nep-dev New Economics Papers
on Development
Issue of 2013‒08‒31
thirteen papers chosen by
Mark Lee
Towson University

  1. Adult Mortality, AIDS and Fertility in Rural Malawi By Durevall, Dick; Lindskog, Annika
  2. Corruption along ethnic lines: A study of individual corruption experiences in 17 African countries By Isaksson, Ann-Sofie
  3. Do They Look for Informal Jobs ?: Migration of the Working Age in Indonesia By Elda Luciana Pardede; Rachmanina Listya
  4. Financial Education in Latin America and the Caribbean: Rationale, Overview and Way Forward By Nidia García; Andrea Grifoni; Juan Carlos López; Diana Mejía
  5. PISA in Low and Middle Income Countries By Simone Bloem
  6. Urbanisation and Green Growth in China By OECD
  7. Cash Transfers and Child Schooling: Evidence from a Randomized Evaluation of the Role of Conditionality By Richard Akresh; Damien de Walque; Harounan Kazianga
  8. Disease Control, Demographic Change and Institutional Development in Africa By Margaret S. McMillan; William A. Masters; Harounan Kazianga
  9. Trade Performance of the Less Developed African Countries By Fontoura, Maria P.; Crespo, Nuno
  10. The Causal Nexus between Financial Development and Economic Growth in Kenya By Uddin, Gazi Salah; Sjö, Bo; Shahbaz, Muhammad
  11. Financial Development and Poverty Reduction Nexus:A Cointegration and Causality Analysis in Bangladesh By Uddin, Gazi Salah; Shahbaz, Muhammad; AROURI, Mohamed El Hedi
  12. Growth effect of FDI in developing economies: The role of institutional quality By JUDE, Cristina; LEVIEUGE, Gregory
  13. Disquiet on the weather front : the welfare impacts of climatic variability in the rural Philippines By Safir, Abla; Piza, Sharon Faye; Skoufias, Emmanuel

  1. By: Durevall, Dick (Department of Economics, School of Business, Economics and Law, Göteborg University); Lindskog, Annika (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The impact of HIV/AIDS on fertility in sub-Saharan Africa has received attention recently, since changes in population structure can impact on future economic development. We analyze the effect of AIDS on actual and desired fertility in rural Malawi, using data from Malawi 2004 Demographic and Health Survey and population censuses. Since AIDS was the dominating cause of death during the 1990s and early 2000s, we use prime-age adult mortality as the key explanatory variable. The focus is on heterogeneity in the response of gender-specific mortality rates. By estimating ordered probit models we show that actual fertility responds positively to male mortality but negatively to female mortality, and that the overall fertility response is positive but small. One interpretation of the findings is that the effects of female and male mortality differ because of an old-age security motive for having children. When a woman risks death before her children grow up, she is less likely to need support of children and demand should be low, but when the risk of husband’s death is high, the woman should expect to rely more on children’s support.
    Keywords: AIDS; demand for children; fertility; HIV; adult mortality; old age security
    JEL: I10 J13 O12
    Date: 2013–08–15
  2. By: Isaksson, Ann-Sofie (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: While a growing literature relates macro variation in corruption to ethnic divisions, existing studies have paid little attention to the possible existence of systematic micro variation in corruption along ethnic lines. The present paper examines whether individual corruption experiences vary systematically depending on ethnic group affiliation, and what the nature of this possible variation is. More specifically, it considers the effect of belonging to influential ethnic groups. Empirical findings drawing on data for more than 23,000 respondents in 17 African countries indeed suggest that individual corruption experiences vary systematically along ethnic lines. Belonging to influential ethnic groups – in terms of relative group size or relative economic and political standing – is associated with a greater probability of having experienced corruption. Assuming that belonging to a larger and economically/politically stronger group helps proxy for a greater probability of the corrupt public official being a co-ethnic, this should imply more corruption among co-ethnics, supporting the idea that enforcement mechanisms within ethnic groups could act to strengthen corrupt contracts. The results depend on the type of corruption considered, though; when focusing on a more clearly extortive form of corruption, there is less evidence of collusive behaviour.
    Keywords: corruption; ethnic groups; Africa; afrobarometer
    JEL: D73 O12 O55
    Date: 2013–08–15
  3. By: Elda Luciana Pardede (Demographic Institute, FEUI); Rachmanina Listya (Demographic Institute, FEUI)
    Abstract: Characteristics of informal activity that are highly flexible in terms of working hours, barrier to entry, mobility, capital and skills requirement, have made informal jobs attractive for migrant workers in developing countries. Informal jobs are also theoretically claimed as a temporary position or transition for migrants who seek to work in more certain, formal jobs. Using individual’s jobs and migration history of adults obtained from the 2007 IFLS data from 2000--2007, this study aims to analyse how migration affects individual’s tendency to work in informal jobs by measuring the immediate effect of migration on the job's status. The result of clustered multinomial logit regression shows that individuals who migrate are less likely to work in informal job relative to formal job compared with individuals who do not migrate. This result contradicts the notion that migration is an act to look for opportunities with high uncertainty because migrants seem more likely to engage in formal jobs compared to non migrants. It may show that temporary positions into the formal jobs are not what the adult migrants in Indonesia are looking for.
    Keywords: Migration, Informal Sector, Employment, Indonesia
    JEL: J60
    Date: 2013–08
  4. By: Nidia García; Andrea Grifoni; Juan Carlos López; Diana Mejía
    Abstract: Macroeconomic stability and growth in the Latin America and the Caribbean (LAC) region have allowed governments to focus on public policies that build on the complementarities between financial education, inclusion and the development of social capital. Financial education programmes can support the needs of emerging middle classes in managing their finances and benefitting from access to more sophisticated financial markets. They can also be a valuable tool to ensure a more effective financial inclusion of the most vulnerable sectors of the population, and help fight poverty and inequality.<P>L'éducation financière en Amérique latine et dans les Caraïbes : tour d'horizon et perspectives<BR>La stabilité et la croissance économique des pays d’Amérique Latine et des Caraïbes ont permis aux gouvernements de la région de concentrer leurs efforts sur la mise en place de politiques publiques qui exploitent la complémentarité entre éducation financière, inclusion financière et développent du capital social. Les programmes dédiés à l’éducation financière ont pour but d’aider les classes moyennes émergentes à gérer leurs budgets et à accéder à des marchés financiers qui deviennent plus sophistiqués. Ces programmes sont aussi importants pour la mise en place d’une inclusion financière plus efficace, ainsi que pour lutter contre la pauvreté et les inégalités.
    Keywords: Latin America, poverty reduction, financial education, financial literacy, financial inclusion, Caribbean, conditional cash transfer programmes, Amérique latine, Caraïbes, éducation financière, réduction de la pauvreté, inclusion financière, alphabétisation financière, programmes de transfert de fonds sous conditions
    JEL: D14 D31 H53 I25 I38 O19
    Date: 2013–08–22
  5. By: Simone Bloem
    Abstract: This paper explores the participation of low- and middle-income countries in OECD’s Programme for International Student Assessment (PISA). It provides a detailed description of partner countries’ participation across PISA rounds and the challenges faced by low- and middle-income partner countries in effectively implementing and deriving policy value from PISA. Specific challenges are illustrated with examples from Tunisia and Kyrgyzstan.<P> Many partner countries lag considerably behind OECD countries on various dimensions of social and economic development. Three OECD countries – Chile, Mexico, Turkey – also differ from higher-income OECD countries in regards to educational achievement and other indicators of social and economic development. After grouping countries based on income (GNI per capita), this paper shows that the cognitive performance of students in countries participating in PISA varies considerably not only between different country income groups but also within them. Analysis of PISA performance in relation to national wealth provides strong arguments for grouping countries according to their social and economic development when reflecting on challenges of participation and effective use of PISA. Lack of funding and governments’ fear of bad performance have been stated as potential deterrents to participation. Lack of institutional capacity and less relevant results due to a non-representative sample of 15 year-olds and clustering of students at low proficiency levels are discussed as main challenges for the effective use of PISA. The paper concludes with some considerations on how to improve the effective use of PISA results in these countries that may be particularly relevant in the context of the OECD’s recently launched initiative called PISA for Development.<BR>Ce document examine la participation des pays à revenu faible ou intermédiaire au Programme international de l’OCDE pour le suivi des acquis des élèves (PISA). Il étudie de façon détaillée la participation des pays partenaires aux différents cycles PISA et les enjeux rencontrés, notamment par les pays partenaires à revenu faible ou intermédiaire, pour mettre en oeuvre de façon efficace l’enquête PISA et en tirer les bénéfices escomptés en termes d’action publique. Ces enjeux spécifiques sont illustrés par des exemples tirés de l’expérience de la Tunisie et du Kirghizistan.<P> De nombreux pays partenaires accusent un retard important par rapport aux pays de l’OCDE concernant différents indicateurs de développement économique et social. Trois pays de l’OCDE – le Chili, le Mexique et la Turquie – se distinguent également des pays de l’OCDE à revenu plus élevé de par leurs résultats éducatifs et d’autres indicateurs de développement économique et social. Après regroupement des pays sur la base de leur revenu (RNB par habitant), ce document montre que les performances cognitives des élèves des pays participant au PISA varient considérablement non seulement entre les différents groupes de pays regroupés par revenu, mais aussi au sein de ces derniers. L’étude de la relation entre la performance aux évaluations PISA et la richesse nationale apporte des arguments solides en faveur du regroupement des pays sur la base de leur développement économique et social lors de l’analyse des enjeux de la participation au PISA et de son utilisation efficace. Le manque de financement et la crainte des pays d’obtenir de mauvais résultats aux évaluations ont été identifiés comme des éléments pouvant dissuader les pays de participer au PISA. L’insuffisance des capacités institutionnelles et la moindre pertinence des résultats en raison de la non-représentativité de l’échantillon d’élèves de 15 ans et de la concentration des élèves aux faibles niveaux de performance sont examinés comme principaux obstacles à une utilisation efficace du PISA. Le document s’achève par une série de recommandations sur la façon d’améliorer l’efficacité de l’utilisation des résultats du PISA dans ces pays, recommandations qui pourraient s’avérer particulièrement pertinentes dans le cadre de l’initiative PISA pour le développement, lancée récemment par l’OCDE.
    Date: 2013–08–20
  6. By: OECD
    Abstract: This working paper assesses national policy and governance mechanisms that can influence green growth in Chinese cities. It applies the OECD conceptual framework for urban green growth to examine the potential challenges and opportunities for increasing economic growth through reducing the environmental impact of urban land use, transport and buildings; through improving water and air quality; and through fostering supply and demand of green products and services. The paper first situates the issue of green growth within the nexus of urbanisation and environmental challenges now facing China. This is followed by a review of environmental and quality of life challenges posed by rapid urbanisation. Opportunities for national policies to influence green growth in four key urban policy sectors are then examined. The paper concludes with an assessment of governance challenges and considers potential changes to facilitate economic growth while reducing the environmental impact of cities.
    Keywords: sustainable development, innovation, transport, renewable energy, China, climate change, energy efficiency, urban sustainability, cities, green technologies, green growth, green economy, multi-level governance, urban development, regional clusters, green cities, attractiveness, metro-region
    JEL: O18 O44 Q01 Q55 Q58 R11 R58
    Date: 2013–05–17
  7. By: Richard Akresh (University of Illinois at Urbana-Champaign); Damien de Walque (The World Bank, Washington DC); Harounan Kazianga (Oklahoma State University)
    Abstract: We 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 (CCT) or unconditional (UCT). Families under the CCT schemes were required to have their children ages 7-15 enrolled in school and attend classes regularly. There were no such requirements under the unconditional programs. Results indicate that UCTs and CCTs 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, CCTs are significantly more effective than UCTs 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: Cash transfers; Conditionality; Education; Africa
    JEL: I21 I25 I38 J13 O15 C93
    Date: 2013–01
  8. By: Margaret S. McMillan (Tufts University, IFPRI and NBER); William A. Masters (Tufts University); Harounan Kazianga (Oklahoma State University)
    Abstract: This paper addresses the role of tropical disease in rural demography and land use rights, using data from Onchocerciasis (river blindness) control in Burkina Faso. We combine a new survey of village elders with historical census data for 1975-2006 and geocoded maps of treatment under the regional Onchocerciasis Control Program (OCP). The OCP ran from 1975 to 2002, first spraying rivers to stop transmission and then distributing medicine to help those already infected. Controlling for time and village fixed effects, we find that villages in treated areas acquired larger populations and also had more cropland transactions, fewer permits required for cropland transactions, and more regulation of common property pasture and forest. These effects are robust to numerous controls and tests for heterogeneity across the sample, including time-varying region fixed effects. Descriptive statistics suggest that treated villages also acquired closer access to electricity and telephone service, markets, wells and primary schools, with no difference in several other variables. These results are consistent with both changes in productivity and effects of population size on public institutions.
    Keywords: West Africa, Burkina Faso, Public Health, Land Rights, Rural Infrastructure.
    Date: 2013–06
  9. By: Fontoura, Maria P.; Crespo, Nuno
    Abstract: Adopting a long term perspective, we evaluate the trade performance of less developed African countries. Besides some general trade indicators, we apply a constant market share analysis in order to decompose export performance into several components with specific economic interpretation. Our main conclusions are: (i) the sectoral specialization structure of exports has remained heavy in commodities but the composition of the basket of goods exported has changed considerably with a very strong concentration in crude oil (mainly in the last two decades), (ii) the geographical structure of exports has also changed, with an important increase of the relative importance of China and USA, (iii) the countries under analysis not only show a negative competitiveness effect, but are also penalized by their sectoral and geographical specialization, and (iv) the most favorable evolution is observed in the most recent sub-period (2000-2007), but it is insufficient to reverse the previous negative trend.
    Keywords: Constant market share analysis, Trade, Less developed African countries
    JEL: F14 O55
    Date: 2013
  10. By: Uddin, Gazi Salah; Sjö, Bo; Shahbaz, Muhammad
    Abstract: This paper aims to reexamine the relationship between financial development and economic growth in Kenya over the period of 1971-2011. Since, financial sector plays a vital role in mobilizing and allocating savings into productive ventures, the core issue of this investigation remains important for developing economics. The examination is based on a Cobb-Douglas production augmented by incorporating financial development. A simulation based ARDL bounds testing and Gregory and Hansen’s structural break cointegration approaches are being utilized in this study. Cointegration is being found between the series in the presence of a structural break in 1992. It is also being established that, in the long run, development of financial sector has positive impact on economic growth. Here remains an important policy implication for the concerned individuals of Kenya, that is, they may emphasize on financial development to ignite economic growth.
    Keywords: Economic Growth, Financial Development, Kenya
    JEL: C1
    Date: 2013–08–03
  11. By: Uddin, Gazi Salah; Shahbaz, Muhammad; AROURI, Mohamed El Hedi
    Abstract: This study investigates the relationship between financial development, economic growth and poverty reduction in Bangladesh using quarter frequency data over the period of 1975-2011. This issue is of importance for developing economics, since the role of financial sector in mobilizing and allocating savings into productive investments. All variables are tested for their order of integration using the ADF and Zivot-Andrews structural break tests. The results show that the variables are integrated at I(1). We then apply a simulation based the ARDL approach to cointegration by incorporating structural breaks stemming in the series for long run relation. Our empirical findings indicated that long run relationship between financial development, economic growth and poverty reduction exists in Bangladesh. The diagnostic tests show that the underlying assumptions of the statistical model are fulfilled. The implication of the empirical findings is explained in the main text.
    Keywords: Financial development, economic growth, poverty
    JEL: C1
    Date: 2013–08–19
  12. By: JUDE, Cristina; LEVIEUGE, Gregory
    Abstract: This paper investigates the effect of FDI on economic growth conditional on the institutional quality of host countries. We consider institutional heterogeneity to be an explanation for the mixed results of previous empirical studies and we develop several arguments to show that institutional quality modulates the intensity of FDI impact on growth. Using a comprehensive data set for institutional quality, we test this hypothesis on a sample of 94 developing countries over the period 1984-2009. The use of Panel Smooth Transition Regression (PSTR) allows us to identify both the heterogeneity and the threshold of institutional quality that influence the FDI growth effect. These results have significant implications for policy sequencing in developing countries. In order to benefit from FDI-led growth, the improvement of the institutional framework should precede FDI attraction policies. While some features of institutional quality have an immediate effect on fostering FDI-led growth, others need a consistent accumulation of efforts, therefore challenging the effectiveness of institutional reforms in developing countries.
    Keywords: FDI, growth, heterogeneity, institutional quality, PSTR, Developing economies
    JEL: C34 F21 F43 O16
    Date: 2013–08–26
  13. By: Safir, Abla; Piza, Sharon Faye; Skoufias, Emmanuel
    Abstract: Three recent rounds (2003, 2006, and 2009) of the Family Income and Expenditure Survey are matched to rainfall data from 43 rainfall stations in the Philippines to quantify the extent to which unusual weather has any negative effects on the consumption of Filipino households. It is found that negative rainfall shocks decrease consumption, in particular food consumption. Rainfall below one standard deviation of its long-run average causes food consumption to decrease by about 4 percent, when compared with rainfall within one standard deviation. Positive deviations above one standard deviation have a limited impact. Moreover, for households close to a highway or to a fixed-line phone, consumption appears to be fully protected from the impact of negative rainfall shocks.
    Keywords: Science of Climate Change,Climate Change Mitigation and Green House Gases,Water Conservation,Regional Economic Development,Climate Change Economics
    Date: 2013–08–01

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