nep-dev New Economics Papers
on Development
Issue of 2014‒03‒22
seven papers chosen by
Jacob A. Jordaan
Utrecht University

  1. Re-re-reply to"the impact of microcredit on the poor in Bangladesh : revisiting the evidence" By Pitt, Mark M.
  2. The nexus between gender, collective action for public goods, and agriculture : evidence from Malawi By McCarthy, Nancy; Kilic, Talip
  3. Women’s Empowerment in Action: Evidence from a Randomized Control Trial in Africa By Oriana Bandiera; Niklas Buehren; Robin Burgess; Markus Goldstein; Selim Gulesci; Imran Rasul; Munshi Sulaiman
  4. Poverty-Food Security Nexus: Evidences from a Survey of Urban Slum Dwellers in Kolkata By Chandana Maitra; Prof. D.S Prasada Rao
  5. Extortion with Protection: Understanding the effect of rebel taxation on civilian welfare in Burundi By Rachel Sabates-Wheeler; Philip Verwimp
  6. Migration, remittances and poverty in Ecuador By Simone BERTOLI; Francesca MARCHETTA
  7. Corruption’s and Democracy’s effects on Economic Growth By Zaouali, Amira

  1. By: Pitt, Mark M.
    Abstract: "The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence,"by David Roodman and Jonathan Morduch (2014) (henceforth RM) is the most recent of a sequence of papers and web postings that seeks to refute the findings of the Pitt and Khandker (1998; henceforth PK) article"The Impact of Group-Based Credit on Poor Households in Bangladesh: Does the Gender of Participants Matter?"that microcredit for women had significant, favorable effects on household consumption and other outcomes. In this version of RM, the authors have backed off many of their prior claims and methods after earlier replies noted their faults (see Pitt (1999), Pitt (2011a), Pitt (2011b), and Pitt and Khandker (2012)). Nonetheless, important claims against PK remain in this new version of RM and are addressed below. Readers should refer to Pitt and Khandker (2012) for a discussion of other issues with RM, including a discussion of the bimodal likelihood.
    Keywords: Economic Theory&Research,Statistical&Mathematical Sciences,Financial Intermediation,Econometrics,Scientific Research&Science Parks
    Date: 2014–03–01
  2. By: McCarthy, Nancy; Kilic, Talip
    Abstract: Across the developing world, public goods exert significant impacts on the local rural economy in general and agricultural productivity and welfare outcomes in particular. Economic and social-cultural heterogeneity have, however, long been documented as detrimental to collective capacity to provide public goods. In particular, women are often under-represented in local leadership and decision-making processes, as are young adults and minority ethnic groups. While democratic principles dictate that broad civic engagement by women and other groups could improve the efficiency and effectiveness of local governance and increase public goods provision, the empirical evidence on these hypotheses is scant. This paper develops a theoretical model highlighting the complexity of constructing a"fair"schedule of individual contributions, given heterogeneity in costs and benefits that accrue to people depending, for instance, on their gender, age, ethnicity, and education. The model demonstrates that representative leadership and broad participation in community organizations can mitigate the negative impacts of heterogeneity on collective capacity to provide public goods. Nationally-representative household survey data from Malawi, combined with geospatial and administrative information, are used to test this hypothesis and estimate the relationship between collective capacity for public goods provision and community median estimates of maize yields and household consumption expenditures per capita. The analysis shows that similarities between the leadership and the general population, in terms of gender and age, and active participation by women and young adults in community groups alleviate the negative effects of heterogeneity and increase collective capacity, which in turn improves agricultural productivity and welfare.
    Keywords: Economic Theory&Research,Housing&Human Habitats,Civil Society,Debt Markets,Community Development and Empowerment
    Date: 2014–03–01
  3. By: Oriana Bandiera; Niklas Buehren; Robin Burgess; Markus Goldstein; Selim Gulesci; Imran Rasul; Munshi Sulaiman
    Abstract: Women in developing countries are disempowered relative to their contemporaries in developed countries. High youth unemployment and early marriage and childbearing interact to limit human capital investment and enforce dependence on men. In this paper we evaluate an attempt to jump-start adolescent women's empowerment in the world's second youngest country: Uganda. In this two-pronged intervention, adolescent girls are simultaneously provided vocational training and information on sex, reproduction and marriage. Relative to adolescents in control communities, after two years the intervention raises the likelihood that girls engage in income generating activities by 72% (mainly driven by increased participation in self-employment), and raises their monthly consumption expenditures by 41%. Teen pregnancy falls by 26%, and early entry into marriage/cohabitation falls by 58%. Strikingly, the share of girls reporting sex against their will drops from 14% to almost half that level and preferred ages of marriage and childbearing both move forward. The findings indicate that women's economic and social empowerment can be jump-started through the combined provision of vocational and life skills, and is not necessarily held back by insurmountable constraints arising from binding social norms.
    JEL: I25 J13 J24 O12
    Date: 2014–03
  4. By: Chandana Maitra (School of Population Health, The University of Queensland); Prof. D.S Prasada Rao (School of Economics, The University of Queensland)
    Abstract: In recent years, the process of economic growth in the Indian economy has been characterized by a peculiar divergence between the indicators of poverty and those of food security – the paradox of rising undernutrition and declining poverty rate over time. Given above, an important question that arises is, whether there is something inherent in poverty that drives food insecurity or whether the two phenomena are independent. The answer to this question has important policy implication because it tells US, in targeting the poor anti-poverty policies might lose sight of the food insecure households, nested in apparently non-poor households. Against this backdrop, the present paper attempts to explore the relationship between poverty and food security in terms of a self-reported, experiential measure of food security, using an urban cross section. The self-reported measure is based on a food security scale which was constructed by adapting the 18-item US Household Food Security Survey Module (HFSSM) in a setting of 500 low income urban slum households in Kolkata, in 2010-11. Based on the scale, households were classified as highly food secure, marginally food secure and food insecure. The relationship between poverty and food security was then examined by applying a simultaneous ordered probit model recognizing the possible endogeneity in the relationship. Results indicate that a poor household is likely to be more food insecure given certain socio-economic characteristics, with the policy implication that poverty alleviation measures would be effective in eliminating food insecurity. Apart from poverty, the other factors which significantly affect household food security status include household size and composition, gender and education level of the household head, indicating need for multi-pronged intervention in eliminating food insecurity.
    Date: 2014–03–07
  5. By: Rachel Sabates-Wheeler; Philip Verwimp
    Abstract: Using a panel dataset from Burundi where information on protection payments during the 10 year civil war were collected, we test the relationship between payments, the nature of extraction by the rebels, and welfare outcomes. We ask, does payment to rebels insure against future welfare loss and does the nature of payment matter? Specifically, does the level of institutionalisation of extraction within the rebel governance structure provide a form of insurance for future welfare? No less than 30% of the interviewees made at least one payment. Rebels extract these taxes through one of two routes: an ‘institutionalised’ and regular cash-with-receipt method or an ad hoc and unpredictable labour extraction. Using matching methods we find that payment through the institutionalised route increases household welfare between 16 and 25%. Ad hoc extraction has no effect. We situate our findings in the empirical literatures on contributions to mafia-type organisations and rebel governance.
    Keywords: extortion; taxation; forced labour; welfare; rebellion; Africa
    Date: 2014–01–30
  6. By: Simone BERTOLI (CEPII); Francesca MARCHETTA (Université d'Auvergne)
    Abstract: We analyse the influence of the recent wave of migration on the incidence of poverty among stayers in Ecuador. We draw our data from a survey that provides detailed information on migrants. The analysis reveals a significant negative effect of migration on poverty among migrant households. This effect is substantially smaller than the one that we find focusing on recipient households. We explore the factors that account for this divergence. Our analysis entails that the existing empirical evidence on the relationship between remittances and poverty needs not to be informative about the size of the direct poverty-reduction potential of migration.
    Keywords: remittances; household-level data; poverty; propensity score matching
    JEL: F22 O15 I32
    Date: 2014
  7. By: Zaouali, Amira
    Abstract: Economists have a long argue that political process such as democracy and corruption are important for economic growth. Our objective in this paper is to demonstrate that one of democracy's indirect posititive effects is its ability to mitigate the negative effect of corruption on economic growth. Although most democratic countries in our sample have a high level of corruption, the electoral mechanism inhibits leaders from engaging in acts of corruption that cause damage to economic performance and thus jeopardize their political survival. Utilizing a dynamic panel data approach for more than 40 countries over the period 2000- 2011, the results show that in democratic countries, corruption has no significant effect on economic growth, while the non-democratic countries suffer the negative effects of corruption that retard economic growth.
    Keywords: Corruption, Democracy, Economic Growth, dynamic panel.
    JEL: C23 E02 O43 O47
    Date: 2014–03–18

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