nep-dev New Economics Papers
on Development
Issue of 2013‒11‒29
fourteen papers chosen by
Jacob A. Jordaan
Utrecht University

  1. On the Generalizability of Experimental Results in Economics: With A Response To Camerer By Omar Al-Ubaydli; John A. List
  2. Recent Trends in Inequality and Poverty in Developing Countries By Facundo Alvaredo; Leonardo Gasparini
  3. Getting incentives right: an impact evaluation of district hospital capitation payment in Vietnam By Nguyen, Ha Thi Hong; Bales, Sarah; Wagstaff, Adam; Dao, Huyen
  4. Human Capital and Fertility in Chinese Clans Before Modern Growth By Carol H. Shiue
  5. "To Have and Have Not": Migration, Remittances, Poverty and Inequality in Algeria By Margolis, David N.; Miotti, Luis; Mouhoud, El Mouhoub; Oudinet, Joël
  6. Seasonal Effects of Water Quality: The Hidden Costs of the Green Revolution to Infant and Child Health in India By Elizabeth Brainerd; Nidhiya Menon
  7. Inequality from a global perspective: An alternative approach By Peter Edward; Andy Sumner
  8. Armed conflict and schooling in Rwanda: Digging deeper. By Guariso, Andrea; Verpoorten, Marijke
  9. Minding Weber more than ever? The impacts of State Capacity and Bureaucratic Autonomy on development goals By Cingolani, Luciana; Thomsson, Kaj; de Crombrugghe, Denis
  10. The Return of the Prodigy Son: Do Return Migrants make Better Leaders? By Marion Mercier
  11. Informal-formal wage gaps in Colombia By Nancy Daza; Luis Fernando Gamboa
  12. Scaling-up adoption of improved technologies: The impact of the promotion of row planting on farmers' teff yields in Ethiopia. By Vandercasteelen, Joachim; Dereje, Mekdim; Minten, Bart; Taffesse, Alemayehu Seyoum
  13. Does Wealth Inequality Matter for Growth? The Effect of Billionaire Wealth, Income Distribution, and Poverty By Bagchi, Sutirtha; Svejnar, Jan
  14. Brain Drain and Economic Performance in Small Island Developing States By David de la CROIX; Frédéric DOCQUIER; Maurice SCHIFF

  1. By: Omar Al-Ubaydli; John A. List
    Abstract: Economists are increasingly turning to the experimental method as a means to estimate causal effects. By using randomization to identify key treatment effects, theories previously viewed as untestable are now scrutinized, efficacy of public policies are now more easily verified, and stakeholders can swiftly add empirical evidence to aid their decision-making. This study provides an overview of experimental methods in economics, with a special focus on developing an economic theory of generalizability. Given that field experiments are in their infancy, our secondary focus pertains to a discussion of the various parameters that they identify, and how they add to scientific knowledge. We conclude that until we conduct more field experiments that build a bridge between the lab and the naturally-occurring settings of interest we cannot begin to make strong conclusions empirically on the crucial question of generalizability from the lab to the field.
    JEL: C9 C90 C91 C92 C93
    Date: 2013–11
  2. By: Facundo Alvaredo (EMod/OMI-Oxford University, Paris School of Economics and CONICET.); Leonardo Gasparini (CEDLAS, UNLP.)
    Abstract: This chapter reviews the empirical evidence on the levels and trends in income/consumption inequality and poverty in developing countries. It includes a discussion of data sources and measurement issues, evidence on the levels of inequality and poverty across countries and regions, an assessment of trends in these variables since the early 1980s, and a general discussion of their determinants. There has been tremendous progress in the measurement of inequality and poverty in the developing world, although serious problems of consistency and comparability still remain. The available evidence suggests that on average the levels of national income inequality in the developing world increased in the 1980s and 1990s, and declined in the 2000s. There was a remarkable fall in income poverty since the early 1980s, driven by the exceptional performance of China over the whole period, and the generalized improvement in living standards in all the regions of the developing world in the 2000s.
    JEL: D31 I32
    Date: 2013–11
  3. By: Nguyen, Ha Thi Hong; Bales, Sarah; Wagstaff, Adam; Dao, Huyen
    Abstract: With the movement toward universal health coverage gaining momentum, the global health research community has made significant efforts to advance knowledge about the impact of various schemes to expand population coverage. The impacts on efficiency, quality, and gaps in service utilization of reforms to provider payment methods are less well studied and understood. The current paper contributes to this limited knowledge by evaluating the impact of a shift by Vietnam's social health insurance agency from reimbursing hospitals on a fee-for-service basis to making a capitation payment to the district hospital where the enrollee lives. The analysis uses panel data on hospitals over the period 2005-2011 and multiple cross-section data sets from the Vietnam Household Living Standards Surveys to estimate impacts on efficiency, quality, and equity. The paper finds that capitation increases hospitals'efficiency, as measured by recurrent expenditure and drug expenditure per case, but has no effect on surgery complication rates or in-hospital deaths. In response to the shift to capitation, hospitals scaled down service provision to the insured and increased provision to the uninsured (who continue to pay out-of-pocket on a fee-for-service basis). The study points to the need to anticipate the intended and unintended effects of any payment reform and the trade-offs among policy objectives.
    Keywords: Health Monitoring&Evaluation,Health Systems Development&Reform,Health Law,Population Policies,Disease Control&Prevention
    Date: 2013–11–01
  4. By: Carol H. Shiue
    Abstract: This paper studies the pre-industrial origins of modern-day fertility decline. The setting is in Anhwei Province, China over the 13th to 19th centuries, a period well before the onset of China’s demographic transition and industrialization. There are four main results. First, we observe non-Malthusian effects in which high income households had relatively fewer children. Second, higher income households had relatively more educated sons, consistent with their greater ability to support major educational investments. Third, those households that invested in education had fewer children, suggesting that households producing educated children were reallocating resources away from child quantity and towards child quality. Fourth, over time, demand for human capital fell significantly. The most plausible reason is the declining returns to educational investments. The findings point to a role for demography in explaining China’s failure to industrialize early on.
    JEL: I25 J11 O15
    Date: 2013–11
  5. By: Margolis, David N. (Paris School of Economics); Miotti, Luis (University of Paris 13); Mouhoud, El Mouhoub (Université Paris-Dauphine); Oudinet, Joël (University of Paris 13)
    Abstract: This article analyses the distributional impact of remittances across two regions of Algerian emigration (Nedroma and Idjeur) using an original survey we conducted of 1,200 households in 2011. Remittances and especially the role played by foreign pensions decrease the Gini index by nearly 4 % for the two Algerian regions, with the effect in Idjeur being twice as large as Nedroma. At the same time, they help reduce poverty by nearly 13 percentage points. Remittances have a strong positive impact on very poor families in Idjeur but much less in Nedroma, where poor families suffer from a “double loss” due to the absence of their migrants and the fact that the latter do not send money home.
    Keywords: remittances, migration, poverty, inequality, Algeria
    JEL: F24 O15 O55
    Date: 2013–11
  6. By: Elizabeth Brainerd (Economics Department, Brandeis University); Nidhiya Menon (Economics Department, Brandeis University)
    Abstract: This paper examines the impact of fertilizer agrichemicals in water on infant and child health using water quality data combined with data on child health outcomes from the Demographic and Health Surveys of India. Because fertilizers are applied at specific times in the growing season, the concentrations of agrichemicals in water vary seasonally and by cropped area as some Indian states plant predominantly summer crops while others plant winter crops. Our identification strategy exploits the differing timing of the planting seasons across states and differing seasonal prenatal exposure to agrichemicals to identify the impact of agrichemical contamination on various measures of child health. The results indicate that children exposed to higher concentrations of agrichemicals during their first month experience worse health outcomes on a variety of measures; these effects are largest among the most vulnerable groups, particularly the children of uneducated poor women living in rural India.
    Keywords: Fertilizer Agrichemicals, Water Pollutants, Child Health, Infant Mortality, India
    JEL: O12 I15 Q53 Q56
    Date: 2013–11
  7. By: Peter Edward (Newcastle University Business School); Andy Sumner (King's College London)
    Abstract: The interplay of between- and within-country inequality, the relative contribution of each to overall global inequality, and the implications this has for who benefits from recent global growth (and by how much), has become a significant avenue for economic research. Drawing conclusions from aggregate inequality indices such as the Gini and Theil reduces the highly complex nature of global inequality to a single coefficient and makes it impossible to take a nuanced view of how global growth interacts with changing national and international inequality. In light of this we propose and justify an alternative approach based on four consumption `layers' identified by reference to the global consumption distribution. We consider how each `layer' of global society has fared since the end of the Cold War.
    Keywords: Poverty, inequality, economic development.
    JEL: D63 I32
    Date: 2013–08
  8. By: Guariso, Andrea; Verpoorten, Marijke
    Abstract: It has been shown that armed conflict in Rwanda had a strong negative impact on schooling. Huge gaps remain, however, in our understanding of its heterogeneous effects across subgroups and the underlying mechanisms. Relying on population census data, we show that – in contrast to previous findings - there is no leveling off, i.e. the negative impact is not stronger for non-poor and boys. We further demonstrate that slower grade progression as well as increased drop-outs explain the drop in primary schooling, while the drop in secondary schooling is driven by a decline in school initiation. Finally, our results reveal a spatial mismatch between commune-level genocide intensity and the drop in schooling. We test for several confounding factors - pre-war regional trends in schooling, migration, selective killings, and post-war assistance to genocide survivors - but find that none of these factors can fully account for the mismatch. We conjecture that the impact of armed conflict on schooling in Rwanda was nationwide, both because the disruption caused by the genocide was felt in every corner of the country and because - besides the genocide - other forms of violence took place in Rwanda in the nineties.
    Date: 2013–11–06
  9. By: Cingolani, Luciana (UNU-MERIT / MGSoG); Thomsson, Kaj (Maastricht University); de Crombrugghe, Denis (Maastricht University)
    Abstract: The notion of state capacity has attracted renewed interest over the last few years, in particular in the study of violent conflict. Yet, state capacity is conceived differently depending on whether the interest lies in the state's power to discourage violent conflict, in its ability to administer efficiently, or simply in its capacity to foster economic development. In this article, we examine the links between state capacity and bureaucratic autonomy, and discuss the conditions under which these converge or differ. Using panel data over 1990-2010 and a novel indicator of bureaucratic autonomy, we then estimate the separate effect of state capacity and bureaucratic autonomy on two of the MDGs indicators: child mortality and the prevalence of tuberculosis. The evidence suggests that a) bureaucratic autonomy has a stronger impact than commonly used measures of state capacity; and b) both bureaucratic autonomy plays a more important role for these indicators than traditional macroeconomic variables.
    Keywords: state capacity, institutions, bureaucracies, millennium development goals, child mortality, tuberculosis
    JEL: I38 D73 O43 O50
    Date: 2013
  10. By: Marion Mercier (DIAL - Développement, institutions et analyses de long terme - Institut de recherche pour le développement [IRD], PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales [EHESS] - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper investigates the impact of political leaders' migration experience on the quality of their leadership. We build up an original database on the personal background of 932 politicians who were at the head of the executive power in a developing country over the 1960-2004 period. We put forward a positive e ffect of the leader having studied abroad on the level of democracy in his country during his tenure. This e ffect is shown to be independent from the leader's education level, as well as from his profession. Moreover, it is mainly driven by countries with a poor initial level of democracy. These results are con rmed by various robustness tests. They propose a new channel through which migration may a ect politics in the sending countries, namely the emergence of the elites.
    Keywords: Political leaders ; Migration ; Democracy ; Developing countries
    Date: 2013–11
  11. By: Nancy Daza (National Planning Department (DNP), Colombia); Luis Fernando Gamboa (Department of Economics, Universidad del Rosario, Colombia)
    Abstract: This document provides recent evidence about the persistency of wage gaps between formal and informal workers in Colombia. The methodology is based on a non-parametric procedure proposed by Nopo (2008a) that allows us to compare labor incomes using matching on variables over a Nationwide Household Survey during 2008-2012. It is found that formal workers earn between 30 to 60 percent more, on average, than informal workers according to the definition of formality adopted and small variations occurs along this period. This is new evidence about the true differences in labor compensation from workers with distinct formality levels in Colombia. These results are important inputs for labor policy in a country with high income inequality levels.
    Keywords: Wage gaps, non-parametric, Colombia, informality.
    JEL: J31 C14 O17
    Date: 2013–08
  12. By: Vandercasteelen, Joachim; Dereje, Mekdim; Minten, Bart; Taffesse, Alemayehu Seyoum
    Abstract: Adoption of yieldincreasing technologies is seen as a key driver to increase agricultural production in Sub-Saharan Africa. There is, however, a lack of empirical evidence on the impact of programs aiming to scale-up the adoption of improved technologies from research settings to the farm level. To fill this gap, this paper assesses the impact of the promotion of a new agricultural technology, i.e. row planting at reduced seed rate, on farmers’ teff yields in Ethiopia. The results of a randomized control trial show that the program to scale-up row planting on average has a positive effect on teff yield. Depending on the measure of yield used, we find increases between 2 percent—but not statistically significant—and 22 percent. These findings are in contrast with larger yield increases found on village demonstration plots and in more controlled settings, as well as with the yield increase expected by teff farmers. The differences seemingly are linked to problems in implementation of the program and of its recommendations, methodological issues, and likely over-optimism on the potential of row planting in real farm settings.
    Keywords: Ethiopia; teff yield; row planting; adoption; new technology;
    Date: 2013
  13. By: Bagchi, Sutirtha (University of Michigan); Svejnar, Jan (Columbia University)
    Abstract: A fundamental question in social sciences relates to the effect of wealth inequality on economic growth. Yet, in tackling the question, researchers have had to use income as a proxy for wealth. We derive a global measure of wealth inequality from Forbes magazine's listing of billionaires and compare its effect on growth to the effects of income inequality and poverty. We find that wealth inequality reduces economic growth, but when we control for the fact that some billionaires acquired wealth through political connections, the effect of politically connected wealth inequality is negative, while politically unconnected wealth inequality, income inequality, and initial poverty have no significant effect.
    Keywords: economic growth, wealth inequality, income inequality, billionaires, political connections
    JEL: D31 O40 O43
    Date: 2013–11
  14. By: David de la CROIX (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Frédéric DOCQUIER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS); Maurice SCHIFF (The World Bank, Development Research Group)
    Abstract: Brain drain is a major issue for Small Island Developing States (SIDS). Econometric analysis confirms that smallness has a strong positive impact per se on emigration rates. On average, 50 percent of the high-skilled labour force in SIDS has left their country, and the brain drain exceeds 75 percent in a few cases. In this paper, we document this phenomenon and study the bi-directional links between brain drain and development. We show that these interdependencies can be the source of multiple equilibria and that small states are much more likely to be badly coordinated than other developing countries and settle in a bad equilibrium. The reason is that their elasticity of emigration to economic performance is larger. After calibration, we identify an important number of badly coordinated SIDS and quantify the economic costs of coordination failure. These costs may exceed 100 percent of the observed GDP per capita. Badly coordinated small states require appropriate development policies aimed at retaining or repatriating their high-skilled labour force.
    Keywords: Brain drain, development, small island developing states, coordination failure
    Date: 2013–11–18

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