nep-dev New Economics Papers
on Development
Issue of 2012‒12‒15
sixteen papers chosen by
Mark Lee
Towson University

  1. An overview of Chinese agricultural and rural engagement in Tanzania: By Bräutigam, Deborah; Tang, Xiaoyang
  2. Branding and agricultural value chains in developing countries: insights from Bihar, India: By Minten, Bart; Singh, K. M.; Sutradhar, Rajib
  3. China's Economic Growth, Structural Change and the Lewisian Turning Point By Fukao, Kyoji; Yuan, Tang jun
  4. Colonialism and Economic Development in Africa By Leander Heldring; James A. Robinson
  5. Cooperation makes beliefs: Weather variation and sources of social trust in Vietnam By Anh Duc Dang
  6. Costly posturing: relative status, ceremonies and early child development in China: By Chen, Xi; Zhang, Xiaobo
  7. Experience Matters: Human Capital and Development Accounting By David Lagakos; Benjamin Moll; Tommaso Porzio; Nancy Qian
  8. Gender assessment of the agricultural sector in the Democratic Republic of the Congo: By Ragasa, Catherine; Kinwa-Muzinga, Annie; Ulimwengu, John M.
  9. Gender Inequality and the Sex Ratio in Three Emerging Economies By Prabir C. Bhattacharya
  10. Labor-tying and poverty in a rural economy:evidence from bangladesh By Selim Gulesci
  11. Non-Monotonicity of Fertility in Human Capital Accumulation and Economic Growth By Spyridon Boikos; Alberto Bucci; Thanasis Stengos
  12. Nonlinear dynamics of livestock assets: Evidence from Ethiopia By Van Campenhout, Bjorn; Dercon, Stefan
  13. Signaling Credit-Worthiness: Land Titles, Banking Practices and Formal Credit in Indonesia By Paul Castãneda Dower; Elizabeth Potamites
  14. Tackling the largest global education challenge? Secular and religious education in northern Nigeria. By Manos Antoninis
  15. The road to specialization in agricultural production:: Evidence from rural China By Qin, Yu; Zhang, Xiaobo
  16. Wage growth through job hopping in China By Kenn Ariga; Fumio Ohtake; Masaru Sasaki; Zheren Wu

  1. By: Bräutigam, Deborah; Tang, Xiaoyang
    Abstract: The recent expansion of Chinese economic engagement in Africa is often poorly documented and not well understood. This paper is the second in an IFPRI-sponsored effort to better understand Chinese engagement in Africa’s agricultural sector. A clearer picture of Chinese activities in agriculture is important as a foundation for Africans and their development partners to more fruitfully engage with an increasingly important actor. Chinese engagement in agriculture and rural development in Tanzania is long-standing. Changes in this engagement reflect the changes in China’s engagement in Africa more generally. This overview paper explores China’s engagement in historical perspective, focusing on foreign aid, other official engagement, and investment by Chinese firms between 1964 and 2011.
    Keywords: agricultural sector, Agricultural development, Rural development, research and development, Agribusiness, Agriculture, Foreign aid, Foreign investment,
    Date: 2012
  2. By: Minten, Bart; Singh, K. M.; Sutradhar, Rajib
    Abstract: Local brands are rapidly gaining agricultural market share in developing countries. However, it is not well understood how they reshape agricultural value chains and what the implications are for consumers and producers. In a detailed case study of the value chain of makhana in Bihar, we see the fast emergence —a doubling over five years—of more expensive packed and branded products. The effect on consumers is ambiguous. While the emergence of brands leads to increasing differentiation in retail markets, the brands in these settings provide mostly incomplete or misleading information for the consumer, and the quality of products contained in branded bags is often lower than for loose products. We also find that farmers realize few direct benefits from the presence of these brands.
    Keywords: value chain, Branding, Consumer behavior., Consumer preferences,
    Date: 2012
  3. By: Fukao, Kyoji; Yuan, Tang jun
    Abstract: In a country such as China, which maintains strict controls on foreign exchange and frequently intervenes in the currency market, it is not surprising that the local currency is persistently undervalued in nominal terms. Normally, one would expect such a policy of deliberate currency undervaluation to result in a sharp rise in domestic prices, with abnormally low prices reversed not through an appreciation of the nominal exchange rate but through a rise in domestic prices. Why is this not occurring in China? A possible explanation is that, due to certain structural reasons, the equilibrium real exchange rate for China is considerably lower than that of other developing countries. Taking this hypothesis as our point of departure, we examine how undervalued the Chinese yuan is in terms of purchasing power parity by comparing China’s experience with other developing countries and the development process of developed countries in the past. In addition, we construct an open economy growth model with three sectors, where - similar to the Lewis growth model - there is surplus labor in the primary sector. Using this model, we analyze the relationship between the economic growth process and the level of absolute prices (real exchange rate). We show that the absolute price level will not increase until the economy reaches the Lewisian turning point. In addition, we show that in an economy like China, where there are strong barriers to the migration of labor to the manufacturing sector and where the ratio of net exports of goods and services to GDP is high, the economy will not reach the turning point until GDP per worker reaches a certain level.
    Keywords: China, Lewisian turning point, Labor market, Purchasing power parity, Equilibrium exchange rate
    JEL: O11 O14 O41 O53 J20 J30 J43 J61 F31 F41 F42 F43
    Date: 2012–11
  4. By: Leander Heldring; James A. Robinson
    Abstract: In this paper we evaluate the impact of colonialism on development in Sub-Saharan Africa. In the world context, colonialism had very heterogeneous effects, operating through many mechanisms, sometimes encouraging development sometimes retarding it. In the African case, however, this heterogeneity is muted, making an assessment of the average effect more interesting. We emphasize that to draw conclusions it is necessary not just to know what actually happened to development during the colonial period, but also to take a view on what might have happened without colonialism and also to take into account the legacy of colonialism. We argue that in the light of plausible counter-factuals, colonialism probably had a uniformly negative effect on development in Africa. To develop this claim we distinguish between three sorts of colonies: (1) those which coincided with a pre-colonial centralized state, (2) those of white settlement, (3) the rest. Each have distinct performance within the colonial period, different counter-factuals and varied legacies.
    JEL: N37 N47 O55
    Date: 2012–11
  5. By: Anh Duc Dang
    Abstract: In this paper, I investigate the origins of social trust within Vietnam. By combining a unique contemporary survey of households with historical data on weather variation, I show that individuals who are heavily threatened by negative weather fluctuation exhibit more trust in neighbours and others within their close group. The evidence indicates that the effects of weather variation on social trust are transmitted through strengthening the cooperation among village peasants as they cope with risk and uncertainty. The results also show that households with higher proportion of agricultural income tend to trust people more. However, the increased strengthening of the village relationships does not erode family ties.
    JEL: O13 O53 Z13 Q54
    Date: 2012–11
  6. By: Chen, Xi; Zhang, Xiaobo
    Abstract: Participating in and presenting gifts at funerals, weddings, and other ceremonies held by fellow villagers have been regarded as social norms in Chinese villages for thousands of years. However, it is more burdensome for the poor to take part in these social occasions than for the rich. Because the poor often lack the necessary resources, they are forced to cut back on basic consumption, such as food, in order to afford a gift to attend the social festivals. For pregnant women in poor families, such a reduction in nutrition intake as a result of gift-giving can have a lasting detrimental health impact on their children.
    Keywords: Social norms, Social relations, food consumption, Stunting, malnutrition, Women,
    Date: 2012
  7. By: David Lagakos; Benjamin Moll; Tommaso Porzio; Nancy Qian
    Abstract: Using recently available large-sample micro data from 36 countries, we document that experience-earnings profiles are flatter in poor countries than in rich countries. Motivated by this fact, we conduct a development accounting exercise that allows the returns to experience to vary across countries but is otherwise standard. When the country-specific returns to experience are interpreted in such a development accounting framework – and are therefore accounted for as part of human capital – we find that human and physical capital differences can account for almost two thirds of the variation in cross-country income differences, as compared to less than half in previous studies.
    JEL: O11 O4 O57
    Date: 2012–12
  8. By: Ragasa, Catherine; Kinwa-Muzinga, Annie; Ulimwengu, John M.
    Abstract: Based on the 2011 Global Hunger Index, the Democratic Republic of the Congo (DRC) has the most severe level of hunger and malnutrition. There is growing recognition that development in the agriculture sector and increasing productivity will be critical to reverse this trend. A growing set of literature looks at gender disparity in access to critical inputs, knowledge and markets, which have been shown to contribute to low productivity and nutrition insecurity. This assessment contributes to the knowledge gap by compiling existing empirical evidence and investigating the gender gaps in access to resources and opportunities in the agriculture and food sector in the DRC.
    Keywords: Gender, Nutrition, food security, Agricultural productivity,
    Date: 2012
  9. By: Prabir C. Bhattacharya
    Abstract: The aim of this paper is to study inequality and deprivations as reflected in the human sex ratio (commonly defined as the number of males per 100 females). The particular focus is on three emerging economies, viz., Russia, India and China. The paper compares and contrasts the experiences of these countries and discusses policy issues. It is noted that while the feminist perspective on the issues surrounding the sex ratio is important, it would be wrong to view these issues always or exclusively through the prism of that perspective . It is also suggested that India and China probably have better prospects of sustained economic growth in the foreseeable future than does Russia.
    Date: 2012
  10. By: Selim Gulesci
    Abstract: I show that labor-tying (being in a labor contract where the employer also acts as an insurance-provider) is an important channel through which the poor in rural Bangladesh insure themselves against risks. Using a theoretical framework adapted from Bardhan (1983), I analyze the effects of an exogenous increase in the outside options of poor women (through an improvement in their self-employment opportunities) on their and their spouses' participation in tied labor, as well as the general equilibrium effects of the treatment on the terms of the labor contracts in the village. I find that treated women and their spouses are less likely to be in tied-labor contracts. Their wages increase through two channels: (a) due to the switch from tied to casual labor contracts (b) through the general equilibrium effects in the village labor market. Furthermore, I find that the treated households form reciprocal transfer links with wealthier households in the village. These findings imply that poor households may be involved in second-best labor contracts to insure themselves against risks. When their self-employment opportunities improve, they break these ties and move to greater reliance on reciprocal transfer arrangements. Keywords: tied labor, poverty, rural labor market. JEL Classification: J43; O12; I32.
    Date: 2012
  11. By: Spyridon Boikos (University of Milan.); Alberto Bucci (University of Milan.); Thanasis Stengos (University of Guelph.)
    Abstract: This paper investigates the relationship between per-capita human capital investment and the birth rate. Since the consequences of higher fertility (birth rate) on per-capita human capital accumulation (the so-called dilution effect) are not the same (in sign and magnitude) across different groups of countries with different birth rates, we analyze the growth impact of a non-linear dilution-effect. The main predictions of the model (concerning the relationship between population and economic growth rates) are then compared with those of a standard model in which the exogenous birth rate affects linearly and negatively (as postulated by most of the existing theoretical literature) human capital investment at the individual level. By using non-parametric techniques, we find evidence of strong nonlinearities in the total effect of fertility on human capital accumulation. This supports the idea that fertility plays a non-monotonic role in the accumulation of human capital and hence in the growth rate of an economy. The non-monotonic effect of fertility on human capital appears to be valid for OECD, as well as non-OECD countries according to our empirical results.
    Keywords: Fertility; Population Growth; Economic Growth; Human Capital Investment; Dilution Effects.
    JEL: O41 J13 J24
    Date: 2012
  12. By: Van Campenhout, Bjorn; Dercon, Stefan
    Abstract: Recent research on the intertemporal dynamics of poverty using microeconomic data often hints at the existence of poverty traps, where some find themselves trapped at a low-level stable equilibrium while others enjoy a higher stable equilibrium. Without a sizable positive shock to well-being, those trapped at the low equilibrium will not automatically outgrow destitution, but merely fluctuate around that low-level equilibrium. Given the dramatic policy consequences implied by such a theory, knowledge about the location of the different equilibria would be extremely helpful. In this paper, we explore the possibilities of threshold-type models to identify those crucial parameters. We illustrate the method by searching for traps in the dynamics of livestock asset holdings in rural Ethiopia. We find evidence of distribution-dependent dynamics and multiple equilibria for tropical livestock units.
    Keywords: microeconomics, data, Livestock, Assets, livestock assets, multiple equilibria, Poverty traps, Market equilibrium, Rural areas,
    Date: 2012
  13. By: Paul Castãneda Dower (New Economic School and the Center for Economic and Financial Research); Elizabeth Potamites
    Abstract: Many land titling programs have produced lackluster results in terms of achieving access to credit for the poor. This may re ect insufficient emphasis on local banking practices. Bankers commonly use methods other than collateral to ensure repayment, such as targeting borrower characteristics that, on average, improve repayment rates. Formal land titles can signal to the bank these important characteristics. Using a household survey from Indonesia, we provide evidence that formal land titles do have a positive and significant effect on access to credit and at least part of this effect is best interpreted as an improvement in information ows. This result stands in contrast to the prevailing notion that land titles only function as collateral. Analysts who neglect local banking practices may misinterpret the observed effect of systematic land titling programs on credit access because these programs tend to dampen the signaling value of formal land titles.
    Date: 2012–09
  14. By: Manos Antoninis
    Abstract: With more than ten million children out of school, Nigeria is the country furthest away from universal primary education. Low access to school is concentrated in the north of the country where a tradition of religious education has been seen as both a constraint and an opportunity. This paper uses recent survey data to explain household decisions related to secular and religious education. It demonstrates a shift in attitudes with unobserved household characteristics that favor religious education attendance being negatively correlated with secular school attendance after controlling for a rich set of background variables. The paper also provides quantitative evidence to support the argument that the poor quality of secular education acts as a disincentive to secular school attendance. This finding cast doubts at policy attempts to increase secular school enrolment through the integration of religious and secular school curricula.
    Keywords: Universal primary education, Islamic education, Nigeria, bivariate probit
    Date: 2012
  15. By: Qin, Yu; Zhang, Xiaobo
    Abstract: Because many rural poor live in areas far away from markets, we investigate whether better road access could help improve their livelihood and reduce rural poverty. We use three waves of a primary panel survey at the household level conducted in 18 remote natural villages in China to study how road access shapes farmers’ agricultural production patterns and input uses and affects rural poverty. Our results show that access to roads is strongly associated with specialization in agricultural production. In natural villages with better road access, farmers plant fewer numbers of crops, purchase more fertilizer, and invest more money in labor. In combination with such factors, road connections improve household agricultural income—in particular, cash income—and contribute to poverty reduction in the surveyed villages. However, better access to rural roads does not appear to bring about significant changes in nonagricultural income.
    Keywords: roads, Agricultural specialization, Input use, rural areas, Rural poor, Household income, Household surveys, Poverty reduction,
    Date: 2012
  16. By: Kenn Ariga (Institute of Economic Research,Kyoto University); Fumio Ohtake (The Institute of Social and Economic Research of Osaka University); Masaru Sasaki (The Graduate School of Economics at Osaka University); Zheren Wu (Faculty of Economics,Kinki University)
    Abstract: This paper uses a unique survey of the Chinese youth to construct a panel data in which we keep track of geographical and job mobilities. Our estimation results deliver the following major findings. (1) The sample individuals are highly mobile. Job quits and relo- cations are frequent and they are closely correlated. We find the job hopping to be highly productive as our estimates indicate each job quit generates more than .2 log increase in monthly wage. .(2) The migrant disadvantage in urban labor market is compensated by their higher job mobility. After four jobs, the expected earnings di¤erentials essentially disappear. We also find that migration and job mobility are highly selective processes. Our evidence indicates that the migrants are positively selected. (3) Job and location mobilities are highly dependent upon family back ground and personal traits which we interpret as representing un- observable characteristics associated with risk taking, active and opti- mistic personality, as well as the implied economic incentives to migrate and keep searching for better jobs.
    JEL: J31 J61 J62
    Date: 2012–11

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