly correlated with technology (expenditures on ICT) and upskilling (expenditures on training), output (defined by total sales value), output diversification, productivity and profit. In addition, we find that at the micro (firm) level, tacit and codified knowledge show positive significant correlations with total capital, and firm size. We explain positive correlations between knowledge and various variables at the micro and macro levels. Therefore, further incentives should be provided to improve tacit and codified sources of knowledge at the macro and micro levels. Our results are consistent with the findings in the knowledge literature, another implication is that since tacit knowledge is often embodied in educated people and so in human capital, the positive impact of tacit knowledge also implies the importance of a good education at the micro and macro levels.
    Keywords: Tacit knowledge, codified knowledge, economic growth, Sudan
    JEL: O10 O11 O12 O30
    Date: 2011
  20. By: Nour, Samia (UNU-MERIT, Maastricht University, and Khartoum University)
    Abstract: This paper examines the industrial performance indicators and the relationships between skill indicators; between skill, upskilling, technology and input-output indicators in Sudan. Our findings are consistent with the stylized facts in the new growth literature, concerning the correlation between skill indicators: education, experience and wages and also concerning the positive complementary relationships between technology, skill and upskilling. Different from the Sudanese literature, a novel element in our analysis is that we use a new primary data from the firm survey (2010) and we provide a new contribution and fill the gap in the Sudanese literature by examining the industrial performance indicators defined by three different sets of economic and productivity indicators, activity indicators and profitability indicators in Sudan. One advantage and interesting element in our analysis in this paper is that we confirm three hypotheses on the relationships between skill indicators; between skill, upskilling, technology and input-output indicators and industrial performance indicators using new primary data from the firm survey (2010) in Sudan. We verify our first hypothesis that irrespective of the observed differences across the industrial firms, the low skill levels - due to high share of unskilled workers - lead to skills mismatch and most probably contribute to decline of labour productivity and industrial performance indicators. We confirm our second hypothesis that an increase in skill levels and firm size lead to improved relationships between actual and required education and experience; between actual education, experience and wages; and between skill, upskilling and technology (ICT) and also improved industrial performance indicators. We also support our third hypothesis concerning the inconclusive relationships between new technology (the use of ICT) and input-output indicators at the micro/firm level. Finally, we provide a new contribution to the Sudanese literature, since we explain that the performance of the industrial firms is most probably immensely undermined by the shortage of skilled workers and also by the lack of entrepreneur perspective. We recommend further efforts to be made to improve adequate availability of skilled workers and commitment to entrepreneur perspective for improvement of labour productivity, industrial performance and therefore, economic growth and development in Sudan.
    Keywords: Industrial performance, skill, technology, input-output, firm size, industry, Sudan
    JEL: J24 L10 L20 L25 L60 O12 O15 O30
    Date: 2011
  21. By: Ayee, Joseph; Soreide, Tina; Shukla, G. P.; Le, Tuan Minh
    Abstract: With a focus on the institutional set-up and the political environment as central to understanding and rectifying the poor impact of mining on Ghana's economic development, this paper highlights the vulnerabilities in mining sector governance along the industry value chain. The authors explain why it has been difficult to implement policies that would have improved social welfare. They find that incentive problems in institutions directly or peripherally involved in mining governance are a major factor, as are an excessively centralized policy-making process, a powerful executive president, strong party loyalty, a system of political patronage, lack of transparency, and weak institutional capacity at the political and regulatory levels. The paper argues that the net impact of mining on economic development is likely to be enhanced with appropriate reforms in governance. Most importantly, there should be a greater awareness of incentive problems at the political level and their possible implications for sector performance and the economy at large. The set of checks and balances, as stipulated by the Constitution, have to be reinforced. Furthermore, capacity building at different levels and institutions is needed and should be combined with efforts to enhance incentives for institutional performance.
    Keywords: National Governance,Environmental Economics&Policies,Public Sector Corruption&Anticorruption Measures,Mining&Extractive Industry (Non-Energy),Governance Indicators
    Date: 2011–07–01
  22. By: Kojima, Masami; Bacon, Robert; Zhou, Xin
    Abstract: Household surveys in Guatemala, India, Indonesia, Kenya, Pakistan, and Sri Lanka were analyzed using a two-stage Heckman model to examine the factors influencing the decision to use liquefied petroleum gas (stage 1) and, among users, the quantity consumed per person (stage 2). In the first stage, liquefied petroleum gas selection in all six countries increased with household expenditure and the highest level of education attained by female and male household members. Electricity connection increased, and engagement in agriculture and increasing household size decreased, liquefied petroleum gas selection in five countries; urban residence increased selection in four countries; and rising firewood and kerosene prices increased selection in three countries each. In the second stage, the quantity of liquefied petroleum gas consumed increased with rising household expenditure and decreasing price of liquefied petroleum gas in every country. Urban residence increased and engagement in agriculture decreased liquefied petroleum gas consumption. Surveys in Albania, Brazil, Mexico, and Peru, which did not report quantities, were also examined by calculating quantities using national average prices. Although fuel prices faced by individual households could not be tested, the findings largely supported those from the first six countries. Once the education levels of men and women were separately accounted for, the gender of the head of household was not statistically significant in most cases across the ten countries. Where it was significant (five equations), the sign of the coefficient was positive for men, possibly suggesting that female-headed households are burdened with unmeasured economic disadvantages, making less cash available for purchasing liquefied petroleum gas.
    Keywords: Energy Production and Transportation,Markets and Market Access,Energy Conservation&Efficiency,Renewable Energy,Energy and Environment
    Date: 2011–07–01
  23. By: Devarajan, Shantayanan; Khemani, Stuti; Walton, Michael
    Abstract: This paper examines the potential role of civil society action in increasing state accountability for development in Sub-Saharan Africa. It further develops the analytical framework of the World Development Report 2004 on accountability relationships, to emphasize the underlying political economy drivers of accountability and implications for how civil society is constituted and functions. It argues on this basis that the most important domain for improving accountability is through the political relations between citizens, civil society, and state leadership. The evidence broadly suggests that when higher-level political leadership provides sufficient or appropriate powers for citizen participation in holding within-state agencies or frontline providers accountable, there is frequently positive impact on outcomes. However, the big question remaining for such types of interventions is how to improve the incentives of higher-level leadership to pursue appropriate policy design and implementation. The paper argues that there is substantial scope for greater efforts in this domain, including through the support of external aid agencies. Such efforts and support should, however, build on existing political and civil society structures (rather than transplanting"best practice"” initiatives from elsewhere), and be structured for careful monitoring and assessment of impact.
    Keywords: Public Sector Corruption&Anticorruption Measures,Parliamentary Government,Social Accountability,Civil Society,ICT Policy and Strategies
    Date: 2011–07–01
  24. By: Monica Beuran (World Bank Country Office in Zambia et Centre d'Economie de la Sorbonne); Gaël Raballand (World Bank Country Office in Zambia); Julio Revilla (World Bank Country Office in Zambia)
    Abstract: Zambia was a middle-income country when it achieved independence from Great Britain in 1964. After decades of international aid Zambia has become a low-income country, and its per capita GDP is only now returning to the levels it had reached over forty years ago. While aid is far from the only variable at work in Zambia's development, its impact has been questionable. This paper examines the issue of aid effectiveness in Zambia, especially in terms of how the incentive structure faced by donors may lead to decreased accountability and inadequate concern for long-term outcomes, rendering aid less beneficial. The paper concludes by proposing a revised approach to the provision and use of international aid in Zambia, as well as in other aid-dependent countries in Sub-Saharan Africa.
    Keywords: Aid effectiveness, Zambia, donors, projects, aid incentives.
    JEL: F35 O19 O22 O55
    Date: 2011–07
  25. By: Duvendack, Maren; Palmer-Jones, Richard
    Abstract: Microfinance (MF) and family planning (FP) are thought to be very important interventions in the promotion of human development and it has been suggested that MF has significant beneficent impacts on contraceptive adoption and fertility. Thus, several authors, e.g. Amin, Hill and Li (1995), Amin et al (1994 and 2001); Schuler, Hashemi and Riley (1997); Hashemi, Schuler and Riley (1996); Schuler and Hashemi (1994), using naive methods find that MF in Bangladesh increases contraceptive use and reduces fertility at the individual level, largely because MF empowers women. Pitt et al (1999 – henceforth PKML), however, using instrumental variables (IV) estimation find that MF is associated with decreases in contraceptive use especially when females borrow, and male borrowing decreases fertility, perhaps because fertility increasing income effects of MF outweigh substitution. Steele et al (2001), also using data from Bangladesh from around the same time as the PKML study, come to conclusions closer to the orthodoxy, arguing that PKML use an inappropriate metric for MF programme participation. In this paper we apply matching methods to our reconstruction of the PKML data to test whether other methods reproduce their results. We find that female borrowing substantially increases contraceptive use but has mainly no effects on fertility, while male borrowing has no effect on contraceptive use or on fertility; this contradicts some of the findings of PKML. Our results are shown to be vulnerable to unobservables, but there is no reason to believe that results on IV based methods are more reliable.
    Keywords: Microfinance; family planning; propensity score matching; Bangladesh
    JEL: J13 O10 O16 O12
    Date: 2011–06
  26. By: Elke Schaffland
    Abstract: Brazil has experienced a substantial amount of change in the last few years. Some of the changes in development policy have led to decreases in poverty and inequality. For example, conditional cash transfers were one of the most widespread poverty-alleviation programs in Brazil becoming one of the biggest programs of this kind in the world. These transfers give grants to eligible poor families to allow increased consumption in the short-term while building human capital through requirements for school attendance and health care. Given these goals, it is important to evaluate the effect of these transfers on human capital. This paper discusses two methodologies for the evaluation of programs’ effect on education: Regression Discontinuity Design and Propensity Score Matching (PSM). Using PSM we find that the probability of school enrollment rises by around 4 percentage points for children of families that receive the transfers. Our results also point to a positive impact on school attendance; recipients miss around less school over a two month period than families without the transfers. However, the dimension of the programs effect differs between age groups; the program has a greater impact on younger children than on older ones.
    Keywords: conditional cash transfers; propensity score matching; education
    Date: 2011–07–21
  27. By: Avraham Ebenstein; Jian Zhang; Margaret S. McMillan; Kevin Chen
    Abstract: This paper examines a possible connection between China’s massive rural to urban migration and high chemical fertilizer use rates during the late 1980s and 1990s. Using panel data on villages in rural China (1987-2002), we find that labor out-migration and fertilizer use per hectare are positively correlated. Using 2SLS, employing the opening of a Special Economic Zone in a nearby city as an instrument, we find that village fertilizer use is linked to contemporaneous short-term out-migration of farm workers. We also examine the long-term environmental consequences of chemical fertilizer use during this period. Using OLS, we find that fertilizer use intensity is correlated with future fertilizer use rates and diminished effectiveness of fertilizer, demonstrating persistency in use patterns, and suggesting that in areas with high use of fertilizer, the land is becoming less responsive. We also demonstrate that fertilizer use within a river basin is correlated with organic forms of water pollution, suggesting that industrialization has induced pollution in China both directly and through its impact on rural labor supply.
    JEL: O1 O13
    Date: 2011–07
  28. By: James A. Levinsohn; Todd Pugatch
    Abstract: Recognizing that a credible estimate of a wage subsidy's impact requires a model of the labor market that itself generates high unemployment in equilibrium, we estimate a structural search model that incorporates both observed heterogeneity and measurement error in wages. Using the model to examine the impact of a wage subsidy, we find that a R1000/month wage subsidy paid to employers leads to an increase of R660 in mean accepted wages and a decrease of 15 percentage points in the share of youth experiencing long-term unemployment.
    JEL: J64 J68
    Date: 2011–07

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