nep-dev New Economics Papers
on Development
Issue of 2015‒07‒18
eleven papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Mining and Local Corruption in Africa By Kotsadam, Andreas; Olsen, Eivind Hammersmark; Knutsen, Carl Henrik; Wig, Tore
  2. Resource Discovery and Conflict in Africa: What Do the Data Show? By Rabah Arezki; Sambit Bhattacharyya; Nemera Mamo
  3. The Effect of Savings Accounts on Interpersonal Financial Relationships: Evidence from a Field Experiment in Rural Kenya By Pascaline Dupas; Anthony Keats; Jonathan Robinson
  4. Governance and the Effectiveness of Public Health Subsidies By Rebecca Dizon-Ross; Pascaline Dupas; Jonathan Robinson
  5. Livestock as an Imperfect Buffer Stock in Poorly Integrated Markets By Lange, Simon; Reimers, Malte
  6. Do development projects link smallholders to markets? By Ebata, Ayako; Hüttel, Silke
  7. Social network effects on mobile money adoption in Uganda By Murendo, Conrad; Wollni, Meike; de Brauw, Alan; Mugabi, Nicholas
  8. Financial literacy and food safety standards in Guatemala: The heterogeneous impact of GlobalGAP on farm income By Müller, Anna K.; Theuvsen, Ludwig
  9. Agricultural diversification and poverty in India: By Birthal, Pratap Singh; Roy, Devesh; Negi, Digvijay S.
  10. Food safety standards in the Guatemalan fresh pea sector: The role of financial literacy in technology adoption By Müller, Anna K.; Theuvsen, Ludwig
  11. The impact of investment in agricultural research and development and agricultural productivity: By Perez, Nicostrato D.; Rosegrant, Mark W.

  1. By: Kotsadam, Andreas (Dept. of Economics, University of Oslo); Olsen, Eivind Hammersmark (Dept. of Economics, University of Oslo); Knutsen, Carl Henrik (Department of Political Science, University of Oslo); Wig, Tore (Department of Political Science, University of Oslo)
    Abstract: We investigate whether mining affects local-level corruption in Africa. Several cross-country analyses report that natural resource production and wealth have adverse effects on political institutions, for instance by increasing corruption, whereas other country-level studies show no evidence of such "political resource curses". These studies face well-known endogeneity and other methodological issues, and employing alternative designs and micro-level data would allow for drawing stronger inferences. Hence, we connect 90,000 survey respondents in four Afrobarometer survey waves to spatial data on about 500 industrial mines. Using a difference-in-differences strategy, we find evidence that mining increases bribe payments. Mines are initially located in less corrupt areas, but mining areas turn more corrupt after mines open and actively produce. A closer study of South Africa - using even more precise spatial matching of mines and survey respondents - corroborates the continent-wide results. Hence, mineral production is, indeed, a "curse" to local institutions.
    Keywords: Resource curse; corruption; minerals; mining
    JEL: D73 Q32 Q33
    Date: 2015–04–30
  2. By: Rabah Arezki; Sambit Bhattacharyya; Nemera Mamo
    Abstract: The empirical relationship between natural resources and conflict in Africa is not very well understood. Using a novel geocoded dataset on resource discovery and conflict we are able to construct a quasi-natural experiment to explore the causal effect of (giant and major) oil and mineral discoveries on conflict in Africa at the grid level corresponding to a spatial resolution of 0.5 x 0.5 degree covering the period 1946 to 2008. Contrary to conventional wisdom, we find no evidence of natural resources triggering conflict in Africa after controlling for grid-specific fixed factors and time varying common shocks. Resource discovery appears to have improved local income measured by nightlights which could be reducing the conflict likelihood. We observe little or no heterogeneity in the relationship across resource type, size of discovery, pre and post conclusion of the cold war, and institutional quality. The relationship remains unchanged at the regional and national levels.
    Keywords: Resource discovery; Conflict onset; Conflict incidence; Conflict intensity
    JEL: D72 O11
    Date: 2015
  3. By: Pascaline Dupas; Anthony Keats; Jonathan Robinson
    Abstract: The welfare impact of expanding access to bank accounts depends on whether accounts crowd out pre-existing financial relationships, or whether private gains from accounts are shared within social networks. To study the effect of accounts on financial linkages, we provided free bank accounts to a random subset of 885 households. Within households, we randomized which spouse was offered an account and find no evidence of negative spillovers to spouses. Across households, we document positive spillovers: treatment households become less reliant on grown children and siblings living outside their village, and become more supportive of neighbors and friends within their village.
    JEL: C93 D14 G21 O16
    Date: 2015–07
  4. By: Rebecca Dizon-Ross; Pascaline Dupas; Jonathan Robinson
    Abstract: Heavily subsidizing essential health products through existing health infrastructure has the potential to substantially decrease child mortality in sub-Saharan Africa. There is, however, widespread concern that poor governance and in particular limited accountability among health workers seriously undermines the effectiveness of such programs. We performed innovative audits on bed net distribution programs in three countries (Ghana, Kenya and Uganda) to investigate local agency problems and their determinants in the allocation of targeted subsidies. Overall, agency concerns appear modest. Around 80% of the eligible receive the subsidy as intended and leakage to the ineligible appears limited, even when the ineligible have a high willingness to pay. The estimated level of mistargeting only modestly affects the cost-effectiveness of free distribution.
    JEL: D73 H11 I15 I38
    Date: 2015–07
  5. By: Lange, Simon; Reimers, Malte
    Abstract: Livestock holdings in rural areas of the West African Semi-arid Tropics (WASAT) are often substantial yet there is little evidence for precautionary saving in the form of livestock. This paper re-visits farm households' ability to smooth consumption ex post via savings in the form of livestock. Based on data covering Burkina Faso's 2004 drought, we find that livestock sales increase significantly in response to drought with households citing the need to finance food consumption. Some consumption smoothing is achieved via adjustments to grain stocks, but households apparently fail to smooth consumption by adjusting livestock holdings. We argue that this seemingly contradictory finding is largely due to a decrease in relative livestock prices during droughts. This renders selling livestock a costly coping strategy and underlines the need for market integration.
    Keywords: precautionary saving, livestock, coping strategies, price risk, Africa, WASAT, Community/Rural/Urban Development, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Risk and Uncertainty, D14, D91, O16, Q12,
    Date: 2015–03
  6. By: Ebata, Ayako; Hüttel, Silke
    Abstract: The objective of this paper is to understand the mechanisms by which development projects facilitate market linkage of smallholder farmers based on panel data from Nicaragua. We find that activities related to entrepreneurial practices have positive and statistically significant effect on commercialization. We also find that increased commercialization is positively correlated with total bean sales income, suggesting a positive indirect effect of the activities. Other activities demonstrate no positive and robust effect on commercialization while direct positive effects on sales income can be observed. This implies that market linkage of smallholder farmers require different sets of intervention tools than traditional farm technical assistance.
    Keywords: Central America, NGO project, Market linkage, Impact Assessment, Food Security and Poverty, International Development, Marketing, O13, Q17, Q18,
    Date: 2015–05
  7. By: Murendo, Conrad; Wollni, Meike; de Brauw, Alan; Mugabi, Nicholas
    Abstract: Social networks play a vital role in generating social learning and information exchange that can drive the diffusion of new financial innovations. This is articularly relevant for developing countries where education, extension and financial information services are underprovided. The recent introduction of mobile money in Africa represents a case where imperfect financial markets, weak extension services and information asymmetries limit the ability of rural households to make informed decisions to take advantage of mobile money innovation. This article identifies the role of social networks in the adoption of mobile money in Uganda. Using data from a survey of 477 rural households, a probit model is estimated controlling for household characteristics, correlated effects, and other possible information sources. Results suggest that learning within social networks helps disseminate information about mobile money and has enhanced its adoption. Compared to poor households, non-poor households rely more on social networks for information about mobile money. Mobile money adoption is likely to be enhanced if promotion programs reach more social networks.
    Keywords: social networks, mobile money, adoption, Uganda, International Development, Research and Development/Tech Change/Emerging Technologies, D14, D83, O33, Q12,
    Date: 2015–02
  8. By: Müller, Anna K.; Theuvsen, Ludwig
    Abstract: The transformation of the global agrifood system is characterized by the increasing importance of food safety and quality standards. This trend is challenging farmers in countries like Guatemala, who often lack necessary skills and assets. We contribute to the ongoing discussion about the impact of standards on smallholder farmers by considering impact heterogeneity. By using propensity score matching techniques, we show that farmers with a higher level of financial literacy seem to benefit more from standard adoption than those with lower levels of financial literacy. Our results hold important practical implications for exporters, standard setters and development organizations.
    Keywords: Food safety standards, financial literacy, developing countries, impact analysis, propensity score matching, impact heterogeneity, Agribusiness, Agricultural Finance, International Development, Labor and Human Capital, Q14, Q12, Q16, O33, C31, I26,
    Date: 2015–02
  9. By: Birthal, Pratap Singh; Roy, Devesh; Negi, Digvijay S.
    Abstract: As stress on Indian agriculture increases because of several reasons, such as continuous fragmentation of landholdings and climate change, there is a serious threat to livelihood based on farming. This is particularly true for small farmers. Growing rural populations and constrained employment opportunities in the nonfarm sector have caused subdivision of landholdings in India to the extent that these cannot provide an adequate livelihood to a majority of farm households. With this view, this study was undertaken to explore options for improving the outcomes of the farmers. In this context, crop diversification into high-value crops (HVCs) can be a possible strategy to improve livelihood. Using data from a nationally representative survey, we establish that households diversifying toward HVCs are less likely to be poor, the biggest impact being for smallholders. Furthermore, using continuous treatment matching, we establish the relationship between degree of diversification (share of area dedicated to HVC) and economic well-being of the farmers. Growers of HVCs need to allocate at least 50 percent of their area to these crops to escape poverty. Although the diversification effect on poverty is in general positive, it seems to wither after a threshold probably because of some operational constraints, such as capital on smaller farms and labor on larger ones.
    Keywords: poverty, livelihoods, smallholders, land ownership, off farm employment, high value agriculture, high-value products, continuous treatment, binary treatment, unobserved factors,
    Date: 2015
  10. By: Müller, Anna K.; Theuvsen, Ludwig
    Abstract: The transformation of the global agrifood system is characterized by the increasing importance of food safety and quality standards. This trend is challenging farmers in countries like Guatemala as they lack necessary skills and assets. This study analyzes the determinants of Globalgap adoption with a special focus on financial literacy. The concept has not been considered yet in technology adoption studies. Our results indicate that financial literacy indeed has a significant impact on the probability to adopt the standard. Our results hold practical implications for development interventions targeting technology and standard adoption and smallholder market integration.
    Keywords: Technology adoption, food safety standards, financial literacy, developing countries, market integration, Food Consumption/Nutrition/Food Safety, Marketing, Research and Development/Tech Change/Emerging Technologies, Q14, Q12, Q16, O33, C38, C31,
    Date: 2015–05
  11. By: Perez, Nicostrato D.; Rosegrant, Mark W.
    Abstract: This study was conducted to determine the impact on world prices, agricultural commodities production, and food security and nutrition of raising the annual growth in agricultural total factor productivity (TFP) from the current estimate of 1.6 percent to 2 percent by 2030 through investment in agricultural research and development (R&D). The study also compared three R&D investment strategies: (1) gradual TFP increase, (2) accelerated TFP increase, and (3) developing-countries-only TFP increase. Results show that compared with the baseline scenario of business as usual, R&D investment strategies to increase TFP to 2 percent can lower world prices of cereals and meat by as much as 17 and 15 percent, respectively, as well as increase area planted in crops by 2.4 percent and crop yields by 8.5 percent by 2030. World cereal and meat production can also be increased by 12.5 and 3.9 percent, respectively, and consumption by 4.5 and 3.9 percent, respectively. The number of malnourished children can be reduced by 7 million (5.4 percent), and the population at risk of hunger can be reduced by 160 million (23.2 percent).
    Keywords: agricultural research, productivity, children, malnutrition, nutrition, hunger, risk, investment, prices, yields, agricultural products, total factor productivity, research and development, IMPACT model, undernourishment, malnourishment,
    Date: 2015

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