nep-dev New Economics Papers
on Development
Issue of 2015‒09‒11
eight papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Toilets Can Work: Short and Medium Run Health Impacts of Addressing Complementarities and Externalities in Water and Sanitation By Esther Duflo; Michael Greenstone; Raymond Guiteras; Thomas Clasen
  2. Productive Spillovers of Social Cash Transfers in Africa:A Local Economy-wide Impact Evaluation (LEWIE) Approach By J. Edward Taylor; Karen Thome; Mateusz Filipski; Benjamin Davis
  3. The Growth Contribution of Colonial Indian Railways in Comparative Perspective By Dan Bogart; Latika Chaudhary; Alfonso Herranz-Loncan
  4. The Impact of Social Cash Transfer Programmes on Community Dynamics in Sub-Saharan Africa By Pamela Pozarny; Benjamin Davis
  5. Productive Impacts of the Child Grant Programme in Zambia By Silvio Daidone; Benjamin Davis; Joshua Dewbre; Mario González-Flores; Sudhanshu Handa; David Seidenfeld; Gelson Tembo
  6. The Impact of IMF-Supported Programs on FDI in Low-income Countries By Ali J Al-sadiq
  7. Inequality and the Tails: The Palma Proposition and Ratio Revisited By Alex Cobham; Luke Schlogl; Andy Sumner
  8. Aid and growth. New evidence using an excludable instrument By Dreher, Axel; Langlotz, Sarah

  1. By: Esther Duflo; Michael Greenstone; Raymond Guiteras; Thomas Clasen
    Abstract: Poor water quality and sanitation are leading causes of mortality and disease in developing countries. However, interventions providing toilets in rural areas have not substantially improved health, likely because of incomplete coverage and low usage. This paper estimates the impact of an integrated water and sanitation improvement program in rural India that provided household-level water connections, latrines, and bathing facilities to all households in approximately 100 villages. The estimates suggest that the intervention was effective, reducing treated diarrhea episodes by 30-50%. These results are evident in the short term and persist for 5 years or more. The annual cost is approximately US$60 per household.
    JEL: I15 O13 Q53 Q56
    Date: 2015–09
  2. By: J. Edward Taylor (IPC-IG); Karen Thome (IPC-IG); Mateusz Filipski (IPC-IG); Benjamin Davis (IPC-IG)
    Abstract: Many countries around the globe, including in sub-Saharan Africa,have implemented social cash transfers (SCTs) as a new line of attackagainst extreme poverty. Most African SCT programmes involve theunconditional transfer of cash to households that are both asset-and labour-poor. The stated goals of these programmes are social:to improve the welfare of the treated households by providingcash and encouraging changes in behaviour related to nutrition,education and health. But by providing poor households withcash, SCT programmes also treat the local economies of whichthese households are part, by stimulating demand for local goodsand services. In light of the eligibility criteria for SCTs, ineligiblehouseholds may be more likely than eligible households to expandtheir production to meet new local demand. If the local supplyresponse is sufficiently elastic, the impacts in local economiesmay be expansionary rather than inflationary.
    Keywords: Productive, Spillovers, Social, Cash Transfers. Africa, Local Economy-wide Impact Evaluation, LEWIE
    Date: 2014–07
  3. By: Dan Bogart; Latika Chaudhary; Alfonso Herranz-Loncan
    Abstract: It is widely recognized that railways were one of the most important drivers of economic growth in the 19th and 20th century, but it is less recognized that railways had a different impact across countries. In this paper, we first estimate the growth impact of Indian railways, one of the largest networks in the world circa 1900. Then, we show railways made a smaller contribution to income per-capita growth in India compared to the most dynamic Latin American economies between 1860 and 1912. The smaller contribution in India is related to four factors: (1) the smaller size of railway freight revenues in the Indian economy, (2) the higher elasticity of demand for freight services, (3) lower wages, and (4) higher fares. Our results suggest large disruptive technologies such as railways and other communication technologies can generate huge resources savings, but may not have large growth impacts.
    Keywords: Railways, Social Savings, ICT, India, Growth Accounting
    JEL: N7 O47 P52 R4
    Date: 2015–02
  4. By: Pamela Pozarny (IPC-IG); Benjamin Davis (IPC-IG)
    Abstract: Social cash transfers are on the rise in sub-Saharan Africa. The African Unions 2008 Social Policy Framework Plan of Action prompted a number of member countries to prioritise social protection strategies, including cash transfers. Such strategies—often partly supported by development partners—address hunger and food insecurity, school enrolment and attendance, the well-being of children, and poverty reduction.(…)
    Keywords: Impact, Social Cash Transfer Programmes, Community Dynamics, Sub-Saharan Africa, PtoP, Protection to Production
    Date: 2015–05
  5. By: Silvio Daidone (IPC-IG); Benjamin Davis (IPC-IG); Joshua Dewbre (IPC-IG); Mario González-Flores (IPC-IG); Sudhanshu Handa (IPC-IG); David Seidenfeld (IPC-IG); Gelson Tembo (IPC-IG)
    Abstract: The Child Grant Programme (CGP) is one of Zambias flagship social protection schemes. It targets ultra-poor districts not previously served by other government programmes. Established in 2010, the CGP reaches 20,000 households with children under the age of five. At the time of the baseline household survey in 2010, beneficiary households received Kwacha (ZMK) 55 a month (about USD12) regardless of household size; this amount was subsequently increased to ZMK60 a month. The grant represents 28 per cent of monthly consumption. Payments were regular and made on a bimonthly basis.(…)
    Keywords: PtoP, Cash Transfer Programme, Protection to Production, Productive Impacts, Child Grant Programme, Zambia
    Date: 2015–02
  6. By: Ali J Al-sadiq
    Abstract: It is common for IMF-supported adjustment programs with low-income member countries (LICs) to project that they will facilitate FDI inflows. The main objective of this paper is to empirically examine this hypothesis. Using an unbalanced panel dataset for 73 low-income countries over the period 1980–2012, and two different econometric methods that address the selection-bias problem, the empirical results robustly show that participating in IMF-supported program is associated with a significant increase in FDI inflows.
    Date: 2015–07–16
  7. By: Alex Cobham; Luke Schlogl; Andy Sumner
    Abstract: This paper revisits the earlier assessments of the Palma Proposition and the ‘Palma Ratio’. The former is a proposition that currently changes in income or consumption inequality are (almost) exclusively due to changes in the share of the richest 10 per cent and poorest 40 per cent because the ‘middle’ group between the richest and poorest always capture approximately 50 per cent of gross national income (GNI). The latter is a measure of income or consumption concentration based on the above-mentioned proposition and calculated as the GNI capture of the richest 10 per cent divided by that of the poorest 40 per cent. In this paper we do the following: note the use already being made of the Palma Ratio; consider the issue of hidden (or partially hidden) inequality and how the Palma may be useful in bringing this to light in the parts of the distribution that we are likely to be more interested in (the richest and the poorest); revisit the empirical basis of the Palma Proposition (the relative stability of the ‘middle’) with a new and expanded dataset across and within developing and developed countries. We find the data reaffirms the Palma Proposition and that the proposition is getting stronger over time. We also discuss the theoretical and empirical questions and implications arising from the Palma Proposition as areas for future exploration.
    Keywords: Inequality; Gini; Palma Ratio
    JEL: D63
    Date: 2015–09
  8. By: Dreher, Axel; Langlotz, Sarah
    Abstract: We use an excludable instrument to test the effect of foreign aid on economic growth in a sample of 96 recipient countries over the 1974-2009 period. We interact donor government fractionalization with a recipient country’s probability of receiving aid. The results show that fractionalization increases donors’ aid budgets, representing the over-time variation of our instrument, while the probability of receiving aid introduces variation across recipient countries. Controlling for country- and period-specific effects that capture the levels of the interacted variables, the interaction provides a powerful and excludable instrument. Making use of the instrument, our results show no significant effect of aid on growth in the overall sample. We also investigate the effect of aid on consumption, savings, and investments, and split the sample according to the quality of economic policy, democracy, and the Cold War period. With the exception of the post-Cold War period (where abundant aid reduces growth), we find no significant effect of aid on growth in any of these sub-samples. None of the other outcomes are affected by aid.
    Keywords: aid effectiveness; economic growth; government fractionalization
    JEL: F35 F53 O11 O19
    Date: 2015–09

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