nep-dev New Economics Papers
on Development
Issue of 2015‒02‒22
fourteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Migration, Diasporas and Culture: an Empirical Investigation By Paul Collier; Anke Hoeffler
  2. Women's Empowerment in Action: Evidence from a Randomized Control Trial in Africa By Oriana Bandiera; Robin Burgess; Selim Gulesci; Imran Rasul; Munshi Sulaiman
  3. Health information, treatment, and worker productivity: Experimental evidence from Malaria testing and treatment among Nigerian sugarcane cutters By Andrew Dillon; Jed Friedman; Pieter Serneels
  4. The Price of Empowerment: Experimental Evidence on Land Titling in Tanzania By Stefan Dercon; Daniel Ayalew; Klaus Deininger; Justin Sanefur; Andrew Zeitlin
  5. The Power of Transparency: Information, Identification Cards and Food Subsidy Programs in Indonesia By Abhijit Banerjee; Rema Hanna; Jordan C. Kyle; Benjamin A. Olken; Sudarno Sumarto
  6. Conspicuous Consumption and Peer Effects among the Poor: Evidence From a Field Experiment By Christopher P. Roth
  7. Does the Quality of Electricity Matter? Evidence from Rural India By Ujjayant Chakravorty; Martino Pelli; Beyza Ural Marchand
  8. Networks and Manufacturing Fims in Africa: Results from a Randomized Field Experiment By Marcel Fafchamps; Simon Quinn
  9. Tackling social exclusion : evidence from Chile By Carneiro, Pedro; Galasso, Emanuela; Ginja, Rita
  10. The impact of extreme weather events on child health: Evidence from Mongolia By Schindler, Kati; Groppo, Valeria
  11. Two Sides of the Same Rupee? Comparing Demand for Microcredit and Microsaving in a Framed Field Experiment in Rural Pakistan By Marcel Fafchamps; Simon Quinn; Uzma Afzal; Giovanna d'Adda; Farah Said
  12. Female genital mutilation and migration in Mali. Do migrants transfer social norms? By Idrissa Diabate; Sandrine Mesplé-Somps
  13. Gone with the storm: rainfall shocks and household well-being in Guatemala By Baez, Javier E.; Lucchetti, Leonardo; Genoni, Maria E.; Salazar, Mateo
  14. Geopolitics, Aid and Growth By Dreher, Axel; Eichenauer, Vera; Gehring, Kai

  1. By: Paul Collier; Anke Hoeffler
    Abstract: Using global data we examine the dynamics of migration from developing to developed countries.  Origin and destination countries are characterized by substantial diffrences in incomes, political rights and cultures.  Incentives as well as costs shape the decision to migrate.  One powerful dynamic effect is that diasporas increase migration, mainly because they lower the cost of migration.  Diasporas assist the next wave of migrants by overcoming the high cost of the emigration, in particular when the origin country is far away and poor.  The interaction between the diaspora and cultural distance is also significant.  Diasporas in culturally distant countries appear to be particularly useful in overcoming the cost of migration.  Culturally distant diasporas are less likely to assimulate and maintain closer links with their country of origin, while diasporas from culturally similar countries are more likely to assimulate and thus be less useful to potential new migrants.
    Keywords: Migraiton, development, culture
    JEL: O15 Z1
    Date: 2014–08–02
  2. By: Oriana Bandiera; Robin Burgess; 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 by 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: 2014–10–02
  3. By: Andrew Dillon; Jed Friedman; Pieter Serneels
    Abstract: Agricultural and other physically demanding sectors are important sources of growth in developing countries but prevalent diseases such as malaria adversely impact the productivity, labor supply, and occupational choice of workers in these sectors by reducing physical capacity.  This study identifies the impact of malaria on worker earnings, labor supply, and daily productivity by randomizing the temporal order at which piece-rate workers at a large sugarcane plantation in Nigeria are offered malaria testing and treatment.  The results indicate a significant and substantial intent to treat effect of the intervention - the offer of a workplace based malaria testing and treatment program increases worker earnings by approximately 10% over the weeks following the mobile clinic visit.  The study further investigates the effect of health information by contrasting program effects by workers revealed health status.  For workers who test positive for malaria, the treatment of illness increases labor supply, leading to higher earnings.  For workers who test negative, and especially for those workers most likely to be surprised by the healthy diagnosis, the health information also leads to increased earnings via increased productivity.  Possible mechanisms for this response include selection into higher return occupations as a result of changes in the perceived cost of effort.  A model of the worker labor decision that includes health perceptions in the decisions to supply effort suggests that, in endemic settings with poor quality health services, inaccurate health perceptions may lead workers to misallocate labor thus resulting in sub-optimal production and occupational choice.  The results underline the importance of medical treatment but also of access to improved information about one's health status, as the absence of either may lead workers to deliver lower than optimal effort levels in lower return occupations.
    Keywords: malaria, labor supply, labor productivity, randomized experiment
    JEL: I12 J22 J24 O12
    Date: 2014–03–02
  4. By: Stefan Dercon; Daniel Ayalew; Klaus Deininger; Justin Sanefur; Andrew Zeitlin
    Abstract: We report on a randomized field experiment using price incentives to address both economic and gender inequality in land tenure formalization.  During the 1990s and 2000s, nearly two dozen African countries proposed de jure land reforms extending access to formal, freehold land tenure to milions of poor households.  Many of these reforms stalled.  Titled land remains the de facto preserve of wealthy households and, within householsd, men.  Beginning in 2010, we tested whether price instruments alone can generate greater inclusion by offering formal titles to residents of a low-income, unplanned settlement in Dar es Salaam at a range of subsidized prices, as well as additional price incentives to include women as owners or co-owners of household land.  Estimated price elasticities of demand confirm that prices - rather than other implementation failures or features of the titling regime - are a key obstacle to broader inclusion in the land registry, and that some decree of pro-poor price discrimination is justified even from a narrow budgetary perspective.  In terms of gender inequality, we find that even small price incentives for female co-titling achieve almost complete gender parity in land ownership with no reduction in demand.
    Keywords: land titling, formalization, gender, field experiment, Tanzania
    JEL: J16 K11 O12 O18 Q15
    Date: 2014–06–05
  5. By: Abhijit Banerjee; Rema Hanna; Jordan C. Kyle; Benjamin A. Olken; Sudarno Sumarto
    Abstract: Can governments improve aid programs by providing information to beneficiaries? In our model, information can change how much aid citizens receive as they bargain with local officials who implement national programs. In a large-scale field experiment, we test whether mailing cards with program information to beneficiaries increases their subsidy from a subsidized rice program. Beneficiaries received 26 percent more subsidy in card villages. Ineligible households received no less, so this represents lower leakage. The evidence suggests that this effect is driven by citizen bargaining with local officials. Experimentally adding the official price to the cards increased the subsidy by 21 percent compared to cards without price information. Additional public information increased higher-order knowledge about eligibility, leading to a 16 percent increase in subsidy compared to just distributing cards. In short, increased transparency empowered citizens to reduce leakages and improve program functioning.
    JEL: D73 I38 O12
    Date: 2015–02
  6. By: Christopher P. Roth
    Abstract: I use a randomised conditional cash transfer program from Indonesia to provide evidence on peer effects in consumption of poor households.  I combine this with consumption visibility data from Indonesia to examine whether peer effects in consumption differ by a good's visibility.  In line with a model of conspicuous consumption, I find that the expenditure share of visible (nonvisible) goods rises (falls) for untreated households in treated sub-districts, whose reference group visible consumption is exogeneously increased.  Finally, I provide evidence on the mechanisms underlying the estimated spillovers using data on social interactions and social punishment norms.  In line with Veblen's (1899) claim that conspicuous consumption is more prevalent in societies with less social capital, I show that the peer effects in visible goods are larger in villages and for households with lower levels of social activities.
    Keywords: Conspicuous Consumption, Peer Effects, Relative Concerns, Spillovers, Social Interactions, Social Norms
    JEL: D12 C21 I38
    Date: 2015–02–04
  7. By: Ujjayant Chakravorty; Martino Pelli; Beyza Ural Marchand
    Abstract: This paper estimates the returns to household income due to improved access to electricity in rural India. We examine the effect of connecting a household to the grid and the quality of electricity, defined as hours of daily supply. The analysis is based on two rounds of a representative panel of more than 10,000 households. We use the district-level density of transmission cables as instrument for the electrification status of the household. We find that a grid connection increases non-agricultural incomes of rural households by about 9 percent during the study period (1994-2005). However, a grid connection and a higher quality of electricity (in terms of fewer outages and more hours per day) increases non-agricultural incomes by about 28.6 percent in the same period.
    Keywords: Electricity Supply, Quality, India, Energy and Development, Infrastructure
    JEL: O12 O18 Q48
  8. By: Marcel Fafchamps; Simon Quinn
    Abstract: We run a novel field experiment to link managers of African manufacturing firms.  The experiment features exogenous link formation, exogenous seeding of information and exogenous assignment to treatment and placebo.  We study the impact of the experiment on firm business practices outside of the lab.  We find that the experiment successfully created new variation in social networks.  We find some limited evidence of diffusion of management practices, particularly in terms of firm formalisation and innovation.  Such diffusion appears to be a combination of diffusion of innovation and simple imitation.
    JEL: D22 L26 O33
    Date: 2014–06–19
  9. By: Carneiro, Pedro; Galasso, Emanuela; Ginja, Rita
    Abstract: This paper studies an innovative welfare program in Chile that combines a period of frequent home visits to households in extreme poverty, with guaranteed access to social services. Program impacts are identified using a regression discontinuity design, exploring the fact that program eligibility is a discontinuous function of an index of family income and assets. The analysis finds strong and lasting impacts of the program on the take-up of subsidies and employment services. These impacts are concentrated among families who had little access to the welfare system prior to the intervention.
    Keywords: Poverty Monitoring&Analysis,Health Monitoring&Evaluation,Gender and Law,Social Inclusion&Institutions,Health Systems Development&Reform
    Date: 2015–01–01
  10. By: Schindler, Kati; Groppo, Valeria
    Abstract: This paper investigates the impact of a devastating weather shock on child anthropometrics, using data from Mongolia. We employ a diff-in-diff strategy to identify the effect of an extremely harsh winter in 2010, which caused the death of about 20 percent of the national livestock. Results indicate that cohorts of children exposed to the 2010 winter and who lived in districts in which the shock was particularly harsh are significantly shorter two years after the shock. The negative effect of the shock is strongest for children from herding households. Moreover, we explore the role of mitigation channels to cushion the impact of the weather shock. In households where the head has more experience in herding, children suffer less from the consequences of the shock. Similarly, households having access to alternative sources of income are better able to protect their children from the effect of the shock. Finally, both the amount of emergency aid delivered per district and the presence of an international organization in a given district relieve the negative impact of the shock. Our findings are robust to different measures of shock intensity and to endogenous migration.
    JEL: I10 O12 J13
    Date: 2014
  11. By: Marcel Fafchamps; Simon Quinn; Uzma Afzal; Giovanna d'Adda; 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: 2015–02–05
  12. By: Idrissa Diabate (INSTAT, Mali); Sandrine Mesplé-Somps (IRD, UMR DIAL, PSL, Université Paris-Dauphine)
    Abstract: In this paper, we investigate how powerful a mechanism migration is in the transmission of social norms, taking Mali and Female Genital Mutilation (FGM) as a case study. Mali has a strong FGM culture and a long-standing history of migration. We use an original household-level database coupled with census data to analyze the extent to which girls living in villages with high rates of return migrants are less prone to FGM. Malians migrate predominantly to other African countries where female circumcision is uncommon (e.g. Côte d’Ivoire) and to countries where FGM is totally banned (France and other developed countries) and where anti-FGM information campaigns frequently target African migrants. Taking a two-step instrumental variable approach to control for the endogeneity of migration decisions, we show that return migrants have a negative and significant influence on FGM. We also show that adults living in villages with return migrants are more in favor of legislation against FGM.________________________________ Dans cet article, nous examinons dans quelle mesure la migration est un vecteur de transferts de normes sociales en étudiant le lien entre migration et excision au Mali. Alors que l’excision est fortement répandue au Mali, ce pays a une forte tradition migratoire vers les pays limitrophes et les pays du Nord où l’excision est soit moins pratiquée soit sanctionnée par la loi. Nous testons l’hypothèse que les migrants acquièrent des opinions différentes en la matière dans les pays d’accueil où l’excision est moins fréquente voire interdite et qu’une fois de retour ils induisent un changement de comportement dans leurs villages d’origine. Nous mobilisons une base originale de données sur l’excision des filles de 0 à 14 ans couplée avec des données de recensement qui permettent de mesurer les taux de migration (courante et de retour) des villages de résidence des personnes interrogées et mettons en œuvre une méthode instrumentale pour contrôler de l’endogénéité de la migration. Nous montrons que les migrants de retour ont effectivement une influence négative et significative sur le risque d’excision et que ce résultat provient essentiellement des migrants de Côte d’Ivoire. Nous montrons également que les adultes vivant dans les villages avec des migrants de retour sont plus en faveur de la législation contre les mutilations génitales.
    Keywords: Female Genital Excision, social transfers, migration, Mali, Excision, transferts sociaux.
    JEL: I15 O55 F22
    Date: 2014–12
  13. By: Baez, Javier E.; Lucchetti, Leonardo; Genoni, Maria E.; Salazar, Mateo
    Abstract: This paper investigates the causal consequences of Tropical Storm Agatha (2010) -- the strongest tropical storm ever to strike Guatemala since rainfall records have been kept -- on household welfare. The analysis reveals substantial negative effects, particularly among urban households. Per capita consumption fell by 12.6 percent, raising poverty by 5.5 percentage points (an increase of 18 percent). The negative effects of the shock span other areas of human welfare. Households cut back on food consumption (10 percent or 43 to 108 fewer calories per person per day) and reduced expenditures on basic durables. These effects are related to a drop in income per capita (10 percent), mostly among salaried workers. Adults coped with the shock by increasing their labor supply (on the intensive margin) and simultaneously relying on the labor supply of their children and withdrawing them from school. Impact heterogeneity is associated with the intensity of the shock, food price inflation, and the timing of Agatha with respect to the harvest cycle of the main crops. The results are robust to placebo treatments, household migration, issues of measurement error, and different samples. The negative effects of the storm partly explain the increase in poverty seen in urban Guatemala between 2006 and 2011, which national authorities and analysts previously attributed solely to the collateral effects of the global financial crisis.
    Keywords: Rural Poverty Reduction,Regional Economic Development,Consumption,Climate Change Economics
    Date: 2015–01–01
  14. By: Dreher, Axel; Eichenauer, Vera; Gehring, Kai
    Abstract: We investigate the effects of short-term political motivations on the effectiveness of foreign aid. Donor countries political motives might reduce the effectiveness of conditionality, channel aid to inferior projects, reduce the aid bureaucracy s effort, and change the power structure in the recipient country. We investigate whether geopolitical motives matter by testing whether the effect of aid on economic growth is reduced by the share of years a country has served on the United Nations Security Council (UNSC) in the period the aid has been committed, which provides quasi-random variation in commitments. Our results show that the effect of aid on growth is significantly lower when aid has been granted for political reasons. We derive two conclusions from this. First, short-term political favoritism reduces growth. Second, political interest variables are invalid instruments for aid, raising doubts about a large number of results in the aid effectiveness literature.
    JEL: O19 O11 F35
    Date: 2014

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