nep-dev New Economics Papers
on Development
Issue of 2018‒01‒01
ten papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Malaria and Education: Evidence from Mali By Josselin Thuilliez; Hippolyte D'Albis; Hamidou Niangaly; Ogobara Doumbo
  2. Targeting credit through community members By Diego A. Vera-Cossio
  3. To sew or not to sew ? assessing the welfare effects of the garment industry in Cambodia By Mejia-Mantilla,Carolina; Woldemichae,Martha Tesfaye
  4. Temperature shocks, growth and poverty thresholds: evidence from rural Tanzania By Marco Letta; Pierluigi Montalbano; Richard S.J. Tol
  5. Learning to constrain: Political competition and randomized controlled trials in development By Cristina Corduneanu-Huci; Michael T. Dorsch; Paul Maarek
  6. Flexible Microfinance Products for Financial Management by the Poor: Evidence from SafeSave By Carolina Laureti; Alain De Janvry; Elisabeth Sadoulet
  7. More Doctors, Better Health? Evidence from a Physician Distribution Policy By Carrillo, B.; Feres, J.;
  8. Publicly Provided Private Goods and Informal Labor Supply By Marcelo Arbex; Flavia Chein; Isabela Furtado; Enlinson Mattos
  9. Intergenerational Effects of Improving Women's Property Rights: Evidence from India By Shreyasee Das; Nayana Bose
  10. Human Capital, Labour Market Outcomes and Horizontal Inequality in Guatemala By Carla Canelas; Rachel Gisselquist

  1. By: Josselin Thuilliez (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Hippolyte D'Albis (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Hamidou Niangaly (MRTC - Malaria Research and Training Center - Faculté de Médecine de Bamako); Ogobara Doumbo (DEAP - Département d'épidémiologie des affections parasitaires - Université de Bamako - Malaria Research and Training Center (MRTC) - Facultés de Médecine, de Pharmacie et d'Odonto-Stomatologie - CNRS - Centre National de la Recherche Scientifique)
    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 utilise this seasonal change as a treatment. We found that malaria has an impact on cognitive and educational outcomes in this village.
    Date: 2017
  2. By: Diego A. Vera-Cossio (University of California - San Diego)
    Abstract: Delegating the allocation of public resources to community members is an increasingly popular form of delivering development programs and are associated with a tradeoff between improved information about potential benef ciaries and favoritism towards local elites. Unlike targeting cash transfers to the poor, the optimal targeting of credit is a more complex problem involving issues of productivity, repayment, and market responses: This paper analyzes this problem using a large-scale lending program, the Thai Million Baht Credit Fund, which decentralizes the allocation of loans to an elected group of community members, and provides three main results. First, exploiting a long and detailed panel, I recover pre-program structural estimates of household total factor productivity and f nd that resources from the program were not allocated to high-productivity, poor households, which is inconsistent with poverty and productive eff ciency as targeting criteria. Second, using socioeconomic networks data, I show that actual targeting is strongly driven by connections to village elites and is related to lower program profitability, which suggests favoritism as a reason for mistargeting. Finally, I exploit quasi-experimental variation in the rollout of the program and uncover evidence that, in general equilibrium, informal credit markets compensate for targeting distortions by redirecting credit towards unconnected households, albeit at higher interest rates than those provided by the program. The results highlight the limitations of community-driven approaches to program delivery and the role of markets in attenuating potential targeting errors.
    Keywords: credit, social networks, misallocation, targeting
    JEL: D14 G21 O12 O16 O17 L14 Z13
    Date: 2017–11
  3. By: Mejia-Mantilla,Carolina; Woldemichae,Martha Tesfaye
    Abstract: This paper uses the 2011 Cambodia Socio-Economic Survey to analyze the relationship between participation in the garment industry and household welfare. The analysis relies on propensity score matching estimators to investigate whether households that have at least one member employed in the textile and apparel sector are better off than those who do not participate in the garment industry, in terms of several monetary and non-monetary welfare indicators. The findings show that garment households are less likely to experience self-reported food insufficiency, and their children are more likely to be enrolled in school. Yet, the positive effect of the treatment is restricted to the bottom 40 percent of the consumption distribution, possibly due to the nature of garment jobs, and the fact that they represent an attractive alternative for the poorest households but not necessarily for the better-off. Using instrumental-variables, the analysis also shows that remittances originating from the textile and apparel sector relax household budget constraints, increasing expenditures in education, health, and investments in agricultural activities.
    Keywords: Inequality,International Trade and Trade Rules
    Date: 2017–05–16
  4. By: Marco Letta (Department of Economics and Social Sciences, Sapienza University of Rome (IT).); Pierluigi Montalbano (Department of Economics and Social Sciences, Sapienza University of Rome (IT).); Richard S.J. Tol (Department of Economics, University of Sussex (UK))
    Abstract: Using the LSMS-ISA Tanzania National Panel Survey by the World Bank, we study the relationship between rural household consumption growth and temperature shocks over the period 2008 – 2013. Temperature shocks have a negative and significant impact on household growth only if their initial consumption lies below a critical threshold. As such, temperature shocks slow income convergence among households. Agricultural yields and labour productivity are the main transmission channels. These findings support the Schelling Conjecture: economic development would allow poor farming households to cope with climate change, and closing the yield gap and modernizing agriculture is crucial for adaptation to the negative impacts of global warming.
    Keywords: weather shocks; climate change; household consumption growth; rural development.
    JEL: I32 O12 Q12 Q54
    Date: 2017–11
  5. By: Cristina Corduneanu-Huci; Michael T. Dorsch; Paul Maarek (Université de Cergy-Pontoise, THEMA)
    Abstract: This paper provides a political economic analysis of impact evaluation experiments con- ducted in international development. We argue that in more politically competitive environments, where incumbents face a higher probability of losing power, govern- ments have stronger incentive to run Randomized Controlled Trial (RCT) experiments to constrain successors' margin of policy discretion. Moreover, the effect of compe- tition on the probability to host RCTs is stronger in more polarized societies since the incumbent's cost of losing power is higher. We first propose a formal model and then empirically examine its theoretical predictions using a unique data set on RCTs that we have compiled. Over a panel of Indian states and a cross-national panel, we nd that certain RCTs are more likely to occur in electorally competitive jurisdictions, and that the effect is amplified by political polarization. We demonstrate that politics matter for when, where, and with which partners RCTs in development happen.
    Keywords: Program evaluation, RCT, External validity, Political accountability, Political competition, Development policy.
    Date: 2017
  6. By: Carolina Laureti; Alain De Janvry; Elisabeth Sadoulet
    Abstract: Well-functioning financial services are key for consumption smoothing and to take advantage of investment opportunities. Even though poor households badly need financial services for their day-to-day money management, a commonly held view is that they are ‘too poor’ to save and to repay loans with flexible terms. This paper explores whether this view holds true for two specific flexible financial products, namely passbook savings accounts and credit lines. Analyzing the daily transactions and balances in more than 10,000 SafeSave accounts—a microfinance institution based in Dhaka, Bangladesh—over nine years (2004-2012) shows that clients make extensive use of their flexible savings-and-loan accounts to accommodate changing availability of and needs for liquidity in the face of three kinds of events: paydays, Islamic festivals (Ramadan, Eid al-Fitr, and Eid al-Adha), and political protests (hartals). Cash-in (savings deposit and loan repayment) flexibility is used to cope with both positive (paydays) and negative shocks (Islamic festivals and political protests); cash-out (withdrawal and loan taken) flexibility is used if the negative shock is anticipated well in advance (as in the case of Islamic festivals). We show that, while interest rates on loans are higher than in competing MFIs, repayment rates are comparably high. We also show that SafeSave is covering its operational costs, indicating that this type of flexible financial services can be offered to the poor in a sustainable fashion. Overall, analysis of the SafeSave experience shows that flexible financial products are much in demand by the poor and that they can be profitable for the microfinance institution that offers them.
    Keywords: Bangladesh; liquidity; household finance; contract design
    JEL: D14 G21 O12
    Date: 2017–12–20
  7. By: Carrillo, B.; Feres, J.;
    Abstract: In 2013, the Brazilian government implemented one of the largest physician distribution programs on record. Using a difference-in-difference framework, we document that the number of physicians increased by 17 percent in treated areas, with effects that are substantially larger in magnitude for family doctors. This expansion increased doctor visits by 4.3 percent and prenatal care by physicians by 10 percent. Yet despite these improvements in physician supply and utilization of doctors, we find little evidence that the program led to better infant health, measured by low birth weight, prematurity and infant mortality.
    Keywords: primary care physicians; doctor utilization; infant health; policy evaluation;
    JEL: I12 I18 I38
    Date: 2017–11
  8. By: Marcelo Arbex (Department of Economics, University of Windsor); Flavia Chein (São Paulo School of Economics, Getulio Vargas Foundation); Isabela Furtado (São Paulo School of Economics, Getulio Vargas Foundation); Enlinson Mattos (São Paulo School of Economics, Getulio Vargas Foundation)
    Abstract: In this paper we investigate how households time allocations decisions between formal and informal sectors are related to publicly provided goods with and without market substitutes. A simple static public provision model motivates our analysis. Households consume a normal private good and a quasi-private (education) good. Household needs some public utility services to consume the private good and supply labor to formal and informal sectors. Using data from the PNAD (National Household Sample Survey) for the period 2007-2015 we construct indexes of access to three groups of publicly provided goods: (I) basic infrastructure or public utility services, (II) basic education and (III) higher education. Our logit results show a positive effect of access to public education (basic and higher) on the probability of evasion. Differently from public utility services, that affect negatively the probability of evasion, the consumption of these goods present substitute in the private sector. We observe a stronger effect of access to publicly provided basic education comparing with higher education. This result may be related to the different quality of publicly provision of higher and basic education. Tobit results suggest a positive and significant effect only in the case of publicly provided education, i.e., an increase in the access or use of publicly provided education increases the supply of informal labor hours.
    Keywords: Education; Public Utility Services; Tax Evasion; Public Provision.
    JEL: J22 H26 H42
    Date: 2017–12
  9. By: Shreyasee Das; Nayana Bose
    Abstract: This paper analyzes the intergenerational effects following the positive changes in women's inheritance rights. The amendment to the Hindu Succession Act, the law governing inheritance for Hindus, empowered unmarried daughters at the time of the reform to have equal rights to inherit ancestral property as their brothers. We employ a difference-in-differences strategy and exploit the state level variation in a woman's exposure to the reform. Using the Indian Human Development Survey data for rural India, we find that the property rights reform significantly increased women's education. We find a significant decrease in her sons' education, the effect is magnified in households where fathers are less educated than mothers. We further explore the role of birth order and the gender composition of children to assess the intergenerational impact of this more gender equal inheritance law. Regardless of the child's gender, our results show a significant decrease in educational attainment for younger children.
    JEL: D13 I25 J16 K36 O12
    Date: 2017–12–11
  10. By: Carla Canelas (Centre d'Economie de la Sorbonne); Rachel Gisselquist (UNU-WIDER)
    Abstract: With the second largest indigenous population by percentage in Latin America, Guatemala is an important case for understanding horizontal inequality and indigenous politics. This paper presents new analysis of survey data, allowing for consideration both of indigenous and ladino populations, as well as of ethno-linguistic diversity within the indigenous population. Overall, our analysis illustrates both the depth and persistence of horizontal inequalities in educational and labour market outcomes, and a broad trend towards greater equality. Earnings gaps have been reduced by, among other factors, improved educational outcomes. Ethnic groups also show distinct patterns of wages and wage gaps, and there is evidence of a ‘sticky floor’ effect at the lower ends of the income spectrum affecting some groups more than others. Our findings suggest that the focus on the indigenous/non-indigenous divide found in much of the economic literature on Latin America obscures meaningful diversity within the indigenous population. We posit that further consideration of such within-group diversity has implications for broader theories of ethnic politics, and in particular for understanding the comparative weakness of indigenous political mobilisation in Guatemala at the national level
    Keywords: Inequality; ethnicity; schooling; earnings; Guatemala
    JEL: J22 J31 J71
    Date: 2017–10

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