nep-dev New Economics Papers
on Development
Issue of 2013‒03‒16
27 papers chosen by
Mark Lee
Towson University

  1. Empowering Women through Development Aid: Evidence from a Field Experiment in Afghanistan By Andrew Beath; Fotini Christia; Ruben Enikolopov
  2. Direct Democracy and Resource Allocation: Experimental Evidence from Afghanistan By Andrew Beath; Fotini Christia; Ruben Enikolopov
  3. The impact of social capital on children educational outcomes: The case of Tanzania By Youyou BAENDE BOFOTA
  4. Conditional Cash Transfers, Payment Dates and Labor Supply: Evidence from Peru By Fernando Fernandez; Victor Saldarriaga
  5. Caste Comparisons: Evidence from India By Xavier Fontaine; Katsunori Yamada
  6. Corruption and the Curse: The Dictator’s Choice By Mare Sarr; Tim Swanson
  7. Evidence on key policies for African agricultural growth: By Diao, Xinshen; Kennedy, Adam; Badiane, Ousmane; Cossar, Frances; Dorosh, Paul; Ecker, Olivier; Hagos, Hosaena Ghebru; Headey, Derek; Mabiso, Athur; Makombe, Tsitsi; Malek, Mehrab; Schmidt, Emily
  8. Extreme weather and civil war in Somalia: Does drought fuel conflict through livestock price shocks? By Maystadt, Jean-Francois; Ecker, Olivier; Mabiso, Athur
  9. Impact of food price changes on household welfare in Ghana: By Minot, Nicholas; Dewina, Reno
  10. Factor endowments, wage growth, and changing food self-sufficiency: Evidence from country-level panel data By Otsuka, Keijiro; Liu, Yanyan; Yamauchi, Futoshi
  11. Do Safety Nets Promote Technology Adoption? Panel data evidence from rural Ethiopia By Alem, Yonas; Broussard, Nzinga H.
  12. Highways and Development in the Peripheral Regions of China By Xu, Hangtian; Nakajima, Kentaro
  13. Unemployment Compensation and the Allocation of Labor in Developing Countries By Charlot, Olivier; Malherbet, Franck; Ulus, Mustafa
  14. The Distribution of Income in Central America By Gindling, T. H.; Trejos, Juan Diego
  15. Pro-poor growth or poverty trap? : estimating intergenerational income mobility in rural Philippines By Takahashi, Kazushi
  16. Outward FDI from developing countries : a case of Chinese firms in South Africa By Kimura, Koichiro
  17. A note on ethnic return migration policy in Kazakhstan : changing priorities and a growing dilemma By Oka, Natsuko
  18. Infrastructure, Industrial Productivity and Regional Specialization in China By Jie Zhang
  19. Does International Migration Increase Child Labor By Anna DePaoli; Mariapia Mendolat
  20. What Do We Learn From Schumpeterian Growth Theory? By Philippe Aghion; Ufuk Akcigit; Peter Howitt
  21. Advertising and Competition in Privatized Social Security: The Case of Mexico By Justine S. Hastings; Ali Hortaçsu; Chad Syverson
  22. Migration and Remittances in Tajikistan: Survey Technical Report By Alexander M. Danzer; Barbara Dietz; Kseniia Gatskova
  23. How the 1978 changes to the foreign domestic workers law in Singapore increased the female labour supply By Freire, Tiago
  24. Wages and Access to International Markets: Evidence from Urban China By He, Xiaobo
  25. Fertility and Female Labor Force Participation: Causal Evidence from Urban China By He, Xiaobo; Zhu, Rong
  26. Crime, health and wellbeing – Longitudinal evidence from Mexico By Braakmann, Nils
  27. Credit The Changing Determinants of High School Attainment in Rural China By Juan Yang; Terry Sicular; Desheng Lai

  1. By: Andrew Beath (Office of the Chief Economist for East Asia and the Pacific, World Bank); Fotini Christia (Department of Political Science, Massachusetts Institute of Technology); Ruben Enikolopov (Institute for Advanced Study and New Economic School)
    Abstract: In societies with widespread gender discrimination, development programs with gender quotas are considered a way to improve women’s economic, political, and social status. Using a randomized field experiment across 500 Afghan villages, we examine the effects of a development program that mandates women’s community participation. We find that even in a highly conservative context like Afghanistan, such initiatives improve female participation in some economic, social, and political activities, including increased mobility and income generation. They, however, produce no change in more entrenched female roles linked to family decision-making or in attitudes towards the general role of women in society.
    Date: 2013–01
  2. By: Andrew Beath (Office of the Chief Economist for East Asia and the Pacific, World Bank); Fotini Christia (Department of Political Science, Massachusetts Institute of Technology); Ruben Enikolopov (Institute for Advanced Study and New Economic School)
    Abstract: Direct democracy is designed to better align policy outcomes with citizen preferences. Using a randomized field experiment in 250 villages across Afghanistan, we compare outcomes of the selection of village-level development projects through secret-ballot referenda and through consultation meetings. We find that elites exert more influence over resource allocation decisions in consultation meetings as compared with referenda. Referenda also improve public satisfaction. The results indicate that the use of direct democracy in public resource allocation mitigates elite capture and results in more legitimate outcomes than those produced by less representative consultative processes.
    Date: 2013–01
  3. By: Youyou BAENDE BOFOTA (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: This paper presents an empirical analysis of the relationship between social capital and children’ educational outcomes in Tanzania, using panel data from the Kagera Health and Development Survey (KHDS). By exploiting the panel structure of the data, we use several econometric techniques - fixed effect, first difference and 2SLS - to address social capital endogeneity issue and omitted variable bias. We find evidence that social capital available in the family affects significantly student attainment and that the magnitudes are large enough to explain a substantial proportion of variation in children schooling in Tanzania in the short term. More importantly, this positive impact lasts over the long term.
    Keywords: Social capital, Education, Developing countries, Tanzania
    Date: 2013–02–18
  4. By: Fernando Fernandez (Barcelona GSE and Universidad de Piura.); Victor Saldarriaga (Peruvian Ministry of Social Development and Inclusion)
    Abstract: We assess the effects of a Conditional Cash Transfer program on adult labor supply in Peru. The program, named Juntos, lacks an experimental design so we rely on a sort of “natural experiment”. Instead of comparing treated and non-treated households, our strategy exploits within-municipality variation in the distance between payment dates of Juntos and interview dates of the Peruvian National Household Survey. We find that having received the cash transfer two weeks before the interview causes a reduction of 6 hours of work of recipients during the week prior to the survey. These effects are larger for married women and for mothers with children aged 5 or less. In addition, results are robust to different specifications and changes in the sample.
    JEL: H52 I28
    Date: 2013–01
  5. By: Xavier Fontaine; Katsunori Yamada
    Abstract: The caste issue dominates a large part of India's social and political life. Caste shapes Indians' identities, and strong tensions exist between castes. This paper evaluates how caste-based comparisons may be exacerbated in such a conflictual context. Using subjective well-being data from an original panel survey, together with a national representative survey on expenditure, we find that both within-caste comparisons and between-rival-caste comparisons reduce well-being. Between-caste comparisons affect well-being three times more than within-caste comparisons. In absolute value, an increase in rival castes' expenditure affects well-being as much as own expenditure. These findings highlight the strength of comparisons between rival castes. Yet this comparison scheme turns out to be asymmetrical: only low castes care about the economic successes of their rivals, and only high-caste Indians compete with their fellows.
    Date: 2013–03
  6. By: Mare Sarr (School of Economics, University of Cape Town); Tim Swanson (Department of Economics, Graduate Institute of International and Development Studies)
    Abstract: We develop a dynamic discrete choice model of a self-interested and unchecked ruler making decisions regarding the exploitation of a resource-rich country. This dictator makes the recursive choice between either investing domestically to live off the productivity of the country while facing the risk of being ousted, or looting the country’s riches by liquefying the resources and departing. We demonstrate that important parameters determining this choice include the level of resources, liquidity and indebtedness. We find that the dictator’s choice regarding the timing of departure is significantly related to external lending, investment and debt. We then argue that this looting phenomenon provides an explanation for the generation of corrupt economies in resource-rich countries. An empirical analysis of available corruption indices suggests that instability-led looting provides a more fundamental explanation of perceived corruption than do various social and cultural indicators or the economic theory of internal political competition.
    Keywords: Corruption, Dictatorship, Lending and Indebtedness, Looting, Natural Resource Curse
    JEL: O11 O13 O16
    Date: 2013–01
  7. By: Diao, Xinshen; Kennedy, Adam; Badiane, Ousmane; Cossar, Frances; Dorosh, Paul; Ecker, Olivier; Hagos, Hosaena Ghebru; Headey, Derek; Mabiso, Athur; Makombe, Tsitsi; Malek, Mehrab; Schmidt, Emily
    Keywords: Agricultural policy, CAADP, input policy, Land tenure, Nutrition policy, policy evidence, Private sector,
    Date: 2013
  8. By: Maystadt, Jean-Francois; Ecker, Olivier; Mabiso, Athur
    Keywords: civil war, Climate change, Conflict, drought, livestock, Prices,
    Date: 2013
  9. By: Minot, Nicholas; Dewina, Reno
    Keywords: Food prices, maize, rice, welfare impact,
    Date: 2013
  10. By: Otsuka, Keijiro; Liu, Yanyan; Yamauchi, Futoshi
    Keywords: cereal self-sufficient ration, Economic transformation, farm size, machine use,
    Date: 2013
  11. By: Alem, Yonas (School of Business, Economics and Law); Broussard, Nzinga H. (The Ohio State University)
    Abstract: We use panel data from rural Ethiopia to investigate if participation in a safety net program enhances fertilizer adoption. Using a difference-in-difference estimator and inverse propensity score weighting we find that participation in Ethiopia’s food-for-work program increased fertilizer adoption. Results also indicate that the likelihood of adopting and the intensity of fertilizer usage increased with livestock holdings for food-for-work-participant households providing some evidence that the intervention helped asset-rich farm households more than asset-poor households. We find no significant effects of free distribution on fertilizer adoption or intensification. Our results are consistent with the hypothesis that safety nets can be viewed as mechanisms that allow households to take on more risk to pursue higher profits. The paper highlights important policy implications related to the inter-related dynamics of safety nets and extension services that aim at promoting productivity enhancing modern agricultural technologies.<p>
    Keywords: Safety Net; Fertilizer Use; Inverse Propensity Score Weighting
    JEL: O12 O33 Q12 Q16
    Date: 2013–02–28
  12. By: Xu, Hangtian; Nakajima, Kentaro
    Abstract: This paper estimates the effects of highways (Gaosu Gonglu) on economic development in China’s county-level cities from 1998 to 2007, a period in which China experienced sharp growth in highway mileage, using a micro level data set on industry and highway placement and the double difference propensity score matching method. After extracting the core regions, empirical estimates indicate that highway placement promotes industrial development in related cities with higher output and more investments, and these results are robust to two different checks. However, county-level cities more than 300 km away from large cities do not benefit from new highways. Furthermore, highways tend to promote the development of heavy industry but not that of light industry. Labor productivity exhibits few positive effects.
    Keywords: transport infrastructure project, double di erence propensity score matching (DD-PSM), regional development
    JEL: H54 R12
    Date: 2013–01
  13. By: Charlot, Olivier (University of Cergy-Pontoise); Malherbet, Franck (University of Rouen); Ulus, Mustafa (Galatasaray University)
    Abstract: This paper studies the effects of the introduction of unemployment compensation (UC) in countries characterized by pervasive informality. We provide a simple framework to analyze the impact of UC on the allocation of workers between formal and informal activities, as well as the allocation of workers between sectors featuring different incentives to go informal. We show that a reasonable amount of UC may reduce informality, while larger amounts of UC induce large disincentives to go formal because of the level of taxation involved. We also argue that the financing of UC should be part and parcel of a well- conceived UC system. We show that UC finance based on payroll taxes is likely to entail an excess level of informality resulting from cross-subsidies between heterogenous sectors. The introduction of a simple layoff tax meant to finance the UC system is then shown to reduce informality, hence highlighting how a well-designed financing scheme may be used as a supplementary instrument to curb informality.
    Keywords: informality, labor market imperfections, unemployment compensation
    JEL: E24 E26 J60 L16 O1
    Date: 2013–02
  14. By: Gindling, T. H. (University of Maryland, Baltimore County); Trejos, Juan Diego (University of Costa Rica)
    Abstract: We document changes in income and earnings inequality in the five Central American countries from the early 1990s to 2009. In the 1990s Costa Rica had the most equal distribution of income in Central America, and one of the most equal distributions of income in Latin America. At the other extreme, Guatemala, Honduras and Nicaragua were among the most unequal countries in Latin America. Inequality in El Salvador was between these extremes. Then, in the first decade of the 21st century inequality in El Salvador and Nicaragua decreased while inequality in Costa Rica, Guatemala and Honduras increased. By 2009 levels of inequality in El Salvador and Nicaragua were similar to those in Costa Rica. In this paper, we examine why income and earning inequality differs between the five Central American countries, and why inequality decreased in El Salvador and Nicaragua but increased in Costa Rica, Guatemala and Honduras.
    Keywords: income inequality, Central America, labour income
    JEL: O15 J31 O54
    Date: 2013–02
  15. By: Takahashi, Kazushi
    Abstract: Using an intergenerational database covering nearly a quarter of a century, we explored the degree of intergenerational income mobility among individuals who had grown up in rural Central Luzon, the Philippines. We found that the intergenerational income elasticity is significantly lower than unity, at roughly 0.23, indicating that the average income growth rate is higher for children born to poorer families. The detailed analysis, however, revealed that its magnitude significantly varies across percentiles in a U-shape. The results provide supporting evidence of multiple equilibria or poverty trap.
    Keywords: Philippines, Poverty, Income distribution, Income, Rural Poverty, Economic Mobility
    JEL: D31 I30 O12
    Date: 2013–02
  16. By: Kimura, Koichiro
    Abstract: Outward foreign direct investment (FDI) from developing countries is increasing. In the research on FDI, it has been considered that only competitive and productive firms can invest in foreign countries. However, since the differences in competitiveness and productivity between multinational enterprises (MNEs) from developed and developing countries have not been explicitly investigated, we cannot say whether MNEs from developing countries can or cannot survive in competition with MNEs from developed countries as well as against competitive and productive indigenous firms in host countries. To examine the activities of MNEs from developing countries, this study investigates Chinese firms in South Africa. It reveals that in order to compensate for the weak brand recognition of Chinese products and to expand sales, Chinese firms have mainly been making products that are sold under the brand names of indigenous South African firms. Chinese firms have expanded their business in South Africa relying on the business resources of indigenous firms in the host country. This indicates that business with indigenous firms is significant for MNEs from developing countries in boosting competitiveness.
    Keywords: China, South Africa, Foreign investments, International business enterprises, Foreign direct investment (FDI), Multinational enterprise (MNE)
    JEL: F23 M16
    Date: 2013–02
  17. By: Oka, Natsuko
    Abstract: This paper offers a brief analysis of the legal aspects of the ethnic return migration policy of Kazakhstan, a post-Soviet Central Asian state that has been active in seeking ties with its diaspora since independence. This paper examines the definition of oralman (repatriates) and the establishment of a quota on the number of Kazakh immigrants who are eligible for government funds to show how the rationale and preferences in repatriation policy have changed over the years. By focusing on changes in migration-related legislation in the late 2000s and early 2010s, the paper notes that two key goals of Kazakhstan’s migration policy are not necessarily consistent with each other: the promotion of an ethnically based nation-building project by encouraging the "return" of co-ethnics living abroad, and building a workforce that is best suited for the development of the state’s economy.
    Keywords: Kazakhstan, Migration, Law, Ethnic return migration, Migration law, Quota system
    Date: 2013–03
  18. By: Jie Zhang (Graduate School of Economics, Keio University)
    Abstract: Infrastructure can affect sectoral productivity and lead to industrial structure changes. Under the framework of Harrigan (1997), this study provides an empirical analysis of the effect of infrastructure on China's industry-level productivity and regional specialization during the period of 1987-2007. We calculate the total factor productivity of 9 manufacturing industries in 28 provinces and study the effects of roads networks, telecommunications, and electric power supply on regional variations in sectoral TFP. We also examine the effect of these infrastructures on the sectoral output share across provinces. By using a structure model of infrastructure accumulation and the 3SLS estimation strategy to control for endogeneity of infrastructure provisions, we find that telecommunications and electric power have positive effects on sectoral TFP performance, while road networks and telecommunications help to explain the regional comparative advantage and production specialization.
    Date: 2013–02
  19. By: Anna DePaoli; Mariapia Mendolat
    Abstract: Global international migration may influence child labor through a labor market effect. We empirically investigate this issue by using an original cross-country survey dataset, which combines information on international emigration flows with detailed individual-level data on child labor at age 5-15 in a wide range of developing countries. By using variation in the emigration supply shocks across labor market units defined on the basis of both geography and skill, we estimate a set of child labor equations where the variable of interest is the interactive effect between parental skill and country-level emigration shocks. We measure the latter through different indicators including a direct measure of the relative skill composition of emigrants relative to the resident population in the country of origin. Overall, after controlling for a large set of individual-level characteristics, remittances, and country fixed effects, our findings are consistent with predictions and show that international out-migration may significantly reduce child labor in disadvantaged households through changes in the local labor market.
    Keywords: International Migration, Child Labor, Factor Mobility, Cross-country Survey Data
    JEL: F22 F1 J61
    Date: 2013–02
  20. By: Philippe Aghion; Ufuk Akcigit; Peter Howitt
    Abstract: Schumpeterian growth theory has operationalized Schumpeter's notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process which could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between growth and development with the notion of appropriate growth institutions; (iv) the emergence and impact of long-term technological waves. In each case Schumpeterian growth theory delivers predictions that distinguish it from other growth models and which can be tested using micro data.
    JEL: O10 O11 O12 O30 O31 O33 O40 O43 O47
    Date: 2013–02
  21. By: Justine S. Hastings; Ali Hortaçsu; Chad Syverson
    Abstract: This paper examines how advertising impacts competition and equilibrium prices in the context of a privatized pension market. We use detailed administrative data on fund manager choices and worker characteristics at the inception of Mexico’s privatized social security system, where fund managers had to set prices (management fees) at the national level, but could select sales force levels by local geographic areas. We develop a model of fund manager choice, price and advertising competition (in terms of sales force deployment), nesting models of informative and persuasive advertising. We find evidence in favor of the persuasive view; exposure to sales force lowered price sensitivity and increased brand loyalty, leading to inelastic demand and high equilibrium fees. We simulate oft-proposed policy solutions: a supply-side policy with a competitive government player, and a demand-side policy which increases price elasticity. We find that demand-side policies are necessary to foster competition in social-safety-net markets with large segments of inelastic consumers.
    JEL: D14 D18 G11 L20 L21 L51
    Date: 2013–03
  22. By: Alexander M. Danzer (Ludwig-Maximilians-Universität München); Barbara Dietz; Kseniia Gatskova
    Abstract: This paper presents the research design and data description of a household survey conducted in Tajikistan in 2011, the Tajikistan Household Panel Survey (THPS). Based on a sample of the 2007 and 2009 Tajikistan Living Standards Measurement Survey (TLSS) administered by the World Bank and UNICEF, 1,503 household were re-interviewed. The main part of the paper explains the technique of the household survey including sampling strategy, questionnaire design, pretest and fieldwork, training of interviewers and supervisors and survey quality control procedures. A short overview over the characteristics of households and respondents follows.
    Keywords: Tajikistan, panel data, survey design, migration
    JEL: C83
    Date: 2013–02
  23. By: Freire, Tiago
    Abstract: In 1978, Singapore was the first country to introduce legislation allowing foreign domestic workers (e.g. maids) to work in the country with special visas. Singapore, with its liberal wage policy (no minimum wage), is also the best quasi-natural experiment in determining how a reduction in the cost of domestic work increases the supply of highly skilled female workers. Though Singapore is often cited in the literature as a success story, there are no studies that try to quantify the impact of this legislation. In this paper, we use data from the census conducted between 1957 and 1990, and Singapore's Yearbook of Manpower Statistics between 1974 and 1985, to evaluate the impact of the 1978 legislation in terms of increasing the labour supply of Singaporean women. We compare the female labour supply before and after 1978, for young and older women, high and low-skilled women, and Singaporean-Malay versus Singaporean-Chinese women. We find that the labour supply of women affected by this policy increased by between 2.7% and 12.7%, consistent with previous findings.
    Keywords: Gender; Labour Supply; Quasi-Natural Experiment; Singapore
    JEL: J16 J21 J61
    Date: 2013–02–19
  24. By: He, Xiaobo
    Abstract: Using China Household Income Project Survey (2002) data, this paper addresses the causal relationship between individual wages and access to international markets. The ordinary least squares estimates show statistically insignificant and quantitatively zero effects of accessibility to international markets proxied by the length of contemporary transport routes connecting the origin city and its nearest major seaport. However, using prefecture-level population density in 1820 as exogenous variation in current transport routes, the two-stage least squares regressions provide an opposite picture indicating that every 1 percent increase in distance from the origin city to international markets (i.e. the nearest seaport), ceteris paribus, has a negative impact on individual wages of 0.086 percent. This causal effect remains robust to various sensitivity tests which include current labor market structure, historical factor endowments and initial population development.
    Keywords: O12, O15, F16
    JEL: F16 O12 O15
    Date: 2013–02–23
  25. By: He, Xiaobo; Zhu, Rong
    Abstract: Using population census data, this paper examines the causal effect of childbearing on married women's labor force participation in urban China. To ameliorate the endogeneity of fertility, we exploit twin births as the instrument for the number of children. While the ordinary least squares estimates indicate that having one more child reduces female labor force participation by 6.7% and 8.5% in 1990 and 2000 respectively, the instrumental variable estimates suggest very small and insignificant effects for both years.
    Keywords: Female labor force participation, Fertility, One-Child Policy
    JEL: J13 J21
    Date: 2013–01–29
  26. By: Braakmann, Nils
    Abstract: This paper uses variation in victimization probabilities between individuals living in the same community to shed new light on the costs of crime. I use panel data from the Mexican Family Life Survey for 2002 and 2005 and look at the impact of within-community differences in victimization risk on changes in self-rated and mental health. My results from fixed effects and instrumental variable estimations point towards substantial negative health effects of actual victimization, which might help to explain the existence of compensating differentials in wages or house prices found in earlier studies.
    Keywords: cost of crime; victimization; health
    JEL: H40 I10 I12 K00 K42 R23
    Date: 2013–01–21
  27. By: Juan Yang (School of Economics and Management, Beijing Normal University); Terry Sicular (University of Western Ontario); Desheng Lai (School of Economics and Management, Beijing Normal University)
    Abstract: The substantial shift in rural schooling levels and the contemporaneous changes in educational finance policy including tax and fees reform, two exempt and one compensation policy and school rearrangement policy, raise the need for a fresh look at the determinants of rural education. In this paper we have examined the determinants of rural high school attainment and changes in those determinants between the years 2002 and 2007 at multiple levels (individual, family and community level). We find that the increasing importance of community versus household and individual factors in determining rural children’s schooling attainment between 2002 and 2007. In addition, government expenditures have a significant and positive impact on high school attainment in both years, with a shift in the relative importance of budgetary versus extrabudgetary funding.
    Keywords: Rural Education; High School Attainment; Family Background; Public Finance; Human Capital; China
    Date: 2013

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