nep-dev New Economics Papers
on Development
Issue of 2013‒04‒27
thirty papers chosen by
Mark Lee
Towson University

  1. Development Impacts of Seasonal and Temporary Migration: A Review of Evidence from the Pacific and Southeast Asia By John Gibson; David McKenzie; Halahingano Rohorua
  2. Intra-National Protectionism in China: Evidence from the Public Disclosure of ‘Illegal’ Drug Advertising By Markus Eberhardt; Zheng Wang; Zhihong Yu
  3. The impact of irrigation on nutrition, health, and gender: A review paper with insights for Africa south of the Sahara By Domenech, Laia; Ringler, Claudia
  4. Does freer trade really lead to productivity growth?: Evidence from Africa By Bresnahan, Lauren; Coxhead, Ian; Foltz, Jeremey; Mogues, Tewodaj
  5. Unbundling Land Administrative Reform: Demand for Second Stage Land Certification in Ethiopia By Bezu, Sosina; Holden, Stein
  6. Is Africa's recent growth sustainable? By Andersen, Thomas Barnebeck; Jensen, Peter Sandholt
  7. Household-level Recovery after Floods in a Developing Country: Evidence from Pakistan By Kurosaki, Takashi
  8. Does Political Reservation Affect Voting Behavior? Empirical Evidence from India By Mori, Yuko; Kurosaki, Takashi
  9. Vulnerability of Household Consumption to Floods and Droughts in Developing Countries: Evidence from Pakistan By Kurosaki, Takashi
  10. Household Vulnerability to Wild Animal Attacks in Developing Countries: Experimental Evidence from Rural Pakistan By Kurosaki, Takashi; Khan, Hidayat Ullah
  11. Job Search Channels, Neighborhood Effects and Wages Inequality in Developing Countries: The Colombian Case By Garcia, Gustavo Adolfo; Nicodemo, Catia
  12. Can Microinsurance Help Prevent Child Labor? An Impact Evaluation from Pakistan By Landmann, Andreas; Frölich, Markus
  13. China and the Two Crises: From 1997 to 2009 By Naughton, Barry
  14. Measurements and Determinants of Multifaceted Poverty: Absolute, Relative, and Subjective Poverty in Indonesia By Dartanto, Teguh; Shigeru, Otsubo
  15. The Determinants of Technology Adoption:The Case of the Rice Sector in Tanzania By Nakano, Yuko; Kajisa, Kei
  16. How Access to Irrigation Influences Poverty and Livelihoods: A Case Study from Sri Lanka By Sellamuttu, Sonali Senaratna; Aida, Takeshi; Kasahara, Ryuji; Sawada, Yasuyuki; Wijerathna, Deeptha
  17. A Fresh Look at Capacity Development from Insiders’ Perspectives: A Case Study of an Urban Redevelopment Project in Medellín, Colombia By Sato, Mine
  18. "Currency Concerns under Uncertainty: The Case of China" By Sunanda Sen
  19. How Much Does Women's Empowerment Influence their Wellbeing? Evidence from Africa By David Fielding
  20. Elderly’s Health Shocks and Household’s Ex-ante Poverty in India By Manoj K. Pandey
  21. Determinants and Persistence of benefits from the National Rural Employment Guarantee Scheme: Panel Data Analysis for Rajasthan, India By Raghbendra Jha; Rahgav Gaiha; Manoj K. Pandey; Shylashri Shankar
  22. The role of bribes in rural governance: The case of India By Raghbendra Jha; Hari Nagarajan; Kailash C.Pradhan
  23. Yet Another Look at the Modernisation Hypothesis: Evidence from South America By Manoel Bittencourt
  24. Is labor income responsible for poverty reduction ? a decomposition approach By Azevedo, Joao Pedro; Inchauste, Gabriela; Olivieri, Sergio; Saavedra, Jaime; Winkler, Hernan
  25. Financial inclusion and legal discrimination against women : evidence from developing countries By Demirguc-Kunt, Asli; Klapper, Leora; Singer, Dorothe
  26. Municipal vulnerability to climate change and climate related events in Mexico By Borja-Vega, Christian; de la Fuente, Alejandro
  27. Foreign job opportunities and internal migration in Vietnam By Fukase, Emiko
  28. Foreign wage premium, gender and education : insights from Vietnam household surveys By Fukase, Emiko
  29. Urbanization and poverty reduction -- the role of rural diversification and secondary towns By Christiaensen, Luc; De Weerdt, Joachim; Todo, Yasuyuki
  30. China's Pure Exporter Subsidies By Fabrice Defever; Alejandro Riaño

  1. By: John Gibson (University of Waikato, NIDEA and Motu); David McKenzie (World Bank, BREAD, CEPR, CReAM and IZA); Halahingano Rohorua (University of Waikato)
    Abstract: Seasonal and temporary migration programs are widely used around the world, yet there is scant evidence as to their development impacts. Absent such evidence, it is difficult to evaluate whether the proliferation of temporary worker programs in recent years is a useful development. This article reviews studies that attempt to measure impacts of seasonal and temporary migration with a particular focus on evidence from the Pacific and Southeast Asia.
    Keywords: Circular migration; Development impacts; Seasonal migration; Temporary migration
    JEL: O12 J61 F22
    Date: 2013–04
  2. By: Markus Eberhardt; Zheng Wang; Zhihong Yu
    Abstract: This paper provides micro-level evidence that drug advertising regulations and inspections in China are used by local governments to discriminate against firms from outside the province. Furthermore, the degree of discrimination varies across firms in that drug manufacturers which have closer ties with rival provinces are more likely to be targeted. These findings demonstrate that giving provincial governments strong incentives to compete with each other may exacerbate the market distortions inherent in a partially reformed economy such as China.
    Keywords: China, intra-national protectionism, drug advertising
    JEL: F15 P26 L25
    Date: 2013
  3. By: Domenech, Laia; Ringler, Claudia
    Abstract: The hypothesis underlying this review paper is that how irrigation gets deployed in SSA will be decisive not only for environmental sustainability (such as deciding remaining forest cover in the region) and poverty reduction, but also for health, nutrition, and gender outcomes in the region. The focus of this paper is on the health, nutrition, and gender linkage.
    Keywords: Irrigation; Nutrition; Health; Gender; Women; Water resources; Environmental impacts; Water use.;,
    Date: 2013
  4. By: Bresnahan, Lauren; Coxhead, Ian; Foltz, Jeremey; Mogues, Tewodaj
    Abstract: We use firm-level data from the World Bank’s Regional Program on Enterprise Development, covering Ghana, Kenya, Nigeria, and Tanzania for 1991–2003. Econometric results confirm well-known relationships, such as a positive association between export intensity and TFP, which implies that more productive firms are more likely to select in to exporting.
    Keywords: trade; firm productivity; Manufacturing industries; exports; trade liberalization;,
    Date: 2013
  5. By: Bezu, Sosina (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Holden, Stein (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: Ethiopia has implemented one of the largest, fastest and cheapest land registration and certification reforms in Africa. While there have been evidences of positive impacts of this land reform in terms of increased investment, land productivity and land rental market activities, the government is now piloting another round of land registration and certification that involves GPS measurement and computer registration. This ‘Second Stage land registration’ is expected to replace the registration from the first round that used field markings in combination with memory of the neighbors to identify plot borders. We use panel data from 600 households in two regions (Oromia and SNNP) to investigate household perceptions and demand for such a Second Stage reform. Our study has revealed a relatively low demand and WTP for Second Stage certificates. The WTP also decreases significantly from 2007 to 2012 while the value of land increases dramatically in the same period. Households with larger land holdings and male-headed households whose First Stage certificate contained only the husband’s name are especially less interested in a new registration. Households who attended a meeting on land registration are more interested and willing to pay for Second Stage certificate. The demand for Second Stage certificates comes primarily from the Land Administrations as it can provide a better basis for Land Administration and produce public documentation of land-related affairs.
    Keywords: Land registration and certification; Second Stage registration and certification; joint land certification; land administration; gender;
    JEL: Q15
    Date: 2013–04–19
  6. By: Andersen, Thomas Barnebeck (Department of Business and Economics); Jensen, Peter Sandholt (Department of Business and Economics)
    Abstract: In this paper we argue that the answer is yes. Our optimism rests on the finding that differences in the level of institutional quality predict cross-country variation in African economic growth during the period 1995-2011. This finding is quite robust. It holds in OLS, LAD and 2SLS settings; it holds for different measures of institutions and different measures of economic growth; and it holds for the period before and the period after the global financial crisis. We also show that changes in institutional quality predict cross-country variation in African economic growth. Moreover, if we split our sample in two equally sized groups, a high-growth and a lowgrowth group, then the high-growth group has experienced a statistically significant increase in institutional quality, whereas the low-growth group has not. Overall, this makes probable that institutions has played an important part in Africa’s recent growth acceleration. The continent has seen many false dawns, caused in large part by ups in commodity prices, but a growth acceleration driven by institutions is likely to signify a genuine African takeoff.
    Keywords: Institutions; economic growth; Africa
    JEL: O11 O43 O47
    Date: 2013–04–15
  7. By: Kurosaki, Takashi
    Abstract: Based on a panel survey conducted in rural Pakistan, this paper analyzes the extent to which households recovered from damage due to floods that hit the country in 2010. With regard to initial recovery, households who had initially fewer assets and were hit by greater flood damage had more difficulty in recovering. After one year, the overall recovery had improved, with initially rich households associated with faster recovery but the speed of recovery decelerated. The overall pattern indicates that the village economy was turning towards the initial asset distribution despite the short-run disturbance to the household economy.
    Keywords: natural disaster, recovery, resilience, Asia, Pakistan
    JEL: O12 D12 D91
    Date: 2012–11
  8. By: Mori, Yuko; Kurosaki, Takashi
    Abstract: This paper empirically examines the impact of political reservation for disadvantaged groups on voting behavior. Using microdata from the National Election Study of the 2004 parliamentary elections in India, we find that in a reserved constituency, where only members of the disadvantaged castes can stand for election, voters of the disadvantaged castes are encouraged to vote. On the other hand, the system of constituency reservation does not have any impact on the turnout of voters belonging to other groups, including relatively upper caste voters. This finding suggests that political reservation does not crowd out the electoral participation of other groups. These voters, however, tend to vote for the right-wing political party in reserved constituencies. This implies a possibility that the political reservation might provoke a social cleavage along castes in Indian politics.
    Keywords: political reservation, affirmative action, voter turnout, political economy
    JEL: J15 J38 D72
    Date: 2013–01
  9. By: Kurosaki, Takashi
    Abstract: Aggregate shocks such as droughts and floods cannot be perfectly insured by risk sharing within a village. Given this inability, what type of households are more vulnerable in terms of a decline in consumption when a village is hit by such shocks and what kind of microeconomic mechanism underlies the household heterogeneity in vulnerability? These questions are investigated using two-period panel data collected in rural Pakistan in 2001 and 2004. We compare consumption response to droughts, floods, and health shocks and investigate how the response differs across different types of households. Empirical results show that the impact of droughts was negligible, younger and more landed households were less vulnerable to floods, and households with greater access to formal financial institutions were less vulnerable to idiosyncratic health shocks. The empirical pattern suggests the possibility of risk sharing among households that are heterogeneous in both risk aversion and credit access.
    Keywords: natural disaster, consumption smoothing, risk sharing, self-insurance, Pakistan
    JEL: O12 D12 D91
    Date: 2013–03
  10. By: Kurosaki, Takashi; Khan, Hidayat Ullah
    Abstract: Based on a three-year panel dataset of households collected in rural Pakistan, we first quantify the extent to which farmers are vulnerable to attacks by wild boars; we then examine the impact of an intervention on households’ capacity to reduce related income losses. A local nongovernmental organization implemented the intervention as a randomized controlled trial at the beginning of the second survey year. This experimental design enabled us to cleanly identify the impact of the intervention. We find that the intervention was highly effective in eliminating the crop-income loss of treated households in the second year, but that effects were not discernible in the third year. The finding from the third year could be due to the high implicit cost incurred by the households in implementing the treatment. Regarding the impact of the intervention on a number of consumption measures, the difference-in-difference estimate for the impact on consumption was insignificant in the second year, but highly positive in the third year when estimated without other controls. A part of this consumption increase was because of changes in remittance inflows. The overall results indicate the possibility that treatment in the absence of subsidies was costly for households due to hidden costs, and hence, the income gain owing to the initial treatment was transient.
    Keywords: wild animal attack, agriculture, consumption, randomized controlled trial, Pakistan
    JEL: O13 O15 Q12
    Date: 2013–03
  11. By: Garcia, Gustavo Adolfo (Autonomous University of Barcelona); Nicodemo, Catia (University of Oxford)
    Abstract: This paper analyses the relationship between social networks and the job search behaviour of individuals. Networking is not only based on friends and relatives but also on neighbourhood. The geographic closeness is associated to social interactions. Individuals who are in physical and social proximity share the same sources of information, because they divide individual characteristics or because they learn from one another's behaviour. Using data from Colombia in 2009 we explore how neighbourhoods have an effect on the channel used to search for a job (formal vs informal). People tend to opt for a formal or informal channel depending on the channel selected by employed people in their neighbourhood. In addition, we study the wage premium in using a formal or informal channel, exploring the inequality that can arise using a different job search method. Our results show that the neighbourhood affects the individual's job search method and referral workers earn less wage at the bottom of the wage distribution with respect to non-referred workers. At the top of the wage distribution the difference observed is due to different characteristics between the two groups. Colombia presents persistent high levels of informality and inequality. These features impose important social and economic costs such as low tax collection, low employee protection and deficiencies in the labour intermediation process with strong informational asymmetries in the job search. New policies to regulate the labour market are need.
    Keywords: neighborhood effects, formal and informal networks, job search, quantile regression
    JEL: J64 J31 J24 P23 J6 J7 J0
    Date: 2013–04
  12. By: Landmann, Andreas (University of Mannheim); Frölich, Markus (University of Mannheim)
    Abstract: Child labor is a common consequence of economic shocks in developing countries. We show how reducing vulnerability can affect child labor and schooling. We exploit the extension of a health and accident insurance scheme by a Pakistani microfinance institution (MFI) that was set up as a randomized controlled trial and accompanied by household panel surveys. Together with increased coverage the MFI offered assistance with claim procedures in treatment branches. Using Difference-in-difference techniques we find lower incidence of child labor and lower child labor earnings caused by the innovation. Separating the two parts of the innovation package, the effects of claim assistance are mostly insignificant, while increased insurance coverage has large effects on child labor outcomes and days missed at school. Consistent with a theoretical model we develop in this paper, the effect is largely due to an ex-ante feeling of protection as opposed to a shock-mitigation effect.
    Keywords: child labor, health insurance, Pakistan
    JEL: J20 J82 O12
    Date: 2013–04
  13. By: Naughton, Barry
    Abstract: China appears to have successfully weathered the worst impact of both the Asian Financial Crisis (1997-98) and the Global Financial Crisis (2008-2009). Chinese leaders did respond quickly, and on occasion massively, to the challenge of external crisis. In retrospect, however, each crisis response can be seen to have involved an element of over-shooting, which was followed by domestic reformulation and retrenchment. This paper will track commonalities and differences of the two crises in three dimensions: immediate macroeconomic crisis response; institutional adaptations; and trade and exchange rate policies. The discussion will clarify that the very “success†of the response to the AFC laid the foundation for deeper economic problems relating to the GFC. In turn, the response to the GFC gave government officials and state-owned enterprises control over an even larger volume of resources, and reduced the accountability of both officials and financial institutions, changes that inevitably have softened budget constraints, reduced individual risk, and encouraged even larger investments. In consequence, the Chinese economy now faces accumulating problems from the maladaptation of domestic institutions, a maladaptation that is not unrelated to the crisis response.
    Keywords: China , Asian Financial Crisis , Global Financial Crisis , monetary policy , stimulus , economic reform
    Date: 2013–02–01
  14. By: Dartanto, Teguh; Shigeru, Otsubo
    Abstract: The notion of ‘poverty’ is diversified and dynamic. It varies across countries with different socio-economic norms. It may also change over time even in the same society, with different stages of social and economic development. A country may be struggling with absolute poverty at the early stages of development, while it may well be more concerned with relative and/or subjective poverty as its average per-capita income increases. This article intends to conduct an exploration of multiple poverty measures by looking into the absolute, relative and subjective poverty incidence in Indonesia. Using the 2005 National Socio-Economic Survey (Susenas), we observed that there was a roughly 28 percentage-point difference in the poverty headcount ratios computed by applying absolute (14.47%) and subjective (42.03%) poverty. There were virtually no correlations among the poverty rankings in the provinces of Indonesia obtained by five poverty metrics. Results of logit model and ordered logit model estimations of the possible determinants of poverty indicate that the main determinants of poverty are educational attainment, number of household members, physical assets (land and house ownership), existence of migrant workers (possible remittances), negative shocks of layoffs and/or health problems, development of public services, and the availability of road infrastructure. A higher educational attainment increases the probability of never being poor in any of the five poverty metrics by almost 11 percentage points. This study also confirmed that households having less than society’s averages in terms of the physical asset of land and consumption of durable goods and fashion tended to subjectively asses themselves as poor. The study suggests that any poverty alleviation programs should consider relative impacts among beneficiaries and non-beneficiaries within each locality and across provinces.
    Keywords: Absolute Poverty , Relative Poverty , Subjective Poverty , Subjective Well-Being , Multidimensional Poverty Analysis , Indonesia
    Date: 2013–02–18
  15. By: Nakano, Yuko; Kajisa, Kei
    Abstract: Using an extensive household-level data set collected in Tanzania, this paper investigates the determinants of technology adoption in rice cultivation by focusing on the role of credit. We find that credit enhances fertilizer use and the adoption of labor-intensive agronomic practices such as transplanting in rows, for which monitoring of hired labor is easy. We also find that new technologies are adopted more widely in irrigated areas and small-scale farmers are not at a disadvantage. Based on these findings, we argue that with appropriate policies including credit, a rice Green Revolution can improve the productivity of small-scale farmers in Tanzania.
    Keywords: technology adoption , Green Revolution , Sub-Saharan Africa , Tanzania
    Date: 2013–03–26
  16. By: Sellamuttu, Sonali Senaratna; Aida, Takeshi; Kasahara, Ryuji; Sawada, Yasuyuki; Wijerathna, Deeptha
    Abstract: This study combines a livelihoods approach with a regression approach to quantify the effectiveness of irrigation infrastructure investment on improving people’s livelihood strategies. Using a unique dataset based on households in southern Sri Lanka, and a natural experimental setting, we estimate from a two stage income regression model to show that irrigation access has a positive effect on income through livelihood choices. We also show through qualitative approaches that factors not linked to irrigation infrastructure may contribute to changes in livelihood portfolios. In addition, we highlight factors that result in certain households being unable to move out of poverty despite access to the improved irrigation infrastructure.
    Keywords: irrigation , poverty , livelihoods
    Date: 2013–03–26
  17. By: Sato, Mine
    Abstract: In contrast to the current discussion on Capacity Development (CD), which is mostly made from the donors’ aid-effectiveness point of view, this paper attempts to explore what foreign donors can learn about CD by tracing the endogenous and long-running CD process from insiders’ perspectives. As a case study, an urban redevelopment project called MIB in Medellín City in Colombia is examined. After clarifying the initial context of urban poverty in Colombia, the paper traces the six phases of the MIB project: institutional preparation and awareness enhancement, conception of the inclusive-urbanism idea, planning of the MIB, construction/reconstruction of the residences, resettlement of residents, and scaling-up. Then the paper makes an in-depth analysis of the whole process, focusing on five key CD factors identified by Hosono et al. (2011): stakeholder ownership, mutual learning, specific drivers, scaling-up, and roles of external actors. From the analysis, the paper proposes four major lessons on CD research and practice in the future. First, we need to change our timeframe through which we look at the CD process. The MIB experience shows that the process can be far longer than what has been assumed by donors and researchers. Second, the current project-centered periodization of development assistance and the overwhelming focus on the project period should be reconsidered. In the MIB, the project implementation phase took only five years in a total process of 30 years. Third, the MIB case shows that documentation of previous projects and seminars, which occur in the pre-project phase under donors’ auspices, can greatly help local specialists conceive of new ideas. Fourth, the post-project phase also merits greater attention in identifying constraints to sustainability and replicability of the project concerned and to explore what external actors can do to overcome the constraints. The paper concludes by pointing out the necessity of accumulating similar kinds of case studies on the CD process made from insiders’ perspectives.
    Keywords: Capacity Development , urban redevelopment , social urbanism , Medellín , Colombia
    Date: 2013–03–29
  18. By: Sunanda Sen
    Abstract: The recent declines in China's financial account balance ended the "twin surplus" era and led to a modest decline in the stock of official reserves, which reflects a reversal in expectations for the Chinese currency. Negative balances, which have been visible in China's financial balances since the last quarter of 2011, have heightened fears/anxiety in markets. These deficits stand in sharp contrast to the typical financial account surplus that existed until 2010. The announcement in September 2011 by Chinese monetary authorities of a "two-way floating" RMB in the foreign exchange market has unsettled market expectations and has led to a sharp fall in the financial balance. The latter brought a change in the expectations regarding the RMB-USD exchange rate. This change was reflected in the drop in foreign exchange assets, which was caused by a jump in short-term trade credits to prepay (for imports) in dollars, a rise in dollar advances from banks, and a withdrawal of dollar deposits. These changes have, of late, been a cause of concern relating to the future of China's economic relations vis-a-vis trading and financial partners, which include the United States. The experience of China, in a changing world beset with deregulation and with speculation affecting her external balance in recent years, provides further confirmation of John Maynard Keynes's observation, in 1937, regarding uncertainty in markets: "About these matters there is no scientific basis on which to form any calculable probability whatever. We simply do not know."
    Keywords: China; Financial Balances; Official Reserves; Twin Surpluses; Rebalancing; Expectations; Internationalization; Managed Exchange Rate
    JEL: E31 E52 F42 O16 O53
    Date: 2013–03
  19. By: David Fielding (Department of Economics, University of Otago, New Zealand)
    Abstract: One of the eight Millennium Development Goals is to 'promote gender equality and empower women.' However, only 1% of official foreign aid is currently spent on gender equality and human rights. Using individual-level survey data from 39 villages in northern Senegal, we model the effects that freedom within the home have on married women's subjective wellbeing. We find the direct effects on wellbeing to be of a similar magnitude to the direct effects of consumption, education and morbidity. These results suggest the need for a review of aid allocation priorities.
    Keywords: wellbeing; health; women's empowerment
    JEL: O15 J12 I15
    Date: 2013–04
  20. By: Manoj K. Pandey
    Abstract: Evidence on the association between traditional poverty measures and health is widely available in the literature. However, the traditional ex-post poverty measures neglect many aspects of household welfare by overlooking the risk that a household faces in view of fewer resources available to it. Household’s vulnerability to expected poverty is an alternative measure which allows quantification of welfare loss due to poverty as well as due to other sources of uncertainty. Using two waves of independent cross-sectional data collected by National Sample Survey Organization (NSSO) in the years 1995–96 and 2004, the paper aims to estimate household’s vulnerability to poverty for Indian households with elderly and examine whether health shocks from the elderly members translated into the risk of household’s poverty in the near future. The econometric results accounting for possible endogenous relationship between health and vulnerability suggest that households with higher concentration of aged members with poor health and disability are more vulnerable to poverty. Thus, economic policies, for general population as well as for aged, should be integrated well with the health policies. Sufficient healthcare facilities and affordable health insurance is needed to be provided to the households with aged — in particular for those living in rural and other poverty prone areas and communities. This is a necessary step to eradicate poverty from poor households and to prevent non-poor households from falling into poverty in the near future.
    Keywords: Health shocks, Poverty, Vulnerability to poverty, elderly
    JEL: J14 I18 C35
    Date: 2013
  21. By: Raghbendra Jha; Rahgav Gaiha; Manoj K. Pandey; Shylashri Shankar
    Abstract: ndia’s National Rural Employment Guarantee Scheme (NREGS) has been hailed as one of the country’s most creative social initiatives. Since the program was begun only recently (in 2004-05) there is a need to assess household access to this program and persistence of benefits to households not just in one year but over time. Using a unique panel data set for 2007-08 and 2009-10 for the Indian state of Rajasthan, this paper analyzes the transitions into and out of the NREGS. It models the impact of such transitions on earnings of workers as well the determinants of such transitions. To the best of our knowledge this is the first study of this kind. Several policy conclusions are advanced.
    Keywords: National Rural Employment Guarantee; Panel data; labor earnings
    JEL: C33 H53 J68 J80 O12
    Date: 2013
  22. By: Raghbendra Jha; Hari Nagarajan; Kailash C.Pradhan
    Abstract: Given that the phenomenon of capture of public programs by sections the population is rampant in developing countries, households can indulge in a strategy to improve their participating in public programs by bribing the suppliers of such programs. This is an important issue affecting both the supply of local public goods and the incidence of corruption. To the best of our knowledge there is no analysis of the impact of bribery on participating in a local public goods program, anywhere. Using a unique data set for rural India this paper addresses the question of whether households bribe elected officials responsible for assuring such supply to improve their access to local public goods. We find considerable evidence of such bribing. We also model the welfare effects of such bribing on groups of households as well as the impact of bribery on aggregate welfare. Several policy conclusions are advanced.
    Keywords: Bribery, Program Capture, Welfare Effects, Rural India.
    JEL: D31 D63 D73 O12
    Date: 2013
  23. By: Manoel Bittencourt
    Abstract: We investigate in this paper whether the exogenous version of the modernisation hypothesis holds in South America, or whether democracy needs development for its own consolidation. We use a sample of all nine countries that re-democratised in the last thirty years or so and the data sets cover two distinct periods, 1970-2007, and 1945-1969. The results, based on dynamic panel time-series data analysis (we use the Fixed Effects, Common Correlated Effects and Fixed Effects with Instrumental Variables estimators), suggest that the modernisation hypothesis holds in the region during the period 1970-2007, or that income, or development in general, plays a positive role in "sustaining" democracy. Moreover, the exogenous version of the modernisation hypothesis does survive scrutiny for the period 1945-1969 as well, a period in which the continent was relatively poorer and democracy a rather elusive concept in the region. We also test for the critical junctures hypothesis, or whether particular historical structural changes play any role in contemporaneous democratisation in the region, however we are not able to provide any concrete evidence in favour of it. Essentially, we suggest that a certain level of development is an important condition for democracy to survive and mature, which - in times of a new democratisation wave taking place in societies with di¤erent developmental paths - is a suggestive observation.
    Keywords: Modernisation hypothesis, Democracy, Development, South America
    JEL: O10 O54 P16
    Date: 2013
  24. By: Azevedo, Joao Pedro; Inchauste, Gabriela; Olivieri, Sergio; Saavedra, Jaime; Winkler, Hernan
    Abstract: Demographics, labor income, public transfers, or remittances: Which factor contributes the most to observed reductions in poverty? Using counterfactual simulations, this paper accounts for the contribution labor income has made to the observed changes in poverty over the past decade for a set of 16 countries that have experienced substantial declines in poverty. In contrast to methods that focus on aggregate summary statistics, the analysis generates entire counterfactual distributions that allow assessing the contributions of different factors to observed distributional changes. Decompositions across all possible paths are calculated so the estimates are not subject to path-dependence. The analysis shows that for most countries in the sample, labor income is the most important contributor to changes in poverty. In ten of the countries, labor income explains more than half of the change in moderate poverty; in another four, it accounts for more than 40 percent of the reduction in poverty. Although public and private transfers were relatively more important in explaining the reduction in extreme poverty, more and better-paying jobs were the key factors behind poverty reduction over the past decade.
    Keywords: Rural Poverty Reduction,Services&Transfers to Poor,Regional Economic Development,Poverty Monitoring&Analysis
    Date: 2013–04–01
  25. By: Demirguc-Kunt, Asli; Klapper, Leora; Singer, Dorothe
    Abstract: This paper documents and analyzes gender differences in the use of financial services using individual-level data from 98 developing countries. The data, drawn from the Global Financial Inclusion (Global Findex) database, highlight the existence of significant gender gaps in ownership of accounts and usage of savings and credit products. Even after controlling for a host of individual characteristics including income, education, employment status, rural residency and age, gender remains significantly related to usage of financial services. This study also finds that legal discrimination against women and gender norms may explain some of the cross-country variation in access to finance for women. The analysis finds that in countries where women face legal restrictions in their ability to work, head a household, choose where to live, and receive inheritance, women are less likely to own an account, relative to men, as well as to save and borrow. The results also confirm that manifestations of gender norms, such as the level of violence against women and the incidence of early marriage for women, contribute to explaining the variation in the use of financial services between men and women, after controlling for other individual and country characteristics.
    Keywords: Access to Finance,Gender and Law,Financial Literacy,Gender and Development,Population Policies
    Date: 2013–04–01
  26. By: Borja-Vega, Christian; de la Fuente, Alejandro
    Abstract: A climate change vulnerability index in agriculture is presented at the municipal level in Mexico. Because the index is built with a multidimensional approach to vulnerability (exposure, sensitivity and adaptive capacity), it represents a tool for policy makers, academics and government alike to inform decisions about climate change resilience and regional variations within the country. The index entails baseline (2005) and prediction (2045) levels based on historic climate data and future-climate modeling. The results of the analysis suggest a wide variation in municipal vulnerability across the country at baseline and prediction points. The vulnerability index shows that highly vulnerable municipalities demonstrate higher climate extremes, which increases uncertainty for harvest periods, and for agricultural yields and outputs. The index shows at baseline that coastal areas host some of the most vulnerable municipalities to climate change in Mexico. However, it also shows that the Northwest and Central regions will likely experience the largest shifts in vulnerability between 2005 and 2045. Finally, vulnerability is found to vary according to specific variables: municipalities with higher vulnerability have more adverse socio-demographic conditions. With the vast municipal data available in Mexico, further sub-index estimations can lead to answers for specific policy and research questions.
    Keywords: Climate Change Mitigation and Green House Gases,Science of Climate Change,Population Policies,Climate Change Economics,Statistical&Mathematical Sciences
    Date: 2013–04–01
  27. By: Fukase, Emiko
    Abstract: This paper investigates the role of employment opportunities created by foreign-owned firms as a determinant of internal migration and destination choice using the Vietnam Migration Survey 2004 and the Vietnam Household Living Standards Survey 2004. Multinomial logit and conditional logit models are estimated to study both origin and destination-specific characteristics of migrants. The paper finds that the migration response to foreign job opportunities is larger for female workers than male workers; there appears to be intermediate selection in terms of educational attainment; and migrating individuals on average tend to go to destinations with higher foreign employment opportunities, even controlling for income differentials, land differentials, and distances between sending and receiving areas.
    Keywords: Population Policies,Labor Markets,Anthropology,Voluntary and Involuntary Resettlement,Human Migrations&Resettlements
    Date: 2013–04–01
  28. By: Fukase, Emiko
    Abstract: This paper investigates the differential impacts of foreign ownership on wages for different types of workers (in terms of educational background and gender) in Vietnam using the Vietnam Household Living Standards Surveys of 2002 and 2004. Whereas most previous studies have compared wage levels between foreign and domestic sectors using firm-level data (thus excluding the informal sector), one advantage of using the Living Standards Surveys in this paper is that the data allow wage comparison analyses to extend to the informal wage sector. A series of Mincerian earnings equations and worker-specific fixed effects models are estimated. Several findings emerge. First, foreign firms pay higher wages relative to their domestic counterparts after controlling for workers’ personal characteristics. Second, the higher the individual workers'levels of education, the larger on average are the wage premiums for those who work for foreign firms. Third, longer hours of work in foreign firm jobs relative to working in the informal wage sector are an important component of the wage premium. Finally, unskilled women experience a larger foreign wage premium than unskilled men, reflecting the low earning opportunities for women and a higher gender gap in the informal wage sector.
    Keywords: Labor Markets,Labor Policies,Economic Theory&Research,Gender and Development,Bankruptcy and Resolution of Financial Distress
    Date: 2013–04–01
  29. By: Christiaensen, Luc; De Weerdt, Joachim; Todo, Yasuyuki
    Abstract: A rather unique panel tracking more than 3,300 individuals from households in rural Kagera, Tanzania during 1991/4-2010 shows that about one in two individuals/households who exited poverty did so by transitioning from agriculture into the rural nonfarm economy or secondary towns. Only one in seven exited poverty by migrating to a large city, although those moving to a city experienced on average faster consumption growth. Further analysis of a much larger cross-country panel of 51 developing countries cannot reject that rural diversification and secondary town development lead to more inclusive growth patterns than metropolitization. Indications are that this follows because more of the poor find their way to the rural nonfarm economy and secondary towns, than to distant cities. The development discourse would benefit from shifting beyond the rural-urban dichotomy and focusing instead more on how best to urbanize and develop the rural nonfarm economy and secondary towns.
    Keywords: Rural Poverty Reduction,Regional Economic Development,Achieving Shared Growth,Population Policies
    Date: 2013–04–01
  30. By: Fabrice Defever; Alejandro Riaño
    Abstract: One third of Chinese exporters sell more than ninety percent of their production abroad. We argue that this distinctive pattern is attributable to the widespread use of subsidies that require firms to export the vast majority of their output. We study this type of subsidy in the context of a heterogeneous-firm model, and show that it is worse from a welfare standpoint than a regular export subsidy, partly because it increases protection of the domestic market. A counterfactual analysis suggests that eliminating these subsidies would result in a welfare gain for China comparable to that of halving its trade costs.
    Keywords: Trade Policy, Export Subsidies, Heterogeneous Firms, China
    JEL: F12 F13 O47
    Date: 2013–04

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