nep-dev New Economics Papers
on Development
Issue of 2016‒08‒28
fourteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Happiness and Alleviation of Income Poverty: Impacts of an unconditional cash transfer programme using a subjective well-being approach By Sudhanshu Handa; Kelly Kilburn; Gustavo Angeles; Peter Mvula; Maxton Tsoka; UNICEF Office of Research - Innocenti
  2. Measuring and Changing Control: Women's Empowerment and Targeted Transfers By Alex Armand; Pedro Carneiro; Ingvild Almas; Orazio Attanasio
  3. Income Poor or Calorie Poor? Who should get the Subsidy? By Chandana Maitra; Sriram Shankar; D.S. Prasada Rao
  4. Wealth Heterogeneity and the Income Elasticity of Migration By Samuel Bazzi
  5. The Persistent Power of Behavioral Change: Long-Run Impacts of Temporary Savings Subsidies for the Poor By Simone Schaner
  6. Skill Transferability, Migration, and Development: Evidence from Population Resettlement in Indonesia By Samuel Bazzi; Arya Gaduh; Alexander D. Rothenberg; Maisy Wong
  7. Budget Analysis and Assessment of smart investment in water for smallholder agriculture in Uganda and East Africa By Francis, Mwaura; Miriam Katunze; Tony, Muhumuza; Isaac, Shinyekwa
  8. Remittances, Growth and Poverty Reduction in Asia - A Critical Review of the Literature and the New Evidence from Cross-country Panel Data By Katsushi S. Imai; Bilal Malaeb; Fabrizio Bresciani
  9. Dynamic and Long-term Linkages among Agricultural and Non-Agricultural Growth, Inequality and Poverty in Developing Countries By Katsushi S. Imai; Wenya Cheng; Raghav Gaiha
  10. How Narrowly Should Anti-poverty Programs Be Targeted? Simulation Evidence from Bolivia and Indonesia By Stephan Klasen; Simon Lange
  11. Local Government Proliferation, Diversity, and Conflict By Samuel Bazzi; Matthew Gudgeon
  12. Information transmission and ownership consolidation in aid programs By Dreher, Axel; Langlotz, Sarah; Marchesi, Silvia
  13. Performance Pay and Malnutrition: Evidence from an Experiment targeting Child Malnutrition in West Bengal By Prakarsh Singh; Sandip Mitra
  14. Unintended Consequences of Rewards for Student Attendance: Results from a Field Experiment in Indian Classrooms By Sujata Visaria; Rajeev Dehejia; Melody M. Chao; Anirban Mukhopadhyay

  1. By: Sudhanshu Handa; Kelly Kilburn; Gustavo Angeles; Peter Mvula; Maxton Tsoka; UNICEF Office of Research - Innocenti
    Abstract: This study analyzes the impact of an exogenous, positive income shock on caregivers’ subjective well-being in Malawi using panel data from 3,365 households targeted to receive Malawi’s Social Cash Transfer Programme that provides unconditional cash to ultra-poor, labour-constrained households. The study consists of a cluster-randomized, longitudinal design. After the baseline survey, half of these village clusters were randomly selected to receive the transfer and a follow-up survey was conducted 17 months later. Utilizing econometric analysis and panel data methods, we find that household income increases from the cash transfer can have substantial subjective well-being gains among caregivers. Households use the cash to improve their families’ livelihoods, ensuring provision of their basic needs including food, shelter, and clothing. Reduction of these daily stresses makes caregivers happier about their current situations and gives them hope that the future will continue to get better.
    Keywords: agricultural income; cash transfers; family income; household income; low income;
    Date: 2016
  2. By: Alex Armand (Navarra Center for International Development); Pedro Carneiro; Ingvild Almas; Orazio Attanasio
    Abstract: This paper studies how targeted cash transfers to women affect their empowerment. We use a novel identification strategy to measure women's willingness to pay to receive cash transfers instead of their partner receiving it. We apply this among women living in poor households in urban Macedonia. We match experimental data with a unique policy intervention (CCT) in Macedonia offering poor households cash transfers conditional on having their children attending secondary school. The program randomized whether the transfer was offered to household heads or mothers at municipality level, providing us with an exogenous source of variation in (offered) transfers. We show that women who were offered the transfer reveal a lower willingness to pay, and we show that this is in line with theoretical predictions.
    Keywords: Targeted cash transfers; CCT
    JEL: D13 J16 O12
    Date: 2015–11
  3. By: Chandana Maitra (School of Economics, The University of Queensland, St Lucia, Brisbane, Australia); Sriram Shankar (Research School of Economics and ANU, Centre for Social Research and Methods, The Australian National University, Canberra, Australia); D.S. Prasada Rao (School of Economics, The University of Queensland, St Lucia, Brisbane, Australia)
    Abstract: Poverty-nutrition linkage remains somewhat puzzling for India because trends in calorie poverty and income poverty have been moving in opposite directions in the Indian economy for the past few decades. Given the above, this paper explores the question whether income poverty increases the risk of calorie poverty in cross section context, using data from a random survey of 500 slum households of Kolkata in 2010-11. Calorie poverty is estimated using household specific calorie norm accounting for age, gender and activity status of household members. To address the issue of causality in cross section data, appropriate empirical models such as simultaneous probit and Bayesan propensity score matching are used. Results indicate, an income poor household is at greater risk of being calorie poor. However, there is lack of one-to-one correspondence between the two groups of households. Additionally, transitional households just above the poverty line exhibit very different calorie behaviour. Findings imply, subsidies offered to income poor households should ameliorate calorie poverty. Moreover, subsidies should be directed to income poor rather than calorie poor households. Additionally, nutrition policy should have different prescription for transitional households immediately above the poverty line.
    Keywords: Nutrition policy, calorie poverty, income poverty, activity status, cross section, endogeneity, simultaneous probit, Bayesian
    Date: 2016–08–18
  4. By: Samuel Bazzi (Boston University & BREAD)
    Abstract: How do income shocks affect international migration flows from poor countries? Income growth not only increases the opportunity cost of migration but also eases liquidity constraints. I develop a method to separate these countervailing individual effects and identify the overall income elasticity of migration. Using new administrative and census data from Indonesia, I find that positive agri- cultural income shocks increase labor emigration flows, particularly in villages with relatively more small landholders. However, in the most developed rural areas, persistent income shocks reduce emigration. Overall, the findings highlight the important role of wealth heterogeneity in shaping migration flows as incomes rise.
    Keywords: International Migration, Wealth Heterogeneity, Income Elasticity, Liquidity Constraints
    JEL: F22 F66 J21 J61 O15 Q15
    Date: 2016–04
  5. By: Simone Schaner
    Abstract: I use a field experiment in rural Kenya to study how temporary incentives to save impact long-run economic outcomes. Study participants randomly selected to receive large temporary interest rates on an individual bank account had significantly more income and assets 2.5 years after the interest rates expired. These changes are much larger than the short-run impacts on experimental bank account use and almost entirely driven by growth in entrepreneurship. Temporary interest rates directed to joint bank accounts had no detectable long-run impacts on entrepreneurship or income, but increased investment in household public goods and spousal consensus over finances.
    JEL: D14 O1 O12
    Date: 2016–08
  6. By: Samuel Bazzi (Boston University & BREAD); Arya Gaduh (University of Arkansas); Alexander D. Rothenberg (RAND Corporation); Maisy Wong (University of Pennsylvania)
    Abstract: We use a natural experiment in Indonesia to provide causal evidence on the role of location-specific human capital and skill transferability in shaping the spatial distribution of productivity. From 1979– 1988, the Transmigration Program relocated two million migrants from rural Java and Bali to new rural settlements in the Outer Islands. Villages assigned migrants from regions with more similar agroclimatic endowments exhibit higher rice productivity and nighttime light intensity one to two decades later. We find some evidence of migrants’ adaptation to agroclimatic change. Overall, our re- sults suggest that regional productivity differences may overstate the potential gains from migration.
    Keywords: Internal Migration, Comparative Advantage, Spatial Labor Allocation, Agricultural Adaptation
    JEL: J43 J61 O12 O13 O15 R12
    Date: 2015–11
  7. By: Francis, Mwaura; Miriam Katunze; Tony, Muhumuza; Isaac, Shinyekwa
    Abstract: Uganda’s government has prioritized enhancing agricultural production and productivity as a primary intervention in developing the economy. The advantages of enhancing agricultural production and productivity include improving food security at the household level, increasing income for farmers, reducing food prices for both farmers and non-farmers, and the potential of this reduction for spurring economic growth. Increased productivity is also viewed as a panacea to the challenge of increased pressure on the land, demand for more food and need for employment creation resulting from the high population growth rate. Investment in water for agriculture production (WfAP) infrastructure has been recommended as the best-bet intervention that will break the constraints facing Uganda’s agriculture. The provision and adoption of WfAP will have multiple effects on the agriculture sector by reducing risk associated with agricultural production and thereby enhancing the adoption of higher yielding technologies.
    Keywords: Agribusiness, Agricultural and Food Policy, Agricultural Finance, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Land Economics/Use,
    Date: 2014–09
  8. By: Katsushi S. Imai (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan and School of Social Sciences, University of Manchester, UK); Bilal Malaeb (Oxford Department of International Development, University of Oxford, UK); Fabrizio Bresciani (Asia and the Pacific Division of International Fund for Agricultural Development (IFAD), Italy)
    Abstract: This study provides a critical review of the role of remittances and migration in promoting growth and reducing and poverty and inequality in developing countries in Asia and the Pacific. It also uses the cross-country panel data and examines the effect of remittances on economic growth, poverty and inequality after taking into account the endogeneity of remittances. First, it has been found from our econometric results that remittances will promote economic growth and reduce poverty - both national poverty and rural poverty based on the international poverty lines for the US$1.25 or US$2 thresholds, while the remittances have no inequality-reducing effect. Second, we have suggested the importance of understanding the underlying factors enabling households to undertake migration and remittances in relation with the underlying structural transformation of the rural economy, such as its shift to the non-farm sector, which typically takes place as village infrastructure develops and educational level of the households improves. Third, we argue that the risk-coping roles of remittances at both macro and micro level are important in understanding the poverty-reducing mechanisms associated with migration and remittances. Fourth, poor households outside the village networks should be supported by policy measures. This is important particularly because our result suggests that the remittances increase inequality in rural areas.
    Keywords: Remittances, Migration, Growth, Poverty, Inequality, Asia
    JEL: F22 O10 O15 O53 I30
    Date: 2016–08
  9. By: Katsushi S. Imai (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan and School of Social Sciences, University of Manchester, UK); Wenya Cheng (School of Social Sciences, University of Manchester, UK); Raghav Gaiha (Faculty of Management Studies, University of Delhi, India and Harvard School of Public Health, Harvard University Boston, USA)
    Abstract: Drawing upon cross-country panel data for developing countries, the present study examines the role of agricultural growth in reducing inequality and poverty by modelling the dynamic linkage between agricultural and non-agricultural sectors. For this purpose, we have compared the role of agricultural growth and that of non-agricultural growth and have found that agricultural growth is more important in reducing poverty, while the negative effect of agricultural growth on inequality is found in a few models where specific definitions of inequality are adopted. Our analysis generally reinforces the case for revival of agriculture in the post-2015 discourse, contrary to the much emphasised roles of rural-urban migration and urbanisation as main drivers of growth and elimination of extreme poverty.
    Keywords: Inequality, Poverty, Growth, Agriculture, Non-agriculture, MDG, SDG
    JEL: C20 I15 I39 O13
    Date: 2016–08
  10. By: Stephan Klasen (Georg-August University Göttingen); Simon Lange (Georg-August University Göttingen)
    Abstract: A key question in the design of anti-poverty programs is to what extent they should be targeted. Empirical evaluations of targeted transfer schemes and simulation exercises often point to further gains that can be had from targeted transfers vis-à-vis universal transfers or from more narrow targeting. Theoretical work, on the other hand, has identified hidden costs associated with targeting - including politico-economic constraints on budgets - but these are frequently ignored in empirical work. In this paper we first argue that common targeting measures can be interpreted as preferences that attach specific weights to true and false positive rates. Based on data from Bolivia and Indonesia, we show that targeting based on an imperfect poverty classifier based on proxy means tests results in very distinct 'optimal' beneficiary shares when these measures are used as a decision criterion. Implications from poverty simulations are sensitive to assumptions about the political economy relationship between the beneficiary share and the available budget. In fact, in many situations, optimizing targeting measures will be misleading when the actual goal is to maximize the effect on poverty.
    Keywords: welfare and poverty measurement; targeting; transfers; social assistance; proxy means tests; poverty; Bolivia; Indonesia
    JEL: C52 I38 O21
    Date: 2016–08–22
  11. By: Samuel Bazzi (Boston University & BREAD); Matthew Gudgeon (Boston University)
    Abstract: The creation of new local governments is a key feature of decentralization in developing countries. This process often causes substantial changes in contestable public resources and the local diversity of the electorate. We exploit the plausibly exogenous timing of new district creation in Indonesia to iden- tify the implications of these changes for violent conflict. Using new geospatial data on violence, we show that allowing for redistricting along group lines can reduce conflict. However, these reductions are undone and even reversed if the newly defined electorates are ethnically polarized, particularly in areas that receive an entirely new seat of government. We identify several mechanisms highlighting the violent contestation of political control.
    Keywords: Conflict, Polarization, Ethnic Diversity, Decentralization
    JEL: D72 D74 H41 H77 O13 Q34
    Date: 2016–03
  12. By: Dreher, Axel; Langlotz, Sarah; Marchesi, Silvia
    Abstract: We investigate the degree of leeway donors of foreign aid should grant to recipient governments when their preferences over how to implement the aid are different, and both the donor and recipient possess some private information about the most effective policies. Intuitively, our model shows that donors should stay in control of how their aid is spent when their own private information is more important than the private information of the recipient. Less obviously, an increase in the difference of preferences between donors and recipients can increase rather than decrease the leeway that donors should grant the recipients, as the recipients' information gains in importance relative to those of the donors, and recipients become less likely to communicate truthfully. We test the model using dyadic data for 28 bilateral aid donors and 112 recipients, over the 1995-2010 period. Our proxy for "centralized" aid is project aid, while budget aid leaves more leeway to the recipient and thus proxies for "decentralized" aid. In line with the model, misaligned interests and informational asymmetries indeed influence the shares of aid given as budget and project aid.
    Keywords: communication; delegation; foreign aid; ownership
    JEL: C23 D82 F33 O1
    Date: 2016–08
  13. By: Prakarsh Singh; Sandip Mitra
    Abstract: We carry out a randomized controlled experiment in West Bengal India to test three separate performance pay treatments in the public health sector. Performance is judged on improvements in child malnutrition. First, we exogenously change wages of government employed child care workers through a basic level of absolute incentives. The second treatment introduces high absolute incentives. Finally, we also test for the impact of basic relative incentives on child health. All treatments include supplying mothers with recipe books. The main results suggest that high absolute incentives reduce severe malnutrition by about 6.3 percentage points over three months. There are no signi?cant e¤ects on health outcomes of basic absolute or basic relative incentives. Results are robust to controlling for prior trends, propensity score matching, and reversion-to-the-mean. This result is consistent with a reported increase in protein-rich diet at home in the high absolute treatment.
    Keywords: Performance pay; Child malnutrition; Absolute and relative incentives
    JEL: M52 I12 I38 J38
    Date: 2014–11
  14. By: Sujata Visaria; Rajeev Dehejia; Melody M. Chao; Anirban Mukhopadhyay
    Abstract: In an experiment in non-formal schools in Indian slums, a reward scheme for attending a target number of school days increased average attendance when the scheme was in place, but had heterogeneous effects after it was removed. Among students with high baseline attendance, the incentive had no effect on attendance after it was discontinued, and test scores were unaffected. Among students with low baseline attendance, the incentive lowered post-incentive attendance, and test scores decreased. For these students, the incentive was also associated with lower interest in school material and lower optimism and confidence about their ability. This suggests incentives might have unintended long-term consequences for the very students they are designed to help the most.
    JEL: I21 I25 O15
    Date: 2016–08

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