nep-dev New Economics Papers
on Development
Issue of 2014‒02‒02
fourteen papers chosen by
Jacob A. Jordaan
Utrecht University

  1. Microcredit Impacts: Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco By Manuela Angelucci; Dean Karlan; Jonathan Zinman
  2. Growth patterns of microfinance clients - Evidence from Sub-Saharan Africa By Winkler, Adalbert; Wagner, Charlotte
  3. Does Education Empower Women? Evidence from Indonesia By Samarakoon, Sujani; Parinduri, Rasyad
  4. Intergenerational Mobility and Interpersonal Inequality in an African Economy By Sylvie Lambert; Martin Ravallion; Dominique Van de Walle
  5. Tracking Under-Reported Financial Flows: China’s Development Finance and the Aid-Conflict Nexus Revisited By Strange, Austin M.; Parks , Bradley; Tierney, Michael J.; Fuchs, Andreas; Dreher , Axel
  6. Political Reservations and Women’s Entrepreneurship in India By Ejaz Ghani; William R. Kerr; Stephen D. O'Connell
  7. Empowering Women: The Effect of Schooling on Young Women's Knowledge and Use of Contraception By Andalón, Mabel; Williams, Jenny; Grossman, Michael
  8. Playing with the Social Net: Solidarity Differences in Resettled and Non-Resettled Communities in Cambodia By Gobien, Simone; Vollan, Björn
  9. Poverty and Social Impact Analysis:Universal Primary Education in Uganda: Equity in Opportunities and Human Capital Investment By Jean-Yves Duclos; Angela Kiconco; Sebastian Levine; Joseph Enyimu; Alex Warren Rodriguez; Albert Musisi
  10. The Trans-Atlantic Slave Trade and Local Political Fragmentation in Africa By Nonso Obikili
  11. Emergency Aid 2.0 By Fuchs, Andreas; Klann, Nils-Hendrik
  12. The Impact of Access to Piped Drinking Water on Human Capital Formation - Evidence from Brasilian Primary Schools By Barde, Julia Alexa; Julia Alexa, Barde; Juliana, Walkiewicz
  13. Rural Migration, Weather and Agriculture: Evidence from Indian Census Data By Brinda Viswanathan; K. S. Kavi Kumar
  14. Entrepreneurship versus Joblessness - Explaining the Rise in Self-Employment By Haywood, Luke; Falco, Paolo

  1. By: Manuela Angelucci; Dean Karlan; Jonathan Zinman
    Abstract: Theory and evidence have raised concerns that microcredit does more harm than good, particularly when offered at high interest rates. We use a clustered randomized trial, and household surveys of eligible borrowers and their businesses, to estimate impacts from an expansion of group lending at 110% APR by the largest microlender in Mexico. Average effects on a rich set of outcomes measured 18-34 months postexpansion suggest no transformative impacts.
    JEL: D12 D22 G21 O12
    Date: 2014–01
  2. By: Winkler, Adalbert; Wagner, Charlotte
    Abstract: We provide evidence on the growth patterns of microfinance clients. Our analysis is motivated by the debate on the impact of microfinance on client income and growth. Based on loan-level data from close to 40,000 clients in Sub-Saharan Africa we make use of an econometric approach widely employed in the firm growth literature. Results show that on average clients exhibit substantial growth between two consecutive loans. Moreover, there is a non-linear relationship between initial client size and growth: smaller businesses show higher growth rates which is marginally counteracted by positive growth of the very large clients. Results also indicate that growth rates decline in the course of the lending relationship. Overall our results provide econometric support for the largely anecdotal evidence presented by microfinance practitioners that their clients grow. At the same time they suggest that the equilibrium size of most clients remains small. --
    JEL: D22 G21 L25
    Date: 2013
  3. By: Samarakoon, Sujani; Parinduri, Rasyad
    Abstract: This paper examines whether education empowers women. We exploit an exogenous variation in education induced by a longer school year in Indonesia in 1978, which fits a fuzzy regression discontinuity design. We find education reduces the number of live births, increases contraceptive use, and promotes reproductive health practices. However, except for a few outcome measures, we do not find evidence that education improves women's decision making authority within households, asset ownership, or community participation. These results suggest that, to some extent, education does empower women in middle-income countries like Indonesia.
    Keywords: education, women’s empowerment, regression discontinuity design, Southeast Asia, Indonesia
    JEL: I24 J16
    Date: 2014
  4. By: Sylvie Lambert (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); Martin Ravallion (Georgetown University - Georgetown University); Dominique Van de Walle (Banque Mondiale - Banque Mondiale)
    Abstract: How much economic mobility is there across generations in a poor, primarily rural, economy? How much do intergenerational linkages contribute to current inequality? We address these questions using original survey data on Senegal that include an individualized measure of consumption. While intergenerational linkages are evident, we find a relatively high degree of mobility across generations, associated with the shift from farm to non-farm sectors and greater economic activity of women. Male-dominated bequests of land and housing bring little gain to consumption and play little role in explaining inequality, though they have important effects on sector of activity. Inheritance of non-land assets and the education and occupation of parents (especially the mother) and their choices about children's schooling are more important to adult welfare than property inheritance. Significant gender inequality in consumption is evident, though it is almost entirely explicable in terms of factors such as education and (non-land) inheritance. There are a number of other pronounced gender differences, with intergenerational linkages coming through the mother rather than the father.
    Keywords: inheritance, land, mobility, inequality, gender
    Date: 2014–01
  5. By: Strange, Austin M.; Parks , Bradley; Tierney, Michael J.; Fuchs, Andreas; Dreher , Axel
    Abstract: China’s development finance is sizable but reliable information is scarce. To address critical information gaps, we introduce a new open source methodology for collecting project-level development finance information and create a database of Chinese official finance to Africa from 2000-2011. Our initial data collection efforts found that China’s official finance commitments amount to approximately US$ 73 billion over the 2000-2011 period. We provide details on 1,511 non-investment projects to 50 African countries. We use this database to extend previous research on the aid-conflict nexus. Our results show that sudden withdrawals of “traditional” aid are only more likely to induce conflict in the absence of sufficient alternative funding from China. More broadly, these findings highlight the importance of gathering better data on the development activities of China and other non-traditional donors to better understand the link between foreign aid and conflict.
    Keywords: Development Finance; Foreign Aid; Non-DAC Donors; South-South Cooperation; China; Aid Shocks; Violent Armed Conflict.
    Date: 2014–01–29
  6. By: Ejaz Ghani; William R. Kerr; Stephen D. O'Connell
    Abstract: We quantify the link between the timing of state-level implementations of political reservations for women in India with the role of women in India’s manufacturing sector. While overall employment of women in manufacturing does not increase after the reforms, we find significant evidence that more women-owned establishments were created in the unorganized/informal sector. These new establishments were concentrated in industries where women entrepreneurs have been traditionally active and the entry was mainly found among household-based establishments. We measure and discuss the extent to which this heightened entrepreneurship is due to channels like greater finance access or heightened inspiration for women entrepreneurs.
    JEL: D22 E26 H11 J16 L10 L26 L60 M13 O10 R00 R10 R12
    Date: 2014–01
  7. By: Andalón, Mabel (University of Melbourne); Williams, Jenny (University of Melbourne); Grossman, Michael (CUNY Graduate Center)
    Abstract: Large differences in fertility between women with high and low levels of education suggest that schooling may have a direct impact on knowledge and use of contraception. We investigate this issue using information on women in Mexico. In order to identify the causal effect of schooling, we exploit temporal and geographic variation in the number of lower secondary schools built following the extension of compulsory education in Mexico from 6th to 9th grade in 1993. We show that raising females' schooling beyond 6th grade increases their knowledge of contraception during their reproductive years and increases their propensity to use contraception at sexual debut. This indicates that the impact of schooling on women's wellbeing extends beyond improved labour market outcomes and includes greater autonomy over their fertility.
    Keywords: schooling, empowerment, contraception, knowledge, natural experiment, Mexico
    JEL: I10 I18 I25
    Date: 2014–01
  8. By: Gobien, Simone; Vollan, Björn
    Abstract: Mutual aid among villagers in developing countries often is the sole possibility to insure against economic shocks. By using field laboratory experiments in Cambodian villages we study social cohesion in newly resettled and established communities which are both part of a land distribution project. All participants signed up voluntarily for the project, share comparable socio-demographic attributes and have similar preexisting network ties. We use a version of the solidarity game to identify the effect of a voluntary resettlement program on the willingness to help fellow villagers after an income shock. The voluntary resettled players only transfer between 41 % and 57 % of the amount the non-resettled players transfer to an anonymous community member. The solidarity differences are not only driven by lower expectations that the others would also help but are based on more selfish preferences among resettled farmers. Our findings are relevant for resettlement policies, because recipients might have to get additional compensation and formal insurance against the negative social consequences of resettlement until social cohesion is eventually re-established. --
    JEL: C93 O15 O22
    Date: 2013
  9. By: Jean-Yves Duclos; Angela Kiconco; Sebastian Levine; Joseph Enyimu; Alex Warren Rodriguez; Albert Musisi
    Abstract: This paper assesses the effectiveness and progressivity of Uganda’s Universal Primary Education program since it was first introduced in 1997, by examining factors driving primary school attendance, grade delay and drop out trends for children between the ages of 6 and 12 over the past two decades. Our findings reveal that primary school attendance has been progressive over time and, in recent years, pro-poor, in the sense that the poorest people have been its major beneficiaries. However, both demand and supply-side factors affecting the provision and use of primary education still stand in the way of achieving optimal and equitable participation from UPE. Our analysis also suggests that policies targeting the poor as well as the poorer parts of the country could yield considerable additional benefits, in terms of greater progressiveness and propoorness of the UPE policy.
    Keywords: Universal Primary Education; Uganda; Poverty and Social Impact analysis
    Date: 2013
  10. By: Nonso Obikili
    Abstract: I examine the possibility that the trans-Atlantic slave trades influenced the political institutions of villages and towns in precolonial Africa. Using anthropological data, I show that villages and towns of ethnic groups with higher slave exports were more politically fragmented during the precolonial era. I use instrumental variables to show that the relationship is at least partly causal. I argue this fragmentation is important for relative economic development because it still influences political institutions today. I support this argument by using more contemporary data to show that areas with higher precolonial political fragmentation have a higher incidence of bribery.
    Keywords: Trans-Atlantic, Slave trade, Poltical
    Date: 2014
  11. By: Fuchs, Andreas; Klann, Nils-Hendrik
    Abstract: Does the proliferation of aid donors lead to visible changes in the world of foreign assistance? Aid provided by low- and middle-income countries, autocratic regimes and donors operating outside the Development Assistance Committee (DAC) of the OECD is gaining in importance. This article uses data on emergency aid supplied by 105 donor countries to explore the determinants of aid and the differences in allocation patterns between donor groups. Our results show that both the so-called new and traditional donors provide emergency aid based on humanitarian need and their self-interests, but we find evidence that non-DAC donors attach relatively more importance to political motives. Additionally, autocratic donors seem to favor countries rich in natural resources and to disfavor democracies. Since the timeliness of the aid delivery is crucial for aid effectiveness, we furthermore analyze which factors influence the number of days that pass after a natural disaster before a donor commits herself to provide emergency relief. With regard to aid promptness, we find DAC, developed and democratic countries to be significantly faster than non-DAC, developing and autocratic countries. --
    JEL: F35 B59 H89
    Date: 2013
  12. By: Barde, Julia Alexa; Julia Alexa, Barde; Juliana, Walkiewicz
    Abstract: We analyze the impact of access to piped water on human capital formation as measured by test scores from standardized school exams at Brasilian primary schools. We fi nd a positive and signi ficant eff ect of around 11 percent of the standard deviation of mean test scores. The eff ect of piped water on test scores increases with the level of education of the mother. This complementarity is more pronounced for families with income below average income and vanishes for families with income above mean. This allows important policy recommendations. Developing countries should focus infrastructure expansion on low income areas and complement them with educational interventions for families with low educational background to increase returns on investment. --
    JEL: I21 I10 H41
    Date: 2013
  13. By: Brinda Viswanathan (Madras School of Economics); K. S. Kavi Kumar (Madras School of Economics)
    Abstract: This study explores the three way linkage between weather variability, agricultural performance and internal migration in India at state and district level using Indian Census data. We base all the analyses on a simultaneous equation model for panel data. The elasticity of inter-state out-migration rate with respect to the per capita net state domestic product is approximately (-)0.75. The crop-wise analysis, on the other hand, shows that the (negative) elasticities are higher and more substantial for rice (-1.85) than for wheat (-0.90). The district-level analysis shows larger magnitudes of estimated change in in-migration rates to relative changes in crop yields. The results suggest that the impact of yield change on the in-migration rate depends on both the inter-play between inter- and intra-district in-migration rates as well as the crop under consideration. The study findings could thus have significant policy relevance, especially in the context of global climate change and the prospect of migration serving as a potential adaptation strategy for people adversely affected by the impact of weather variability on crop yield.
    Keywords: Weather Variability; Agricultural Impacts; Internal Migration; Developing Countries; Climate Change; Adaptation
    JEL: O15 Q54 R11
    Date: 2013–03
  14. By: Haywood, Luke; Falco, Paolo
    Abstract: The self-employed constitute a large proportion of the workforce in developing countries and the sector has been found to be growing further. Different accounts exist as to the cause of this development, with pull factors such as high returns to capital and increased wealth contrasted with push factors such as barriers to entry into the wage sectors following traditional segmeted labour market models. This article considers changes in the structure of earnings for the self-employed in Ghana and compares them with the wage employed. Models of segmented labour markets typically consider sorting on unobservables to be important, and often posit a sector choice model. If there are barriers to entry into one of the sectors, however, selection on unobservables there may be no clear selection rule. We apply a simple model of a two-sector labour market and estimate earnings using a correlated random coef cients model that allows for multiple patterns of sorting and selection on unobservables using instrumental variables GMM. We nd evidence of increasing return to productive characteristics for the self-employed, but also a large wage premium. --
    JEL: O12 J31 J42
    Date: 2013

This nep-dev issue is ©2014 by Jacob A. Jordaan. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.