nep-dev New Economics Papers
on Development
Issue of 2013‒09‒13
seventeen papers chosen by
Jacob A. Jordaan
Utrecht University

  1. Evaluation of development programs : randomized controlled trials or regressions ? By Elbers, Chris; Gunning, Jan Willem
  2. Are the EU trade preferences really effective? A Generalized Propensity Score evaluation of the Southern Mediterranean Countries' case in agriculture and fishery By Emiliano Magrini; Pierluigi Montalbano; Silvia Nenci
  3. Empowering women through employment, earnings and wealth in India By Aparna Mathur; Sita Nataraj Slavov
  4. Aid's Incomplete Trial: reconsidering the aid-growth paradigm in the macro aid effectiveness literature. By Hansen, Marc
  5. Long-Term Barriers to Economic Development By Spolaore, Enrico; Wacziarg, Romain
  6. The links between economic integration and remittances behaviour of migrants in the Netherlands By Bilgili, Özge
  7. Should Foreign Aid Fund Agricultural Training? Evidence from Armenia. By Randall Blair; Kenneth Fortson; Joanne Lee; Anu Rangarajan
  8. Determinants of Empowerment in a Capability Based Poverty Approach: Evidence from The Gambia By Sofia Karina Trommlerová; Stephan Klasen; Ortrud Lessmann
  9. Communicating with Farmers through Social Networks By Ariel BenYishay; A. Mushfiq Mobarak
  10. The Geo-Politics of Foreign Aid and Transnational Terrorism By Azam, Jean-Paul; Thelen, Véronique
  11. Friend or foe or family ? a tale of formal and informal plants in India By Ghani, Ejaz; O'Connell, Stephen D.; Sharma, Gunjan
  12. The growth of outward FDI and the competitiveness of the underlying economy: the case of India By Narula, Rajneesh; Prasad Kodiyat, Tiju
  13. Achieving the Millennium Development Goals: Lessons for Post-2015 New Development Strategies By Sapkota, Jeet Bahadur; Shiratori, Sakiko
  14. Foreign aid, urbanization and green cities By Li, Jun
  16. INDUSTRIAL STRATEGY AND ECONOMIC TRANSFORMATION:Lessons of five outstanding cases By Hosono, Akio
  17. Unilateral Facilitation Does Not Raise International Labor Migration from the Philippines By David McKenzie; Emily Beam; Dean Yang

  1. By: Elbers, Chris; Gunning, Jan Willem
    Abstract: Can project evaluation methods be used to evaluate programs: complex interventions involving multiple activities? A program evaluation cannot be based simply on separate evaluations of its components if interactions between the activities are important. In this paper a measure is proposed, the total program effect (TPE), which is an extension of the average treatment effect on the treated (ATET). It explicitly takes into account that in the real world (with heterogeneous treatment effects) individual treatment effects and program assignment are often correlated. The TPE can also deal with the common situation in which such a correlation is the result of decisions on (intended) program participation not being taken centrally. In this context RCTs are less suitable even for the simplest interventions. The TPE can be estimated by applying regression techniques to observational data from a representative sample from the targeted population. The approach is illustrated with an evaluation of a health insurance program in Vietnam.
    Keywords: Poverty Monitoring&Analysis,Health Monitoring&Evaluation,Science Education,Scientific Research&Science Parks,Statistical&Mathematical Sciences
    Date: 2013–09–01
  2. By: Emiliano Magrini (European Commission - JRC-IPTS - AGRILIFE Unit (Sevilla, ES)); Pierluigi Montalbano (Sapienza, University of Rome); Silvia Nenci (University of ROme 3)
    Abstract: The aim of this work is to assess the trade impact of preferential schemes in agriculture and fishery granted by the European Union (EU) to the Southern Mediterranean Countries (SMCs). This analysis presents several methodological improvements to previous works. First of all, we rely on a continuous treatment - i.e., preferential margins - to capture the ``average treatment effect'' of trade preferences rather than on a binary treatment based on dummy variables. Second, we apply non parametric matching techniques for continuous treatment, namely a generalized propensity score matching (GPS) technique, to assess the average causal effects of preferences on trade flows. Third, we use highly disaggregated data at sectoral level in order to evaluate properly the preferential treatment which is conceived to be applied at the product level. Our results show how the impact of EU preferences in agriculture and fishery granted to SMCs is positive and significant and better evaluated using impact evaluation techniques. We also assess the functional form of the relationship between EU-SMCs preferences and bilateral trade flows as well as the optimal level of preferential margin above which the marginal impact decreases.
    Keywords: International trade, EU-MED integration, Preferential trade agreement, Impact evaluation, Matching econometrics.
    JEL: C21 F10 F13 F15
  3. By: Aparna Mathur (American Enterprise Institute); Sita Nataraj Slavov (American Enterprise Institute)
    Abstract: Using data from two detailed, nationally representative, household datasets, we explore whether women who are economically empowered are less likely to experience domestic violence. We find that, while working women may be at a greater risk of violence, higher earnings are associated with a reduction in violence.
    Keywords: women's employment,India,domestic violence
    JEL: A F
    Date: 2013–08
  4. By: Hansen, Marc
    Abstract: The Macroeconomic Aid Effectiveness Literature (Macro AEL) has had a resounding effect both within the academic community and within the policy arena where its policy recommendations carry substantial weight. Although the empirical aspect of this literature has received substantial scrutiny, the fundamental practice of assessing the effectiveness of aid by measurement against its impact on macroeconomic growth, referred to here as the Aid-Growth Paradigm, has escaped a similar fate. Consequently this paper will focus on an analysis of the theoretical foundations upon which the empirically dominated Aid-Growth Paradigm is constructed and show that the lack of consensus that plagues the Macro-AEL could be a symptom of the underlying underdeveloped theoretical framework. Through an analysis of the theoretical growth models and the implicit assumptions on the causal channels connecting aid and growth this paper illustrates that the Aid-Growth Paradigm suffers from two correlated oversimplifications. The first is the implicit assumption that the only causal channel that connects aid to growth is simply and directly through consumption and investment and the second is the reduction of the purpose of aid, namely development, to the promotion of macroeconomic growth. A more comprehensive approach, Rigorous Impact Evaluation, is then outlined based on the shortcomings of the Aid-Growth Paradigm that will allow a more multidimensional and exhaustive evaluation of aid’s effectiveness.
    Keywords: Aid effectiveness; Aid-growth paradigm; Rigorous Impact Evaluation
    Date: 2013
  5. By: Spolaore, Enrico (Tufts University); Wacziarg, Romain (UCLA, NBER and CEPR)
    Abstract: What obstacles prevent the most productive technologies from spreading to less developed economies from the worlds technological frontier? In this paper, we seek to shed light on this question by quantifying the geographic and human barriers to the transmission of technologies. We argue that the intergenerational transmission of human traits, particularly culturally trans- mitted traits, has led to divergence between populations over the course of history. In turn, this divergence has introduced barriers to the di¤usion of technologies across societies. We provide measures of historical and genealogical distances between populations, and document how such distances, relative to the worlds technological frontier, act as barriers to the di¤usion of devel- opment and of speci…c innovations. We provide an interpretation of these results in the context of an emerging literature seeking to understand variation in economic development as the result of factors rooted deep in history.
    Keywords: Long-run growth, genetic distance, intergenerational transmission, di¤usion of innovations.
    Date: 2013
  6. By: Bilgili, Özge (UNU-MERIT / MGSoG)
    Abstract: In a time of economic downturn and the recession in Europe, a migrant's labour market position is even more precarious, and may influence their economic homeland engagement. Based on the IS Academy, Migration and Development: A World in Motion Project survey data , I focus on Afghan, Burundian, Ethiopian and Moroccan first generation migrants in the Netherlands, and explore how their economic integration is related to different aspects of their economic remittances behaviour. The main objectives of this paper can be summarized as follows: 1) to describe migrants' labour market performance; 2) to designate migrants' economic remittances behaviour with a focus on propensity to remit, amount of remittances and reason for remitting; and 3) to discuss how labour market performance relates to migrants' economic homeland engagement. In line with the resource dependent transnationalism argument, this paper concludes that economic integration is positively linked to propensity to remit and the amount of remittances sent. Moreover, I show that especially those with a secure employment status are more likely to remit, remit more and remit more for investment purposes rather than consumption. The paper starts out with a literature review on economic transnationalism and a description of the hypotheses. Next, the data and methods used are explained in detail. Subsequently, the descriptive and analytical results of the paper are presented, followed by a concluding section.
    Keywords: migrants in the Netherlands, economic remittances, economic integration, transnationalism
    JEL: F22 J15 J61 O15
    Date: 2013
  7. By: Randall Blair; Kenneth Fortson; Joanne Lee; Anu Rangarajan
    Keywords: Foreign Aid, Agricultural, Armenia, International
    JEL: F Z
    Date: 2013–08–30
  8. By: Sofia Karina Trommlerová (IHEID Geneva); Stephan Klasen (Georg-August University Göttingen); Ortrud Lessmann (Helmut-Schmidt-Universität Hamburg)
    Abstract: Although empowerment is seen as intrinsically important and instrumentally valuable to escape poverty, there is very little research on the empirical drivers of empowerment. Using custom-made household-level information and using advanced econometric techniques that also correct for endogeneity, we examine what empowers individuals in The Gambia to change their own lives and affect changes in their communities. We show that people’s self-reported capabilities are the most important drivers of empowerment. We also show that respondents’ confidence that they will be the most powerful agents in their lives is higher for men, foreigners, people free of health limitations, and younger people.
    Keywords: empowerment; agency; capability approach; The Gambia; correction for endogeneity
    JEL: I30 I32 O15 Z13
    Date: 2013–09–02
  9. By: Ariel BenYishay (University of New South Wales); A. Mushfiq Mobarak (Economic Growth Center, Yale University)
    Abstract: Low adoption of productive agricultural technologies is a puzzle. Agricultural extension services rely on external agents to communicate with farmers, although social networks are known to be the most credible source of information about new technologies. We conduct a large-scale field experiment on communication strategies in which extension workers are partnered with different members of social networks. We show that communicator actions and effort are susceptible to small performance incentives, and adoption rates vary by communicator type. Communicators who face conditions most comparable to target farmers are the most persuasive. Incorporating communication dynamics can enrich the literature on social learning.
    Keywords: social learning, agriculture, technology adoption, Malawi
    JEL: O33 O13 Q16
    Date: 2013–08
  10. By: Azam, Jean-Paul; Thelen, Véronique
    Abstract: This paper reviews some findings by Azam and Thelen (2008, 2010, 2012) that illustrate how foreign aid is used by rich countries to purchase the services of recipient governments with a view to protect or promote their economic and political interests. In particular, these findings show that foreign aid is effective at controlling the number of transnational terrorist attacks coming from the recipient countries, while it is not so regarding the number of attacks in the host countries. In contrast, they show that military intervention, as captured by the presence of US soldiers on the ground is counter-productive, as it increases the number of terrorist attacks both by source country and by host country.
    Date: 2013–08–25
  11. By: Ghani, Ejaz; O'Connell, Stephen D.; Sharma, Gunjan
    Abstract: This paper examines the interaction between formal (organized) and informal (unorganized) plants in the manufacturing sector in India. How has the size and productivity of the plants in the organized sector affected the plants in the unorganized sector? How have informal plants affected formal plants? Are the magnitudes of the effects symmetric in either direction? The evidence shows that there are positive horizontal and vertical spillovers in each direction. Informal firms are an important supplier of inputs to formal firms. Employment and output in the organized sector is greater in those states in India that have a greater presence of unorganized suppliers of inputs. Conversely, unorganized employment and output are greater in states that have a greater presence of organized buyers of inputs. But there are two important asymmetries in the relationship between the organized and unorganized sectors. First, the unorganized sector is much more dependent on and responsive to organized sector presence than vice versa. Second, unorganized sector productivity is dependent on and responsive to organized sector productivity and presence but the reverse is not true.
    Keywords: Labor Policies,Water and Industry,Labor Markets,Industrial Management,E-Business
    Date: 2013–09–01
  12. By: Narula, Rajneesh (John H. Dunning Centre for International Business, Henley Business School, University of Reading); Prasad Kodiyat, Tiju (Centre for Research in Economics and Finance, Cranfield School of Management)
    Abstract: There has been an impressive spurt in the outward FDI activity of Indian MNEs since the 1990s. However, despite the rhetoric, this growth has not been exceptional, when compared to other similarly developed countries. Received economic arguments propose that successful outward investors tend to be the most competitive domestic firms in their home economy. Their firm-specific assets tend to be a function of the political economy and economic structure of the home economy. In IB terms, this means that the ownership-specific assets of Indian multinationals are a subset of the ownership assets of their parent companies, which in turn are largely determined by the location-specific assets of the home economy. The evidence suggests that the strengths and weaknesses in the location assets of India have caused pockets of excellence to emerge, but that these conditions do not lend themselves to a broader growth in competitiveness, meaning that further rapid growth is ultimately not sustainable. Systematic upgrading and radical policy changes are needed to build up India's knowledge infrastructure and institutions to support a shift in India's competitive advantages to new sectors outside these pockets. This ultimately means a policy emphasis on the manufacturing sector, and within that, promoting a shift from low-tech to higher technology manufacturing sectors, and a strengthening of the formal sector.
    Keywords: India, innovation systems, comparative advantage, competitiveness, MNEs, infrastructure, globalization, location advantages
    JEL: F23 O32
    Date: 2013
  13. By: Sapkota, Jeet Bahadur; Shiratori, Sakiko
    Abstract: Most of the reports on the Millennium Development Goals (MDGs) released by the multilateral development organizations and other agencies focus either on a single goal or on a few goals and examine global/regional trends or cross-country differences. There are few comprehensive cross-country analyses on the progress of the MDGs. This paper is an effort to reduce this gap. Using the database from the World Bank, an assessment is attempted on the progress towards key indicators between 1990 and 2010. This study also examines how different initial conditions have affected the speed of the progress and how overall improvement does not necessarily mean the narrowing of the inequality within and/or across the countries involved. In particular, low-income countries and fragile states are lagging behind in MDGs performance. We conclude by suggesting that two new purposes be incorporated in the post-2015 development strategy: Inclusive development and resilient society.
    Keywords: MDGs post-2015 development strategies , poverty , inequality , resilience , developing countries
    Date: 2013–08–08
  14. By: Li, Jun
    Abstract: Rapid urbanization, and particularly the associated problems of urban poverty, unsustainable development and environmental degradation, pose an enormous challenge to many developing countries. In the last decade more foreign aid has been diverted to urban
    Keywords: developing countries, sustainability, aid effectiveness, scalable, transferable, framework
    Date: 2013
  15. By: Shimada, Go
    Abstract: Industrialization is the key for sustainable economic growth in Africa. The role of industrial policy has been discussed intensively recently. This paper sheds light on the learning (or learning how to learn) aspect of industrialization policy, proposing a comprehensive approach. A great deal of past literature focuses only on the technological aspects of learning, but industrialization is a multi-faceted task, covering policy planning, policy implementation, and managerial knowledge. This paper took up a case from Ethiopia. The case study confirmed that learning on managerial knowledge improved performance of private firms. It also confirmed that policy learning expanded the policy scope of the government to help private sector development. These two aspects are inseparable, and this comprehensive approach should be used by donor countries for the industrialization of Africa.
    Keywords: industrialization policy, Ethiopia, private firms
    Date: 2013–07–18
  16. By: Hosono, Akio
    Abstract: Industrial development, especially industrial structure up-grading and diversification, is considered essential for economic transformation and sustained growth. The objective of this paper is to obtain insights into how crucial factors for industrial development, such as accumulation of knowledge and capabilities, technological innovation, infrastructure, institutions, interact in practice, focusing on several outstanding cases of industrial development, which produced a remarkable economic transformation. In these cases, different factors including investment in infrastructure, technological breakthrough, as well as external factors, triggered the economic transformation, but it could not have happened without continuous accumulation of capabilities and knowledge through learning. In all cases, effective institutions accomplished the role of facilitator or catalyzer of transformation.
    Keywords: industrial development , economic transformation , THAILAND , Brazil BANGLADESH , CHILE , SINGAPORE
    Date: 2013–07–18
  17. By: David McKenzie (Development Research Group, The World Bank); Emily Beam (Department of Economics, National University of Singapore); Dean Yang (Economics Department, University of Michigan)
    Abstract: Significant income gains from migrating from poorer to richer countries have motivated unilateral (source-country) policies facilitating labor emigration. However, their effectiveness is unknown. We conducted a large-scale randomized experiment in the Philippines testing the impact of unilaterally facilitating international labor migration. Our most intensive treatment doubled the rate of job offers but had no identifiable effect on international labor migration. Even the highest overseas job-search rate we induced (22%) falls far short of the share initially expressing interest in migrating (34%). We conclude that unilateral migration facilitation will at most induce a trickle, not a flood, of additional emigration.
    Keywords: International migration, passport costs, barriers to migration, unilateral migration policy, imperfect information, job-matching, field experiment, Philippines
    JEL: O15 F22 O15 C93
    Date: 2013–09

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