nep-dev New Economics Papers
on Development
Issue of 2016‒04‒30
eleven papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Do Input Subsidies Reduce Poverty among Smallholder Farm Households? Panel Survey Evidence from Zambia By Mason, Nicole; Tembo, Solomon
  2. Labor Markets and Poverty in Village Economies By Oriana Bandiera; Robin Burgess; Narayan Das; Selim Gulesci; Imran Rasul; Munshi Sulaiman
  3. How Common Crop Yield Measures Misrepresent Productivity among Smallholder Farmers By Reynolds, Travis W.; Anderson, C. Leigh; Slakie, Elysia; Gugerty, Mary Kay
  4. Farmers' Coping Strategies against an Aggregate Shock: Evidence from the 2008 Sichuan Earthquake By Jin, Ling; Chen, Kevin Z.; Yu, Bingxin; Filipski, Mateusz
  5. Does weather matter? How rainfall shocks affect credit risk in agricultural micro-finance By Pelka, Niels; Weber, Ron; Musshoff, Oliver
  6. Impact of electrification on children's nutritional status in rural Bangladesh By Fujii, Tomoki; Shonchoy, Abu S.; XU, Sijia
  7. The impact of farm input subsidies on maize marketing in Malawi By Sibande, Lonester; Bailey, Alastair; Davidova, Sophia
  8. Can the big push approach end rural poverty in Africa? : Insights from Sauri millennium village in Kenya By Wanjala, Bernadette
  9. The Development of Development Economics By Bigsten, Arne
  10. School grants and education quality : experimental evidence from Senegal By Amaro Da Costa Luz Carneiro,Pedro Manuel; Koussihouede,Oswald; Lahire,Nathalie; Meghir,Costas; Mommaerts,Corina
  11. Can information help reduce imbalanced application of fertilizers in India? Experimental evidence from Bihar: By Fishman, Ram; Kishore, Avinash; Rothler, Yoav; Ward, Patrick S.; Jha, Shankar; Singh, R. K. P.

  1. By: Mason, Nicole; Tembo, Solomon
    Abstract: Many of the ‘new’ agricultural input subsidy programs (ISPs) in sub-Saharan Africa include among their objectives raising farm incomes and reducing rural poverty, but there is a dearth of empirical evidence on whether ISPs are achieving these objectives. Focusing on the case of Zambia, where ISPs account for approximately 50% of all agricultural sector poverty reduction program expenditures, we use nationally-representative panel survey data to estimate the effects of ISP fertilizer on smallholder farm household incomes, poverty incidence, and poverty severity based on the US$2 and US$1.25/capita/day poverty lines. Panel data (fixed effects and correlated random effects) and instrumental variables/control function methods are used to correct for the potential endogeneity of subsidized fertilizer to household incomes and poverty status. Results suggest that although ISP fertilizer raises incomes, the increase is not large enough or widely distributed enough to substantively reduce poverty incidence or severity among smallholder farm households in Zambia.
    Keywords: Consumer/Household Economics, Food Security and Poverty,
    Date: 2015
  2. By: Oriana Bandiera; Robin Burgess; Narayan Das; Selim Gulesci; Imran Rasul; Munshi Sulaiman
    Abstract: We study how women's choices over labor activities in village economies correlate with poverty and whether enabling the poorest women to take on the activities of their richer counterparts can set them on a sustainable trajectory out of poverty. To do this we conduct a large-scale randomized control trial, covering over 21,000 households in 1,309 villages surveyed four times over a seven year period, to evaluate a nationwide program in Bangladesh that transfers livestock assets and skills to the poorest women. At baseline, the poorest women mostly engage in low return and seasonal casual wage labor while wealthier women solely engage in livestock rearing. The program enables poor women to start engaging in livestock rearing, increasing their aggregate labor supply and earnings. This leads to asset accumulation (livestock, land and business assets) and poverty reduction, both accelerating after four and seven years. These gains do not come at the expense of others: non-eligibles' livestock rearing businesses are not crowded out and wages received for casual jobs increase as the poor reduce their labor supply in such labor activities. Our results show that: (i) the poor are able to take on the work activities of the non-poor but face barriers to doing so, and, (ii) one-o¤ interventions that remove these barriers lead to sustainable poverty reduction.
    JEL: J22 O12
    Date: 2015–08
  3. By: Reynolds, Travis W.; Anderson, C. Leigh; Slakie, Elysia; Gugerty, Mary Kay
    Abstract: Common estimates of agricultural productivity rely upon crude measures of crop yield, typically defined as the weight of a crop harvested divided by the area harvested. But this common yield measure poorly reflects performance among farm systems combining multiple crops in one area (e.g., intercropping), and also ignores the possibility that farmers might lose crop area between planting and harvest (e.g., partial crop failure). Drawing on detailed plot-level data from Tanzania’s National Panel Survey, this paper contrasts measures of smallholder productivity using production per hectare harvested and production per hectare planted. Yield by area planted differs significantly from yield by area harvested, particularly for smaller farms and female-headed households. OLS regression further reveals different demographic and management-related drivers of variability in yield gains – and thus different implications for policy and development interventions – depending on the yield measurement used. Findings suggest a need to better specify “yield” to more effectively guide agricultural development efforts.
    Keywords: Crop Production/Industries, Farm Management,
    Date: 2015
  4. By: Jin, Ling; Chen, Kevin Z.; Yu, Bingxin; Filipski, Mateusz
    Abstract: While rural households in developing countries deploy a series of risk coping strategies to insulate against shocks, their effectiveness relies heavily on the nature of the shocks. Using unique datasets collected before and after the disastrous 2008 Sichuan earthquake, this paper examines the effectiveness of various coping strategies employed by the affected rural households. The rural household survey identifies a number of coping strategies including depleting savings, government aid, subsidized bank loans, informal credit, private transfer, selling assets, and saving money by letting children drop out of school. Difference-in-differences (DID) estimation results show that, in response to the earthquake, rural households also adjust their income generating strategies through crop diversification and pursuing nonagricultural selfemployment, and increased working time by male household members.
    Keywords: Aggregate Shock, Coping Strategy, Income Diversification, Labor Supply, Agricultural Finance, Farm Management, Labor and Human Capital, Q12, Q54,
    Date: 2015
  5. By: Pelka, Niels; Weber, Ron; Musshoff, Oliver
    Abstract: Small-scale farmers in developing countries are undersupplied with capital. Although microfinance institutions have become well established in developing countries, they have not significantly ex-tended their services to farmers. It is generally believed that this is partly due to the riskiness of lending to farmers. This paper combines original data from a Madagascan microfinance institution with weather data to estimate the effect of rainfall on the repayment performance of loans granted to farmers. Results estimated by linear probability models and a sequential logit model show that excessive rain in the harvest period increases the credit risk of loans granted to farmers
    Keywords: Agricultural Finance, Environmental Economics and Policy,
    Date: 2015
  6. By: Fujii, Tomoki; Shonchoy, Abu S.; XU, Sijia
    Abstract: We offer micro-econometric evidence for a positive impact of rural electrification on the nutritional status of children under five as measured by height-for-age Z-score (HAZ) in rural Bangladesh. In most estimates, access to electricity is found to improve HAZ by more than 0.15 points and this positive impact comes from increased wealth and reduced fertility, even though the evidence for the latter is weak. We also analyze the causal channels through the local health facility and exposure to television. We find no evidence for the presence of the former channel and mixed evidence for the latter.
    Keywords: Bangladesh, Nutrition, Electric power, Rural development, Electrification, Height-for-age Z score, Malnutrition, Television, Wealth
    JEL: O15 O22 I15
    Date: 2016–03
  7. By: Sibande, Lonester; Bailey, Alastair; Davidova, Sophia
    Abstract: This paper investigates the effects of subsidized fertilizer on marketing of maize in Malawi. It uses the nationally representative two-wave Integrated Household Panel Survey (IHPS) data of 2010 and 2013. The correlated random effects method of analyzing linear and non-linear panel data models is used to estimate the average partial effects. The control function approach of the instrumental variables methods is employed to control for potential endogeneity of subsidized fertilizer. The results suggest that subsidized fertilizer increases farmers’ market participation as sellers, quantity sold and commercialization of maize. However, the magnitudes of the effects are relatively smaller, which highlight the challenge of improving farm household income from sales of staple food crops. The results have implication on sustainability of the program, policy formulation and design of programs for the agricultural sector and small farmers in developing countries.
    Keywords: Farm Input Subsidy, Maize Marketing, Malawi, Farm Management, International Development, Marketing, Q1, Q13, Q18,
    Date: 2015
  8. By: Wanjala, Bernadette (Tilburg University, School of Economics and Management)
    Abstract: This study sought to provide the first independent rigorous evaluation of the Millennium Villages Project, using Sauri millennium village (Kenya) as a case study. Sauri has been coined as a success story of the MVP across Africa, which makes it an ideal case study to assess the impact of the MVP interventions. The study is an ex-post evaluation and therefore applies non-experimental evaluation methods. The first empirical chapter of the thesis seeks to estimate the magnitude of the changes induced by the MVP interventions in agricultural productivity, production margins, selfconsumption and different sources of household income. We find significant MVP effects on agricultural productivity and total household income (including selfconsumption) but insignificant cash income effects. The chapter concludes that there is a need to test assumptions on which the theories of change are based in order to ensure effectiveness of the interventions. The second empirical chapter assesses whether the MVP effects could be explained by the level of diversification of sources of income. We find that: (i) there was an insignificant difference in the level of diversification between the millennium villages and the control villages; (ii) the main push factors into diversification were the small land and large household sizes; (iii) variations in income and poverty were also explained by land and household sizes, among other factors, with an insignificant MVP dummy and (iv) households that diversified more had lower MVP effects, a likely indication of MVP’s focus on agricultural interventions as opposed to the nonfarm economy. The third empirical chapter examined whether the performance of market institutions (input, output and credit markets) promoted or undermined the achievement of the MVP goals. We find that (i) increased access to inputs enhanced agricultural productivity in the first year, but the gains were not sustained after the phasing out of the input subsidy; (ii) collective marketing of produce through cereal banks was not successful and (iii) interventions in credit markets were not successful, given the low repayment rates of microfinance loans and low uptake of credit financing from commercial banks. Constraints to access to credit (especially lack of collateral and cost of borrowing) were still prevalent in Sauri after the MVP. The concluding chapter provides a summary of the findings, identifies key emerging issues and provides areas for further research. The key emerging issues were: the importance of designing the project as an experiment to enable more accurate impact evaluation, the failure to test the assumptions of the theory of change and sustainability of the gains beyond the project period.
    Date: 2016
  9. By: Bigsten, Arne (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper discusses the historical roots of development economics and how it has changed over the last half century. We first identify the most important changes in orientation within development economics and discuss whether there are important areas that have been side-lined. Then we look at current work in development economics and discuss where the field should go in the future.
    Keywords: development economics; review; methodology
    JEL: B12 O11 O12 O13 O14 O15 O16 O17 O18 O19
    Date: 2016–04
  10. By: Amaro Da Costa Luz Carneiro,Pedro Manuel; Koussihouede,Oswald; Lahire,Nathalie; Meghir,Costas; Mommaerts,Corina
    Abstract: The effect of increasing school resources on educational outcomes is a central issue in the debate on improving school quality. This paper uses a randomized experiment to analyze the impact of a school grants program in Senegal, which allowed schools to apply for funding for improvements of their own choice. The analysis finds positive effects on test scores at lower grades that persist at least two years. These effects are concentrated among schools that focused funds on human resource improvements rather than school materials, suggesting that teachers and principals may be a central determinant of school quality.
    Keywords: Education For All,Effective Schools and Teachers,Secondary Education,Tertiary Education,Primary Education
    Date: 2016–04–06
  11. By: Fishman, Ram; Kishore, Avinash; Rothler, Yoav; Ward, Patrick S.; Jha, Shankar; Singh, R. K. P.
    Abstract: The imbalanced application of chemical fertilizers in India is widely blamed for low yields, poor soil health, pollution of water resources, and large public expenditures on subsidies. To address the issue, the government of India is investing in a large-scale, expensive program of individualizedsoil testing and customized fertilizer recommendations, with the hope that scientific information will lead farmers to optimize the fertilizer mix. We conducted a randomized controlled trial in the Indian state of Bihar in what we believe to be the first evaluation of the effectiveness of the program as currently implemented. We found no evidence of any impact of soil testing and customized fertilizer recommendations on actual fertilizer use or the willingness to pay for lacking nutrients (elicited using aBecker-DeGroot-Marschak mechanism). Several factors could be driving these results, including a lack of understanding, lack of confidence in the information’s reliability, or the costs of the recommended fertilizer mixes. We provide evidence that suggestslack of confidence is the main factor inhibiting farmers’ response
    Keywords: fertilizers, farm inputs, soil analysis, randomized controlled trial, Becker-DeGroot-Marschak mechanism,
    Date: 2016

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