nep-dev New Economics Papers
on Development
Issue of 2015‒01‒14
sixteen papers chosen by
Jacob A. Jordaan
Universitiet Utrecht

  1. The development push of refugees: Evidence from Tanzania: By Maystadt, Jean-François; Duranton, Gilles
  2. Two Sides of the Same Rupee? Comparing Demand for Microcredit and Microsaving in a Framed Field Experiment in Rural Pakistan By Uzma Afzal; Giovanna d'Adda; Marcel Fafchamps; Simon Quinn; Farah Said
  3. Household Migration and Children's Educational Attainment. The case of Uganda By Lucia Ferrone; Gianna Claudia Giannelli
  4. The Microcredit Puzzle: Labour Supply Behaviour of Rural Households in Bangladesh By Asadul Islam; Debayan Pakrashi
  5. Remittances and Governance: Does the Government Free Ride? By Durga P. Gautam
  6. Land rights knowledge and conservation in rural Ethiopia: Mind the gender gap: By Quisumbing, Agnes R.; Kumar, Neha
  7. Protecting Child Nutritional Status in the Aftermath of a Financial Crisis: Evidence from Indonesia By Giles, John T.; Satriawan, Elan
  8. Mobile Money, Remittances and Rural Household Welfare: Panel Evidence from Uganda By Ggombe Kasim Munyegera; Tomoya Matsumoto
  9. Parental Attitude and Investment in Children’s Education and Health in Developing Countries By Lutfunnahar Begum; Philip J. Grossman; Asadul Islam
  10. Summary of Cows, missing milk markets and nutrition in rural Ethiopia: By Hoddinott, John F.; Headey, Derek D.; Dereje, Mekdim
  11. Climate change, groundwater salinization and road maintenance costs in coastal Bangladesh By Dasgupta, Susmita; Hossain, Md. Moqbul; Huq, Mainul; Wheeler, David
  12. Short and Long Run Effects of Earthquakes on Farm Businesses in Indonesia By Gignoux, Jérémie; Menéndez, Marta
  13. Beer, Wood, and Welfare By Grimm, Michael; Peters, Jörg
  14. Do remittances not promote growth? : a bias-adjusted three-step mixture-of-regressions By Konte M.
  15. The impact of India's rural employment guarantee on demand for agricultural technology: By Bhargava, Anil K.
  16. Did the Aid Boom Pacify Sub-Saharan Africa? By Azam, Jean-Paul; Thelen, Véronique

  1. By: Maystadt, Jean-François; Duranton, Gilles
    Abstract: Every year, thousands of people flee their country of origin to seek protection mainly in neighboring countries. Understanding better the consequences of temporary population shocks on hosting economies should help to guide policies to enhance resilience in emergency situations. This study exploits a 1991–2010 Tanzanian household panel to assess the effects of the temporary refugee inflows originating from Burundi (1993) and Rwanda (1994). We find that the refugee presence has had a persistent and positive impact on the welfare of the local population. We investigate the possible channels of transmission, underscoring the importance of a decrease in transport costs as a key driver of this persistent change in welfare. We interpret these findings as the ability of a temporary shock to induce a persistent shift in the equilibrium through subsequent investments rather than a switch to a new equilibrium in a multiple-equilibrium setting.
    Keywords: Refugees, Migration, roads, infrastructure, Economic development, transportation, Poverty, Climate, population shocks, resilience, multiple equilibrium,
    Date: 2014
  2. By: Uzma Afzal; Giovanna d'Adda; Marcel Fafchamps; Simon Quinn; Farah Said
    Abstract: Standard models often predict that people should either demand to save or demand to borrow, but not both. We hypothesise instead that saving and borrowing among microfinance clients are substitutes, satisfying the same underlying demand: for a regular schedule of deposits and a lump-sum withdrawal. We test this using a framed field experiment among women participating in group lending arrangements in rural Pakistan. The experiment — inspired by the rotating structure of a ROSCA — involves randomly offering credit products and savings products to the same subject pool. We find high demand both for credit products and for savings products, with the same individuals often accepting both a credit product and a savings product over the three experiment waves. This behavior can be rationalised by a model in which individuals prefer lump-sum payments (for example, to finance a lumpy investment), and in which individuals struggle to hold savings over time. We complement our experimental estimates with a structural analysis, in which different ‘types’ of participants face different kinds of constraints. Our structural framework rationalises the behaviour of 75% of participants; of these ‘rationalised’ participants, we estimate that two-thirds have high demand for lump-sum payments coupled with savings difficulties. These results imply that the distinction between microlending and microsaving may be largely illusory; participants value a mechanism for regular deposits and lump-sum payments, whether that is structured in the credit or the debt domain.
    Date: 2014
  3. By: Lucia Ferrone (Dipartimento di Scienze per l'Economia e l'Impresa); Gianna Claudia Giannelli (Dipartimento di Scienze per l'Economia e l'Impresa)
    Abstract: In many Sub-Saharan African countries, a large number of people migrate internally or abroad because of demographic, economic and political factors. This pronounced mobility is likely to have consequences for children's education, still a matter of concern in the region. We study this issue for Uganda, investigating whether migration of household members affects children's primary education and in what direction. Using the Uganda National Panel Survey for 2005, 2009, 2010 and 2011, we estimate conditional fixed effects logit models of school attendance and primary school completion. We find that children's migration has a significant positive impact while adults' migration has a significant negative one on children's school attendance rates, while remittances have no influence. These findings suggest that children's migration is indeed beneficial, since it may contribute to match demand and supply of schooling. Adults' absence, instead, has controversial effects when children are left behind. In fact, lack of supervision and substitution of adults' tasks with child work might reduce the rate of school attendance. However, neither children's nor adults' migration seem to increase the rate of primary school completion, an evidence that points to the problem of the low quality of primary education in developing countries.
    Keywords: Migration, Schooling, Panel Data Models with Fixed Effects, Uganda
    JEL: I25 J13 J61 O15
    Date: 2014
  4. By: Asadul Islam; Debayan Pakrashi
    Abstract: Using a unique panel dataset collected from rural households in Bangladesh, we examine the role of microcredit in the intra-household and inter-sectoral distribution of labour supply. The data also enables us to discuss seasonality in labour supply. We find robust evidence that the effects of microcredit on labour supply are not symmetrical across occupations and genders and access to microcredit could not smooth out the seasonality in the labour supply. The overall results suggest that opportunities for diversification into market oriented activities remain limited, even when an access to microcredit relaxes the financial constraints faced by households in rural Bangladesh.
    Keywords: microcredit, labour supply, intra-household, seasonality.
    JEL: J01 J16 J22 J82
    Date: 2014–09
  5. By: Durga P. Gautam (West Virginia University, College of Business and Economics)
    Abstract: Through what channel and to what extent does the inflow of remittances affect the quality of governance in the recipient countries? Recent studies suggest that a rise in remittances reduces public goods provision. Scholars generally agree that remittances increase consumption expenditure of the recipient households. This implicit positive correlation between remittances and the ratio of household to government consumption indicates an increasing share of private goods in household consumption. The decreasing share of public goods, on the other hand, tends to reduce households0 incentives to monitor and hold the government accountable. As a result, the external benefits generated by household consumption induce the government to substitute the provision of public goods for remittances, thereby raising the scope of expected benefits for a rational government official from illegitimate transactions with a private partner. Using recently advanced kernel regression methods, we find that remittances lead to higher corruption and poor governance in countries with higher private consumption. These results provide supports for the ongoing global efforts to redirect remittance flows from household consumption toward productive investments.
    Keywords: remittances, corruption, institutions, nonparametric regression, public goods, consumption
    JEL: F24 D73 C14 H3 E6
    Date: 2014–12
  6. By: Quisumbing, Agnes R.; Kumar, Neha
    Abstract: Using the 2009 round of the Ethiopian Rural Household Survey, this paper examines the medium-term impact of the land registration on investment behavior by households, particularly the adoption of soil conservation techniques and tree planting. It investigates whether men’s and women’s knowledge of their property rights under the land registration (as measured by answers to a list of questions regarding the provisions of the registration, covering such areas as tenure security, land transfer rights, and rights related to gender equity and inheritance) has an impact on these investments.
    Keywords: Land rights, Land ownership, Soil conservation, Gender, Women, assets, households, conservation agriculture, Land degradation, legal knowledge, soil conservation practices,
    Date: 2014
  7. By: Giles, John T. (World Bank); Satriawan, Elan (Universitas Gadjah Mada)
    Abstract: In response to concerns over the vulnerability of the young in the wake of Indonesia's 1997-1998 economic crises, the Government of Indonesia implemented a supplementary feeding program to support early childhood nutritional status. This paper exploits heterogeneity in duration of program exposure to evaluate the impact of the program on children aged 6 to 60 months. By examining differences in nutritional status of treated younger children and a placebo group of older children, the analysis finds that the program improved the nutritional status of treated children, and most significantly, led to 7 and 15 percent declines in rates of moderate and severe stunting, respectively, for children aged 12 to 24 months who were exposed to the program for at least 12 months over two years.
    Keywords: nutritional interventions, program evaluation, poverty, financial crises, Indonesia
    JEL: I12 I18 O15 O20 O22
    Date: 2014–12
  8. By: Ggombe Kasim Munyegera (National Graduate Institute for Policy Studies); Tomoya Matsumoto (National Graduate Institute for Policy Studies)
    Abstract: Mobile money service in Uganda has expanded rapidly, penetrating as much as over 30 percent of the adult population in just four years since its inception. We investigate the impact of this financial innovation on household welfare, using household survey panel data from rural Uganda. Results from our preferred specification reveal that adopting mobile money services increases household per capita consumption by 72 percent. The mechanism of this impact is the facilitation of remittances; user households are more likely to receive remittances, receive remittances more frequently and the total value received is significantly higher than that of non-user households. Our results are robust to a number of robustness checks. JEL (O16, O17, O33, I131)
    Date: 2014–12
  9. By: Lutfunnahar Begum; Philip J. Grossman; Asadul Islam
    Abstract: This paper investigates whether parents’ inherent gender bias is associated with intrahousehold human capital investment among boys and girls. We conduct an artifactual field experiment to identify parents’ inherent gender bias and then attempt to examine how this attitude correlates with the actual decisions regarding schooling and health of their own children. We focus on five indicators for education, viz., years of schooling, grade for age, enrolment status, education expenditure, and test scores; and three indicators for health, viz., incidence of illness, and access to formal treatment and treatment cost, in case of illness. Although the game outcome suggests that on average, there is no systematic inherent bias among parents, yet inherently biased parents allocate resources in a discriminatory manner. The results suggest that boy-biased parents are more likely to have their boys enrolled in school and to spend more on their boys’ education; and also, less likely to enrol their girls in school and spend less on girls’ education. The boy-biased parents are also less likely to seek formal treatment and tend to spend less when a girl is sick.
    Keywords: Household behavior, Gender, Children, Field experiment, Bangladesh
    JEL: D10 J16 J13 C93 D13
    Date: 2014–09
  10. By: Hoddinott, John F.; Headey, Derek D.; Dereje, Mekdim
    Abstract: In rural economies encumbered by significant market imperfections, farming decisions may partly be motivated by nutritional considerations, in addition to income and risk factors. These imperfections create the potential for farm assets to have direct dietary impacts on nutrition in addition to any indirect effects via income. We test this hypothesis for the dairy sector in rural Ethiopia, a context in which markets are very thin, own-consumption shares are very high, and milk is an important source of animal-based proteins and micronutrients for young children. We find that cow ownership raises children’s milk consumption, increases linear growth, and reduces stunting in children by seven to nine percentage points. However, we also find that the direct nutritional impacts of household cow ownership are less important where there is good access to local markets, suggesting that market development can substitute for household cow ownership.
    Keywords: Dairy, Dairy production, Markets, Nutrition, Smallholders, Livestock, malnutrition, Children,
    Date: 2014
  11. By: Dasgupta, Susmita; Hossain, Md. Moqbul; Huq, Mainul; Wheeler, David
    Abstract: The potentially-adverse impact of salinity on paved roads is well-established in the engineering literature. The problem seems destined to grow, as climate-related changes in sea level and riverine flows drive future increases in groundwater salinity. However, data scarcity has prevented systematic analysis for poor countries. This paper assesses the impact of groundwater salinity on road maintenance expenditures in the coastal region of Bangladesh. The assessment draws on new panel measures of salinity from 41 stations in coastal Bangladesh, and road maintenance expenditures, income, road network length, and road surfaces from 20 coastal municipalities. In a model relating maintenance expenditure for paved roads to groundwater salinity, municipal income, and road network length, large and significant effects are found for salinity. The regression model is used to predict the effect of within-sample salinity variation on road maintenance expenditure share, holding municipal income and road length constant at sample mean values. Increasing salinity from its sample minimum to its sample maximum increases the predicted road maintenance expenditure share by 252 percent. The implied welfare impact may also be substantial, particularly for poor households, if diversion of expenditures to road maintenance reduces support for community sanitation, health, and other infrastructure related programs.
    Keywords: Transport Economics Policy&Planning,Water Conservation,Roads&Highways,Rural Roads&Transport,Water Resources Assessment
    Date: 2014–12–01
  12. By: Gignoux, Jérémie; Menéndez, Marta
    Abstract: This paper studies the impact of earthquakes on farm business assets in rural Indonesia. Using a panel fixed effects model, we evaluate if the negative consequences of earthquakes extend beyond the immediate event into the medium and long-term. Our results suggest that rural households were able to recover in the medium -run, and even exhibit welfare gains in the long-run. Productive assets in farm businesses were on average reconstituted and even increased in the medium-run. Thus, reconstruction strategies after large earthquakes seem to provide incentives to small farm business holders to reconstitute and increase their investments.
    Keywords: Natural disasters; long-term effects; recovery; farm businesses;
    JEL: I30 L26 O10 Q54
    Date: 2014–08
  13. By: Grimm, Michael (University of Passau); Peters, Jörg (RWI)
    Abstract: Local beer breweries in Burkina Faso absorb a considerable amount of urban woodfuel demand. We assess the woodfuel savings caused by the adoption of improved brewing stoves by these, mostly female owned, small enterprises and estimate the implied welfare effects through the woodfuel market on private households. We find substantial wood savings among the breweries and, subsequently, huge welfare gains for households. Since woodfuel is predominantly used for cooking by the poorer strata, the intervention under study is an example for a green growth intervention with pro-poor welfare gains – something green growth strategies should look for.
    Keywords: demand for woodfuel, technology adoption, improved stoves, green growth, impact evaluation, female employment
    JEL: D2 D6 I3 O3
    Date: 2014–12
  14. By: Konte M. (UNU-MERIT)
    Abstract: This paper re-examines the impact of remittance inflows on growth using data for developing countries over the period 1970-2010. The paper seeks to understand why it has been so difficult to find a positive impact of remittances on growth despite the growing amount of remittances in many developing countries and the different studies that have emphasized the positive effect of remittances on poverty and inequality. We relax the hypothesis that all countries follow the same unique growth regime and test whether the impact of remittances on growth depends on the growth regime to which a country belongs. We apply the newly bias-adjusted three-step finite mixture approach, which incorporates corrections into the different steps of the estimation. We find that our data are best described by an econometric model with two different growth regimes one in which remittances have a positive and significant impact on growth and another in which the effect of remittances is insignificant. The analysis of the determinants of the probability of being in the remittances growth-enhancing regime shows that an increase in the level of financial development decreases the probability of a country being in this growth regime, while being a Sub-Saharan African country increases this probability.
    Keywords: Remittances; Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence;
    JEL: F24 O47
    Date: 2014
  15. By: Bhargava, Anil K.
    Abstract: This paper investigates whether this increase in the opportunity cost of agricultural labor incentivizes farm owners to adopt labor-saving agricultural technology. Using a regression discontinuity design and new Indian agricultural census data, this paper finds that NREGA causes a shift of roughly 20 percentage points away from labor-intensive technologies toward labor-saving ones, particularly for small farmers and low-powered technologies.
    Keywords: technology adoption, labor markets, Poverty, rural areas, subsidies, Agricultural development, welfare, employment, social protection, social safety nets, Mahatma Gandhi National Rural Employment Guarantee,
    Date: 2014
  16. By: Azam, Jean-Paul; Thelen, Véronique
    Abstract: The incidence of civil war in Sub-Saharan Africa since the turn of the century is less than half of what it was on average in the last quarter of the 20th century. This paper shows that the aid boom triggered by 9/11 played a key role in achieving purposefully this result using panel data for 46 African countries over four decades. The duly instrumented estimated linear probability model predicts that the observed fall in the probability of a civil war occurring in a typical Sub-Saharan African country/year could have been achieved by increasing foreign aid by 25% on average, had the higher incidence of natural disasters and the commodity price shocks of the 2000s not stacked the odds against peace. However, the small rise in minor conflicts mitigates this achievement to some extent.
    Keywords: Foreign Aid – Africa – Civil Wars
    JEL: F35 N47 P45
    Date: 2014–12

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