nep-dev New Economics Papers
on Development
Issue of 2014‒12‒29
fourteen papers chosen by
Jacob A. Jordaan
Universitiet Utrecht

  1. Financing Smallholder Agriculture: An Experiment with Agent-Intermediated Microloans in India By Pushkar Maitra; Sandip Mitra; Dilip Mookherjee; Alberto Motta; Sujata Visaria
  2. Measured as poor versus feeling poor: Comparing objective and subjective poverty rates in South Africa By Posel, Dorrit; Rogan, Michael
  3. Gender Differences In Technology Adoption And Welfare Impact Among Nigerian Farming Households By Obisesan, Adekemi
  4. Agricultural Technology, School Participation and Child Labor in Developing Countries: Cotton Expansion in Burkina Faso By Harounan Kazianga
  5. Macroinsurance for Microenterprises: A Randomized Experiment in Post-Revolution Egypt By McKenzie, David
  6. What doesn't kill you makes you poorer : adult wages and the early-life disease environment in India By Lawson, Nicholas; Spears, Dean
  7. Place and child health : the interaction of population density and sanitation in developing countries By Hathi, Payal; Haque, Sabrina; Pant, Lovey; Coffey, Diane; Spears, Dean
  8. This mine is mine! How minerals fuel conflicts in Africa By Berman, Nicolas; Couttenier, Mathieu; Rohner, Dominic; Thoenig, Mathias
  9. Agricultural intensification : the status in six African countries By Binswanger-Mkhize, Hans P.; Savastano, Sara
  10. Agricultural Employment, Wages and Poverty in Developing Countries By Katsushi S. Imai; Raghav Gaiha; Constanza Di Nucci
  11. Making Progress on Foreign Aid By Qian, Nancy
  12. Further Evidence on the Link between Pre-Colonial Political Centralization and Comparative Economic Development in Africa By Michalopoulos, Stelios; Papaioannou, Elias
  13. African growth miracle or statistical tragedy? Interpreting trends in the data over the past two decades By Jerven, Morten
  14. Activity Choice in Rural Non-farm Employment (RNFE): Survival versus accumulative strategy By Bezu, Sosina; Barrett, Christopher B.; Holden, Stein

  1. By: Pushkar Maitra; Sandip Mitra; Dilip Mookherjee; Alberto Motta; Sujata Visaria
    Abstract: Recent evaluations of traditional microfinance loans have found no significant impacts on borrower incomes or productive activities. We examine whether this can be remedied by (a) modifying loan features to facilitate financing of working capital needs of farmers, and (b) delegating selection of borrowers for individual liability loans to local trader-lender agents incentivized by repayment-based commissions. We conduct a field experiment in West Bengal where this design (called TRAIL) was offered in randomly selected villages. In remaining villages a more traditional design (called GBL) was offered, wherein five-member groups applied for joint liability loans with terms otherwise similar to TRAIL loans. TRAIL loans increased cultivation of potatoes (the major cash crop in the region) and farm incomes by 17–21%, whereas GBL loans had insignificant and highly dispersed effects. We argue this was because TRAIL agents selected borrowers that were low-risk and highly productive, whereas the GBL scheme attracted farmers that were riskier on average and highly heterogeneous in terms of productivity. TRAIL loans also achieved higher repayment and take-up rates, and lower administrative costs.
    JEL: O16 O17 Q14
    Date: 2014–11
  2. By: Posel, Dorrit; Rogan, Michael
    Abstract: In this paper, we compare subjective and money-metric measures of poverty in South Africa using data collected in the 2008/09 Living Conditions Survey. In addition to collecting detailed information on expenditure, the survey asked respondents to provide
    Keywords: income poverty, subjective poverty, economies of scale, adult equivalence
    Date: 2014
  3. By: Obisesan, Adekemi
    Abstract: This study examined gender differences in cassava production technology adoption and the impact on poverty status of farming households in southwest, Nigeria. The data were collected with the aid of structured questionnaire through a multistage sampling technique. The data were analyzed using Propensity Score Matching, descriptive statistics and Foster-Greer-Thorbecke weighted poverty index. Out of the 482 households, 387 with similar characteristics were used in the analysis. Adoption level was 26% higher among male adopters than their female counterparts. Adoption was significantly influenced by gender, participation in off-farm activities, distance to market, land area cultivated, years of farming experience, access to credit, cassava yield and level of education. The impact of the improved technology on the headcount index of the male (12.57%) was higher than female adopters (5.62%). This suggests that cassava improved production technology is poverty reducing, however, gender sensitivity should be incorporated into technology adoption and enabling environment should be provided to enhance participation of women.
    Keywords: Gender, Technology adoption, Poverty, Cassava, Nigeria
    JEL: I3 O32 Q16
    Date: 2014–08–15
  4. By: Harounan Kazianga (Oklahoma State University)
    Abstract: I use variation in cotton production in Burkina Faso to measure changes in local economic conditions between 1994 and 2003, which proxy for the value of children's time. I test how this variation affects schooling and child labor using three rounds of nationally representative household surveys. Cotton adoption increases household’s income, leading to increased demand for schooling and reduced child labor. On the other hand, because children are productive on cotton farms, cotton adoption increases the opportunity cost of child time and the demand for child labor. I find that cotton adoption increased schooling for girls, while boys were not significantly affected. I provide suggestive evidence showing that boys are more productive than girls on cotton farms. Therefore, the income effect from cotton adoption was larger than the wage effect for girls, hence the positive effect on enrollment. For boys the income and wage effects offset each other.
    Keywords: Agricultural Technology, School Participation and Child Labor in Developing Countries: Cotton Expansion in Burkina Faso
    JEL: O12 I25 Q12
    Date: 2014–12
  5. By: McKenzie, David
    Abstract: Firms in many developing countries cite macroeconomic instability and political uncertainty as major constraints to their growth. Economic theory suggests uncertainty can cause firms to delay investments until uncertainty is resolved. We conduct a randomized experiment in post-revolution Egypt to measure the impact of insuring microenterprises against macroeconomic and political uncertainty. Demand for macroeconomic shock insurance was high; 36.7 percent of microentrepreneurs in the treatment group purchased insurance. However, purchasing insurance does not change the likelihood that a business takes a new loan, the size of the loan, or how they invest this loan. We attribute this lack of effect to microenterprises largely investing in inventories and raw materials rather than irreversible investments like equipment. These results suggest that, contrary to what they profess, macroeconomic and political risk is not inhibiting the investment behavior of microenterprises. However, insurance may still be of value to them to help cope with shocks when they do occur, but we are unable to examine this dimension as our insurance product did not pay out over the course of the pilot.
    Keywords: Egypt; insurance; microenterprises; political instability; risk; uncertainty
    JEL: C93 D22 G22 O12 O16
    Date: 2014–10
  6. By: Lawson, Nicholas; Spears, Dean
    Abstract: A growing literature documents links between early-life health and human capital, and between human capital and adult wages. Although most of this literature has focused on developed countries, economists have hypothesized that effects of early-life health on adult economic outcomes could be even greater in developing countries. This paper asks whether the early-life disease environment in India influences adult economic wages. The paper uses two measures of early-life disease environment to investigate this question: infant mortality rates and open defecation. A district-level differences-in-differences strategy is used to show that men born in district-years with lower infant mortality and better sanitation earned plausibly higher wages in their 20s and 30s. The effect estimates are applied to calculate the fiscal and welfare consequences of the disease environment, whichare considerable. In particular, eliminating open defecation would increase tax revenue by enough to offset completely a cost to the government of over \$400 per household that stops defecating in the open. A fiscally neutral elimination of open defecation in India would increase the net present value of lifetime wages by more than \$1,800 for an average male worker born today. These large economic benefits ignore any other benefits of improved health or reduced mortality. The result suggests that the disease environment could have important effects on developing-country economic outcomes.
    Keywords: Environmental Economics&Policies,Population Policies,Economic Theory&Research,Labor Policies,Disease Control&Prevention
    Date: 2014–11–01
  7. By: Hathi, Payal; Haque, Sabrina; Pant, Lovey; Coffey, Diane; Spears, Dean
    Abstract: A long literature in demography debates the importance of place for health. This paper assesses whether the importance of dense settlement for child mortality and child height is moderated by exposure to local sanitation behavior. Is open defecation, without a toilet or latrine, worse for infant mortality and child height where population density is greater? Is poor sanitation an important mechanism by which population density in?uences health outcomes? The paper uses newly assembled data sets to present two complementary analyses, which represent di?erent points in a trade-o? between external and internal validity. The first analysis concentrates on external validity by studying infant mortality and child height in a large, international child-level data set of 172 Demographic and Health Surveys, matched to census population density data for 1,800 subnational regions. The second analysis concentrates on internal validity by studying child height in Bangladeshi districts, with a new data set constructed with Geographic Information System techniques, and controls for ?xed e?ects at a high level of geographic resolution. The paper ?nds a statistically robust and quantitatively comparable interaction between sanitation and population density with both approaches: open defecation externalities are more important for child health outcomes where people live more closely together.
    Keywords: Population Policies,Health Monitoring&Evaluation,Demographics,Health Systems Development&Reform,Early Child and Children's Health
    Date: 2014–11–01
  8. By: Berman, Nicolas; Couttenier, Mathieu; Rohner, Dominic; Thoenig, Mathias
    Abstract: This paper studies empirically the impact of mining on conflicts in Africa. Using novel data, we combine geo-referenced information over the 1997-2010 period on the location and characteristics of violent events and mining extraction of 27 minerals. Working with a grid covering all African countries at a spatial resolution of 0.5x0.5 degree, we find a sizeable impact of mining activity on the probability/intensity of conflict at the local level. This is both true for low-level violence (riots, protests), as well as for organized violence (battles). Our main identification strategy exploits exogenous variations in the minerals' world prices; however the results are robust to various alternative strategies, both in the cross-section and panel dimensions. Our estimates suggest that the historical rise in mineral prices observed over the period has contributed to up to 21 percent of the average country-level violence in Africa. The second part of the paper investigates whether minerals, by increasing the financial capacities of fighting groups, contribute to diffuse violence over time and space, therefore affecting the intensity and duration of wars. We find direct evidence that the appropriation of a mining area by a group increases the probability that this group perpetrates future violence elsewhere. This is consistent with "feasibility" theories of conflict. We also find that secessionist insurgencies are more likely in mining areas, which is in line with recent theories of secessionist conflict.
    Keywords: conflict; minerals; mines; natural resources; rebellion
    JEL: C23 D74 Q34
    Date: 2014–08
  9. By: Binswanger-Mkhize, Hans P.; Savastano, Sara
    Abstract: The Boserup-Ruthenberg framework has long been used to explain and understand the determinants of agricultural growth, the nature of the intensification of farming systems, investment, and technology adoption. The literature has produced an extensive body of evidence that summarizes or tests the hypothesis in Africa and often found it confirmed. However, in the past two decades, rapid population growth has put African farming systems under stress. At the same time, there has been a sharp increase in urbanization and economic growth that is providing new market opportunities for farmers. It is therefore necessary to investigate whether this has resulted in rapid intensification of farming systems, permitting rapid agricultural growth and maintenance or increase in the incomes of the farming population. This paper describes the status of intensification in six African countries using the first round of data from the Living Standards Measurement Study-Integrated Surveys on Agriculture. In addition, the paper (i) develops internationally comparable measures of overall agro-ecological crop potential and urban gravity in the farmers'location and (ii) estimates the causal impact of agro-ecological potential and urban gravity on population density, infrastructure, and market access and on a range of agricultural intensification variables. The paper shows that the new measures have relevant explanatory power. The descriptive analysis shows that the patterns of intensification observed across countries suggest several inconsistencies with Boserup-Ruthenberg. The paper also finds that urban gravity, except for its impact on crop intensities, has little impact on other intensification indicators.
    Date: 2014–11–01
  10. By: Katsushi S. Imai; Raghav Gaiha; Constanza Di Nucci
    Abstract: Abstract Drawing upon panel data estimations, we have analysed the relationships among agricultural productivity, employment, technology, openness of the economy, inequality in land distribution and poverty. First, we have identified a number of important factors affecting agricultural productivity, such as agricultural R&D expenditure, irrigation, fertilizer use, agricultural tractor/machinery use, reduction in inequality of land distributions, or reduction in gender inequality. Second, while agricultural wage rate is negatively associated with agricultural productivity and food price in levels, the growth in agricultural wage rate is positively correlated with the growth in agricultural land or labour productivity as well as with the growth in food price, particularly after 2000. Contrary to the ILO’s (2012) claim that the gap has widened recently, this suggests the narrowing gap between wage and labour productivity once we focus on the conditional relationship between the two. Third, agricultural employment per hectare tends to increase agricultural productivity after taking account of the endogeneity of the former, while the growth in agricultural employment per hectare tends to increase the growth in non-agricultural employment over time with adjustment for endogeneity of the former. In this context, we have reviewed the recent literature and emphasised the importance of enhancing agricultural productivity and employment. Fourth, both agricultural growth and non-agricultural growth tend to lead to reduction in overall inequality. Finally, increase in agricultural productivity which is treated as endogenous will reduce poverty significantly through the overall economic growth. Overall, policies to increase agricultural productivity and agricultural employment are likely to increase non-agricultural growth, overall growth and reduce poverty, where guaranteeing gender inequality is likely to be one of the key factors.
    Date: 2014
  11. By: Qian, Nancy
    Abstract: Foreign aid is one of the most important policy tools that rich countries use for helping poor countries to improve population well-being and facilitate economic and institutional development. The empirical evidence on its benefits is mixed and has generated much controversy. This paper presents descriptive statistics which show that foreign aid to very poor countries accounts for very little of total global aid; reviews the evidence that foreign aid is often determined by the objectives of donor countries rather than the needs of recipient countries; argues that the evidence on the impact of aggregate foreign aid is hindered by problems of measurement and identification, which are partly due to the heterogenous nature of aid; and discusses recent studies using natural and randomized experiments to examine narrowed definitions of aid on more disaggregated outcomes.
    Keywords: development; global poverty; political economy
    JEL: O1
    Date: 2014–09
  12. By: Michalopoulos, Stelios; Papaioannou, Elias
    Abstract: We examine the link between pre-colonial statehood and contemporary regional African development, as reflected in satellite images on light density at night. We employ a variety of historical maps to capture the former. Our within-country analysis reveals a strong positive correlation between pre-colonial political centralization and contemporary development (and urbanization). If anything, the association strengthens when we account for measurement error on the historical maps of pre-colonial political organization.
    Keywords: Africa; development; ethnicity; institutions; state capacity
    JEL: O10 O40 O43
    Date: 2014–11
  13. By: Jerven, Morten
    Abstract: This paper reviews the current problems of national accounting in Sub-Saharan Africa. With the current uneven application of methods and availability of data, any ranking of countries according to gross domestic product levels is misleading. It is increas
    Keywords: economic growth, national income accounting, Sub-Saharan Africa
    Date: 2014
  14. By: Bezu, Sosina (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Barrett, Christopher B. (Department of Applied Economics and Management, Cornell University, USA); Holden, Stein (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: This paper examines the nonfarm employment choice of individuals using panel data from Ethiopia that covers the period 1994-2004. Non-farm activities that require more resources in the form of skill or capital yield higher returns but employ proportionately fewer people. Women have lower participation rate than men, and those women who participate are often engaged in low-return activities. The econometric results suggest that the factors that influence individuals’ decision to participate in non-farm employment differ for the different types of activities. Determinants of participation in high-return activities are dominated by capacity variables. Determinants of participation in low-return activities are dominated by push factors. Education is the only factor that has the same (positive) impact on the likelihood of participation in all types on non-farm employment. Education was also found to have more impact on participation of women.
    Keywords: Non-farm; off-farm; non-agriculture; income diversification; Ethiopia
    JEL: C23 D13 J24 J62
    Date: 2014–11–19

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