nep-dev New Economics Papers
on Development
Issue of 2012‒07‒01
seventeen papers chosen by
Mark Lee
Towson University

  1. Social capital, government expenditures, and growth By Giacomo Ponzetto; Ugo Troiano
  2. International Coordination and the Effectiveness of Aid By Bigsten, Arne; Tengstam, Sven
  3. Social Capital, Network Effects and Savings in Rural Vietnam By Newman, Carol; Tarp, Finn; Van Den Broeck, Katleen
  4. Risk experiments in gains and losses: A case study for Benin By Gheyssens, Jonathan; Gunther, Isabel
  5. Mapping the Impacts of Food Aid: Current Knowledge and Future Directions By Margolies, Amy; Hoddinott, John
  6. Consequences of Aid Volatility for Macroeconomic Management and Aid Effectiveness By Hudson, John
  7. Aid and Growth Accelerations: Vulnerability Matters By Guillaumont, Patrick; Wagner, Laurent
  8. On the Impact of External Debt and Aid on Public Expenditure Allocation in Sub-Saharan Africa after the Launch of the HIPC Initiative By Quattri, Maria; Fosu, Augustin Kwasi
  9. The Effects of Rural Land Right Security on Labour Structural Transformation and Urbanization: Evidence from Thailand By , Thanyaporn
  10. Donor Assistance and Political Reform in Tanzania By , Aili Mari
  11. Ordinal Welfare Comparisons with Multiple Discrete Indicators:A First Order Dominance Approach and Application to Child Poverty By Arndt, Channing; Distante, Roberta; Hussain, M. Azhar; Osterdal, Lars Peter; Huong, Pham Lan
  12. Beyond Electoral Democracy: Foreign Aid and the Challenge of Deepening Democracy in Benin By Gazibo, Mamoudou
  13. Ghana: The Limits of External Democracy Assistance By Gyimah-Boadi, E.; Yakah, Theo
  14. The Role of Income and Immigration Policies in Attracting International Migrants By Ortega, Francesc; Peri, Giovanni
  15. Unemployment Insurance, Job Search and Informal Employment By Margolis, David Naum; Navarro, Lucas; Robalino, David A.
  16. Does It Pay to Be a Cadre? Estimating the Returns to Being a Local Official in Rural China By Zhang, Jian; Giles, John T.; Rozelle, Scott
  17. Finding Eldorado: Slavery and Long-run Development in Colombia By Daron Acemoglu; Camilo García-Jimeno; James A. Robinson

  1. By: Giacomo Ponzetto; Ugo Troiano
    Abstract: Countries with greater social capital have higher economic growth. We show that social capital is also highly positively correlated across countries with government expenditure on education. We develop an infinite-horizon model of public spending and endogenous stochastic growth that explains both facts through frictions in political agency when voters have imperfect information. In our model, the government provides services that yield immediate utility, and investment that raises future productivity. Voters are more likely to observe public services, so politicians have electoral incentives to underprovide public investment. Social capital increases voters' awareness of all government activity. As a consequence, both politicians' incentives and their selection improve. In the dynamic equilibrium, both the amount and the efficiency of public investment increase, permanently raising the growth rate.
    Keywords: Social Capital, Government Expenditures, Economic Growth, Public Investment, Elections, Imperfect Information
    JEL: D72 D83 H50 H54 O43 Z13
    Date: 2012–02
  2. By: Bigsten, Arne; Tengstam, Sven
    Abstract: This paper discusses and seeks to quantify the effects of improved donor coordination on aid effectiveness. Empirical estimates are first provided of the reductions in transaction costs that can be achieved by better donor coordination via concentration t
    Keywords: donor coordination, Paris Agenda, aid efficiency
    Date: 2012
  3. By: Newman, Carol; Tarp, Finn; Van Den Broeck, Katleen
    Abstract: Information failures are a major barrier to formal financial saving in low income countries. Households in rural communities often lack the information necessary to set up formal deposit accounts or are uncertain about the returns to saving formally. In t
    Keywords: household savings, social capital, information failure, women.s unions, Vietnam
    Date: 2012
  4. By: Gheyssens, Jonathan; Gunther, Isabel
    Abstract: The aim of this paper is to expand our knowledge on risk aversion among the poor by conducting experiments that do not only test risk aversion in small and large stakes but also in risky gains and risky losses. To our knowledge, this is the first attempt
    Keywords: risk aversion; loss aversion; religion
    Date: 2012
  5. By: Margolies, Amy; Hoddinott, John
    Abstract: This paper provides an overview on the impacts of food aid. We consider its effects on consumption, nutrition, food markets and labour supply, as well as the extent to which it exacerbates or mitigates conflict. We also consider the comparative evidence o
    Keywords: food aid, humanitarian assistance, social protection, disincentives, conflict
    Date: 2012
  6. By: Hudson, John
    Abstract: This paper reviews both the literature on aid volatility and also adds to that literature. In general, the focus of this literature has been on the volatility of overall aid, while we focus more on the volatility of the individual aid sectors, e.g., educa
    Keywords: aid volatility, sector aid, school completion rates, internet users
    Date: 2012
  7. By: Guillaumont, Patrick; Wagner, Laurent
    Abstract: This paper confronts three conundrums. First, does the relationship between aid and growth fade over time when aid is successful? Second, why are aid inflows neglected in the literature on growth acceleration (or episodes). Third, why is country vulnerabi
    Keywords: official development assistance, growth acceleration, economic vulnerability, probit estimations
    Date: 2012
  8. By: Quattri, Maria; Fosu, Augustin Kwasi
    Abstract: In the wake of the current financial and economic crises, the economies of sub-Saharan Africa find themselves squeezed between likely reductions in official development assistance and the pressing challenge to eradicate poverty. Public expenditure allocat
    Keywords: SSA, HIPC, public expenditure allocation, external debt and aid
    Date: 2012
  9. By: , Thanyaporn
    Abstract: This paper attempts to contribute to the understanding of the impacts of secure rural agricultural land rights on labour structural transformation from agriculture to non-agriculture as well as on urbanization, with a specific focus on Thailand. Using pro
    Keywords: land right security, labour structural transformation, urbanization
    Date: 2012
  10. By: , Aili Mari
    Abstract: Tanzania has been a relative success story in Africa in terms of political reform. While foreign aid has helped strengthen institutions that advance accountability, it simultaneously supports a status quo that undermines accountability and democratization
    Keywords: Tanzania, democratization, accountability, foreign aid, decentralization, public goods
    Date: 2012
  11. By: Arndt, Channing; Distante, Roberta; Hussain, M. Azhar; Osterdal, Lars Peter; Huong, Pham Lan
    Abstract: We develop an approach for making welfare comparisons between populations with multidimensional discrete well-being indicators observed at the micro level. The approach is rooted in the concept of multidimensional first order dominance. It assumes that, f
    Keywords: ordinal; welfare; multi-dimensional poverty measurement; first order dominance; Mozambique; Vietnam
    Date: 2012
  12. By: Gazibo, Mamoudou
    Abstract: In the 1990s, analysts were almost unanimous in considering Benin to be one of the most important aid recipients among the newly democratizing African countries. After more than two decades of democratic practice, the country has clearly completed the pha
    Keywords: Benin, foreign aid, democratic consolidation, accountability, corruption, elections
    Date: 2012
  13. By: Gyimah-Boadi, E.; Yakah, Theo
    Abstract: Ghana?s experience since the early 1990s indicates that external aid can significantly impact a country?s democratic transition. External democracy assistance has been a crucial, positive factor in Ghana?s steady evolution into an electoral democracy over
    Keywords: Ghana, electoral democracy, foreign aid
    Date: 2012
  14. By: Ortega, Francesc (Queens College, CUNY); Peri, Giovanni (University of California, Davis)
    Abstract: This paper makes two contributions to the literature on the determinants of international migration flows. First, we compile a new dataset on annual bilateral migration flows covering 15 OECD destination countries and 120 sending countries for the period 1980-2006. We also collect data on time-varying immigration policies that regulate the entry of immigrants for our destination countries over this period. Second, we extend the empirical model of migration choice across multiple destinations developed by Grogger and Hanson (2011) by allowing for unobserved individual heterogeneity between migrants and non-migrants. Our estimates show that international migration flows are highly responsive to income per capita at destination. This elasticity is twice as high for within-EU migration, reflecting the higher degree of labor mobility within the European Union. We also find that tightening of laws regulating immigrant entry reduce rapidly and significantly their flow.
    Keywords: international migration, labor movements, immigration policies
    JEL: F22 E25 J61
    Date: 2012–06
  15. By: Margolis, David Naum (World Bank); Navarro, Lucas (Universidad Alberto Hurtado); Robalino, David A. (World Bank)
    Abstract: This paper analyses the potential impacts of introducing unemployment insurance (UI) in middle income countries using the case of Malaysia, which today does not have such a system. The analysis is based on a job search model with unemployment and three employment sectors: formal and informal wage employment, and self employment. The parameters of the model are estimated to replicate the structure of the labor market in Malaysia in 2009 and the distribution of earnings for informal, formal and self employed workers. The results suggest that unemployment insurance would have only a modest negative effect on unemployment if benefits are not overly generous. The main effect would be a reallocation of labor from wage into self employment while increasing average wages in the formal and informal sectors.
    Keywords: unemployment insurance, informal sector, self employment, job search
    JEL: J64 J65 O17 J23 J31 J21 J62
    Date: 2012–06
  16. By: Zhang, Jian (Central University of Finance and Economics); Giles, John T. (World Bank); Rozelle, Scott (Stanford University)
    Abstract: Recruiting and retaining leaders and public servants at the grass-roots level in developing countries creates a potential tension between providing sufficient returns to attract talent and limiting the scope for excessive rent-seeking behavior. In China, researchers have frequently argued that village cadres, who are the lowest level of administrators in rural areas, exploit personal political status for economic gain. Much existing research, however, compares the earnings of cadre and non-cadre households in rural China without controlling for unobserved dimensions of ability that are also correlated with success as entrepreneurs or in non-agricultural activities. The findings of this paper suggest a measurable return to cadre status, but the magnitudes are not large and provide only a modest incentive to participate in village-level government. The paper does not find evidence that households of village cadres earn significant rents from having a family member who is a cadre. Given the increasing returns to non-agricultural employment since China‘s economic reforms began, it is not surprising that the returns to working as a village cadre have also increased over time. Returns to cadre-status are derived both from direct compensation and subsidies for cadres and indirectly through returns earned in off-farm employment from businesses and economic activities managed by villages.
    Keywords: returns to political status, public sector labor markets, village political economy, rural China
    JEL: O16 O17 J45 P25 P26
    Date: 2012–06
  17. By: Daron Acemoglu; Camilo García-Jimeno; James A. Robinson
    Abstract: Slavery has been a major institution of labor coercion throughout history. Colonial societies used slavery intensively across the Americas, and slavery remained prevalent in most countries after independence from the European powers. We investigate the impact of slavery on long-run development in Colombia. Our identification strategy compares municipalities that had gold mines during the 17th and 18th centuries to neighboring municipalities without gold mines. Gold mining was a major source of demand for slave labor during colonial times, and all colonial gold mines are now depleted. We find that the historical presence of slavery is associated with increased poverty and reduced school enrollment, vaccination coverage and public good provision. We also find that slavery is associated with higher contemporary land inequality.
    JEL: H41 N96 O10 O54
    Date: 2012–06

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