nep-dev New Economics Papers
on Development
Issue of 2016‒10‒02
fourteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs Worldwide By Banerjee, Abhijit; Hanna, Rema; Kreindler, Gabriel; Olken, Benjamin A.
  2. Contracting Out the Last-Mile of Service Delivery: Subsidized Food Distribution in Indonesia By Banerjee, Abhijit; Hanna, Rema; Kyle, Jordan C.; Olken, Benjamin A.; Sumarto, Sudarno
  3. Mainstreaming an Effective Intervention: Evidence from Randomized Eavluations of "Teaching at the Right Level" in India By Banerjee, Abhijit; Banerji, Rukmini; Berry, James; Duflo, Esther; Kannan, Harini; Mukerji, Shobhini; Shotland, Marc; Walton, Michael
  4. Working Paper 233 - Technology Adoption and Risk Exposure among Smallholder Farmers: Panel Data Evidence from Tanzania and Uganda By Mukasa Adamon N.
  5. Malaria and Education: Evidence from Mali By Josselin Thuilliez; Hippolyte D'Albis; Hamidou Niangaly; Ogobara Doumbo
  6. Let it Rain: Weather Extremes and Household Welfare in Rural Kenya By Wineman, Ayala; Mason, Nicole M.; Ochieng, Justus; Kirimi, Lilian
  7. Local elections, political fragmentation, and service delivery in Indonesia By Blane Lewis
  8. Can Cash Transfers Help Households Escape an Inter-Generational Poverty Trap? By M. Caridad Araujo; Mariano Bosch; Norbert Schady
  9. Effect of a micro entrepreneur-based community health delivery program on under-five mortality in Uganda: a cluster-randomized controlled trial By Björkman Nyqvist, Martina; Guariso, Andrea; Svensson, Jakob; Yanagizawa-Drott, David
  10. The impact of a rural microcredit scheme targeting women on household vulnerability and empowerment: evidence from South West Nigeria By Damilola Olajide; Divine Ikenwilo; Kehinde Omotosho; Ngozi Ibeji; Olufemi Obembe
  11. Working Paper 234 - The Unintended Consequences of Agricultural Input Intensification: Human Health Implications of Agro-chemical use in Sub-Saharan Africa By Megan Sheahan; Christopher Barrett; Casey Goldvale
  12. Borrowing Requirements, Credit Access, and Adverse Selection: Evidence from Kenya By Jack, William; Kremer, Michael; Laat, Joost de; Suri, Tavneet
  13. Rational Herding toward the Poor: Evidence from Location Decisions of Microfinance Institutions within Pakistan By Jérôme Monne; Céline Louche; Christophe Villa
  14. Taking Stock of the Evidence on Micro-Financial Interventions By Francisco J. Buera; Joseph P. Kaboski; Yongseok Shin

  1. By: Banerjee, Abhijit (MIT); Hanna, Rema (Harvard University); Kreindler, Gabriel (MIT); Olken, Benjamin A. (MIT)
    Abstract: Targeted transfer programs for poor citizens have become increasingly common in the developing world. Yet, a common concern among policy makers - both in developing as well as developed countries - is that such programs tend to discourage work. We re-analyze the data from 7 randomized controlled trials of government-run cash transfer programs in six developing countries throughout the world, and find no systematic evidence that cash transfer programs discourage work.
    Date: 2015–12
  2. By: Banerjee, Abhijit (MIT); Hanna, Rema (Harvard University); Kyle, Jordan C. (International Food Policy Research Institute); Olken, Benjamin A. (MIT); Sumarto, Sudarno (National Team for the Acceleration of Poverty Reduction, Jakarta)
    Abstract: Outsourcing government service provision to private firms can improve efficiency and reduce rents, but there are risks that non-contractible quality will decline and that reform could be blocked by vested interests exactly where potential gains are greatest. We examine these issues by conducting a randomized field experiment in 572 Indonesian localities in which a procurement process was introduced that allowed citizens to bid to take over the implementation of a subsidized rice distribution program. This led 17 percent of treated locations to switch distributors. Introducing the possibility of outsourcing led to a 4.6 percent reduction in the markup paid by households. Quality did not suffer and, if anything, households reported the quality of the rice improved. Bidding committees may have avoided quality problems by choosing bidders who had relevant experience as traders, even if they proposed slightly higher prices. Mandating higher levels of competition by encouraging additional bidders further reduced prices. We document offsetting effects of having high rents at baseline: when the initial price charged was high and when baseline satisfaction levels were low, entry was higher and committees were more likely to replace the status quo distributor; but, incumbents measured to be more dishonest on an experimental measure of cheating were also more likely to block the outsourcing process. We find no effect on price or quality of providing information about program functioning without the opportunity to privatize, implying that the observed effect was not solely due to increased transparency. On net, the results suggest that contracting out has the potential to improve performance, though the magnitude of the effects may be partially muted due to push back from powerful elites.
    Date: 2016–01
  3. By: Banerjee, Abhijit; Banerji, Rukmini; Berry, James; Duflo, Esther; Kannan, Harini; Mukerji, Shobhini; Shotland, Marc; Walton, Michael
    Abstract: Previous randomized studies have shown that addressing children's current learning gaps, rather than following an over-ambitious uniform curriculum, can lead to significant learning gains. In this study, we evaluate a series of efforts to scale up the NGO Pratham's approach to teaching children according to their actual learning level, in four Indian States. While this approach was previously shown to be extremely effective when implemented with community volunteers outside of school, the objective of these new scale-up evaluations was to develop a model that could be implemented within the government school system. In the first two instances (Bihar and Uttarakhand), the methodology was not adopted by government schoolteachers, despite well-received training sessions and Pratham support. Motivated by the quantitative and qualitative analysis of these early attempts, we adapted the approach and designed large-scale experiments in the states of Haryana and Uttar Pradesh to test two new scale-up models. In Haryana, teachers received support from government resource persons trained by Pratham, and implemented the approach during a dedicated hour. In Uttar Pradesh, Pratham volunteers implemented high-intensity, short-burst "learning camps" for 40 days, in school and during school hours, with additional 10-day summer camps. Both models proved effective, with gains in language of 0.15 standard deviation in Haryana, and 0.70 standard deviations in Uttar Pradesh, on all students enrolled in these schools at baseline. These two models provide blueprints that can be replicated inside other government systems.
    Keywords: education; India
    JEL: I20 I21 O12 O35
    Date: 2016–09
  4. By: Mukasa Adamon N. (African Development Bank)
    Abstract: This paper investigates the empirical linkages between production risk and technology adoption decisions among agricultural farmers in Tanzania and Uganda using a balanced household panel dataset from the World Bank’s LSMS-ISA project. Applying a moment-based approach and a Mundlak-Chamberlain IV fixed effects model to control for endogeneity and unobserved heterogeneity, I find that the first four moments of production significantly explain changes in the probability of adopting chemical fertilizer, improved seeds, and pesticides. While the use of these modern inputs is found to be risk-decreasing, estimates suggest that the higher their purchasing costs, the greater the cost of farmers’ private risk bearing. Under the assumption of a moderate risk aversion, the risk premium amounts to 12.7% and 30.5% of the expected production revenues respectively in Tanzania and Uganda, largely explained by production volatility and downside risk aversion. This underscores the need to account for farmers’ preferences towards higher order moments when designing technology adoption policies
    Date: 2016–04–18
  5. By: Josselin Thuilliez (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Hippolyte D'Albis (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Hamidou Niangaly (MRTC - Malaria Research and Training Center - Faculté de Médecine de Bamako); Ogobara Doumbo (MRTC - Malaria Research and Training Center - Faculté de Médecine de Bamako)
    Abstract: This article examines the influence of malaria on human capital accumulation in the village of Diankabou in Mali. To account for malaria endogeneity and its interaction with unobservable risk factors, we exploit natural variations in malaria immunity across individuals of several sympatric ethnic groups – the Fulani and the non-Fulani – who differ in their susceptibility to malaria. The Fulani are known to be less susceptible to malaria infections, despite living with a similar malaria transmission intensity to those seen among other ethnic groups. We also use natural variation of malaria intensity in the area (during and after the malaria transmission season) and utilize this seasonal change as a treatment. We find that malaria has an impact on cognitive and educational outcomes in this village. We discuss the implications of this result for human capital investments and fertility decisions with the help of a quantity-quality model.
    Keywords: Immunity,Malaria,Education,Cognition,Fertility
    Date: 2016–01
  6. By: Wineman, Ayala; Mason, Nicole M.; Ochieng, Justus; Kirimi, Lilian
    Abstract: Households in rural Kenya are sensitive to weather shocks through their reliance on rain-fed agriculture and livestock. Yet the extent of vulnerability is poorly understood, particularly in reference to extreme weather. This paper uses temporally and spatially disaggregated weather data and three waves of household panel survey data to understand the impact of weather extremes –including periods of high and low rainfall, heat, and wind– on household welfare. Particular attention is paid to heterogeneous effects across agro-ecological regions. We find that all types of extreme weather affect household well-being, although effects sometimes differ for income and calorie estimates.
    Keywords: Food Security and Poverty,
    Date: 2016
  7. By: Blane Lewis
    Abstract: This study examines the impact of local elections on public service delivery in Indonesia, focusing particular attention on the interaction between directly elected executives and politically fragmented parliaments. The investigation considers two common measures of political fragmentation: the number of parliament seats and the number of political parties in parliament. The analysis finds that the impact of direct elections on service access is not conditional on parliament size but that it is significantly dependent on the number of political parties represented in parliament. When parliaments comprise a small number of political parties the impact of direct elections on service delivery is positive; as the number of parties grows election benefits decline; and when the proliferation of political parties becomes particularly pronounced the influence of direct elections on service outcomes turns negative. Evidence suggests that the adverse impact of direct elections at high levels of party proliferation may be due to increased difficulties in achieving government-wide consensus on planning and executing expenditure budgets and an associated decline in spending.
    Keywords: local government, elections, political fragmentation, public service delivery, regression discontinuity, Indonesia
    JEL: H72 H75 H76
    Date: 2016
  8. By: M. Caridad Araujo; Mariano Bosch; Norbert Schady
    Abstract: Many poor households in developing countries are liquidity-constrained. As a result, they may under-invest in the human capital of their children. We provide new evidence on the long-term (10-year) effects of cash transfers using data from Ecuador. Our analysis is based on two separate sources of data and two identification strategies. First, we extend the results from an experiment that randomly assigned children under the age of 6 years to “early” or “late” treatment groups. Although the early treatment group received twice as much in transfers, we find no difference between children in the two groups on performance on a large number of tests. Second, we use a regression discontinuity design exploiting the fact that a “poverty index” was used to determine eligibility for transfers. We focus on children who were just-eligible and just-ineligible for transfers when they were in late childhood, and compare their school attainment and work status 10 years later. Transfers increased secondary school completion, but the effects are small, between 1 and 2 percentage points from a counterfactual school completion rate of 75 percent. We conclude that any effect of cash transfers on the inter-generational transmission of poverty in Ecuador is likely to be modest.
    JEL: I3
    Date: 2016–09
  9. By: Björkman Nyqvist, Martina; Guariso, Andrea; Svensson, Jakob; Yanagizawa-Drott, David
    Abstract: Systematic reviews of existing evidence show promising effects of community health worker (CHW) programs as a strategy to improve child survival, but also highlight challenges faced by CHW programs, including insufficient incentives to deliver timely and appropriate services. We assessed the effect of an incentivized community health delivery program in Uganda on all-cause under-five mortality. A cluster-randomized controlled trial, embedded within the scale-up of a new community health delivery program, was undertaken in 214 clusters in 10 districts in Uganda. In the intervention clusters micro entrepreneur-based community health promoters (CHPs) were deployed over a three-year period (2011-2013). On average 38 households were surveyed in each cluster at the end of 2013, for a total sample size of 8,119 households. The primary study outcome was all-cause under-five mortality (U5MR). U5MR was reduced by 27% (adjusted RR 0.73, 95% CI 0.58-0.93).
    Keywords: child mortality; infant mortality; social entrepreneurship; Living Goods; community health worker
    Date: 2016–09
  10. By: Damilola Olajide; Divine Ikenwilo; Kehinde Omotosho; Ngozi Ibeji; Olufemi Obembe
    Abstract: The rapid expansion of microcredit in recent years is informed by the belief that removal of constraints to credit access facing the poor, particularly women, through microcredit can improve their well-being and ultimately help them out of poverty. However, the evidence supporting these promises has been largely inconclusive. This study examined the impact of a rural microcredit scheme targeting women on vulnerability and empowerment of the beneficiaries and their household members. The study was conducted in collaboration with the Amoye Microfinance Bank, Ikere Ekiti, Nigeria. Data was collected from a follow-up survey of 2,938 applicants, comprising 1,555 women who were successful (treated group) and 1,383 women who were unsuccessful (control group), and 8,418 household members. Eligibility for the microcredit was based on a credit scoring system. A regression discontinuity design was adopted to exploit the information around the eligibility threshold to identify the program impact. Vulnerability and empowerment were measured from five domains. The results showed that beneficiaries of the microcredit were significantly less vulnerable than non-beneficiaries, but not all of the measurement domains were significant. Also, beneficiaries were significantly more empowered than non-beneficiaries, and all of the measurement domains were significant. Additionally, indicators of labour market participation were significantly higher for household members of beneficiaries than for household members of non-beneficiaries. The analysis extended to examining associations between the estimated impacts and some institutional factors such as pricing, repayment method, loan duration and use of loan. The results suggest that these factors are potentially relevant for the aspect of design of microcredit schemes. The findings further inform the policy debate on the promises of microfinance, specifically relating to the multidimensional nature of the impacts, effects on family members of beneficiaries, and the relevance of institutional factors for microcredit design.
    Keywords: Microcredit; Regression Discontinuity Design; Financial inclusion; Vulnerability; Female empowerment.
    JEL: C21 C31 D14 G21 I32 O16 O55 Z13
    Date: 2016
  11. By: Megan Sheahan; Christopher Barrett; Casey Goldvale
    Abstract: While agro-chemicals such as pesticides, fungicides, and herbicides are often promoted as inputs that increase agricultural productivity by limiting a range of pre-harvest losses, their use may have negative human health and labor productivity implications. We explore the relationship between agro-chemical use and the value of crop output at the plot level and a range of human health outcomes at the household level using nationally representative panel survey data from four Sub-Saharan African countries where more than ten percent of main season cultivators use agro-chemicals. We find that agro-chemicals use is associated with increased value of harvest, with similar magnitudes across three of the four countries under study, but is also associated with increases in costs associated with human illness, including increased health expenditures related to illness and time lost from work due to sickness in recent past. We motivate our empirical work with a simple dynamic optimization model that clearly shows the role that farmer understanding of these feedbacks can play in optimizing the use of agro-chemicals. The central role of information in determining that optimum underscores the role of agricultural and public health extension as modern input intensification proceeds in the region.
    Date: 2016–04–18
  12. By: Jack, William; Kremer, Michael; Laat, Joost de; Suri, Tavneet
    Abstract: We examine the potential of asset-collateralized loans in low-income country credit markets. When a Kenyan dairy cooperative exogenously replaced high down payments and joint liability requirements with loans collateralized by the asset itself - a large water tank - loan take-up increased from 2.4% to 41.9%. In contrast, substituting joint liability requirements for deposit requirements had no impact on loan take up. There were no repossessions among farmers allowed to collateralize 75% of their loans, and a 0.7% repossession rate among those offered 96% asset collateralization. A Karlan-Zinman test based on waiving borrowing requirements ex post finds evidence of adverse selection with very low deposit requirements, but not of moral hazard. A simple model and rough calibration suggests that adverse selection and regulatory caps on interest rates may deter lenders from making welfare-improving loans with low deposit requirements. We estimate that 2/3 of marginal loans led to increased water storage investment. Real effects of loosening borrowing requirements include increased household water access, reductions in child time spent on water-related tasks, and greater school enrollment forr girls.
    Keywords: agriculture; asymmetric information; borrowing requirements; collateralization; credit; down-payment; Kenya
    JEL: O13 O16
    Date: 2016–09
  13. By: Jérôme Monne (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes, Audencia Business School); Céline Louche (Audencia Business School); Christophe Villa (Audencia Business School)
    Abstract: Analyzing the geographical location of almost all the microfinance institutions (MFIs) within Pakistan, this paper gives further evidence that microfinance activities do not reach the poorest rural areas. Especially, we explore how this result is driven by the uncertainty faced by MFIs in their location decision i.e. they can hardly predict accurately whether or not they will perform financially. Furthermore, we find that MFIs are spatially clustered and identify three main reasons for this: common attraction factors i.e. the characteristics of one area place fits to the preferences of all MFIs so that they are all located in the same areas; payoff externalities to be collocated; and herd behaviour, i.e. MFIs follows one another. Most importantly, we find that a significant part of this herding process is rational, i.e. early locations of MFIs convey information used by later ones such that it reverses or neutralizes the negative impact of uncertainty resulting then in more locations in needier areas. Since it allows them to be located in poorer areas, MFIs improve the achievement of their social goal. This latter result is rather good news for those who reckon that a better access to financial services enhances economic growth and fosters poverty alleviation. Indeed, rational herding constitutes an endogenous moderator effect to the big issue that financial services penetration is too weak in the poorest rural areas.
    Keywords: panel Poisson regression,rational herding,poverty,microfinance institutions,location decisions,uncertainty
    Date: 2016
  14. By: Francisco J. Buera; Joseph P. Kaboski; Yongseok Shin
    Abstract: We review the empirical evidence on microfinance and asset grants to the ultra poor or microentrepreneurs, and assess our ability to account for this evidence using quantitative theory. Properly executed, these interventions can help segments of the population increase their income and consumption, but neither the empirical micro nor quantitative macro literatures give much reason to believe that such interventions can lead to wide-scale, transformative impacts akin to escaping aggregate poverty traps.
    JEL: O1 O11 O12 O16
    Date: 2016–09

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