nep-dev New Economics Papers
on Development
Issue of 2015‒08‒30
twelve papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Are the world’s poorest being left behind? By Martin Ravallion
  2. Saving for a (Not So) Rainy Day: A Randomized Evaluation of Savings Groups in Mali By Beaman, Lori; Karlan, Dean; Thuysbaert, Bram
  3. Global poverty estimates based on 2011 purchasing power parity: Where should the new poverty line be drawn? By Nanak Kakwani; Hyun H. Son
  4. From Local to Global: External Validity in a Fertility Natural Experiment By Rajeev Dehejia; Cristian Pop-Eleches; Cyrus Samii
  5. Chronic Poverty in Rural Cambodia: Quality of Growth for Whom? By Tsuruga, Ippei
  6. Sea Change: The Competing Long-Run Impacts of the Transatlantic Slave Trade and Missionary Activity in Africa By Okoye, Dozie; Pongou, Roland
  7. Can improved biomass cookstoves contribute to REDD+ in low-income countries ? evidence from a controlled cooking test trial with randomized behavioral treatments By Beyene,Abebe D.; Bluffstone,Randall; Dissanayake,Sahan; Gebreegziabher,Zenebe; Martinsson,Peter; Mekonnen,Alemu; Toman,Michael A.
  8. Rural electrification and domestic violence in Sub-Saharan Africa By Sievert, Maximiliane
  9. Public good provision in Indian rural areas : the returns to collective action by microfinance groups By Casini,Paolo; Vandewalle,Lore; Wahhaj,Zaki
  10. Do the land-poor gain from agricultural investments? Empirical evidence from Zambia using panel data By Ahlerup, Pelle; Tengstam, Sven
  11. Continued Existence of Cows Disproves Central Tenets of Capitalism? By Anagol, Santosh; Etang, Alvin; Karlan, Dean
  12. Gender and Constraints to Entrepreneurship in Africa: New Evidence from Swaziland By Brixiova, Zuzana; Kangoye, Thierry

  1. By: Martin Ravallion (Georgetown University and NBER, U.S.A.)
    Abstract: Traditional assessments of economic growth and progress against poverty put little or no weight on increasing the standard of living of the poorest—raising the floor for permanent consumption above the biological minimum. Yet raising the floor is often emphasized by policy makers, moral philosophers and social choice theorists. To address this deficiency, the paper defines and measures the expected value of the floor as a weighted mean of observed consumptions for the poorest stratum. Using data for the developing world over 1981-2011, the estimated floor is about half the \$1.25 a day poverty line. Economic growth and social policies have delivered only modest progress in raising the floor, despite progress in reducing the number living near the floor.
    Keywords: Poverty, consumption floor, Rawls, growth, safety-nets.
    JEL: I32 I38 O15
    Date: 2015–07
  2. By: Beaman, Lori (Northwestern University and Innovations for Poverty Action); Karlan, Dean (Yale University and Innovations for Poverty Action); Thuysbaert, Bram (Ghent University and Innovations for Poverty Action)
    Abstract: High transaction and contracting costs are often thought to create credit and savings market failures in developing countries. The microfinance movement grew largely out of business process innovations and subsidies that reduced these costs. We examine an alternative approach, one that infuses no external capital and introduces no change to formal contracts: an improved "technology" for managing informal, collaborative village-based savings groups. Such groups allow, in theory, for more efficient and lower-cost loans and informal savings, and in practice have been scaled up by international non-profit organizations to millions of members. Individuals save together and then lend the accumulated funds back out to themselves. In a randomized evaluation in Mali, we find improvements in food security, consumption smoothing, and buffer stock savings. Although we do find suggestive evidence of higher agricultural output, we do not find overall higher income or expenditure. We also do not find downstream impacts on health, education, social capital, and female decision-making power. Could this have happened before, without any external intervention? Yes. That is what makes the result striking, that indeed there were no resources provided nor legal institutional changes, yet the NGO-guided, improved informal processes led to important changes for households.
    JEL: D12 D91 O12
    Date: 2014–10
  3. By: Nanak Kakwani; Hyun H. Son
    Abstract: This paper calculates a new global poverty line based on 2011 PPP. It moves away from the World Bank’s method of anchoring a single global poverty line on the national poverty lines of the poorest countries. To calculate a new global poverty line based on 2011 PPP, the paper proposes the use of equivalent poverty lines. Each country has a different equivalent poverty line. The paper demonstrates that there is no single poverty line in 2011 PPP that is equivalent to \$1.25 in 2005 PPP. Single poverty lines vary for each region since countries have experienced different inflation rates and have different PPP conversion rates between 2005 and 2011. To calculate a single poverty line in 2011 PPP, the paper measures the weighted average of equivalent poverty lines of 66 countries in Asia and Sub-Saharan Africa with weights proportional to their populations. The corresponding poverty line is calculated at \$1.78 in 2011 PPP. Using the proposed global poverty line of \$1.78 in 2011 PPP, the number of poor is reduced by 58.06 million with the reduction largely occurring in Asia.
    Date: 2015–08
  4. By: Rajeev Dehejia; Cristian Pop-Eleches; Cyrus Samii
    Abstract: Experimental evidence on a range of interventions in developing countries is accumulating rapidly. Is it possible to extrapolate from an experimental evidence base to other locations of policy interest (from “reference” to “target” sites)? And which factors determine the accuracy of such an extrapolation? We investigate applying the Angrist and Evans (1998) natural experiment (the effect of boy-boy or girl-girl as the first two children on incremental fertility and mothers’ labor force participation) to data from International IPUMS on 166 country-year censuses. We define the external validity function with extrapolation error depending on covariate differences between reference and target locations, and find that smaller differences in geography, education, calendar year, and mothers’ labor force participation lead to lower extrapolation error. As experimental evidence accumulates, out-of-sample extrapolation error does not systematically approach zero if the available evidence base is naïvely extrapolated, but does if the external validity function is used to select the most appropriate reference context for a given target (although absolute error remains meaningful relative to the magnitude of the treatment effect). We also investigate where to locate experiments and the decision problem associated with extrapolating from existing evidence rather than running a new experiment at a target site.
    JEL: C18 C31 C9 J13
    Date: 2015–08
  5. By: Tsuruga, Ippei
    Abstract: With the post-2015 era approaching, debates surrounding poverty have seriously started to consider what makes for quality growth in order to eliminate extreme poverty, rather than just reduce it. Zero poverty cannot be realised without tackling chronic poverty. However, due to lack of data and evidence, poverty-reduction policies hardly consider the particular situations and characteristics of the chronically poor. In order to fill such research gaps, this paper examines the trends and characteristics of chronic poverty in rural Cambodia between 2004 and 2010. Applying a blend of nationally representative qualitative (participatory poverty assessment) and quantitative sources (household survey), I primarily estimate chronic poverty headcount rates, based on criteria defined by the poor. Surprisingly, despite the excellent progress in economic development, the chronic poverty headcount ratio barely improved from 11 percent. The result implies that rapid economic growth has successfully raised the consumption of chronically poor households, but had done little to help them accumulate productive assets and human capital to break a vicious cycle of poverty. Structural constraints are identified in their demographic and socioeconomic characteristics, including: limited asset ownership, low human development, female heads of household, high child dependency, fewer economically active members, small household size, and many young members. From a policy perspective, one striking finding is that consumption measurements based on the current national poverty line cannot be used to identify a majority of the chronic poor. This is not merely a matter of different measurement applications, because the chronically poor identified in this study are just as deprived as the consumption-based poor in some other attributes like human development. The evidence suggests that poverty reduction programs should take into consideration the multidimensional criteria identified here to avoid leaving the chronically poor behind in the country’s development. This policy implication is particularly important for targeting mechanisms of social protection instruments implemented under the National Social Protection Strategy, which are key measures in ending poverty in Cambodia.
    Keywords: chronic poverty , combining methods , social protection , targeting , Cambodia
    Date: 2015–04–01
  6. By: Okoye, Dozie; Pongou, Roland
    Abstract: This paper contributes to the debate on the effect of European contact on African societies by comparing the long-run economic impacts of the transatlantic slave trade and historical missionary activity. Recognizing that early missionary activity in Africa was unintentionally aided by the preceding slave trade, it proposes an analytical framework in which the effect of the slave trade was partially mediated by missions. Using unique data from Nigeria, we analyze the causal effects of these shocks on schooling attainment, and consequent effects on literacy rates and self-employment. We �find a total negative effect of the transatlantic slave trade on schooling; its negative direct effect outweighs its positive indirect effect through missionary activity. Missionary activity, on the other hand, has a strong positive direct effect which outweighs the total negative effect of the slave trade. Furthermore, individuals whose ancestors were historically exposed to greater missionary activity are more likely to be literate and less likely to be self-employed, consistent with the positive effect of missionary activity on schooling. In contrast, exposure to the slave trade is associated with lower literacy rates and a greater likelihood of being self-employed. Analyzing the mechanisms, we provide evidence suggesting that the persistent effects of these historical shocks are due to intergenerational factors and higher schooling infrastructure in areas that were less exposed to the slave trade or more exposed to missionary activity. Consistent with a simple theory, these persistent effects are larger for women, younger cohorts, rural residents, and migrants. Religion does not appear to be especially important, and the �findings rule out an explanation based on simple changes in tastes for schooling.
    Keywords: European contact, Africa, Slave Trade, Missions, Development, Education, Nigeria
    JEL: I20 N30 N37 N47 O10 O15 Z12
    Date: 2015–08–10
  7. By: Beyene,Abebe D.; Bluffstone,Randall; Dissanayake,Sahan; Gebreegziabher,Zenebe; Martinsson,Peter; Mekonnen,Alemu; Toman,Michael A.
    Abstract: This paper provides field experiment?based evidence on the potential additional forest carbon sequestration that cleaner and more fuel-efficient cookstoves might generate. The paper focuses on the Mirt (meaning ?best?) cookstove, which is used to bake injera, the staple food in Ethiopia. The analysis finds that the technology generates per-meal fuel savings of 22 to 31 percent compared with a traditional three-stone stove with little or no increase in cooking time. Because approximately 88 percent of harvests from Ethiopian forests are unsustainable, these findings suggest that the Mirt stove, and potentially improved cookstoves more generally, can contribute to reduced forest degradation. These savings may be creditable under the United Nations Collaborative Program on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries. Because of the highly specific nature of the Mirt stove and the lack of refrigeration in rural Ethiopia, rebound effects are unlikely, but this analysis was unable completely to rule out such leakage. The conclusions are therefore indicative, pending evidence on the frequency of Mirt stove use in the field. The effects of six randomized behavioral treatments on fuelwood and cooking time outcomes were also evaluated, but limited effects were found.
    Keywords: Urban Environment,Energy Production and Transportation,Renewable Energy,Climate Change Mitigation and Green House Gases,Environmental Economics&Policies
    Date: 2015–08–17
  8. By: Sievert, Maximiliane
    Abstract: One third of all women experience violence within their lifetime, most frequently perpetrated by their intimate partner (IPV). It impacts women's sexual, reproductive, and mental health, and increases the risk of chronic disease. Ways to reduce IPV are less obvious, though. Especially in rural areas, electrification is frequently said to foster women's development and contribute to a modernization of gender roles. Using Demographic and Health Survey (DHS) data from rural areas in 22 Sub-Saharan countries, the present paper analyses the effect of electrification on IPV by means of pseudo-panel and propensity score matching approaches. Women in households with electricity report significantly lower acceptance of IPV. It is especially access and higher exposure to information via TV sets that causes the difference in IPV acceptance. Accordingly, rural electrification might potentially play an important role in eliminating violence against women.
    Keywords: rural electrification,domestic violence,intimate partner violence,pseudopanel,propensity score matching
    JEL: J12 J16 O13 O18
    Date: 2015
  9. By: Casini,Paolo; Vandewalle,Lore; Wahhaj,Zaki
    Abstract: Self-help groups (SHGs) are the most common form of microfinance in India. The authors provide evidence that SHGs, composed of women only, undertake collective actions for the provision of public goods within village communities. Using a theoretical model, this paper shows that an elected official, whose aim is to maximize re-election chances, exerts higher effort in providing public goods when private citizens undertake collective action and coordinate their voluntary contributions towards the same goods. This effect occurs although government and private contributions are assumed to be substitutes in the technology of providing public goods. Using first-hand data on SHGs in India, the paper tests the prediction of the model and shows that, in response to collective action by SHGs, local authorities tackle a larger variety of public issues, and are more likely to tackle issues of interest to SHGs. The findings highlight how the social behavior of SHGs can influence the governance of rural Indian communities.
    Keywords: Economic Theory&Research,Corporate Law,Debt Markets,Civil Society,Political Economy
    Date: 2015–08–19
  10. By: Ahlerup, Pelle (Department of Economics, School of Business, Economics and Law, Göteborg University); Tengstam, Sven (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In the context of the global land rush, some portray large-scale land acquisitions as a potent threat to the livelihoods of already marginalized rural farming households in Africa. In order to avoid the potential pitfall of studying a particular project that may well have atypical effects, this paper systematically investigates the impact on commercial farm wage incomes for rural smallholder households of all pledged investments in the agricultural sector in Zambia between 1994 and 2007. The results suggest that agricultural investments are associated with a robust moderate positive effect, but only for households with a relative shortage of land.<p>
    Keywords: Agriculture; Investments; sub-Saharan Africa
    JEL: N57 O13 O16 Q12
    Date: 2015–08
  11. By: Anagol, Santosh (University of PA); Etang, Alvin (Yale University); Karlan, Dean (Yale University)
    Abstract: We examine the returns from owning cows and buffaloes in rural India. We estimate that when valuing labor at market wages, households earn large, negative average returns from holding cows and buffaloes, at negative 64% and negative 39% respectively. This puzzle is mostly explained if we value the household's own labor at zero (a stark assumption), in which case estimated average returns for cows is negative 6% and positive 13% for buffaloes. Why do households continue to invest in livestock if economic returns are negative, or are these estimates wrong? We discuss potential explanations, including labor market failures, for why livestock investments may persist.
    JEL: E21 M40 O12 Q10
    Date: 2014–01
  12. By: Brixiova, Zuzana (University of Cape Town); Kangoye, Thierry (African Development Bank)
    Abstract: This paper contributes to closing a knowledge gap on gender, entrepreneurship and development by linking the entrepreneurial productivity to start-up capital and skills. The empirical analysis of a survey of entrepreneurs in Swaziland confirmed the importance of start-up capital for sales. Women entrepreneurs have smaller start-up capital and are less likely to fund it from the formal sector than their men counterparts, pointing to a possible room for policy interventions. Further, business training is positively associated with sales performance of men entrepreneurs, but has no effect on women. However, this does not call for abolishing training programs for women entrepreneurs. Instead their design and targeting should be revisited.
    Keywords: gender and entrepreneurship, start-up capital, skills, training, multivariate analysis
    JEL: L53 O12
    Date: 2015–08

This nep-dev issue is ©2015 by Jacob A. Jordaan. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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