nep-dev New Economics Papers
on Development
Issue of 2017‒06‒18
nine papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Global economic growth and agricultural land conversion under uncertain productivity improvements in agriculture By Bruno Lanz; Simon Dietz; Tim Swanson
  2. Project Performance and Bid Evaluation:Evidence from World Bank Procurement Auctions By Qi Zhang
  3. Intensive and Extensive Margins of Mining and Development: Evidence from Sub-Saharan Africa* By Nemera Mamo; Sambit Bhattacharyya; Alexander Moradi; Rabah Arezki
  4. Growth, Nighttime Lights and Power Infrastructure Investment: Evidence from Angola Abstract: An increasing number of papers in the literature use satellite data on nighttime lights as a proxy for economic activities, such as GDP or GDP growth. They implicitly assume that the relationship between GDP and nighttime lights works through the demand side, and there is no constraint on the supply of electricity. This paper first points out a paradox in using this method: the countries for which the method is needed the most, i.e. the countries with poor statistical capacity, are just the countries, for which the assumption of the method is satisfied the least, i.e. the countries with a large power infrastructure deficit. Motivated by this, we collected the data on power infrastructure investment in Angola, a country with a large power infrastructure funding gap. Indeed, we find that in the case of Angola the stable relationship between GDP growth and lights growth assumed in the literature is broken. Instead,increase in lights strongly co-moved with increase in power infrastructure investment. The strong link between lights and investment enables us to develop a new method of quantitatively evaluating value-for-money for infrastructure investments, which directly estimates the cost-effectiveness of transforming investment to welfare, as measured by lights. We estimate the overall cost-effectiveness, and the cost-effectiveness of different financing methods in the case of Angola. By Qi Zhang; James Cust
  5. Changes in income, education and health inequality over the last 20 years: evidence from Latin America, sub-Saharan Africa and South Asia By Giovanni Andrea Cornia
  6. Evidence on economic versus political institutions as determinants of development By Daniel L. Bennett; Hugo J. Faria; James D. Gwartney; Hugo M. Montesinos-Yufa; Daniel R. Morales; Carlos E. Navarro
  7. Inequality, poverty and inclusive growth in TOGO: An Assessment of the Survey Data By Ametoglo, Muriel Eyram Silo; Guo, Ping
  8. Measurement errors in consumption surveys and the estimation of poverty and inequality indices By Giovanni D’Alessio
  9. A Deep Causal Inference Approach to Measuring the Effects of Forming Group Loans in Online Non-profit Microfinance Platform By Thai T. Pham; Yuanyuan Shen

  1. By: Bruno Lanz; Simon Dietz; Tim Swanson
    Abstract: We study how stochasticity in the evolution of agricultural productivity interacts with economic and population growth at the global level. We use a two-sector Schumpeterian model of growth, in which a manufacturing sector produces the traditional consumption good and an agricultural sector produces food to sustain contemporaneous population. Agriculture demands land as an input, itself treated as a scarce form of capital. In our model both population and sectoral technological progress are endogenously determined, and key technological parameters of the model are structurally estimated using 1960-2010 data on world GDP, population, cropland and technological progress. Introducing random shocks to the evolution of total factor productivity in agriculture, we show that uncertainty optimally requires more land to be converted into agricultural use as a hedge against production shortages, and that it significantly affects both optimal consumption and population trajectories.
    Keywords: Agricultural productivity; Economic growth; Endogenous innovations; Environmental constraints; Food security; Global population; Land conversion; Stochastic control
    JEL: O11 O13 O31 J11 C61 Q16 Q24
    Date: 2017–05
  2. By: Qi Zhang
    Abstract: Open competitive bidding with the contract awarded to the bidder offering the lowest bid price is commonly the recommended method for public procurement. However, the benefits of this form of bidding are subject to certain conditions, such as a good number of available bidders and no post-contract adaptations. This paper quantitatively evaluates the implications of the extent to which these conditions are satisfied for contract performance. It combines the performance ratings of World Bank financed projects with the information on bidding for World Bank procurement contracts and uses natural resources as exogenous variations to show that in resource-rich countries, where the conditions are less likely to be satisfied, awarding the contract to the bidder with the lowest bid price may not be the best procurement method in terms of contract performance. This is consistent with the evidence that World Bank financed projects performed better in non-resource-rich countries than in resource-rich countries over the last 40 years. This may explain why since 2016 the World Bank has shifted the focus of bid evaluation from the lowest bid to bids that provide the best overall value for money, taking into account risk, quality, cost and other factors as needed.
    Keywords: procurement, auction, World Bank, project evaluation
    JEL: D4 Q3 H4 H5
    Date: 2016
  3. By: Nemera Mamo; Sambit Bhattacharyya; Alexander Moradi; Rabah Arezki
    Abstract: What are the economic consequences of mining in Sub-Saharan Africa? Using a panel of 3,635 districts from 42 Sub-Saharan African countries for the period 1992 to 2012 we investigate the effects of mining on living standards measured by night-lights. Night-lights increase in mining districts when mineral production expands (intensive margin), but large effects approximately equivalent to 16% increase in GDP are mainly associated with new discoveries and new production (extensive margin). We identify the effect by carefully choosing feasible but not yet mined districts as a control group. In addition, we exploit giant and major mineral discoveries as exogenous news shocks. In spite of the large within district effects, there is little evidence of significant spillovers to other districts reinforcing the enclave nature of mines in Africa. Furthermore, the local effects disappear after mining activities come to an end which is consistent with the ’resource curse’ view.
    Keywords: Mineral discovery, Mineral production, Night-time lights
    JEL: O11 O13 Q32
    Date: 2017
  4. By: Qi Zhang; James Cust
    Keywords: procurement, growth accounting, nighttime lights, investment, electricity, infrastructure, value-for-money
    JEL: Q4 O1 H4
    Date: 2016
  5. By: Giovanni Andrea Cornia (Dipartimento di Scienze per l'Economia e l'Impresa)
    Abstract: This paper analyses the interactions among income, health and educational inequality, and reviews changes in the distribution of income, health and education during the last three decades in Latin America, sub-Saharan Africa and South Asia. The analysis tries to relate such changes to the development strategies followed by the countries of these regions during this period. Such strategies have exerted a considerable influence on public policy and human development inequality. The paper concludes with a set of policies that would help reduce inequality in these three dimensions based on the interconnections among them.
    Date: 2017
  6. By: Daniel L. Bennett (Patrick Henry College); Hugo J. Faria (University of Miami); James D. Gwartney (Florida State University); Hugo M. Montesinos-Yufa (Florida State University & IESA); Daniel R. Morales (IDEICE & Florida State University); Carlos E. Navarro (IESA & Monteavila University)
    Abstract: A growing body of evidence suggests that institutions are an important causal determinant of economic development, yet there remains considerable debate over which institutions are most important. In this paper, we employ an identification strategy that allows us to simultaneously examine the potential causal impact of economic and political institutions. The results of different instrumental variable estimators strongly suggest that economic institutions, gauged by the Index of Social Infrastructure and by the Economic Freedom of the World Index, are economically and statistically significant determinants of income per capita. However, political institutions, measured by Constraints on the Executive, exert smaller and less discernible statistical impact on development. These findings are robust to the inclusion of confounding factors that potentially influence development such as geography, ethnolinguistic fractionalization, human capital, as well as robust to a number of alternative sets of covariates, data sources, sample sizes, instrumental variables, and to tests that provide for valid inferences under near exogeneity.
    Keywords: Comparative Economic Development, Institutions, Out of Africa Hypothesis, IV Estimators, Cognitive Skills. Publication Status: In Submission
    JEL: I25 O10 O43 P10
    Date: 2017–05–24
  7. By: Ametoglo, Muriel Eyram Silo; Guo, Ping
    Abstract: Our research carries out three tasks. The first is to examine the trends of poverty and inequality across the rural and urban areas in Togo between 2006 and 2011. The second task is to look for the drivers of these changes. The last is to inspect the evidence of inclusive growth. Using data from Core Welfare Indicators Questionnaire Survey (QUIBB) for 2006 and 2011 and the ADePT Poverty and Inequality Module, we explore poverty and inequality indices. We found that: 1) fifty percent of the Togolese population in the urban area, lives with per capita consumption expenditure greater than the poverty line. 2) The decrease of the headcount ratio poverty from 2006 to 2011 was much faster in the urban areas than the rural areas. 3) In five years, inequality has risen in both rural and urban areas. 4) Even though the prevalence of poverty has declined between 2006 and 2011, the depth and severity of poverty has intensified in Togo. 5) The economic growth in Togo was not pro-poor.
    Keywords: poverty, inequality, pro-poor, inclusive growth
    JEL: I31 I32 O10
    Date: 2016–10–31
  8. By: Giovanni D’Alessio (Bank of Italy)
    Abstract: This paper firstly aims to evaluate the incidence of measurement error affecting the main variables collected in surveys on consumption. The assessment is carried out on two Tanzania surveys which provide both diary and panel data. Diary data can be employed to obtain reliability coefficients for time-invariant variables. When variables vary over time, as in the case of panel data, an estimation of the incidence of measurement error on the total variance can be obtained by applying models which allow the decomposition of observed variability into true dynamics and noise (e.g. the Heise model and the latent Markov model). Some evaluations of the reliability of the data are also conducted on the basis of the internal consistency criterion, an approach that does not require panel data. On the basis of the reliability estimates obtained, examples of possible impacts of measurement errors on poverty analysis are briefly discussed. These experiments clearly show the importance of the topic in poverty and inequality data analysis.
    Keywords: inequality, poverty, survey data, measurement errors, reliability
    JEL: D31 I32
    Date: 2017–06
  9. By: Thai T. Pham; Yuanyuan Shen
    Abstract: Kiva is an online non-profit crowdsouring microfinance platform that raises funds for the poor in the third world. The borrowers on Kiva are small business owners and individuals in urgent need of money. To raise funds as fast as possible, they have the option to form groups and post loan requests in the name of their groups. While it is generally believed that group loans pose less risk for investors than individual loans do, we study whether this is the case in a philanthropic online marketplace. In particular, we measure the effect of group loans on funding time while controlling for the loan sizes and other factors. Because loan descriptions (in the form of texts) play an important role in lenders' decision process on Kiva, we make use of this information through deep learning in natural language processing. In this aspect, this is the first paper that uses one of the most advanced deep learning techniques to deal with unstructured data in a way that can take advantage of its superior prediction power to answer causal questions. We find that on average, forming group loans speeds up the funding time by about 3.3 days.
    Date: 2017–06

This nep-dev issue is ©2017 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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