nep-dev New Economics Papers
on Development
Issue of 2012‒07‒29
ten papers chosen by
Mark Lee
Towson University

  1. Who Benefits from Customary Justice? Rent-seeking, Bribery and Criminality in Sub-Saharan Africa By Olivier STERCK; Olivia D’AOUST
  2. Poverty & Privilege: Primary School Inequality in South Africa By Nicholas Spaull
  3. Can Mistargeting Destroy Social Capital and Stimulate Crime? Evidence from a Cash Transfer Program in Indonesia By Cameron, Lisa A.; Shah, Manisha
  4. Is There an Informal Employment Wage Premium? Evidence from Tajikistan By Arabsheibani, Reza; Staneva, Anita V.
  5. Evaluating the impact of a targeted land distribution program: Evidence from Vietnam By Dwayne Benjamin; Loren Brandt; Brian McCaig; Nguyen Le Hoa
  6. Why Highly Educated Women Face Potential Poverty: A Case Study in Dhaka, Bangladesh By Syeda Umme Jakera Malik
  7. Soft skills or hard cash ? the impact of training and wage subsidy programs on female youth employment in Jordan By Groh, Matthew; Krishnan, Nandini; McKenzie, David; Vishwanath, Tara
  8. Rainfall variability, occupational choice, and welfare in rural Bangladesh By Bandyopadhyay, Sushenjit; Skoufias, Emmanuel
  9. Does the minimum wage affect employment ? evidence from the manufacturing sector in Indonesia By Del Carpio, Ximena; Nguyen, Ha; Wang, Liang Choon
  10. Foreign Aid, External Debt and Governance By Qayyum, Unbreen; Musleh ud, Din; Haider, Adnan

  1. By: Olivier STERCK (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Olivia D’AOUST (UNIVERSITE LIBRE DE BRUXELLES, ECARES)
    Abstract: In many Sub-Saharan countries, customary and statutory judicial systems co-exist. Customary justice is exercised by clan leaders or local courts, and based on restorative principles. By contrast, statutory justice is mostly retributive and administered by magistrates’ courts. As the jurisdiction of the customary and the statutory systems often overlap, victims can choose which judicial system to refer to, which may lead to contradictions between rules and inconsistencies in judgments. In this essay, we construct a model representing a dual judicial system. We show that the overlap of competence encourages rent-seeking and bribery, and yields to high rates of petty crimes and civil disputes. We recommend the subsidization of the statutory judicial system, as it efficiently improves deterrence and incapacitation in the dual judicial system while minimizing corruption of customary judges. We illustrate our theoretical predictions by discussing the functioning of the Ugandan dual judicial system.
    Keywords: Custom, Justice, Criminal Behavior, Informal Institutions
    JEL: K40 O17 D70
    Date: 2012–07–06
  2. By: Nicholas Spaull (Department of Economics, University of Stellenbosch)
    Abstract: Although racial segregation has been abolished for 18 years now, schools which served predominantly White students under apartheid remain functional, while those which served Black students remain dysfunctional and unable to impart the necessary numeracy and literacy skills students should be acquiring by this level. The present study provides an overview of this dualistic nature of the primary education system in South Africa, with special attention paid to the bimodality of student performance. It argues that there are in fact two different education systems in South Africa and thus two different data-generating processes. These two sub-systems can be seen when splitting student performance by former-department, language, or socioeconomic status. The implications of such a dualistic schooling system are also elucidated, with special emphasis on government reporting and econometric modeling. The recently released SACMEQ III dataset is used for the econometric modeling. The study finds that when modeling student performance separately for the wealthiest 25% of schools on the one hand, and the poorest 75% of schools on the other, there are stark differences in the factors influencing student performance which are large and statistically significant. Only 5 of the 27 factors are shared between the two models for mathematics, and 11 of the 29 factors for reading. This suggests a bifurcated system where the process which converts inputs into outputs is fundamentally different for each sub-system. Ultimately the paper has two logical conclusions: 1) Observing averages in South African education is uniquely misleading and overestimates the educational achievement of the majority of students, and 2) Modeling a single schooling system when there are in fact two school systems can lead to spurious results and misleading policy conclusions.
    Keywords: Primary schooling; South Africa; SACMEQ; educational inequality, student performance
    JEL: I20 I21 I28
    Date: 2012
  3. By: Cameron, Lisa A. (Monash University); Shah, Manisha (University of California, Irvine)
    Abstract: Cash transfer programs can provide important financial support for poor households in developing countries and are becoming increasingly common. However the potential for mistargeting of program funds is high. This paper focuses on the social consequences arising from misallocation of resources in close knit communities. We find that the mistargeting of a cash transfer program in Indonesia is significantly associated with increases in crime and declines in social capital within communities. Hence poorly administered transfer programs have a potentially large negative downside that extends beyond the pure financial costs that have been the focus of the literature to date.
    Keywords: cash transfer programs, crime, mistargeting, social capital
    JEL: O12 O15 I38
    Date: 2012–07
  4. By: Arabsheibani, Reza (Swansea University); Staneva, Anita V. (Swansea University)
    Abstract: This paper defines informal sector employment and decomposes the difference in earnings distributions between formal and informal sector employees in Tajikistan for 2007. Using the quantile regression decomposition technique proposed by Machado and Mata (2005), we find a significant informal employment wage premium across the whole earnings distribution. This contrast with earlier studies and casts doubt on the recent literature showing that the informal sector is poorly rewarded. It seems to be the case that the informal employment in Tajikistan is the main source of income.
    Keywords: formal/informal employment, quantile regression decomposition
    JEL: C14 J21 J30
    Date: 2012–07
  5. By: Dwayne Benjamin; Loren Brandt; Brian McCaig; Nguyen Le Hoa
    Abstract: In this paper we estimate the impact of a land reform program in the Central Highlands of Vietnam. In 2002, Program 132 directed the transfer of farm land to ethnic minority households that had less than one hectare of land. Using the 2002 Vietnam Living Standards Survey as a baseline, in 2007 we resurveyed over one thousand households to provide a retrospective evaluation of the impact of their participation in Program 132. We supplemented the household-level panel with commune and district-level surveys as well as local interviews in order to better understand the details of program implementation. Contrary to official reports that the program was implemented as intended, our findings show that there was considerable deviation from the planned program parameters: Many eligible households did not receive land, while ineligible households often did. We estimate that beneficiaries of the program in the province of Kontum experienced increases of household income largely in line with what one would expect from a small plot of poor farm land. Outside Kontum, where participation rates were substantially lower, household incomes did not improve with program participation, though this could be explained by lags in the maturation of perennial crops. Overall, our results underscore the limitations of simple transfers of land as a mechanism for improving the living standards of ethnic minorities. Our results also show the significant gap that can exist between simple program design and decentralized implementation, the potential implications of which we discuss for program evaluation.
    Keywords: Land Reform; Vietnam; Ethnic Minorities; Program Evaluation
    JEL: Q15 I3 O12 O13
    Date: 2012–07–16
  6. By: Syeda Umme Jakera Malik (Social Work Department, Asian University of Bangladesh (AUB))
    Abstract: Although highly educated women in Bangladesh expect to achieve gender equality, compared to highly educated men, they experience poverty in disproportionate scales. Various educational and motivational programs have been successfully working in Bangladesh. Subsequently, women have broken out the common social problems like illiteracy, early marriage, etc. For example, Bangladesh has already achieved gender parity in education levels. Many women are getting proper family support, achieve higher education, and gain more respect in family life. However, a huge number of highly educated women are not in positions that would allow them to use their education as a capital to fulfill their basic needs, and subsequently, they are leading a life which is at risk of being poor. Professional identity is not only a source of income but also a way of social interaction and social security. This paper aims to explore women’s potential poverty despite being highly educated. Potential poverty is defined as the risk of being poor.
    Keywords: women, highly educated, gender, professional idenity, potential poverty, Dhaka, Bangladesh
    Date: 2012–07
  7. By: Groh, Matthew; Krishnan, Nandini; McKenzie, David; Vishwanath, Tara
    Abstract: Throughout the Middle East, unemployment rates of educated youth have been persistently high and female labor force participation, low. This paper studies the impact of a randomized experiment in Jordan designed to assist female community college graduates find employment. One randomly chosen group of graduates was given a voucher that would pay an employer a subsidy equivalent to the minimum wage for up to 6 months if they hired the graduate; a second group was invited to attend 45 hours of employability skills training designed to provide them with the soft skills employers say graduates often lack; a third group was offered both interventions; and the fourth group forms the control group. The analysis finds that the job voucher led to a 40 percentage point increase in employment in the short-run, but that most of this employment is not formal, and that the average effect is much smaller and no longer statistically significant 4 months after the voucher period has ended. The voucher does appear to have persistent impacts outside the capital, where it almost doubles the employment rate of graduates, but this appears likely to largely reflect displacement effects. Soft-skills training has no average impact on employment, although again there is a weakly significant impact outside the capital. The authors elicit the expectations of academics and development professionals to demonstrate that these findings are novel and unexpected. The results suggest that wage subsidies can help increase employment in the short term, but are not a panacea for the problems of high urban female youth unemployment.
    Keywords: Tertiary Education,Labor Markets,Labor Policies,Primary Education,Access to Finance
    Date: 2012–07–01
  8. By: Bandyopadhyay, Sushenjit; Skoufias, Emmanuel
    Abstract: This study investigates the choice of occupational focus versus diversification between household members in rural Bangladesh as an autonomous and proactive adaptation strategy against ex ante local rainfall variability risks. The analysis combines nationally representative household level survey data with historical climate variability information at the Upazila level. The authors note that flood prone Upazilas may face reduced risks from local rainfall variability as compared with non-flood prone Upazilas. They find that two members of the same household are less likely to be self-employed in agriculture if they live in an area with high local rainfall variability. However, the occupational diversification strategy comes at a cost to households in terms of consumption welfare. The paper considers the effects of three policy actions, providing access to credit, safety net, and market. Access to market appears to be more effective in reducing the likelihood of costly within-household occupational diversification as an ex ante climate risk-reducing strategy as compared with access to credit and safety net.
    Keywords: Science of Climate Change,Hazard Risk Management,Climate Change Mitigation and Green House Gases,Housing&Human Habitats,Water Conservation
    Date: 2012–07–01
  9. By: Del Carpio, Ximena; Nguyen, Ha; Wang, Liang Choon
    Abstract: Using survey data from the Indonesian manufacturing industry, this paper investigates the impact of minimum wage on employment and wages offered by Indonesian manufacturing firms from 1993 to 2006. It shows that the estimated effects of minimum wage on employment are positive within a province (i.e., with province fixed effects), but negative within a firm (i.e., with firm fixed effects), indicating the importance of using firm panel data to reduce the endogeneity bias in estimates. It finds significant heterogeneous effects of minimum-wage changes on employment. The employment effects of minimum wages are significant and negative among small firms and less educated workers, but not among large firms and workers with high school education and above. The negative employment impact is more severe for non-production workers than for production workers. The analysis also shows that the minimum wage disproportionally affects women: most of the non-production job losses are experienced by female workers. Lastly, the paper finds that the minimum wage is more correlated with the average wage of small firms than that of large firms, suggesting that minimum wages are more binding in small firms.
    Keywords: Labor Markets,Labor Policies,Microfinance,Corporate Social Responsibility,Tertiary Education
    Date: 2012–07–01
  10. By: Qayyum, Unbreen; Musleh ud, Din; Haider, Adnan
    Abstract: This paper presents a theoretical model for governance. Specifically, the Ramsey-Cass-Koopman's growth model has been extended by incorporating governance in an open economy framework. Steady-state and short run analysis show that external debt and foreign aid do not affect the growth rate of consumption but have level impact on consumption. Foreign aid and governance encourage the economic growth but external debt creates a burden on the economy. Both Investment and saving are independent of external debt and thus the current account surplus. Foreign aid does not affect investment directly but it has a direct positive impact on the savings in the economy. Therefore, it is argued that improvements in the quality of governance will stimulate the output and consumption rapidly and it acts like a catalyst.
    Keywords: External Debt; Foreign Aid; Governance; Ramsey-Cass-Koopman Model
    JEL: E02 F35 F34 F43 E20
    Date: 2012–07–25

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