nep-dev New Economics Papers
on Development
Issue of 2012‒02‒20
forty-six papers chosen by
Mark Lee
Towson University

  1. Real Exchange Rate and Economic Growth: Evidence from Chinese Provincial Data (1992 - 2008) By Jinzhao Chen
  2. Working Paper 144 - An Analysis of the Impact of Financial Integration on Economic Activity and Macroeconomic Volatility in Africa within the Financial Globalization Context By AfDB
  3. Working Paper 145 - Assessing the Returns to Education in the Gambia By AfDB
  4. Measuring Households' Vulnerability to Idiosyncratic and Covariate Shocks – the case of Bangladesh By Md. Shafiul Azam; Katsushi S. IMAI
  5. Growth vs. level effect of population change on economic development: An inspection into human-capital-related mechanisms By Raouf BOUCEKKINE; B. MARTINEZ; J. R. RUIZ-TAMARIT
  6. International Migration and the Propagation of HIV in Sub-Saharan Africa By Frédéric DOCQUIER; Chrysovalantis VASILAKIS; D. TAMFUTU MUNSI
  7. Incentives and nutrition for rotten kids: intrahousehold food allocation in the Philippines By Dubois, Pierre; Ligon, Ethan A.
  8. Inequality, Human Capital Formation and the Process of Development By Galor, Oded
  9. Is Caste Destiny? Occupational Diversification among Dalits in Rural India By Gang, Ira N.; Sen, Kunal; Yun, Myeong-Su
  10. Social Divisions in School Participation and Attainment in India: 1983-2004 By Asadullah, Niaz; Kambhampati, Uma; López Bóo, Florencia
  11. Is There Such Thing as Middle Class Values? Class Differences, Values and Political Orientations in Latin America By López-Calva, Luis Felipe; Rigolini, Jamele; Torche, Florencia
  12. Cultural Diversity, Geographical Isolation, and the Origin of the Wealth of Nations By Ashraf, Quamrul; Galor, Oded
  13. Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of the Literature By Vivarelli, Marco
  14. Bumpy Rides: School to Work Transitions in South Africa By Pugatch, Todd
  15. The "Out of Africa" Hypothesis, Human Genetic Diversity, and Comparative Economic Development By Ashraf, Quamrul; Galor, Oded
  16. Alternative Cash Transfer Delivery Mechanisms: Impacts on Routine Preventative Health Clinic Visits in Burkina Faso By Akresh, Richard; de Walque, Damien; Kazianga, Harounan
  17. Remittances and Children's Capabilities: New Evidence from Kyrgyzstan, 2005-2008 By Kroeger, Antje; Anderson, Kathryn H.
  18. Yet Another Look at the Modernisation Hypothesis: Evidence from Latin America By Manoel Bittencourt
  19. Economic Growth and Government Debt: Evidence from the Young Democracies of Latin America By Manoel Bittencourt
  20. Democracy and External Shock Resilience in Developing Countries. Evidence from the Great Recession By Essers, Dennis
  21. Is there a role for genetics in economic development? By Luis Angeles
  22. Fertility and Child Occupation: Theory and Evidence from Senegal By VERHEYDEN Bertrand; FAYE Ousmane
  23. The effects of migration on children's activities in households at origin: Evidence from Senegal By FAYE Ousmane; CISSÉ Fatou
  24. Social Capital and Economic Development : The Case of Uzbekistan By Manuela Trochke
  25. Poor, or just feeling poor ? on using subjective data in measuring poverty By Ravallion, Martin
  26. Global survey of development banks By de Luna-Martinez, Jose; Vicente, Carlos Leonardo
  27. An economic integration zone for the east African community : exploiting regional potential and addressing commitment challenges By Dobronogov, Anton; Farole, Thomas
  28. Regional integration and natural resources : who benefits ? evidence from MENA By Carrere, Celine; Gourdon, Julien; Olarreaga, Marcelo
  29. Mines, migration and HIV/AIDS in southern Africa By Corno, Lucia; de Walque, Damien
  30. Employment generation in rural Africa : mid-term results from an experimental evaluation of the Youth Opportunities Program in Northern Uganda By Blattman, Christopher; Fiala, Nathan; Martinez, Sebastian
  31. Econometric models of child mortality dynamics in rural Bangladesh. By Saha, U.R.
  32. Visualizing Development:Eyeglasses and Academic Performance in Rural Primary Schools in China By Glewwe, Paul; Park, Albert; Zhao, Meng
  33. Demographic Dividends, Dependencies and Economic Growth in China and India By Jane Golley; Rod Tyers
  34. Living Standards In South Africa’s Former Homelands By Martine Mariotti
  35. Fairness and Redistribution- the Case of Latin American Countries By Erik Alencar de Figueiredo
  36. Right to the city and critical reflections on property rights activism in China’s urban renewal contexts By Hyun Bang Shin
  37. A Romerian Contribution to the Empirics of Economic Growth By Bahar Bayraktar Saðlam; Ý. Hakan Yetkiner
  38. Cooperation makes beliefs: climate variation and sources of social trust in Vietnam By Dang, Anh
  39. Politics and Consumer Prices in Africa By Simplice A, Asongu
  40. The political economy of development assistance: peril to government quality dynamics in Africa By Simplice A, Asongu
  41. The Impact of Health Insurance for Children: Evidence from Vietnam By Nguyen Viet, Cuong
  42. Police and Crime Against Firms in Developing Economies By Islam, Asif
  43. Reversed Economics and Inhumanity of Development Assistance in Africa By Simplice A, Asongu
  44. Is There a Gender Bias in Crime Against Firms for Developing Economies? By Islam, Asif
  45. Investment and Growth in Rich and Poor Countries By Yin-Wong Cheung; Michael P. Dooley; Vladyslav Sushko
  46. The Sahel's Silent Maize Revolution: Analyzing Maize Productivity in Mali at the Farm-level By Jeremy D. Foltz; Ursula T. Aldana; Paul Laris

  1. By: Jinzhao Chen (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper studies the convergence, and the role of internal real exchange rate on economic growth in the Chinese provincial level. Using informal growth equation à la Barro [1991] and dynamic panel data estimation, we find conditional convergence among the coastal provinces and among inland provinces. Moreover, our results show that the real exchange rate appreciation has a positive effect on the provincial economic growth.
    Keywords: Real Exchange Rate ; Economic Growth ; China ; Generalized method of moments
    Date: 2012–02
  2. By: AfDB
    Date: 2012–02–16
  3. By: AfDB
    Date: 2012–02–16
  4. By: Md. Shafiul Azam (Economics, School of Social Sciences, University of Manchester, UK); Katsushi S. IMAI (Economics, School of Social Sciences, University of Manchester, UK)
    Abstract: The paper examines the level and sources of vulnerability in rural Bangladesh using a household survey. We use a simple two-level random intercept model to estimate expected mean and variance in consumption as well as to decompose the variance into idiosyncratic and covariate components. Our results indicate that both idiosyncratic and covariate shocks have considerable impact on household's vulnerability and idiosyncratic shocks seem to have greater impact on household's consumption vulnerability than the covariate shocks. Furthermore, idiosyncratic shocks appear to have a relatively higher impact on relatively well endowed (i.e. in terms of human capital, land holdings, activity status etc.), well off households and covariate shocks seem to have a relatively higher impact on poorer, less educated, household's vulnerability. Our results also reveal that rural vulnerability in Bangladesh is mainly poverty induced rather than risk induced. Around 78 per cent all who are vulnerable is accounted for by low expected mean consumption and only 22 per cent of them are due to high consumption volatility. Overall vulnerability in rural areas is estimated to be 50 per cent. The categorization of poverty into transient and chronic poverty is even more insightful. The study finds that those without education or agricultural households are likely to be the most vulnerable. The geographical diversity of vulnerability is considerable. It is suggested that ex ante measures to prevent households from becoming poor as well as ex post measures to alleviate those already in poverty should be combined.
    Keywords: poverty, vulnerability, risks, poverty dynamics, Bangladesh
    JEL: C21 C25 I32
    Date: 2012–01
  5. By: Raouf BOUCEKKINE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES), Center for Operations Research and Econometrics (CORE) and GREQAM,Aix-Marseille University, France); B. MARTINEZ (Department of Economics, Universidad Complutense de Madrid (Spain)); J. R. RUIZ-TAMARIT (Department of Economic Analysis, Universitat de Valencia (Spain), and Department of Economics, Université Catholique de Louvain (Belgium) (IRES))
    Abstract: This paper studies the different mechanisms and the dynamics through which demography is channelled to the economy. We analyze the role of demographic changes in the economic development process by studying the transitional and the long-run impact of both the rate of population growth and the initial population size on the levels of per capita human capital and income. We do that in an enlarged Lucas-Uzawa model with intergenerational altruism. In contrast to the existing theoretical literature, the long-run level effects of demographic changes, i.e. their impact on the levels of the variables along the balanced growth path, are deeply characterized in addition to the more standard long-run growth effects. We prove that the level effect of the population rate of growth is non-negative (positive in the empirically most relevant case) for the average level of human capital, but a priori ambiguous for the level of per capita income due to the interaction of three transmission mechanisms of demographic shocks, a standard one (dilution) and two non-standard (altruism and human capital accumulation). Overall, the sign of the level effects of population growth depend on preference and technology parameters, but numerically we show that the joint negative effect of dilution and altruism is always stronger than the finduced positive human capital effect. The growth effect of population growth depends basically on the attitude to intergenerational altruism and intertemporal substitution. Moreover, we also prove that the long-run level effects of population size on per capita human capital and income may be negative, nil, or positive, depending on the relationship between preferences and technology, while its growth effect is zero. Finally, we show that the model is able to replicate complicated time relationships between economic and demographic changes. In particular, it entails a negative effect of population growth on per capita income, which dominates in the initial periods, and a positive effect which restores a positive correlation between population growth and economic performance in the long term.
    Keywords: Human Capital, Population Growth, Population Size, Endogenous Growth, Level Effect, Growth Effect
    JEL: C61 C62 E2 J10 O41
    Date: 2011–10–28
  6. By: Frédéric DOCQUIER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS); Chrysovalantis VASILAKIS (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); D. TAMFUTU MUNSI (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: In this paper, we identify and quantify the role of international migration in the propagation of HIV across sub-Saharan African countries. We use a panel database on bilateral migration flows and HIV prevalence rates covering 44 countries over the nineties. Controlling for unobserved heterogeneity, spatial autocorrelation, reverse causality and reflection issues, and incorrect treatment of country fixed effects, we regress the log-change of HIV prevalence rates on the average levels of prevalence at destination and origin of migrants. We find evidence of a very robust emigration-induced propagation mechanism. On the contrary, immigration has no significant effect. Numerical experiments reveal that the long-run effect of emigration accounts for more than 5 percent of HIV prevalence rates in 18 countries (resp. 20 percent in 9 countries).
    Keywords: international migration, labor mobility, HIV/AIDS, pandemics, propagation of diseases
    JEL: F22 I12 J61
    Date: 2011–10–28
  7. By: Dubois, Pierre; Ligon, Ethan A. (University of California, Berkeley. Dept of agricultural and resource economics)
    Abstract: Using data on individual consumption expenditures from a sample of farm households in the Philippines, we construct a direct test of the risk-sharing implications of the collective household model. We are able to contrast the efficient outcomes predicted by the collective household model with the outcomes we might expect in environments in which food consumption delivers not only utils, but also nutrients which affect future productivity. Finally, we are able to contrast each of these two models with a third, involving a hidden action problem within the household; in this case, the efficient provision of incentives implies that the consumption of each household member depends on their (stochastic) productivity. The efficiency conditions which characterize the within-household allocation of food under the collective household model are violated, as consumption shares respond to earnings shocks. If future productivity depends on current nutrition, then this can explain some but not all of the response, as it appears that the quality of current consumption depends on past earnings. This suggests that some actions taken by household members are private, giving rise to a moral hazard problem within the household.
    Date: 2011–02
  8. By: Galor, Oded (Brown University)
    Abstract: Conventional wisdom about the relationship between income distribution and economic development has been subjected to dramatic transformations in the past century. While classical economists advanced the hypothesis that inequality is beneficial for growth, the neoclassical paradigm dismissed the classical hypothesis and suggested that income distribution has limited role in the growth process. A metamorphosis in these perspectives has taken place in the past two decades. Theory and subsequent empirical evidence have demonstrated that income distribution has a significant impact on human capital formation and the development process. In early stages of industrialization, as physical capital accumulation was a prime engine of growth, inequality enhanced the process of development by channeling resources towards individuals whose marginal propensity to save is higher. In later stages of development, however, as human capital has become a main engine of growth, equality, in the presence of credit constraints, has stimulated human capital formation and growth. Moreover, unequal distribution of land has been a hurdle for economic development. While industrialists have had an incentive to support education policies that foster human capital formation, landowners, whose interests lay in the reduction of the mobility of their labor force, have favored policies that deprived the masses of education.
    Keywords: inequality, human capital, growth, development, credit market imperfections
    Date: 2012–01
  9. By: Gang, Ira N. (Rutgers University); Sen, Kunal (University of Manchester); Yun, Myeong-Su (Tulane University)
    Abstract: The caste system – a system of elaborately stratified social hierarchy – distinguishes India from most other societies. Among the most distinctive factors of the caste system is the close link between castes and occupations, especially in rural India, with Dalits or Scheduled Castes (SC) clustered in occupations that were the least well paid and most degrading in terms of manual labour. Along with the Scheduled Tribes (STs), the SCs have the highest incidence of poverty in India, with poverty rates that are much higher than the rest of the population. Since independence, the Indian government has enacted affirmative action policies in educational institutions and public sector employment for SCs and STs. In addition, in the more populous states of India, political parties have emerged that are strongly pro-SC in their orientation in the more populous states of India. We use five rounds of all-India employment data from the National Sample Survey quinquennial surveys from 1983 to 2004 to assess whether these political and social changes has led to a weakening of the relationship between low caste status and occupational segregation that has existed historically in India. We find evidence that the occupational structure of the SC households is converging to that of the non-scheduled households. However, we do not find evidence of a similar occupational convergence for ST households.
    Keywords: caste, occupational diversification, poverty, India
    JEL: O12 J15
    Date: 2012–01
  10. By: Asadullah, Niaz (University of Reading); Kambhampati, Uma (University of Reading); López Bóo, Florencia (Inter-American Development Bank)
    Abstract: This study documents the size and nature of "Hindu-Muslim" and "boy-girl" gaps in children's school participation and attainments in India. Individual-level data from two successive rounds of the National Sample Survey suggest that considerable progress has been made in decreasing the Hindu-Muslim gap. Nonetheless, the gap remains sizable even after controlling for numerous socio-economic and parental covariates, and the Muslim educational disadvantage in India today is greater than that experienced by girls and Scheduled Caste Hindu children. A gender gap still appears within as well as between communities, though it is smaller within Muslim communities. While differences in gender and other demographic and socio-economic covariates have recently become more important in explaining the Hindu-Muslim gap, those differences altogether explain only 25 percent to 45 percent of the observed schooling gap.
    Keywords: social disparity, religion, India, gender inequality
    JEL: I21 O15
    Date: 2012–01
  11. By: López-Calva, Luis Felipe (World Bank); Rigolini, Jamele (World Bank); Torche, Florencia (New York University)
    Abstract: Middle class values have long been perceived as drivers of social cohesion and growth. In this paper we investigate the relation between class (measured by the position in the income distribution), values, and political orientations using comparable values surveys for six Latin American countries. We find that both a continuous measure of income and categorical measures of income-based class are robustly associated with values. Both income and class tend to display a similar association to values and political orientations as education, although differences persist in some important dimensions. Overall, we do not find strong evidence of any "middle class particularism": values appear to gradually shift with income, and middle class values lay between the ones of poorer and richer classes. If any, the only peculiarity of middle class values is moderation. We also find changes in values across countries to be of much larger magnitude than the ones dictated by income, education and individual characteristics, suggesting that individual values vary primarily within bounds dictated by each society.
    Keywords: middle class, income, values, political orientations
    JEL: D3 D7 O1 Z1
    Date: 2012–01
  12. By: Ashraf, Quamrul (Williams College); Galor, Oded (Brown University)
    Abstract: This research argues that variations in the interplay between cultural assimilation and cultural diffusion have played a significant role in giving rise to differential patterns of economic development across the globe. Societies that were geographically less vulnerable to cultural diffusion benefited from enhanced assimilation, lower cultural diversity, and more intense accumulation of society-specific human capital. Thus, they operated more efficiently with respect to their production-possibility frontiers and flourished in the technological paradigm that characterized the agricultural stage of development. The lack of cultural diffusion and its manifestation in cultural rigidity, however, diminished the ability of these societies to adapt to a new technological paradigm, which delayed their industrialization and, hence, their take-off to a state of sustained economic growth. The theory thus contributes to the understanding of the advent of divergence and overtaking in the process of development. Consistently with the theory, the empirical analysis establishes that (i) geographical isolation prevalent in pre-industrial times (i.e., prior to the advent of airborne transportation technology) has had a persistent negative impact on the extent of contemporary cultural diversity; (ii) pre-industrial geographical isolation had a positive impact on economic development in the agricultural stage but has had a negative impact on income per capita in the course of industrialization; and (iii) cultural diversity, as determined exogenously by pre-industrial geographical isolation, has had a positive impact on economic development in the process of industrialization.
    Keywords: cultural assimilation, cultural diffusion, cultural diversity, geographical isolation, economic development, agriculture, industrialization
    JEL: O11 O13 O14 O31 O33 O41 O43 O50
    Date: 2012–01
  13. By: Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: This paper critically discusses the theoretical and empirical literature on the quantitative and qualitative employment impact of technological change, compares the relative explanatory power of the competing theories, and explains in detail the macro and micro evidence on the issue, with reference both to the advanced economies and the developing countries (DCs).
    Keywords: technology, innovation, employment, skill, skill-biased technological change
    JEL: O33
    Date: 2012–01
  14. By: Pugatch, Todd (Oregon State University)
    Abstract: Re-enrollment in school following a period of dropout is a common feature of the South African school to work transition that has been largely ignored in both the literature on South Africa and the wider literature on sequential schooling choice. In this paper, I quantify the importance of the option to re-enroll in the school to work transition of South African youth. I estimate a structural model of schooling choice in South Africa using a panel dataset that contains the entire schooling and labor market histories of sampled youth. Estimates of the model's structural parameters confirm the hypothesis that enrollment choices reflect dynamic updating of the relative returns to schooling versus labor market participation. In a policy simulation under which re-enrollment prior to high school completion is completely restricted, the proportion completing at least 12 years of schooling rises 6 percentage points, as youth who would have dropped out under unrestricted re-enrollment reconsider the long-term consequences of doing so. The results suggest that the option to re-enroll is an important component of the incentives South African youth face when making schooling decisions.
    Keywords: human capital investment, labor supply, youth unemployment, dynamic discrete choice, South Africa
    JEL: I21 J24 O12
    Date: 2012–01
  15. By: Ashraf, Quamrul (Williams College); Galor, Oded (Brown University)
    Abstract: This research argues that deep-rooted factors, determined tens of thousands of years ago, had a significant effect on the course of economic development from the dawn of human civilization to the contemporary era. It advances and empirically establishes the hypothesis that in the course of the exodus of Homo sapiens out of Africa, variation in migratory distance from the cradle of humankind to various settlements across the globe affected genetic diversity and has had a direct long-lasting effect on the pattern of comparative economic development that could not be captured by contemporary geographical, institutional, and cultural factors. In particular, the level of genetic diversity within a society is found to have a hump-shaped effect on development outcomes in the pre-colonial era, reflecting the trade-off between the beneficial and the detrimental effects of diversity on productivity. Moreover, the level of genetic diversity in each country today (i.e., genetic diversity and genetic distance among and between its ancestral populations) has a similar non-monotonic effect on the contemporary levels of income per capita. While the intermediate level of genetic diversity prevalent among the Asian and European populations has been conducive for development, the high degree of diversity among African populations and the low degree of diversity among Native American populations have been a detrimental force in the development of these regions. Further, the optimal level of diversity has increased in the process of industrialization, as the beneficial forces associated with greater diversity have intensified in an environment characterized by more rapid technological progress.
    Keywords: Out of Africa hypothesis, human genetic diversity, comparative development, population density, Neolithic Revolution, land productivity, Malthusian stagnation
    JEL: N10 N30 N50 O10 O50 Z10
    Date: 2012–01
  16. By: Akresh, Richard (University of Illinois at Urbana-Champaign); de Walque, Damien (World Bank); Kazianga, Harounan (Oklahoma State University)
    Abstract: We conducted a unique randomized experiment to estimate the impact of alternative cash transfer delivery mechanisms on household demand for routine preventative health services in rural Burkina Faso. The two-year pilot program randomly distributed cash transfers that were either conditional or unconditional and the money was given to either mothers or fathers. Families enrolled in the conditional cash transfer schemes were required to obtain quarterly child growth monitoring at local health clinics for all children under five years old. There was not such a requirement under the unconditional programs. Compared with control group households, conditional cash transfers significantly increase the number of preventative health care visits during the previous year, while unconditional cash transfers did not have such an impact. For the conditional cash transfers, money given to mothers or fathers showed beneficial impacts of similar magnitude in increasing routine visits.
    Keywords: cash transfers, conditionality, gender, child health, Africa
    JEL: I15 I38 J13 O15
    Date: 2012–01
  17. By: Kroeger, Antje (DIW Berlin); Anderson, Kathryn H. (Vanderbilt University)
    Abstract: The Kyrgyz Republic is one of the largest recipients of international remittances in the world; from a Balance of Payments measure of remittances, it ranked tenth in the world in 2008 in the ratio of remittances to GDP, a rapid increase from 30th place in 2004. Remittances can be used to maintain the household's standard of living by providing income to families with unemployed and underemployed adult members. Remittances can also be used to promote investment not only in businesses and communities but also in people. In this paper, we examine the role that remittances have played in the Kyrgyz Republic in promoting investments in children. Based on the capabilities approach to well-being initiated by Sen (2010), we look at the impact of remittances and domestic transfer payments primarily from internal migration on children's education and health. Our outcomes include enrollment in school and preschool, expenditures, stunting and wasting of preschool children, and health habits of older children. We use unique panel data from the Kyrgyz Republic for 2005-2008 and thus control for some of the biases inherent in cross-sectional studies of remittances and family outcomes. We find that overall remittances and domestic transfers have not promoted investments in the human capital of children. Specifically, preschool enrollments were higher in the urban north but secondary school enrollments were lower in other regions in remittance receiving households; expenditures were also negatively affected in the south and the mountain areas. These negative enrollment results were larger for girls than for boys. We also found evidence of stunting and wasting among young children and worse health habits among boys in remittance or transfer receiving households. In the long run, Kyrgyzstan needs human capital development for growth; our results suggest that remittances are not providing the boost needed in human capital to promote development in the future.
    Keywords: children's education and health, remittances, Central Asia
    JEL: C23 F22 I21 R23
    Date: 2012–01
  18. By: Manoel Bittencourt (Department of Economics, University of Pretoria)
    Abstract: We investigate in this paper whether the modernisation hypothesis holds in Latin America, and our sample includes nine Latin American countries that re-democratised in the last forty years or so. The data set covers the period between 1970 and 2007, and the results, based on dynamic panel data analysis (we use the Fixed Effects, Fixed Effects with Instrumental Variables, DIF-GMM and SYS-GMM estimators), suggest that the modernisation hypothesis holds in the region, or that income, or development in general, play a positive role on democracy. We also test for the critical junctures hypothesis, or whether particular historical structural changes play any role in contemporaneous democratisation in the region, however we are not able to provide any concrete evidence in favour of it. Essentially, we suggest that a certain level of development is an important condition for democracy to mature and survive, which-- in times of a new democratisation wave taking place in societies with different levels of development-- is a suggestive observation.
    Keywords: Modernisation hypothesis, democracy, development, Latin America
    JEL: O10 O54 P16
    Date: 2012–02
  19. By: Manoel Bittencourt (Department of Economics, University of Pretoria)
    Abstract: We investigate in this paper what are the main determinants of government and external debt in Latin America. Our sample includes nine Latin American countries that re-democratised in the last 30 years or so, and the data cover the period between 1970 and 2007. The results, based on principal component and dynamic panel data analyses (we use the Pooled OLS, Fixed Effects, Fixed Effects with Instrumental Variables, DIF-GMM and SYS-GMM estimators), robustly suggest that economic growth, presumably via the automatic stabilisers, has had the ability of reducing debt in the region. Other important candidates suggested by the literature do not present clear-cut estimates on debt. Essentially, this suggests that the tax-smoothing model still holds in Latin America, which? in times of debt crisis? is very suggestive of the importance of fast economic activity in keeping debt under control.
    Keywords: Growth, Debt, Latin America
    JEL: H60 N16 O11 O54
    Date: 2012–01
  20. By: Essers, Dennis
    Abstract: While some developing countries appear to have been largely unaffected by the Great Recession that originated in advanced economies, others took a severe blow in 2008-2009. A number of recent studies have attempted to explain the observed heterogeneity of developing country growth performances during the latest global financial and economic crisis by linking it to pre-crisis macro-economic and financial country features - with rather mixed success. In this newly emerging body of research, surprisingly little attention has, however, been paid to institutional differences between countries, and the variation in political institutional arrangements more particularly. The current paper takes a first shot at bridging this hiatus by gauging the impact of democracy on the crisis growth of developing countries. From a theoretical point of view, and as suggested in the political economy literature, democracy could be either growthretarding or growth-enhancing in times of economic crisis, the overall effect ultimately being an empirical question. Using a cross-section sample of more than 100 non-advanced countries and controlling for a range of macroeconomic, financial and standard institutional factors as well as pre-crisis trends, we find evidence suggesting that, on the whole, democratic country features are negatively correlated with growth performance during the 2008-2009 global crisis. Our findings are seemingly robust to the use of various sets of controls, different estimators, several country subsamples and alternative measures of democracy and crisis growth.
    Keywords: Global Financial Crisis, Growth, External Shocks, Democracy
    Date: 2012–01
  21. By: Luis Angeles
    Abstract: Spolaore and Wacziarg (2009) have presented evidence supporting a role of genetic distance to the United States as a barrier to economic development. We extend their empirical work by controlling for the share of Europeans and European descendants in the population. We find that the role of genetic distance disappears and o¤er two alternative interpretations of the patterns in the data.
    Keywords: Genetics; economic development; European settlement.
    JEL: O1 O3 O4
    Date: 2012–01
  22. By: VERHEYDEN Bertrand; FAYE Ousmane
    Abstract: This paper analyzes household fertility and child occupation decisions in a risky environment. Fertility decisions are made fi?rst, when only the distribution of shocks is known. When shocks are realized and fertility is ?xed, parents adapt by allocating children?s occupations, i.e. school, paid work and domestic chores. Fertility is decreasing with the shock probability and increasing with parental permanent income. Households facing an adverse shock make more use of child labor and send fewer children to school, unless the total number of children is small. These predictions are tested with data from the Senegalese SEHW (2003) following this two-step methodology. A Poisson model estimates the number of children with classical instruments and household-level information on shock distribution, con?rming the theory?s predictions on fertility. A multivariate Tobit model estimates the determinants of children occupations, including the occurrence of shocks and accounting for the endogeneity of fertility. The number of children increases (decreases) the probability of child specialization (multiple activities). Shock-related variables have an adverse e¤ect on schooling.
    Keywords: Fertility; education; child labor; shocks
    JEL: J13 J24 O12 O15
    Date: 2011–11
  23. By: FAYE Ousmane; CISSÉ Fatou
    Abstract: This paper examines the repercussions of international migration on children?s time allocation in households at origin. We focus on children of age 7 to 12 and distinguish three activities: market work, French school attendance, and enrollment in Medersa (Arab/Islamic traditional school). In our analysis, we account for heterogeneities in migration constraints considering differences in migration destinations and the number of migrants within households. We instrument for migration using policy and governance facets in destination countries, precisely France, Spain, and Italy. Results show that – after controlling for endogeneity – migration has a positive and significant impact on enrollment in French curriculum school. However, once we account for the destination of the migrant, this positive and significant impact is only verified in households with migrants in Europe. We also note that when the number of migrants within a household increases, children of age 7 to 12 are less likely to attend French school and they are more likely to be involved in paid work activities. We draw evidence from the 2009 Senegalese household survey on migration and remittances (Enquête Ménage sur la Migration et les Transferts de Fonds).
    Keywords: International migration; Child Labour; Education; Time allocation; Left-behind; Senegal
    JEL: F22 J13 J22 O15 O55
    Date: 2011–11
  24. By: Manuela Trochke (Osteuropa-Institut, Regensburg)
    Abstract: While most transition countries suffered substantially from the world financial crisis of 2008 and still cope with its consequences, Uzbekistan has stayed almost untouched and shows constant economic growth since 2001. Neither macroeconomic foundations nor available institutional indicators provide an explanation for the sustained “Uzbek Growth Puzzle” (Zettelmeyer, 1999). This paper argues that social capital plays a major role in this puzzle. I examine how social capital has contributed to (1) the ease of transition, (2) the development of effective markets and (3) the development of an effective government. In view of the empirical results from other countries, I analyze the Uzbek case with the help of stylized facts for Uzbek social capital and the data derived from the AsiaBarometer surveys for 2003 and 2005.
    Date: 2011–12
  25. By: Ravallion, Martin
    Abstract: The challenges faced in calibrating poverty and welfare measures to objective data have long been recognized. Until recently, most economists have resisted a seemingly obvious solution, namely to ask people themselves:"Do you feel poor?"The paper studies the case for and against this approach. It is argued that, while one would not want to use self-assessments as welfare metrics in their own right, there is scope for using such data to help calibrate multidimensional measures. Indeed, the idea of a"social subjective poverty line"(below which people tend to think they are poor, but above which they do not) is arguably the most conceptually appealing way of defining poverty. However, the paper points to a number of concerns that have received insufficient attention, including the choice of covariates, survey design issues, measurement errors, frame-of-reference effects, and latent heterogeneity in personality traits and personal tradeoffs. Directions for future research are identified.
    Keywords: Rural Poverty Reduction,Economic Theory&Research,Services&Transfers to Poor,Crime and Society
    Date: 2012–02–01
  26. By: de Luna-Martinez, Jose; Vicente, Carlos Leonardo
    Abstract: Historically, development banks have been an important instrument of governments to promote economic growth by providing credit and a wide range of advisory and capacity building programs to households, small and medium enterprises, and even large private corporations, whose financial needs are not sufficiently served by private commercial banks or local capital markets. During the current financial crisis, most development banks in Latin America, followed by Asia, Africa, and Europe, have assumed a countercyclical role by scaling up their lending operations exactly when private banks experienced temporary difficulties in granting credit to the private sector. Despite the importance of development banks during crisis and non-crisis periods, little is known about them. This survey examines how development banks operate, what their policy mandates are, what financial services they offer, which type of clients they target, how they are regulated and supervised, what business models they have adopted, what governance framework they have, and what challenges they face. It also examines the countercyclical role played by development banks during the recent financial crisis. This survey is based on new data that have been collected from 90 national development banks in 61 countries.
    Keywords: Banks&Banking Reform,Access to Finance,Debt Markets,Bankruptcy and Resolution of Financial Distress,Emerging Markets
    Date: 2012–02–01
  27. By: Dobronogov, Anton; Farole, Thomas
    Abstract: Integration in the East African Community offers significant opportunities not only to expand trade among member states, but more importantly to scale up regional production to take advantage of much larger global market opportunities. Special economic zones are a potentially valuable instrument to facilitate the integration of regional value chains in support of this scaling up. They also have the potential to deliver powerful demonstration effects on the benefits of integration and to help entrench the integration process. This paper discusses the proposal for developing an"economic integration zone"in the East African Community. The benefits of such a zone could be substantial, as would be the practical challenges to implementation -- in particular the political economy challenges. However, a number of institutional and commercial solutions exist to address these challenges.
    Keywords: Debt Markets,Emerging Markets,Economic Theory&Research,Banks&Banking Reform,Public Sector Economics
    Date: 2012–02–01
  28. By: Carrere, Celine; Gourdon, Julien; Olarreaga, Marcelo
    Abstract: This paper builds on theoretical predictions that show that gains from regional integration are unevenly distributed between resource rich and poor countries. It explores the effects of different integration schemes in the Middle East and North Africa. The results suggest that within the Pan Arab Free Trade Agreement, there is significant trade creation for resource poor countries associated with regional integration, and no evidence of trade diversion. In resource rich countries, however, there is evidence of pure trade diversion in both resource-rich/labor-abundant countries and resource-rich/labor-importing countries. This underscores the idea that regional integration can help to spread the benefits of unevenly distributed resource wealth among the region's economies.
    Keywords: Free Trade,Trade Law,Trade Policy,Economic Theory&Research,Trade and Regional Integration
    Date: 2012–02–01
  29. By: Corno, Lucia; de Walque, Damien
    Abstract: Swaziland and Lesotho have the highest HIV prevalence in the world. They also share another distinct feature: during the last century, they sent a large numbers of migrant workers to South African mines. This paper examines whether participation in mining in a bordering country affects HIV infection rate. A job in the mines means leaving for long periods away from their families and living in an area with an active sex industry. This creates potential incentives for multiple, concurrent partnerships. Using Demographic and Health Surveys, the analysis shows that migrant miners ages 30-44 are 15 percentage points more likely to be HIV positive, and women whose partner is a migrant miner are 8 percentage points more likely to become infected. The study also shows that miners are less likely to abstain or use condoms, and female partners of miners are more likely to engage in extramarital sex. The authors interpret these results as suggesting that miners'migration into South Africa has increased the spread of HIV/AIDS in their countries of origin. Consistent with this interpretation, the association between HIV infection and being a miner or a miner's wife are not statistically significant in Zimbabwe, a country where the mining industry is local and does not involve migrating to South Africa.
    Keywords: Population Policies,HIV AIDS,Disease Control&Prevention,Gender and Health,Gender and Law
    Date: 2012–02–01
  30. By: Blattman, Christopher; Fiala, Nathan; Martinez, Sebastian
    Abstract: Can cash transfers promote employment and reduce poverty in rural Africa? Will lower youth unemployment and poverty reduce the risk of social instability? The authors experimentally evaluate one of Uganda's largest development programs, which provided thousands of young people nearly unconditional, unsupervised cash transfers to pay for vocational training, tools, and business start-up costs. Mid-term results after two years suggest four main findings. First, despite a lack of central monitoring and accountability, most youth invest the transfer in vocational skills and tools. Second, the economic impacts of the transfer are large: hours of non-household employment double and cash earnings increase by nearly 50 percent relative to the control group. The authors estimate the transfer yields a real annual return on capital of 35 percent on average. Third, the evidence suggests that poor access to credit is a major reason youth cannot start these vocations in the absence of aid. Much of the heterogeneity in impacts is unexplained, however, and is unrelated to conventional economic measures of ability, suggesting we have much to learn about the determinants of entrepreneurship. Finally, these economic gains result in modest improvements in social stability. Measures of social cohesion and community support improve mildly, by roughly 5 to 10 percent, especially among males, most likely because the youth becomes a net giver rather than a net taker in his kin and community network. Most strikingly, we see a 50 percent fall in interpersonal aggression and disputes among males, but a 50 percent increase among females. Neither change seems related to economic performance nor does social cohesion a puzzle to be explored in the next phase of the study. These results suggest that increasing access to credit and capital could stimulate employment growth in rural Africa. In particular, unconditional and unsupervised cash transfers may be a more effective and cost-efficient forming of large-scale aid than commonly believed. A second stage of data collection in 2012 will collect longitudinal economic impacts, additional data on political violence and behavior, and explore alternative theoretical mechanisms.
    Keywords: Debt Markets,Labor Policies,Economic Theory&Research,Primary Education,Educational Sciences
    Date: 2011–12–01
  31. By: Saha, U.R. (Tilburg University)
    Abstract: Child mortality remains an important issue in Bangladesh. This thesis consists of four empirical studies on child mortality using data on Health and Demographic Surveillance System (HDSS) in Matlab, Bangladesh. The first study investigates the inter-family observed and unobserved heterogeneity in child deaths and the causal effect of death of one child on survival chances of the next child. The second study investigates the relationships between birth spacing, child survival and fertility allowing for the simultaneous nature of these processes, and controlling for both observed and unobserved heterogeneity in the outcomes of interest. The third study investigates the causal role of contraceptive use on birth spacing allowing for simultaneous nature of these processes and controlling for both observed and unobserved heterogeneity in the outcomes of interest. The fourth study analyzes the underlying epidemiology of child deaths taking into account competing risks associated with both observed and unobserved heterogeneity. The studies distinguish the differences in child mortality dynamics in rural Bangladesh between two areas ICDDR,B and comparison with and without extensive health services.
    Date: 2012
  32. By: Glewwe, Paul; Park, Albert; Zhao, Meng
    Abstract: About 10% of primary school students in developing countries have poor vision, but very few of them wear glasses. Almost no research examines the impact of poor vision on school performance, and simple OLS estimates are likely to be biased because studying harder often adversely affect oneâs vision. This paper presents results from a randomized trial in Western China that offered free eyeglasses to 1,528 rural primary school students. The results indicate that wearing eyeglasses for one year increased average test scores of students with poor vision by 0.15 to 0.22 standard deviations, equivalent to the learning acquired from an additional 0.33-0.50 years of schooling, and that the benefits are greater for under-performing students. A simple cost-benefit analysis suggests very high economic returns to wearing eyeglasses, raising the question of why such investments are not made by most families. We find that girls are more likely to refuse free eyeglasses, and that lack of parental awareness of vision problems, mothersâ education, and economic factors (expenditures per capita and price) significantly affect whether children wear eyeglasses in the absence of the intervention.
    Keywords: Teaching/Communication/Extension/Profession,
    Date: 2012–01
  33. By: Jane Golley; Rod Tyers
    Abstract: The world's two population giants have undergone significant, and significantly different, demographic transitions since the 1950s. The demographic dividends associated with these transitions during the first three decades of this century are examined using a global economic model that incorporates full demographic behavior and measures of dependency that reflect the actual number of workers to non-workers, rather than the number of working aged to non-working aged. While much of China's demographic dividend now lies in the past, alternative assumptions about future trends in fertility and labor force participation rates are used to demonstrate that China will not necessarily enter a period of “demographic taxation” for at least another decade, if not longer. In contrast with China, much of India's potential demographic dividend lies in waiting for the decades ahead, with the extent and duration depending critically on a range of policy choices.
    JEL: C68 E27 F43 J11 O53
    Date: 2012–02
  34. By: Martine Mariotti
    Abstract: I exploit the sudden increase in employment in 1975, 1976 and 1977 in some former homelands by comparing the long term adult physical outcomes of children benefitting from the employment increase to those not subject to it. Using a standard difference in difference approach I find that there was some malnutrition in the homelands resulting in stunting in African men born during the shock providing support to the foetal origins hypothesis. The employment shock did not affect other long term outcomes such as education and general health, although there is some evidence of an improvement in long term health. This study provides previously unmeasured individual level information on the quality of life in the homelands during apartheid, an era when African living standards were neglected but unmeasured because of a lack of data collection.
    JEL: I31 N37
    Date: 2012–01
  35. By: Erik Alencar de Figueiredo
    Abstract: Following the suggestion of modern egalitarians, the model proposed by Alesina & Angeletos (2005) sets up a fairness rule based on composition of equality, designated by the weights of effort and luck. However, empirical evidence for a set of Latin American countries suggests that, unlike developed countries, these societies do not have a well-established view about the role of merit on economic outcome. Therefore, this paper proposes a theoretical framework based on a new fairness rule, namely the perception that the country does not offer everyone with the same opportunities. The new parameterization leads to a unique and stable equilibrium, characterized by an intermediate level of taxation between the equilibria of the "U.S." and of "Europe".
    Keywords: Redistribution,Fairness,Fairness
    JEL: D31 E62 H2
    Date: 2012
  36. By: Hyun Bang Shin
    Abstract: The rapid transformation of urban socio-spatial landscape in China has resulted in an increasing degree of frustration and discontent among local residents who face threats of demolition and eviction. This has given rise to sporadic protests by local residents who are often known as 'nail households', that is, persistent protesters who are fixed to the land and hold onto their dwellings in protest against unwilling eviction and demolition of their dwellings. The presence of these protesters provides an effective example of local residents' out cry in China. This paper is an attempt to critically re-visit the existing debates on local residents' property rights activism in urban redevelopment processes, and to discuss the extent to which it can be an effective strategy. The paper refers to the right-to-the-city debate to examine whose right counts in China's urban renewal contexts. It also makes use of empirical findings, both quantitative and qualitative, to examine how nail houses are received among local residents and migrants, and discusses the extent to which migrants can fit into local residents' struggle against the top-down imposition of neighbourhood transformation. The paper ultimately calls for the need to form a place-based alliance that enables urbanites including migrants to come together to launch an effective claim on their right to the city.
    Keywords: right to the city, property rights, urban renewal, nail houses, displacement, China
    JEL: I38 K42 O18 P26
    Date: 2011–12
  37. By: Bahar Bayraktar Saðlam (Department of Economics, Hacettepe University); Ý. Hakan Yetkiner (Department of Economics, Izmir University of Economics)
    Abstract: Mankiw Romer and Weil (1992) made the Solovian set up widely-used to test the determinants of economic growth and the speed of convergence. Subsequently, in almost all convergence studies, an exogenously growing technology is assumed and this component is treated as part of the constant term. In this study, we expand the Mankiw Romer and Weil (1992) set-up through a Solovianized Romer (1990) framework, which allows us to decompose the exogenously growing technological progress. Within this framework, the growth rate of technology depends on the characteristics of the R&D sector, including the share of labor devoted to R&D activities. We estimate the convergence equation derived from Solovianized Romer model for 31 OECD countries for the period 1980-2008 by applying the system GMM approach. The empirical findings of the model supports the conditional convergence hypothesis, but predicts a much lower convergence rate (0.01) than that predicted by the existing empirical growth literature (0.02). The model supports the positive and significant role of R&D on economic growth. Another contribution of the model is the elegant introduction of human capital to the convergence equation.
    Keywords: Convergence, Economic Growth, Exogenous Technological Change
    JEL: O30 O47 O50 C23
    Date: 2012–01
  38. By: Dang, Anh
    Abstract: I investigate the origins of social trust within Vietnam. Combining a unique contemporary survey of households with historic data on climate variation, I show that individuals who were heavily threatened by negative climate fluctuation exhibit more trust in neighbors and other people in close group. The evidence indicates that the effects of climate variation on social trust transmitted through strengthening the cooperation among village peasants in coping with risk and uncertainty. The results also indicate that households with higher proportion of agricultural incomes tend to rely more on village members in the case of emergency. However, the increased village relationship does not erode family ties.
    Keywords: Climate variation; social trust; Vietnam
    JEL: O13 Z13 Q54
    Date: 2011–11
  39. By: Simplice A, Asongu
    Abstract: The motivations of the Arab Spring that have marked the history of humanity over the last few months have left political economists, researchers, governments and international policymakers pondering over how the quality of political institutions affect consumer welfare in terms of commodity prices. This paper investigates the effect of political establishments on consumer prices in the African continent. Findings suggest that in comparison with authoritarian regimes, democracies better provide for institutions that keep inflationary pressures on commodity prices in check. As a policy implication, improving the quality of democratic institutions will ameliorate consumer welfare through lower inflation rates. Such government quality institutional determinants include, among others: voice and accountability, rule of law, regulation quality, control of corruption and press freedom.
    Keywords: Consumer prices; Political institutions; Welfare; Africa
    JEL: O1 I30 Q00 P00 P50
    Date: 2012–01–25
  40. By: Simplice A, Asongu
    Abstract: This paper assesses the effectiveness of foreign aid in improving government institutions in 52 African countries using updated data(1996-2010). Findings suggest development assistance deteriorates government quality dynamics of corruption-control, political-stability, rule of law, regulation quality, voice and accountability and government effectiveness. It is therefore a momentous epoque to solve the second tragedy of foreign aid; high time economists and policy makers start rethinking the models and theories on which foreign aid is based. In the meantime, it is up to people who really care about the poor to hold aid agencies accountable for results.
    Keywords: Foreign Aid; Political Economy; Development; Africa
    JEL: F35 F50 O55 O10 B20
    Date: 2012–02–09
  41. By: Nguyen Viet, Cuong
    Abstract: Although there are numerous studies on impact evaluation of overall health insurance, little is known on the impact of health insurance on health care utilization and out-of-pocket health care spending of children, especially in developing countries. This paper measures the impact of child health insurance on health care utilization and spending of children from 6 to 14 years old in Vietnam using two recent nationally representative surveys. Unlike previous empirical studies which found a positive effect of health insurance on health care utilization in Vietnam, we did not find a statistically significant effect of school health insurance as well as free health insurance for children on outpatient health care contacts. However, the school health insurance and free health insurance help the insured children decrease out-of-pocket spending per outpatient contact by around 14 and 26 percent, respectively.
    Keywords: Child health insurance; impact evaluation; health care utilization; out-of-pocket spending; Vietnam
    JEL: G22 H51 H43 I10
    Date: 2011–06–21
  42. By: Islam, Asif
    Abstract: Economic theory predicts that a rise in police presence will reduce criminal activity. However several studies in the literature have found mixed results. This study adds to the literature by exploring the relationship between the size of police and crime against firms, an important issue especially for developing economies. Using data for about 12,000 firms in 27 developing countries we find that increasing the police force has a negative effect on crime against firms. We also find that several macro-economic factors can weaken or strengthen this negative effect. The results are robust to various sensitivity checks.
    Keywords: Crime; Firms; Development; Police Size
    JEL: O10 K42 O50
    Date: 2011–12–15
  43. By: Simplice A, Asongu
    Abstract: Purpose – The purpose of this paper is to assess the aid-development nexus in 52 African countries using updated data(1996-2010) and a new indicator of human development(adjusted for inequality). Design/methodology/approach – The estimation technique used is a Two-Stage-Least Squares Instrumental Variable approach. Instruments include: income-levels, legal-origins and religious-dominations. The first-step consists of justifying the choice of the estimation technique with a Hausman-test for endogeneity. In the second-step, we verify that the instrumental variables are exogenous to the endogenous components of explaining variables(aid dynamic channels) conditional on other covariates(control variables). In the third-step, the strength and validity of the instruments are examined with the Cragg-Donald and Sargan overidentifying restrictions tests respectively. Robustness checks are ensured by: (1) the use of alternative aid indicators; (2) estimation under restricted and unrestricted hypotheses ; and (3) adoption of two interchangeable sets of instruments. Findings – The findings broadly indicate that development assistance is detrimental to GDP growth, GDP per capita growth and inequality adjusted human development. Given concerns on the achievement of the MDGs, the relevance of these results point to the deficiency of foreign aid as a sustainable cure to poverty in Africa. Social implications – It is a momentous epoque to solve the second tragedy of foreign aid; it is high time economists and policy makers start rethinking the models and theories on which foreign aid is based. In the meantime, it is up to people who care about the poor to hold aid agencies accountable for piecemeal results. Originality/value – These findings are based on data collected after pioneering works on the aid-development nexus. Usage of the inequality adjusted human development index first published in 2010, corrects past works of the bunch of criticisms inherent in the first index.
    Keywords: Foreign Aid; Political Economy; Development; Africa
    JEL: F35 F50 O55 O10 B20
    Date: 2012–02–09
  44. By: Islam, Asif
    Abstract: The literature has typically found a positive relationship between crime rates and female headed households. Female headed households tend to indicate instability and vulnerability, and thus a positive relationship may not be surprising. This study explores the relationship between female owned firms and losses due to crime experienced by firms using data for about 12,000 firms in 27 developing countries. Although we do find a similar positive relationship between female owned firms and losses due to crime, the results may suggest that the reason may be a gender bias in the incidence of crime. We find similar results for female owned and managed firms and losses due to crime. We also find that several macro-economic factors can weaken or strengthen the relationship between crime and female ownership and management. The results are robust to various sensitivity checks.
    Keywords: Crime; Firms; Gender; Development
    JEL: O10 K42 O50 J16
    Date: 2012–01–26
  45. By: Yin-Wong Cheung; Michael P. Dooley; Vladyslav Sushko
    Abstract: This paper revisits the association between investment and growth. The empirical findings highlight substantial heterogeneity for the effect of investment on growth and suggest a possible negative association. Results based on a battery of cross-sectional and time-series regressions show that the link between investment and growth has weakened over time and that investment in high-income countries is more likely to have a negative effect on growth. The adverse effect for high-income countries appears to have increased over time. An implication is that uphill capital flows could be associated with negative or zero returns. The result is robust to the presence of control variables that are commonly included in growth studies.
    JEL: F43 O4 O57
    Date: 2012–01
  46. By: Jeremy D. Foltz; Ursula T. Aldana; Paul Laris
    Abstract: Since independence a quiet revolution has taken place in maize production in the Sahel with Mali increasing production more than ten-fold and yields going up ~2% a year. This research work uses farm level panel data from southern Mali's maize growing regions to demonstrate this success in agricultural production and technological change. We analyze the determinants of production to unpack increases in input use from technological change. The estimations show that farmer adoption of increased fertilizer use has driven much of the productivity growth rather than the adoption of improvements in seeds and management. Additionally, we find strong evidence of observed and unobserved heterogeneity, which affects both the choice of fertilizer amounts and the marginal returns to fertilizer use. The results demonstrate the key changes behind this silent maize revolution and point to the importance of taking into account farmer heterogeneity in estimating productivity and returns to fertilizer.
    JEL: O13 O33 Q12 Q16
    Date: 2012–02

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