nep-dev New Economics Papers
on Development
Issue of 2015‒07‒25
seven papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Migration and Consumption Insurance in Bangladesh By Melanie Morten; Corina Mommaerts; Ahmed Mobarak; Costas Meghir
  2. Act Now: Microcredit with Voluntary Contributions and Zero Interest Rate - Evidence from Pakistan By Mahreen Mahmud
  3. Small-scale Subsistence Farming, Food Security, Climate Change and Adaptation in South Africa: Male-Female Headed Households and Urban-Rural Nexus By Byela Tibesigwa and Martine Visser
  4. Improving education outcomes in South Asia : findings from a decade of impact evaluations By Asim,Salman; Chase,Robert S.; Dar,Amit; Schmillen,Achim Daniel
  5. Aid on Demand: African Leaders and the Geography of China's Foreign Assistance By Dreher, Axel; Fuchs, Andreas; Hodler, Roland; Parks, Bradley C.; Raschky, Paul A.; Tierney, Michael J.
  6. The Importance of Geographic Access for the Impact of Microfinance By Alimukhamedova, Nargiza; Filer, Randall K; Hanousek, Jan
  7. Business as Unusual. An Explanation of the Increase of Private Economic Activity in High-Conflict Areas in Afghanistan By Tommaso Ciarli; Chiara Kofol; Carlo Menon

  1. By: Melanie Morten (Stanford University); Corina Mommaerts (Yale University); Ahmed Mobarak (Yale University); Costas Meghir (Yale University)
    Abstract: We investigate the relationship between seasonal migration and informal risk sharing in rural Bangladesh. We use data from a randomized controlled trial which provided incentives for households to migrate (Bryan et al., 2014). Using this experimental variation, we first provide evidence of the effect of decreasing migration costs on endogenous risk sharing in the village. We then investigate the mechanisms of this effect. We undertake a semi-parametric analysis of the source of income shocks, source of insurance and measurement error. Next, we characterize a dynamic model of migration and endogenous risk sharing, incorporating investment in learning about migration possibilities. Estimation of the model is in progress; we plan to analyze the welfare effect of alternative policies to encourage migration, such as access to credit and further reductions in the cost of migrating.
    Date: 2015
  2. By: Mahreen Mahmud
    Abstract: We study a unique microcredit model with zero interest rate and voluntary contributions, used by Akhuwat, a microfinance organization operating in Pakistan since 2001. Borrowers are encouraged to give any amount they wish to the organization every month, in addition to the instalment for the repayment of principal. These voluntary contributions result in an implicit interest rate of around 4.5%. The analysis of monthly data on voluntary contributions provide evidence that the organization is rewarding borrowers for their contributions by giving them repeat loans and that borrowers are strategically timing these voluntary contributions through their loan cycle to maximize impact. In the case of joint liability loans, borrowers in poorly performing groups make on average higher voluntary contributions, and voluntary contributions in a previous loan cycle correlate with borrower discipline in a subsequent loan cycle. Thus, voluntary contributions can signal borrower quality, and joint liability borrowers appear to be using them to signal their quality independently of their group.
    Keywords: Microfinance; Voluntary Contributions; Social Capital
    JEL: O12 O16 D64
    Date: 2015–07
  3. By: Byela Tibesigwa and Martine Visser
    Abstract: This study examines the role of gender of the head of household on the food security of small-scale subsistence farmers in urban and rural areas of South Africa, using the exogenous switching treatment-effects regression framework. Our results show that agriculture contributes to food security of female-headed more than male-headed households, especially in rural areas. We also observe that male-headed households are more food secure compared to female-headed households, and this is mainly driven by differences in off-farm labour participation. We further observe that the food security gap between male- and female-headed households is wider in rural than in urban areas, where rural male- and female-headed households are more likely to report chronic food insecurity, i.e., are more likely to experience hunger than their urban counterparts. Our results suggest that the current policy interest in promoting rural and urban agriculture is likely to increase food security in both male- and female-headed household, and reduce the gender gap.
    Keywords: Food security; male-headed household; female-headed households; urban; rural
    JEL: Q18 Q54
    Date: 2015
  4. By: Asim,Salman; Chase,Robert S.; Dar,Amit; Schmillen,Achim Daniel
    Abstract: There have been many initiatives to improve education outcomes in South Asia. Still, outcomes remain stubbornly resistant to improvements, at least when considered across the region. To collect and synthesize the insights about what actually works to improve learning and other education outcomes, this paper conducts a systematic review and meta-analysis of 29 education-focused impact evaluations from South Asia, establishing a standard that includes randomized control trials and quasi-experimental designs. It finds that while there are impacts from interventions that seek to increase the demand for education in households and communities, those targeting teachers or schools and thus the supply-side of the education sector are generally much more adept at improving learning outcomes. In addition, interventions that provide different actors with resources and those that incentivize behavioral changes show moderate but statistically significant impacts on student learning. A mix of input- and incentive-oriented interventions tailored to the specific conditions on the ground appears most promising for fostering education outcomes in South Asia.
    Keywords: Education For All,Tertiary Education,Effective Schools and Teachers,Access&Equity in Basic Education,Primary Education
    Date: 2015–07–13
  5. By: Dreher, Axel; Fuchs, Andreas; Hodler, Roland; Parks, Bradley C.; Raschky, Paul A.; Tierney, Michael J.
    Abstract: This article investigates whether China's foreign aid is particularly prone to political capture by political leaders of aid-receiving countries. Specifically, we examine whether more Chinese aid is allocated to the political leaders' birth regions and regions populated by the ethnic group to which the leader belongs, controlling for indicators of need and various fixed effects. We have collected data on 117 African leaders' birthplaces and ethnic groups and geocoded 1,650 Chinese development finance projects across 3,097 physical locations committed to Africa over the 2000-2012 period. Our econometric results show that current political leaders' birth regions receive substantially larger financial flows from China than other regions. On the contrary, when we replicate the analysis for the World Bank, our regressions with region-fixed effects show no evidence of such favoritism. For Chinese and World Bank aid alike, we also find no evidence that African leaders direct more aid to areas populated by groups who share their ethnicity, when controlling for region-fixed effects.
    Keywords: Africa; aid allocation; China; favoritism; foreign aid; georeferenced data; official development assistance; spatial analysis
    JEL: D73 F35 P33 R11
    Date: 2015–07
  6. By: Alimukhamedova, Nargiza; Filer, Randall K; Hanousek, Jan
    Abstract: The geographic distance between a household and financial institutions may constitute a significant obstacle to achieving the benefits of modern financial institutions. We measure the impact of improved distance-related access to microcredits in Uzbekistan. Residents living closer to microfinance institutions are propensity score matched to those further away using both household and village characteristics. Households located closer to microfinance institutions have larger businesses in terms of income, profits and employees than similar households located further away. Similarly, they spend more on most forms of consumption and have greater savings.
    Keywords: geographic access; microcredit; microfinance institutions
    JEL: C34 O16
    Date: 2015–07
  7. By: Tommaso Ciarli; Chiara Kofol; Carlo Menon
    Abstract: In this paper we use a unique dataset that combines spatial detailed information on conflict events and on households' activity, to show a positive and significant correlation between violent conflict and entrepreneurship in Afghanistan. We build spatial and IV identifications to estimate the effect of different measures of conflict on the investment in a range of private economic activities of nearby households. The results consistently show that the level of conflict, its impact, and to a lesser extent its frequency, increase the probability that a household engages in self-employment activities with lower capital intensity and in activities related to subsistence agriculture, and reduce the probability of investing in higher capital self-employment. Overall, by increasing entrepreneurship, conflict pushes the country towards a regressive structural change. However, the magnitude of most of the effects is quite small. The paper contributes to a literature that, due to data constraints and identification issues, has not yet delivered conclusive evidence.
    Keywords: Violent conflict, entrepreneurship, development
    JEL: O12 D74 L26 R12
    Date: 2015–07

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