nep-dev New Economics Papers
on Development
Issue of 2013‒02‒03
33 papers chosen by
Mark Lee
Towson University

  1. Failure vs. Displacement: Why An Innovative Anti-Poverty Program Showed No Net Impact By Morduch, Jonathan; Ravi, Shamika; Bauchet, Jonathan
  2. Cross-Border Spillover: U.S. Gun Laws and Violence in Mexico By Dube, Arindrajit; Dube, Oeindrila; García-Ponce, Omar
  3. Understanding Urban Wage Inequality in China 1988-2008: Evidence from Quantile Analysis By Appleton, Simon; Song, Lina; Xia, Qingjie
  4. Wage Growth through Job Hopping in China By Ariga, Kenn; Ohtake, Fumio; Sasaki, Masaru; Wu, Zheren
  5. Corruption, Shadow Economy and Income Inequality: Evidence from Asia By Kar, Saibal; Saha, Shrabani
  6. Aid, Growth, and Jobs By Fields, Gary
  7. The Effects of the State Sector on Wage Inequality in Urban China: 1988–2007 By Xia, Qingjie; Song, Lina; Li, Shi; Appleton, Simon
  8. Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam By Nguyen, Huu Chi; Nordman, Christophe Jalil; Roubaud, François
  9. Expansion of Lowland Rice Production and Constraints on a Rice Green Revolution: Evidence from Uganda By Kijima, Yoko
  10. Is GBS Still a Preferable Aid Modality? By Furukawa, Mitsuaki; Takahata, Junichiro
  11. Is a gender gap in net school enrollment a reflection of the gender wage gap in the labor market? Evidence using household data from Vietnam By Tien Manh Vu
  12. Technological Upgradation in the Jute Mills of Bangladesh: Challenges and Way Out By Khondaker Golam Moazzem; Kishore Kumer Basak; Md. Tariqur Rahman
  13. Framework for the Proposed Comprehensive Trade Policy for Bangladesh By Khondaker Golam Moazzem; Nazneen Ahmed; Syed Nasim Manzur; Mehruna Islam Chowdhury
  14. Crime and conflicts in Africa: consequences of corruption? By Simplice A, Asongu; Oasis, Kodila-Tedika
  15. Fighting African Conflicts and Crimes: Which Governance Tools Matter? By Simplice A , Asongu; Oasis, Kodila-Tedika
  16. State fragility, rent seeking and lobbying: evidence from African data By Simplice A , Asongu; Oasis , Kodila-Tedika
  17. Missing links, missing markets: Internal exchanges, reciprocity and external connections in the economic networks of Gambian villages By Jaimovich, Dany
  18. Wartime Violence and Post-Conflict Development Policy: The Case of Agricultural Concessions in Mozambique By McDougal, Topher; Caruso, Raul
  19. Does trade reduce poverty ? a view from Africa By Le Goff, Maelan; Singh, Raju Jan
  20. The impact of the global food crisis on self-assessed food security By Headey, Derek D.
  21. Does access to finance matter in microenterprise growth ? evidence from Bangladesh By Khandker, Shahidur R.; Samad, Hussain A.; Ali, Rubaba
  22. Trends in developing country trade 1980-2010 By Michalopoulos, Constantine; Ng, Francis
  23. Structural change and cross-country growth empirics By Eberhardt, Markus; Teal, Francis
  24. Political reforms and public policy : evidence from agricultural and food policies By Olper, Alessandro; Fatkowski, Jan; Swinnenm Johan
  25. Intrahousehold bargaining and resource allocation in developing countries By Doss, Cheryl
  26. Does urbanization affect rural poverty ? evidence from Indian districts By Cali, Massimiliano; Menon, Carlo
  27. Cash transfers and child schooling : evidence from a randomized evaluation of the role of conditionality By Akresh, Richard; de Walque, Damien; Kazianga, Harounan
  28. Determinants of export growth at the extensive and intensive margins : evidence from product and firm-level data for Pakistan By Reis, Jose Guilherme; Taglioni, Daria
  29. How subjective beliefs about HIV infection affect life-cycle fertility : evidence from rural Malawi By Shapira, Gil
  30. Children's health opportunities and project evaluation : Mexico's Oportunidades program By Van de gaer, Dirk; Vandenbossche, Joost; Figueroa, Jose Luis
  31. Is foreign aid fungible ? evidence from the education and health sectors By Van de Sijpe, Nicolas
  32. Gender equality and economic growth in Brazil : a long-run analysis By Agenor, Pierre-Richard; Canuto, Otaviano
  33. Service sector reform and manufacturing productivity : evidence from Indonesia By Duggan, Victor; Rahardja, Sjamsu; Varela, Gonzalo

  1. By: Morduch, Jonathan; Ravi, Shamika; Bauchet, Jonathan
    Abstract: We present results from a randomized trial of an innovative anti-poverty program in India. Instead of a safety net, the program provides “ultra-poor” households with inputs to create a new livelihood and attain economic independence. We find no statistically significant evidence of lasting net impact on consumption, income or asset accumulation. The main impact was the re-optimization of time use: sharp gains in income from the new livelihood were fully offset by lower earnings from wage labor. The result highlights how the existence of alternative economic options shapes net impacts and external validity.
    JEL: O1 D1 J2 J4
    Date: 2012–12
  2. By: Dube, Arindrajit (University of Massachusetts Amherst); Dube, Oeindrila (New York University); García-Ponce, Omar (New York University)
    Abstract: To what extent, and under what conditions, does access to arms fuel violent crime? To answer this question, we exploit a unique natural experiment: the 2004 expiration of the U.S. Federal Assault Weapons Ban exerted a spillover on gun supply in Mexican municipios near Texas, Arizona and New Mexico, but not near California, which retained a pre-existing state-level ban. We find first that Mexican municipios located closer to the non-California border states experienced differential increases in homicides, gun-related homicides and crime gun seizures in the post-2004 period. Second, the magnitude of this effect is contingent on political factors related to Mexico's democratic transition. Killings increased substantially more in municipios where local elections had become more competitive prior to 2004, with the largest differentials emerging in high narco-trafficking areas. Our findings are consistent with the notion that political competition undermined informal agreements between drug cartels and entrenched local governments, highlighting the role of political instability in mediating the gun-crime relationship.
    Keywords: gun control, violence, informal employment, cross-border spillover, cartels
    JEL: K14 D72 D73
    Date: 2012–12
  3. By: Appleton, Simon (University of Nottingham); Song, Lina (University of Nottingham); Xia, Qingjie (Peking University)
    Abstract: This paper examines change in wage gaps in urban China by estimating quantile regressions on CHIPS data. It applies the Machado and Mata (2005) decomposition, finding sharp increases in inequality from 1988 to 1995 and from 2002 to 2008 largely due to changes in the wage structure. The analysis reports how the returns to education and experience vary across wage quantiles, along with wage differentials by sex and party membership. The role of industrial structure, ownership reform and occupational change are also estimated. In the recent period, 2002 to 2008, falls in the returns to education and experience have been equalising. However, changes in every other category of observed wage differential – by sex, occupation, ownership, industrial sector and province – have served to widened inequality. The gender gap continued to rise, as did the gap between white collar and blue collar workers, and between manufacturing and most other industrial sectors.
    Keywords: China, labour, wages, quantile regression, inequality
    JEL: J31 J42 O15 P23
    Date: 2012–12
  4. By: Ariga, Kenn (Kyoto University); Ohtake, Fumio (Osaka University); Sasaki, Masaru (Osaka University); Wu, Zheren (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 relocations are frequent and they are closely correlated. We find that 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 differentials 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 unobservable characteristics associated with risk taking, active and optimistic personality, as well as the implied economic incentives to migrate and keep searching for better jobs.
    Keywords: wage growth, migration, school to work transition
    JEL: J31 J61 J62
    Date: 2012–12
  5. By: Kar, Saibal (Centre for Studies in Social Sciences, Calcutta); Saha, Shrabani (Edith Cowan University)
    Abstract: A number of recent studies for Latin America show that as the size of the informal economy grows, corruption is less harmful to inequality. We investigate if this relationship is equally compelling for developing countries in Asia where corruption, inequality and shadow economies are considerably large. We use Panel Least Square and Fixed Effects Models for Asia to find that both 'Corruption Perception Index' and 'ICRG' index are sensitive to a number of important macroeconomic variables. We find that in the absence of the shadow economy, corruption increases inequality. However, with larger shadow economies in South Asia, the income inequality tends to fall.
    Keywords: corruption, inequality, shadow economy, panel data, South Asia
    JEL: J48 K42 O17 O53
    Date: 2012–12
  6. By: Fields, Gary (Cornell University)
    Abstract: Various development objectives are worthy, but to my mind, one objective dominates all others: reducing the scourge of absolute economic misery in the world. In this paper, I focus on an important but relatively underemphasized approach to poverty reduction: helping the poor earn more in the labour market for the work they do, so that they can buy the goods and services they need to move up out of poverty.
    Keywords: foreign assistance, economic growth, employment, poverty, developing countries
    JEL: I3 J2 O1 O19
    Date: 2013–01
  7. By: Xia, Qingjie (Peking University); Song, Lina (University of Nottingham); Li, Shi (Beijing Normal University); Appleton, Simon (University of Nottingham)
    Abstract: This paper examines the effects of state sector domination on wage inequality in urban China. Using Chinese Household Income Project surveys, we conduct two exercises: with quantile regression analysis, we identify wage gaps across the distribution and over time; and we employ the Machado and Mata (2005) decomposition to investigate how urban wage inequality was affected by the changes in wage structure and employment share of the state sector. We find that since the radical state sector reforms designed to reduce over-staffing and improve efficiency since the late 1990s, urban wage gaps were narrowed due to the reduction of employment share in the state sector; the wage premium of the state sector in comparison with the non-state sector increased significantly; and changes in the wage structure of the labour market caused the rise in urban wage inequality.
    Keywords: China, state sector, wage inequality, quantile regression, counterfactual analysis
    JEL: J31 J42 O15 P23
    Date: 2013–01
  8. By: Nguyen, Huu Chi (IRD, DIAL, Paris); Nordman, Christophe Jalil (IRD, DIAL, Paris); Roubaud, François (IRD, DIAL, Paris)
    Abstract: In spite of its predominant economic weight in developing countries, little is known about the informal sector earnings structure compared to that of the formal sector. Taking advantage of the VHLSS dataset in Vietnam, in particular its three wave panel data (2002, 2004, 2006), we assess the magnitude of various formal-informal earnings gaps while addressing heterogeneity at three different levels: the worker, the job (wage employment vs. self-employment) and the earnings distribution. We estimate fixed effects and quantile regressions to control for unobserved individual characteristics. Our results suggest that the informal sector earnings gap highly depends on the workers' job status and on their relative position in the earnings distribution. Penalties may in some cases turn into premiums. By comparing our results with studies in other developing countries, we draw conclusions highlighting the Vietnam's labour market specificity.
    Keywords: informal employment, earnings gap, transition matrix, panel data, Vietnam
    JEL: J21 J23 J24 J31 O17
    Date: 2013–01
  9. By: Kijima, Yoko
    Abstract: In Uganda, rice production has increased rapidly in the past 10 years while the yield has been stagnant. To examine this mixed story in detail, we use data on 600 rural households with access to wetlands. The estimation results on the expansion of rice cultivation show that the high population density in upland farm areas has pushed farmers to rice cultivation in wetlands. Although applying proper cultivation practices such as constructing bunds, leveling, and transplanting is considered to be critical in yield enhancement, as well as using chemical fertilizer and improved varieties, such cultivation practices are rarely adopted in Uganda. The rice production function estimation results show that these practices do not increase the yield significantly once village fixed effects are controlled for. This suggests that these practices are not being adopted since the rice yield is not enhanced effectively by the cultivation practices. This is probably explained by the fact that the water supply in wetlands tends to be unstable and to suffer from drought and floods.
    Keywords: agricultural intensification , lowland rice , cultivation practices , Uganda
    Date: 2012–12–06
  10. By: Furukawa, Mitsuaki; Takahata, Junichiro
    Abstract: This paper attempts to assess the effect of General Budget Support (GBS) in developing countries by using panel data on government revenue, expenditure, and social indicators for the 10-year period from 1997 to 2006. We focus on the health sector as a representative social sector. The results show that GBS in fact increases the budget allocation for the health sector more than tax revenue does. However, the effect of government health expenditure on health indicators is not necessarily improved by the introduction of GBS, which indicates that the introduction of GBS alone has limited impact. The paper suggests that the complementarity between GBS and projects/programs focusing on human and institutional capacity development should be seriously considered.
    Keywords: General Budget Support , fungibility , intergovernmental transfer , aid modality , complementarity
    Date: 2013–01–09
  11. By: Tien Manh Vu (Ph.D Candidate, Osaka School of International Public Policy, Osaka University)
    Abstract: The paper estimates both the gender gap in wage and net schooling enrollment from Vietnam household data. The results imply a reflection of gender wage gap in the labor market in hazard of school withdrawals. Generally, males have higher incentive to terminate their schooling to join the labor force. Males would have 43.8 percent higher in participating the labor market and gain 18.4 percent of wage per hour higher than females. Also, we observe 16?44.4 percent lower in probability for males to enroll in school, especially, the school withdrawal rate accelerates at higher speed after the age of primary school. Meanwhile, females would have an incentive to complete junior, senior high school and 3?year college thanks to higher speed gain in wage. Besides, family having a combination of a household head working for a state?owned firm and his spouse working as self?employed would best facilitate their co?residing children and grandchildren for more years of schooling. Finally, the current education subsidy and tuition fee reduction policy do minimal to reduce the hazard of school dropouts among beneficiaries.
    Keywords: School dropouts, Returns to schooling, Wage, Gender gap, Vietnam
    JEL: I24 I25 J31
    Date: 2013–01
  12. By: Khondaker Golam Moazzem; Kishore Kumer Basak; Md. Tariqur Rahman
    Abstract: In view of the recent rise of global demand for jute goods and consequent revitalisation of jute manufacturing sector in Bangladesh, the paper has examined the market potentials of jute goods at local and international level, and has revealed that there is scope for creating a huge local demand for raw jute which will contribute to increased production. Based on the findings from a sample-based survey, the paper put forward necessary suggestions required to modernise the machineries, improve the production process, and develop the human resources in the jute manufacturing sector to enhance the sector’s capacity and competitiveness.
    Keywords: Jute manufacturing sector, Mandatory Use of Jute for Packaging Products Act 2010
    Date: 2012–11
  13. By: Khondaker Golam Moazzem; Nazneen Ahmed; Syed Nasim Manzur; Mehruna Islam Chowdhury
    Abstract: The paper has been prepared for the Ministry of Commerce of the Government of Bangladesh to formulate the Trade Policy Framework which will serve as the benchmark document for the Comprehensive Trade Policy for Bangladesh. The study has carried out detailed analysis of the present tariff structure, incentives and support structure, trade facilitation measures, priority sectors, institutional capacity, bilateral, regional and multilateral trade negotiations in Bangladesh, and has come up with the structure of the proposed policy document.
    Keywords: Comprehensive Trade Policy, Ministry of Commerce, Trade Policy Framework
    Date: 2012–10
  14. By: Simplice A, Asongu; Oasis, Kodila-Tedika
    Abstract: With earthshaking and jaw-breaking levels of corruption in the African continent, the question on the extent to which corruption influences crime still remains unanswered. This paper assesses the effect of corruption (corruption-control) in 38 African countries using updated data. We find that, crime is highly positively (negatively) correlated with corruption (corruption-control). The potential mitigation effect (by corruption-control) is higher than the corresponding positive effect of corruption, implying, corruption-control offsets crime emanating beyond the corruption mechanism (inter alia, other poor governance mechanisms). The relationship is statistically strong when controlling for the number of police officers, age dependency, per capital economic prosperity, level of education, government effectiveness and population density. Given that crime is proxied by the level of organized internal conflict, the findings also sustain the substantial role of corruption in the birth and propagation of conflicts within and across Africa. Policy implications are discussed.
    Keywords: Security; Corruption; Crime; Conflicts; Africa
    JEL: O55 F52 O17 K42 P16
    Date: 2013–01–15
  15. By: Simplice A , Asongu; Oasis, Kodila-Tedika
    Abstract: Crimes and conflicts are seriously undermining African development. This article assesses the best governance tools in the fight against the scourges. The following findings are established. (1) Democracy, autocracy and voice & accountability have no significant negative correlations with crime. (2) The increasing relevance of government quality in the fight is as follows: regulation quality, government effectiveness, political stability, rule of law and corruption-control. (3) Corruption-control is the most effective mechanism in fighting crimes (conflicts). The findings are significantly strong when controlling for age dependency, number of police (and security) officers, per capita economic prosperity, educational level and population density. Justifications for the edge of corruption-control (as the most effective governance tool) and policy implications are discussed.
    Keywords: Security; Governance; Conflicts; Crime; Africa
    JEL: O55 F52 O17 K42 P16
    Date: 2013–01–20
  16. By: Simplice A , Asongu; Oasis , Kodila-Tedika
    Abstract: This paper assesses the determinants of state fragility in sub-Saharan Africa using hitherto unexplored variables in the literature. The previously missing dimension of nation building is integrated and the hypothesis of state fragility being a function of rent seeking and/or lobbying by de facto power holders is tested. The resulting interesting finding is that, political interference, rent seeking and lobbying increase the probability of state fragility by mitigating the effectiveness of governance capacity. This relationship (after controlling for a range of economic, institutional and demographic factors) is consistent with a plethora of models and specifications. The validity of the hypothesis is confirmed in a scenario of extreme state fragility. Moreover, the interaction between political interferences and revolutions mitigate the probability of state fragility while the interaction between natural resources and political interferences breeds the probability of extreme state fragility. As a policy implication, there is a ‘sub-Saharan African specificity’ in ‘nation building’ and prevention of conflicts. Blanket fragility oriented policies will be misplaced unless they are contingent on the degree of fragility, since ‘fragile’ and ‘extreme fragile’ countries respond differently to economic, institutional and demographic characteristics of state fragility.
    Keywords: State fragility; rent seeking; lobbying; nation building; Africa
    JEL: C43 O55 O43 H11 O20
    Date: 2013–01–29
  17. By: Jaimovich, Dany
    Abstract: A unique dataset of social and economic networks collected in 60 rural Gambian villages is used to study the ways in which households with links outside the village (that are considered as a proxy for market connections) behave in the locally available exchange networks for land, labor, input and credit. Using measures gleaned from the social network analysis literature, the econometric results at both household and link (dyadic) level provide evidence of: (i) substitutability between internal and external links, and (ii) substitutability between internal reciprocation and external links. These findings provide support for the transformation process of primitive economies described in a long tradition of anthropological work as well as recent theoretical models.
    Keywords: Social Networks; Missing markets; Gift economy; Economic Anthropology; West Africa
    JEL: Z13 C31 O12
    Date: 2013–01
  18. By: McDougal, Topher (University of San Diego); Caruso, Raul (Catholic University of the Sacred Heart)
    Abstract: Widely hailed as a paragon of successful post-conflict development policy, the Government of Mozambique has focused its economic aspirations on the promise of biofuel exports over the past decade. It has made hundreds of agricultural concessions to corporations in the biofuels industry. However, this land use competes with pre-existing local claims on arable land and water resources, possibly heightening food insecurity in rural areas. In response, local groups have sought to oppose the concessions, thus securing their land grants. We investigate whether the magnitude and recentness of wartime violence influence the success of communities in opposing agricultural concessions and securing community land grants. We test this and two alternative hypotheses with districtlevel data on biofuels concessions, recognized community landholdings, and civil war events generated in a geographic information system. Controlling for demographic, geographic, and market access factors, we find that while the recentness of violence may actually galvanize community cohesion and reinvigorate local institutional capacity, the intensity of violence plays a more nuanced role, associated, as it is, with higher levels of both corporate concessions (locally undesirable) and community land grants (locally desirable). We suggest that these findings are consistent with the idea that violence heightens community cohesion, but degrades connections between the local and national levels.
    JEL: D74 N47 N57 O13 O25 Q15 Q16 Q18
    Date: 2013–01–01
  19. By: Le Goff, Maelan; Singh, Raju Jan
    Abstract: Although trade liberalization is being actively promoted as a key component in development strategies, theoretically, the impact of trade openness on poverty reduction is ambiguous. A more liberalized trade regime is argued to change relative factor prices in favor of the more abundant factor. If poverty and relative low income stem from abundance of labor, greater trade openness should lead to higher labor prices and a decrease in poverty. However, should the re-allocation of factors be hampered, the expected benefits from freer trade may not materialize. The theoretical ambiguity on the effects of openness is reflected in the available empirical evidence. This paper examines how the effect of trade openness on poverty may depend on complementary reforms that help a country take advantage of international competition. Using a non-linear regression specification that interacts a proxy of trade openness with proxies of various country structural specificities and a panel of 30 African countries over the period 1981-2010, the analysis finds that trade openness tends to reduce poverty in countries where financial sectors are deep, education levels high and governance strong.
    Keywords: Achieving Shared Growth,Free Trade,Economic Theory&Research,Trade Policy,Emerging Markets
    Date: 2013–01–01
  20. By: Headey, Derek D.
    Abstract: The paper provides the first large-scale survey-based evidence on the impact of the global food crisis of 2007-08 using an indicator of self-assessed food security from the Gallup World Poll. For the sampled countries as a whole, this subjective indicator of food security remained the same or even improved, seemingly owing to a combination of strong economic growth and limited food inflation in some of the most populous countries, particularly India. However, these favorable global trends mask divergent trends at the national and regional levels, with a number of countries reporting substantial deterioration in food security. The impacts of the global crisis therefore appear to be highly context specific.
    Keywords: Food&Beverage Industry,Food Security,Rural Poverty Reduction,Nutrition,Food&Nutrition Policy
    Date: 2013–01–01
  21. By: Khandker, Shahidur R.; Samad, Hussain A.; Ali, Rubaba
    Abstract: In less-developed economies such as Bangladesh, the farm sector is the major source of employment and income, while the rural nonfarm sector provides as an additional source of income. But the rural nonfarm sector increasingly plays an important role in fostering the development of the rural economy. A significant share of this sector is made up of microenterprise activities, which requires investment and access to adequate funds. This paper investigates the role access to finance plays in promoting the efficiency and growth of microenterprise activities. The findings suggest that households engaged in microenterprise activities, in addition to farm and other nonfarm activities, are much better off (in terms of income, expenditure and poverty) than those not engaged in such activities. Fewer than 10 percent of the enterprises have access to institutional finance (formal banks or microcredit), although the rate of return on microenterprise investments is more than sufficient (36 percent per year) to repay institutional loans. The research suggests that credit constraints may reduce the enterprises'profit margin by as much as 13.6 percent per year. As the returns to microenterprise investment are found to be high, microfinance institutions can play a larger role in supporting microenterprise growth in Bangladesh.
    Keywords: Access to Finance,Debt Markets,Investment and Investment Climate,Banks&Banking Reform,Economic Theory&Research
    Date: 2013–01–01
  22. By: Michalopoulos, Constantine; Ng, Francis
    Abstract: This paper reviews trends and patterns in developing countries'trade from 1980 to 2010. During the 30-year span, world trade expanded rapidly, especially in developing countries in the last decade. A similar picture emerges in trade in services. These overall trends, however, mask different trade patterns during some of the time periods and among different developing countries and groups. For example, except for Asia, the 1980s were pretty much a"lost"decade for many developing countries and groups. But that changed in the 1990s and 2000s, with trade by all major developing countries growing faster than developed countries. From 1980 to 2000, trade by Least Developed Countries grew much more slowly than that of developing countries as a whole. But those countries saw the fastest growth in trade in the following decade. This strong overall trade performance -- with some exceptions (for example Sub-Sahara Africa in the manufacturing trade) -- raises questions about sustainability, trade policy and the architecture of the trading system.
    Keywords: Emerging Markets,Economic Theory&Research,Trade Policy,Inequality,Income
    Date: 2013–01–01
  23. By: Eberhardt, Markus; Teal, Francis
    Abstract: One of the most striking features of economic growth is the process of structural change whereby the share of agriculture in GDP decreases as countries develop. The cross-country growth literature typically estimates an aggregate homogeneous production function or convergence regression model that abstracts from this process of structural change. This paper investigates the extent to which assumptions about aggregation and homogeneity matter for inferences regarding the nature of technology differences across countries. Using a unique World Bank dataset, it estimates production functions for agriculture and manufacturing in a panel of 40 developing and developed countries for the period from 1963 to 1992. It empirically models dimensions of heterogeneity across countries, allowing for different choices of technology within both sectors. The paper argues that heterogeneity is important within sectors across countries implying that an analysis of aggregate data will not produce useful measures of the nature of the technology or productivity. It shows that many of the puzzling elements in aggregate cross-country empirics can be explained by inappropriate aggregation across heterogeneous sectors.
    Keywords: Economic Theory&Research,E-Business,ICT Policy and Strategies,Economic Growth,Statistical&Mathematical Sciences
    Date: 2013–01–01
  24. By: Olper, Alessandro; Fatkowski, Jan; Swinnenm Johan
    Abstract: This paper studies the effect of political regime transitions on public policy using a new data set on global agricultural and food policies over a 50-year period (including data from 74 developing and developed countries over the 1955–2005 period). The authors find evidence that democratization leads to a reduction of agricultural taxation, an increase in agricultural subsidization, or both. The empirical findings are consistent with the predictions of the median voter model because political transitions occurred primarily in countries with a majority of farmers. The results are robust to different specifications, estimation approaches, and variable definitions.
    Keywords: Parliamentary Government,Labor Policies,Emerging Markets,Political Economy,Population Policies
    Date: 2013–01–01
  25. By: Doss, Cheryl
    Abstract: Many key development outcomes depend on women's ability to negotiate favorable intrahousehold allocations of resources. Yet it has been difficult to clearly identify which policies can increase women's bargaining power and result in better outcomes. This paper reviews both the analytical frameworks and the empirical evidence on the importance of women's bargaining power. It argues that there is sufficient evidence from rigorous studies to conclude that women's bargaining power does affect outcomes. But in many specific instances, the quantitative evidence cannot rigorously identify causality. In these cases, a combination of quantitative and qualitative evidence may suggest policy levers. Taken together, there are sufficient data in place to support a greatly expanded focus on intrahousehold outcomes and bargaining power. Additional data at the individual level will allow for further and more detailed research. A growing literature supports the current conventional wisdom -- namely, that the patterns of evidence suggest that women's education, incomes, and assets all are important aspects of women's bargaining power.
    Keywords: Labor Policies,Rural Development Knowledge&Information Systems,Anthropology,Gender and Law,Economic Theory&Research
    Date: 2013–01–01
  26. By: Cali, Massimiliano; Menon, Carlo
    Abstract: Although a high rate of urbanization and a high incidence of rural poverty are two distinct features of many developing countries, there is little knowledge of the effects of the former on the latter. Using a large sample of Indian districts from the 1983-1999 period, the authors find that urbanization has a substantial and systematic poverty-reducing effect in the surrounding rural areas. The results obtained through an instrumental variable estimation suggest that this effect is causal in nature and is largely attributable to the positive spillovers of urbanization on the rural economy rather than to the movement of the rural poor to urban areas. This rural poverty-reducing effect of urbanization is primarily explained by increased demand for local agricultural products and, to a lesser extent, by urban-rural remittances, the rural land/population ratio, and rural nonfarm employment.
    Keywords: Rural Poverty Reduction,Population Policies,Regional Economic Development,Achieving Shared Growth
    Date: 2013–01–01
  27. By: Akresh, Richard; de Walque, Damien; Kazianga, Harounan
    Abstract: The authors conduct a randomized experiment in rural Burkina Faso to estimate the impact of alternative cash transfer delivery mechanisms on education. The two-year pilot program randomly distributed cash transfers that were either conditional or unconditional. Families under the conditional schemes were required to have their children ages 7-15 enrolled in school and attending classes regularly. There were no such requirements under the unconditional programs. The results indicate that unconditional and conditional cash transfer programs have a similar impact increasing the enrollment of children who are traditionally favored by parents for school participation, including boys, older children, and higher ability children. However, the conditional transfers are significantly more effective than the unconditional transfers in improving the enrollment of"marginal children"who are initially less likely to go to school, such as girls, younger children, and lower ability children. Thus, conditionality plays a critical role in benefiting children who are less likely to receive investments from their parents.
    Keywords: Youth and Governance,Primary Education,Street Children,Educational Sciences,Education For All
    Date: 2013–01–01
  28. By: Reis, Jose Guilherme; Taglioni, Daria
    Abstract: As globalization progresses and investment is mobile, it is ever more important for policy makers to understand drivers of growth and exports at the micro-level: Which products are being produced and exported? Which firms populate the domestic economy? Are they successful in exporting? How are firms affected by exogenous shocks and policy intervention? Through the use of descriptive statistics and econometric analysis, this paper assesses the trade competitiveness of Pakistan using micro-data. The case of Pakistan is interesting since the country's recent trade policy has reverted to a protectionist path since the mid-2000s and trade performance is stagnating, as indicated by a decrease in its trade-to-gross domestic product ratio over the past decade and low levels of sophistication of exports. The main findings of the paper are the following. Like many other countries, Pakistan posts a high concentration of exports in the hands of a limited number of large exporters. The dominance of few exporters has increased over time and it seems associated with the changes in trade policy. Low rates of product innovation and experimentation and a low ability of the Pakistani export sector to enter into new higher growth sectors are other features emerging from the data. All in all, the mediocre performance seems to be associated with internal problems with trade-related incentives, business environment, and governance, in addition to the well-known external constraints.
    Keywords: Economic Theory&Research,Free Trade,Markets and Market Access,Debt Markets,Trade Policy
    Date: 2013–01–01
  29. By: Shapira, Gil
    Abstract: This paper studies the effect of subjective beliefs about HIV infection on fertility decisions in a context of high HIV prevalence and simulates the impact of different policy interventions, such as HIV testing programs and prevention of mother-to-child transmission, on fertility and child mortality. It develops a model of women's life-cycle, in which women make sequential fertility decisions. Expectations about the life horizon and child survival depend on women's perceived exposure to HIV infection, which is allowed to differ from the actual exposure. In the model, women form beliefs about their HIV status and about their own and their children's survival in future periods. Women update their beliefs with survival to each additional period as well as when their HIV status is revealed by an HIV test. Model parameters are estimated by maximum likelihood with longitudinal data from the Malawi Diffusion and Ideational Change Project, which contain family rosters, information on HIV testing, and measures of subjective beliefs about own HIV status. The model successfully fits the fertility patterns in the data, as well as the distribution of reported beliefs about own HIV status. The analysis uses the model to assess the effect of HIV on fertility by simulating behavior in an environment without HIV. The results show that the presence of HIV reduces the average number of births a woman has during her life-cycle by 0.15. The paper also finds that HIV testing can reduce the fertility of infected women, leading to a reduction of child mortality and orphan-hood.
    Keywords: Population Policies,Gender and Health,Disease Control&Prevention,Gender and Law,Adolescent Health
    Date: 2013–01–01
  30. By: Van de gaer, Dirk; Vandenbossche, Joost; Figueroa, Jose Luis
    Abstract: This paper proposes a methodology to evaluate social projects from the perspective of children's opportunities on the basis of the effects of these projects on the distribution of outcomes. The evaluation is conditioned on characteristics for which individuals are not responsible; in this case, parental education level and indigenous background. The methodology is applied to evaluate the effects on children's health opportunities of Mexico's Oportunidades program, one of the largest conditional cash transfer programs for poor households in the world. The evidence from this program shows that gains in health opportunities for children from indigenous backgrounds are substantial and are situated in crucial parts of the distribution, whereas gains for children from nonindigenous backgrounds are more limited.
    Keywords: Health Monitoring&Evaluation,Disease Control&Prevention,Gender and Law,Primary Education,Street Children
    Date: 2013–01–01
  31. By: Van de Sijpe, Nicolas
    Abstract: This paper adopts a new approach to the issue of foreign aid fungibility. In contrast to most existing empirical studies, panel data are employed that contain information on the specific purposes for which aid is given. This allows linking aid that is provided for education and health purposes to recipient public spending in these sectors. In addition, aid flows that are recorded on a recipient's budget are distinguished from those that are not recorded on budget, and the previous failure to differentiate between on- and off-budget aid is shown to produce biased estimates of fungibility. Sector program aid is the measure of on-budget aid, whereas technical cooperation serves as a proxy for off-budget aid. The appropriate treatment of off-budget aid leads to lower fungibility estimates than those reported in many previous studies. Specifically, in both sectors and across a range of specifications, technical cooperation, which is the largest component of total education and health aid, leads to, at most, a small displacement of recipient public expenditures.
    Keywords: Health Monitoring&Evaluation,Gender and Health,Public Sector Expenditure Policy,Disability,Debt Markets
    Date: 2013–01–01
  32. By: Agenor, Pierre-Richard; Canuto, Otaviano
    Abstract: This paper studies the long-run impact of policies aimed at fostering gender equality on economic growth in Brazil. The first part provides a brief review of gender issues in the country. The second part presents a gender-based, three-period OLG model that accounts for women's time allocation between market work, child rearing, human capital accumulation, and home production. Bargaining between spouses depends on relative human capital stocks, and thus indirectly on access to infrastructure. The model is calibrated and various experiments are conducted, including investment in infrastructure, conditional cash transfers, a reduction in gender bias in the market place, and a composite pro-growth, pro-gender reform program. The analysis showed that fostering gender equality, which may partly depend on the externalities that infrastructure creates in terms of women's time allocation and bargaining power, may have a substantial impact on long-run growth in Brazil.
    Keywords: Health Monitoring&Evaluation,Population Policies,Economic Theory&Research,Gender and Law,Labor Policies
    Date: 2013–01–01
  33. By: Duggan, Victor; Rahardja, Sjamsu; Varela, Gonzalo
    Abstract: This paper examines the extent to which policy restrictions on foreign direct investment in the Indonesian service sector affected the performance of manufacturers over the period 1997-2009. It uses firm-level data on manufacturers'total factor productivity and the OECD's foreign direct investment Regulatory Restrictiveness Index, combined with data from Indonesia’s input-output tables regarding the intensity with which manufacturing sectors use services inputs. Controlling for firm-level fixed effects and other relevant policy indicators, it finds, first, that relaxing policies toward foreign direct investment in the service sector was associated with improvements in perceived performance of the service sector. Second, it finds that this relaxation in service sector foreign direct investment policies accounted for 8 percent of the observed increase in manufacturers'total factor productivity over the period. The total factor productivity gains accrue disproportionately to those firms that are relatively more productive, and that gains are related to the relaxation of restrictions in both the transport and electricity, gas, and water sectors. Total factor productivity gains are associated, in particular, with the relaxation of foreign equity limits, screening, and prior approval requirements, but less so with discriminatory regulations that prevent multinationals from hiring key personnel abroad.
    Keywords: E-Business,Banks&Banking Reform,Transport Economics Policy&Planning,ICT Policy and Strategies,Emerging Markets
    Date: 2013–01–01

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