nep-dev New Economics Papers
on Development
Issue of 2017‒11‒19
fourteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Active labour market programmes in Latin America and the Caribbean: Evicence from a meta analysis By Escudero, Verónica; Kluve, Jochen; López Mourelo, Elva; Pignatti, Clemente
  2. Impact of school feeding programmes on educational outcomes: Evidence from dry cereals in schools in Burkina Faso By Pouirkèta Rita Nikiema
  3. The impact of Ethiopian Productive Safety-net Program on children’s educational aspirations By Aregawi G. Gebremariam; Elisabetta Lodigiani; Giacomo Pasini
  4. Has the Development Gap between the Ethnic Minority and Majority Groups Narrowed in Viet Nam? Evidence from Household Surveys By Fujii, Tomoki
  5. Analysing the determinants of health aid allocation in sub-Saharan Africa By Abrams M E Tagem
  6. Status, patterns, and microeconomic drivers of the extent of diversity in crop production: Evidence from Afghanistan By Hayatullah Ahmadzai
  7. The Distributional Impact of Fiscal Policy in Indonesia. By Jon Jellema; Matthew Wai-Poi; Rythia Afkar
  8. Polarized Education Levels and Civil War By Gustavo Javier Canavire-Bacarreza; Michael Jetter; Alejandra Montoya-Agudelo
  9. Debt Relief and Good Governance: New Evidence By Andreas Freytag; Jonatan Pettersson; Julian Schmied
  10. Income Inequality and Violence Against Women: Evidence from India By Rashad, Ahmed; Sharaf, Mesbah
  11. Fiscal Incidence in Armenia By Stephen D. Younger; Artsvi Khachatryan
  12. A Fiscal Incidence Analysis for Ethiopia By Ruth Hill; Gabriela Inchauste; Nora Lustig; Eyasu Tsehaye; Tassew Woldehanna
  13. The Effects of Land Markets on Resource Allocation and Agricultural Productivity By Chaoran Chen; Diego Restuccia; Raul Santaeulalia-Llopis
  14. Linkages between financial development, financial instability, financial liberalisation and economic growth in Africa By Batuo, Enowbi; Mlambo, Kupukile; Asongu, Simplice

  1. By: Escudero, Verónica; Kluve, Jochen; López Mourelo, Elva; Pignatti, Clemente
    Abstract: We present a systematic collection and assessment of impact evaluations of active labour market programmes (ALMP) in Latin America and the Caribbean (LAC). The paper delineates the strategy to compile a novel meta database and provides a narrative review of 51 studies. Based on these studies, the quantitative analysis extracts a sample of 296 impact estimates, and uses meta regression models to analyse systematic patterns in the data. In addition to analysing earnings and employment outcomes as in previous meta analyses, we also code and investigate measures of job quality, such as the effects on hours worked and formality. We find that ALMPs in LAC are particularly effective in increasing the probability of having a formal job, compared to other outcomes. Our results also show that training programmes are slightly more effective than other types of interventions. Moreover, when looking at the sample of training programmes alone, we observe that formal employment is also the outcome category that is most likely to be impacted positively by these programmes. In terms of targeting, we find that ALMPs in the region work better for women than for men, and for youth compared to prime-age workers. Finally, medium-run estimates are not more likely to be positive than short-run estimates, while programmes of short duration (4 months or less) are significantly less likely to produce positive effects compared to longer interventions.
    Keywords: active labour market program,Latin America and the Caribbean,employment,informality,impact evaluation,meta analysis
    JEL: J08 J24 O54
    Date: 2017
  2. By: Pouirkèta Rita Nikiema
    Abstract: Food for Education (FFE) programmes have been implemented in developing countries since the 1960s. This paper examines the impact of the Catholic Relief Services (CRS) school feeding programme on pupils’ attendance and girls’ enrolment rate within primary schools in northern Burkina Faso. Using difference-in-difference (DID) estimation with the data set on the Beoog Biiga programme, we find that take-home rations (THRs) increased school attendance for both boys and girls. Moreover, the findings show that girls’ enrolment rate within schools increased by 3.2 per cent. This is driven by the increase in the number of newly enrolled girls compared with boys. We conclude that THRs have the potential to increase girls’ educational attainment and gender equality within schools.
    Date: 2017
  3. By: Aregawi G. Gebremariam (Department of Economics, University Of Venice Cà Foscari); Elisabetta Lodigiani (Elisabetta Lodigiani University of Padua; Centro Studi Luca d'Agliano, University of Milan); Giacomo Pasini (Ca’ Foscari University of Venice; NETSPAR, Le Tilburg)
    Abstract: Children’s educational aspirations are important predictors of educational attainment and of occupational success. However, aspirations can be affected by whether an individual is poor or rich. This paper evaluates the impacts of Ethiopia’s Productive Safety Net Program (PSNP), launched by the government of Ethiopia in 2005/06 to support food insecure rural households, on children’s educational aspirations. Using longitudinal data from the Young Lives’ survey in Ethiopia and applying a differences–in-differences methodology, we find that the program increases educational aspirations of children. In our preferred specification, the immediate effect of the program is to increase by 0.73 years of education aspirations of children. Furthermore, we find that aspirations are affected also in the long run, even if the point estimates are sensible to model specification. The results point to broad and long lasting positive effects of a program designed to relieve chronically poor households from food insecurity.
    Keywords: Educational aspirations, PSNP, differences–in-differences, food insecure
    JEL: H43 I38 O12
    Date: 2017
  4. By: Fujii, Tomoki (Asian Development Bank Institute)
    Abstract: Using household data for rural northern Viet Nam between 1993 and 2014, we find that the ethnic minority group continued to lag behind the majority group in various development indicators despite the overall improvement in living standards. Our regression and decomposition analyses show that the structural differences between the two groups are an important cause of the persistent development gap. However, the nature of structural differences changed over time and no single source of structural difference explains the persistent gap. We argue that more minority-appropriate policies are needed to lift poor minority households out of poverty further and reduce the development gap.
    Keywords: development gaps; ethnicity; ethnic minority; structural differences; Oaxaca-Blinder decomposition; poverty decomposition; inequality
    JEL: I32 O10
    Date: 2017–02–08
  5. By: Abrams M E Tagem
    Abstract: Aid allocation studies typically find considerable heterogeneity in donors’ allocation patterns; be it for total Official Development Assistance (ODA) or sector-specific aid. This paper investigates the underlying factors influencing donors’ selection and actual allocation decisions for health aid, using health aid data from the newly-created Institute of Health Metrics and Evaluation (IHME) database; covering 9 major donors and 44 recipient countries from 1990 to 2011. This is carried out in three steps; first, we test the selection and allocation decisions of bilateral/multilateral donors. Second, we proceed to test for increased importance of the previous Millennium Development Goals (MDGs, recently replaced by the Sustainable Development Goals) after the Millennium Declaration. Third, we test the hypothesis that Public-Private Partnerships (PPPs) have different selection/allocation patterns to traditional donors. The first exercise confirms that donors differ in their selection/allocation patterns, but they all select poorer countries as recipients. The second exercise shows that donors placed more emphasis on the MDGs post the Millennium Declaration while the final exercise confirms that the PPPs are indeed different in their selection and disbursement patterns.
    Keywords: MDGs, Public-Private Partnerships, Health Aid, Disease Burden
    Date: 2017
  6. By: Hayatullah Ahmadzai
    Abstract: We analyse the microeconomic determinants of the extent of crop diversification in Afghanistan by employing instrumental variable Tobit analysis using data from a cross-section survey of 8,613 farm households in 364 districts in all 34 provinces collected in 2013/14. The estimates of the Composite Entropy Index (CEI) show a relatively low level of crop diversification. Regression results indicate that landholding size, access to sufficient irrigation water, ownership of tractor, oxen, and cattle by the farm households, household size, landscape, and quality of land significantly increase the level of crop diversification. A significantly lower degree of crop diversification is found for farm households with higher off-farm income, and farmers living in communities with low access to all-season drivable roads. Since off-farm income is highly likely to be associated with the unobserved household characteristics such as household entrepreneurial skills and risk preferences which are omitted from the regression analysis, one would expect biased estimates of the relevant coefficients. We allow off-farm income to be endogenous and use Instrumental variable (IV) Tobit analysis revealing that endogeneity masks the true effect of off-farm income; the negative impact of off-farm income on the level of crop diversification is even greater when endogeneity is accounted for. This is consistent with the hypothesis that risk-aversion behaviour of famers generates an upward bias in the coefficient of off-farm income if endogeneity is not allowed for. Unobserved risk-aversion behaviour drive household’s decision to diversify into both nonfarm income and crop mix.
    Keywords: Off-farm Income, Crop Diversity, Agricultural Economics, Afghanistan
    Date: 2017
  7. By: Jon Jellema (CEQ Institute); Matthew Wai-Poi (World Bank); Rythia Afkar (World Bank)
    Abstract: In recent years, income inequality has become a pressing issue in Indonesian politics. From 2000-2014, a rise in GDP per capita coincided with a 10% rise in the country’s Gini coefficient. This paper uses the 2012 National Socioeconomic Survey (SUSENAS) collected by the Central Statistical Agency in Indonesia and 2012 public expenditure and revenue data from the Audit Board of the Republic of Indonesia (BPK), to generate an empirical framework that assesses the redistributive impact of several fiscal measures undertaken by the Indonesian government. This paper finds that every income decile represented in SUSENAS is a net receiver from fiscal policy after taxes, transfers, in-kind transfers and subsidies are all added to “market income” to create “final income.” Gains amongst the poorest household are made much greater by the inclusion of in-kind transfers for health and education. However, SUSENAS included very few of the richest 0.5% of Indonesians, who account for the majority of personal income tax (PIT) collections, so it was assumed that Indonesians do not pay income tax. Interestingly, this study finds that 40% of the poor, measured at “consumable income,” are impoverished by taxes and transfers. This percentage drops considerably with the addition of in-kind transfers. Overall, it was found that fiscal policy does reduce inequality and poverty by a modest amount. The Gini index is lowered from 0.394 to 0.370 under the study’sbaseline scenario, which differs only slightly from scenarios utilizing different underlying assumptions. The poverty headcount (measured at $1.25 UDS per day) is reduced from 12.1% to 10.5%.
    Keywords: fiscal incidence, taxation, social spending, inequality, poverty, Indonesia
    JEL: H22 D31 I38
    Date: 2017–05
  8. By: Gustavo Javier Canavire-Bacarreza; Michael Jetter; Alejandra Montoya-Agudelo
    Abstract: This paper suggests that societies exhibiting a large degree of educational polarization among its populace are systematically more likely to slip into civil conflict and civil war. Intuitively, political preferences and beliefs of highly educated citizens are likely to differ fundamentally from those of uneducated citizens. We propose an index of educational polarization and test its predictive power in explaining the likelihood of civil conflict and civil war, analyzing 146 countries (equivalent to over 93 percent of the world population) from 1950 to 2014. Our results produce strong evidence for a positive, statistically powerful, and economically sizeable relationship. In our benchmark estimation, a one standard deviation increase in educational polarization is associated with a 4.6 and 3.8 percentage point rise in the chances of civil conflict and civil war, respectively. These results are robust to the inclusion of the conventional control variables, country-fixed effects, and country-specific time trends.
    Keywords: civil conflict, civil war, educational polarization, panel data
    JEL: D63 D74 I24 O15
    Date: 2016
  9. By: Andreas Freytag; Jonatan Pettersson; Julian Schmied
    Abstract: Since the introduction of the HIPC Initiative in the early 2000s, indebted LICs had to show a decent governance performance before their debts were forgiven. We discuss the hypothesis that during the follow-up, Multilateral Debt Relief Initiative (MDRI), the World Bank has refrained from this policy, and that debt relief decisions are rather politically driven. We test different political economy theories by applying panel models to a set of debtor and creditor countries, respectively. Our main finding shows, that improvements in governance quality led to higher levels of debt forgiveness in 2000-2004, but not in the subsequent periods.
    Keywords: debt relief, World Bank, MDRI, HIPC, political economy, development aid
    JEL: O20
    Date: 2017
  10. By: Rashad, Ahmed (Frankfurt School of Finance & Management); Sharaf, Mesbah (University of Alberta, Department of Economics)
    Abstract: Violence against women is a global social problem and could have severe health consequences on women and children. Though the literature is rich with studies on the determinants of violence against women, little attention has been given to the potential impact of income inequality on violence against women. This paper investigates the impact of income inequality, at the state level, on violence against women in India, where violence against women is one of the highest in the world. We use data on a nationally representative sample of 69,704 women from the third National Family Health Survey for India, conducted in 2005-06. We argue that income inequality increases the risk of experiencing violence by eroding social capital in the living community. To estimate the causal impact of economic inequality on violence against women and avoid endogeneity concern, we rely on an instrumental variable approach. As a first step, we use standard regression models and find that state income inequality increases intimate partner violence as well as violence by anyone other than her partner. When tackling the endogeneity issue, our findings suggest that income inequality increases the risk of violence by anyone other than the partner, but it did not increase the risk of spousal violence. The study’s findings are robust to different regression techniques. Policies that reduce income inequality would help in reducing the level of violence against women.
    Keywords: Income Inequality; Instrumental Variable; Violence Against Women; India
    JEL: I14 I15 I18
    Date: 2017–11–08
  11. By: Stephen D. Younger (CEQ Institute); Artsvi Khachatryan
    Abstract: We use methods developed by the Commitment to Equity Institute and data from the 2011 Integrated Living Conditions Survey (ILCS) to assess the effects of government taxation and social spending on poverty and inequality in Armenia. We find that Armenia achieves considerable redistribution despite a relatively small budget. More than half of this redistribution is due to old-age pensions. Results for poverty reduction are less encouraging. At a poverty line of US$2.50 per day, which is similar to Armenia’s national poverty line, the fisc lowers the headcount by 0.084, but at the US$4.00 poverty line, the fisc actually increases the headcount slightly (0.019). Even though transfers are reasonably well-targeted in Armenia, taxes, especially indirect taxes, do fall on poorer households, thus offsetting the poverty-reducing effect of public expenditures. Expenditure targeting in Armenia is very good. Expenditures that are supposed to help the poor and vulnerable go disproportionately to the poor, as they should. At the same time, expenditures on services that should be universal – education and health care – are spread fairly evenly across the population, as they should be. Given already good targeting, Armenia’s only option for greater redistribution is larger budgets for the besttargeted expenditures such as the Family Benefit.
    Keywords: Fiscal incidence, social spending, inequality, poverty, Armenia
    JEL: H22 H5 D31 I3
    Date: 2017–04
  12. By: Ruth Hill (Poverty & Equity Global Practice at the World Bank.); Gabriela Inchauste (Poverty & Equity Global Practice at the World Bank); Nora Lustig (Stone Center for Latin American Studies, Department of Economics, Tulane University, Commitment to Equity Institute (CEQI).); Eyasu Tsehaye (Poverty & Equity Global Practice at the World Bank); Tassew Woldehanna (Addis Ababa University)
    Abstract: This paper uses the 2010/11 Household Consumption Expenditure Survey (HCES) and the Welfare Monitoring Survey (WMS) collected by the Central Statistical Agency (CSA) of Ethiopia, as well as 2011 data from national income and public finance accounts from the Ministry of Finance and Development to assess the effects of government taxes, transfers and social spending on the distribution of income in Ethiopia, and examines whether policy can be modified to improve the well-being of the poor. This study finds that fiscal policy in Ethiopia is progressive and equalizing, and poor populations are net beneficiaries of the fiscal system. Though the depth and severity of poverty is ameliorated, the poverty headcount is higher after taxes, transfers, and subsidies. Though Ethiopia’s Gini coefficient was lowered by 2 points, the poverty headcount (under $1.25 USD per day in 2005 PPP) is increased from 31.9% to 32.4% as a result of fiscal policy. Direct taxes, such as PIT, were progressive and equalizing, but aggregately poverty-increasing due to a low cutoff income for PIT and a regressive land use fee. Direct transfers, especially the Productive Safety Net Program (PSNP), were progressive, equalizing, and poverty-reducing. Indirect taxes were progressive and equalizing, but poverty-increasing. Subsidies for goods like kerosene were relatively equalizing, while electricity subsidies were regressive because poor households often do not use electricity. Expenditures on primary education and health were progressive and equalizing, but spending on tertiary education was not. Due to low completion rates of primary education amongst the poor, access to tertiary education by the poor is almost nil.
    Keywords: fiscal incidence, taxation, social spending, inequality, poverty, Ethiopia
    JEL: H22 D31 I38
    Date: 2017–04
  13. By: Chaoran Chen; Diego Restuccia; Raul Santaeulalia-Llopis
    Abstract: We assess the role of land markets on factor misallocation in Ethiopia--where land is owned by the state--by exploiting policy-driven variation in land rentals across time and space arising from a recent land certification reform. Our main finding from detailed micro data is that land rentals significantly reduce misallocation and increase agricultural productivity. These effects are nonlinear across farms--impacting more those farms farther away from their efficient operational scale. The effect of land rentals on productivity is 70 percent larger when controlling for non-market rentals--those with a pre-harvest rental rate of zero. Land rentals significantly increase the adoption of new technologies, especially fertilizer use.
    Keywords: Productivity, agriculture, land markets, rentals, misallocation, micro data.
    JEL: E02 O11 O13 O55 Q1
    Date: 2017–11–11
  14. By: Batuo, Enowbi; Mlambo, Kupukile; Asongu, Simplice
    Abstract: In the aftermath of the 2008 global financial crisis, the implications of financial liberalisation for stability and economic growth has come under increased scrutiny. One strand of literature posits a positive relationship between financial liberalisation and economic growth and development. However, others emphasise the link between financial liberalisation is intrinsically associated with financial instability which may be harmful to economic growth and development. This study assesses linkages between financial instability, financial liberalisation, financial development and economic growth in 41 African countries for the period 1985-2010. The results suggest that financial development and financial liberalisation have positive effects on financial instability. The findings also reveal that economic growth reduces financial instability and the magnitude of reduction is higher in the pre-liberalisation period compared to post-liberalisation period.
    Keywords: Economic Growth , Financial Development, Financial instability and Africa
    JEL: G23 O16 O47 O55
    Date: 2017–01

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