nep-dev New Economics Papers
on Development
Issue of 2017‒09‒17
eight papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. The Determinants of Foreign Direct Investment in sub-Saharan Africa: What Role for Governance? By Andres Rodrigues-Pose; Gilles Cols
  2. Does fiscal decentralization enhance citizens’ access to public services and reduce poverty? Evidence from a conflict setting By Tiangboho Sanogo
  3. Does Urbanization Reduce Rural Poverty? Evidence from Vietnam By Adel Ben Youssef; Mohamed El Hedi Arouri; Cuong Nguyen-Viet
  4. This paper seeks to explain the U-shaped relationship between farm productivity and farm scale -the initial fall in productivity as farm size increases from its lowest levels and the continuous upward trajectory as scale increases after a threshold - observed across the world and in low-income countries. We show that the existence of fixed transaction costs can explain why the smallest farms are most efficient in their use of labor, slightly larger farms least efficient and larger farms as efficient as the smallest farms. We show that to explain the rising upper tail of the U requires there be economies of scale machine capacity. We address the question of whether these conditions are met in India using data from the India ICRISAT VLS panel survey. We find evidence consistent with our model, suggesting that there are too many farms, at scales insufficient to exploit locally-available equipment capacity scale-economies and hampered by labor-market transaction costs. Classification-O13, Q15, Q12 By Andrew D. Foster; Mark Rosenzweig
  5. Absolute Poverty: When Necessity Displaces Desire By Robert C. Allen
  6. Conditional cash transfer programmes in Latin America and the Caribbean: Coverage and investment trends By Cecchini, Simone; Atuesta, Bernardo
  7. Influence of socio-demographic characteristics on different dimensions of household food insecurity in Montevideo, Uruguay By Rossi, Máximo; Ferre, Zuleika; Curutchet, María Rosa; Giménez, Ana; Ares, Gastón
  8. Energy Consumption and Health Outcomes in Africa By Adel Ben Youssef; Laurence Lannes; Christophe Rault; Agnès Soucat

  1. By: Andres Rodrigues-Pose; Gilles Cols
    Abstract: For the past quarter of a century, foreign direct investment (FDI) flows have grown exponentially across the world. Sub-Saharan Africa has, however, lagged behind and only lured on average a mere 2% of global FDI. The investment that the region attracts tends, moreover, to be concentrated in a number of commodity-rich countries. Natural resources and the size of national markets have generally been considered as the main drivers of FDI. The quality of local institutions has, by contrast, attracted less attention. This paper uses institutional data for 22 countries in order to demonstrate that the quality of governance plays a far from negligible and enduring role in the distribution of FDI in sub-Saharan Africa. It is shown that factors such as political stability, government effectiveness, lower corruption, voice and accountability, and the rule of law not only are more important determinants of FDI than the size of local markets, but also that their influence on the capacity of African countries to attract FDI is long-lasting.
    Keywords: Foreign direct investment (FDI), good governance, institutions, markets, natural resources, sub-Saharan Africa
    Date: 2017–09
  2. By: Tiangboho Sanogo (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper investigates whether, and how, the devolution of revenue raising responsibilities to municipalities enhances access to public services and contributes to reducing poverty in Côte d’Ivoire. The analysis uses a local government’ revenue and expenditure dataset from 2001 to 2011 for 115 municipalities in 35 departments. An adjusted multidimensional poverty index and a headcount poverty index are calculated at the local level using the Household Living Standard Survey. The empirical analysis uses a grouped fixed effect approach, combined with a two-stage least squares methodology with panel corrected standard errors clustered by department, to address both time-varying heterogeneity and local revenue endogeneity. The results suggest that increased local revenue positively affects access to public services and reduces poverty. However, there is evidence that fiscal decentralization has a more robust effect on access to public service, than on poverty. This effect seems to work mainly through enhancing access to education more than access to health, water, and sanitation services. Contrary to existing literature, our results indicate that municipalities are more likely to improve access to public services in less ethnically diverse localities and in rural zones. The study provides evidence that the effect of the conflict experienced by the country has been limited statistically.
    Keywords: Fiscal decentralization,Local development,Multidimensional poverty,Local government revenue,Municipalities,Côte d’Ivoire.
    Date: 2017–09–06
  3. By: Adel Ben Youssef (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Mohamed El Hedi Arouri (CRGM - Centre de Recherche Clermontois en Gestion et Management - Université d'Auvergne - Clermont-Ferrand I); Cuong Nguyen-Viet (Chercheur Indépendant)
    Abstract: This paper contributes to the urbanization-poverty nexus by assessing the effect of urbanization on income, expenditure, and poverty in rural households in Vietnam, using data from household surveys. We find that the urbanization process stimulates the transition from farm to non-farm activities in rural areas. More specifically, urbanization tends to reduce farm income and increase wages and non-farm income in rural households. This suggests that total income and consumption expenditure of rural households are more likely to increase with urbanization. Finally, we find also that urbanization helps to decrease the expenditure poverty rate of rural households, albeit by a small magnitude.
    Keywords: rural poverty,urbanization, household surveys, Vietnam, R11, I30,, Asia
    Date: 2016–09–27
  4. By: Andrew D. Foster (Brown University); Mark Rosenzweig (Yale University)
    Date: 2017–09
  5. By: Robert C. Allen
    Abstract: A new basis for an international poverty measurement is proposed based on linear programming for specifying the least cost diet and explicit budgeting for non-food spending. This approach is superior to the World Bank’s ‘$-a-day’ line because it is (1) clearly related to survival and well being, (2) comparable across time and space since the same nutritional requirements are used everywhere while non-food spending is tailored to climate, (3) adjusts consumption patterns to local prices, (4) presents no index number problems since solutions are always in local prices, and (5) requires only readily available information. The new approach implies much more poverty than the World Bank’s, especially in Asia.
    Keywords: absolute poverty,diet problem,linear programming,World Bank poverty line
    JEL: I12 I32
    Date: 2017–07
  6. By: Cecchini, Simone; Atuesta, Bernardo
    Abstract: This document analyses the evolution of the population coverage and investment of conditional cash transfer (CCT) programmes, which are poverty reduction initiatives, in the countries of Latin America and the Caribbean over the past 20 years. The analysis is based on up-to-date, detailed information from the database on non-contributory social protection programmes in Latin America and the Caribbean, which is administered by the Economic Commission for Latin America and the Caribbean (ECLAC) and available to the public via the Internet. The database presents information on the various components of the programmes and the institutions responsible for them and provides data on budgets, expenditure, coverage and transfer amounts of each CCT programme.
    Date: 2017–09
  7. By: Rossi, Máximo; Ferre, Zuleika; Curutchet, María Rosa; Giménez, Ana; Ares, Gastón
    Abstract: Using a cross-sectional survey with a representative sample of households from the metropolitan area centered on Montevideo, we evaluate first the factorial structure of the Latin American & Caribbean Household Food Security Scale (ELCSA) with an exploratory factor analysis. Secondly, using a probit model we study the influence of socio-demographic characteristics on each of the identified dimensions of the food insecurity. The percentage of affirmative responses to the items of the ELCSA scale ranged from 31.7% to 4.4%. Two factors were identified with the exploratory factor analysis from households without children under 18 years old, whereas three factors were identified for households with children. The identified factors were associated with different severity levels of food insecurity. Likelihood of experiencing different levels of food insecurity was affected by individual characteristics of the respondent as well as characteristics of the household. Household income had the largest influence on all the dimensions, which indicates a strong relationship between income and food insecurity.
    Keywords: food security,income,factor analysis,Latin America
    JEL: I14 I31 D12
    Date: 2017
  8. By: Adel Ben Youssef (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Laurence Lannes (The World Bank - The World Bank); Christophe Rault (LEO - Laboratoire d'économie d'Orleans - CNRS - Centre National de la Recherche Scientifique - UO - Université d'Orléans); Agnès Soucat (WHO - World Health Organisation - WHO(OMS))
    Abstract: We examine causal links between energy consumption and health indicators (Mortality rate under-5, life expectancy, greenhouse effect, and government expenditure per capita) for a sample of 16 African countries over the period 1971-2010 (according to availability of countries' data). We use the panel-data approach of Kónya (2006), which is based on SUR systems and Wald tests with country specific bootstrap critical values. Our results show that health and energy consumption are strongly linked in Africa. Unilateral causality is found from energy consumption to life expectancy and child under-5 mortality for Senegal, Morocco, Benin, DRC, Algeria, Egypt, and South Africa. At the same time, we found a bilateral causality between energy consumption and health indicators in Nigeria. In particular, our findings suggest that electricity consumption Granger causes health outcomes for several African countries.
    Keywords: Energy consumption,Electricity,Health outcomes,Africa
    Date: 2016–09–15

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.