nep-dev New Economics Papers
on Development
Issue of 2018‒03‒26
sixteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Firm performance and participation in public procurement: Evidence from Sub-Saharan Africa By Hoekman, Bernard; Sanfilippo, Marco
  2. The Effects of Foreign Aid on Refugee Flow By Axel Dreher; Andreas Fuchs; Sarah Langlotz
  3. Globalization and Income Inequality Revisited By Florian Dorn; Clemens Fuest; Niklas Potrafke
  4. The long-term impact of Italian colonial roads in the Horn of Africa, 1935-2000 By Bertazzini, Mattia C.
  5. South-South FDI: Is It Really Different? By Gold, Robert; Görg, Holger; Hanley, Aoife; Seric, Adnan
  6. Is the allocation of time gender sensitive to food price changes? an investigation of hours of work in Uganda By Daniela Campus; Gianna Claudia Giannelli
  7. By ignoring intra-household inequality, do we underestimate the extent of poverty? By Philippe De Vreyer; Sylvie Lambert
  8. Education is Forbidden: The Effect of the Boko Haram Conflict on Education in North-East Nigeria By Eleonora Bertoni; Michele Di Maio; Vasco Molini; Roberto Nisticò
  9. Growing Up in a War: The Shaping of Trust and Identity After Conflict in Peru By Edgar Salgado Chavez
  10. ‘Women on top’ and/or ‘economic progress’: What affects actual and reported crime against women? An analysis of socio-economic factors in India By Banerjee, Swapnendu
  11. International Import Competition and the Decision to Migrate: Evidence from Mexico By Majlesi, Kaveh; Narciso, Gaia
  12. The Average and Heterogeneous Effects of Transportation Investments: Evidence from sub-Saharan Africa 1960-2010 By Remi Jedwab; Adam Storeygard
  13. Aspirations of Small-Scale Entrepreneurs : Evidence from Urban Retailers in Indonesia By Dalton, Patricio; Rüschenpöhler, Julius; Zia, Bilal
  14. Blinded by the Light? Heterogeneity in the Luminosity-Growth Nexus and the African Growth Miracle By Lionel Roger
  15. Will Urban Migrants Formally Insure their Rural Relatives? Family Networks and Rainfall Index Insurance in Burkina Faso By Harounan Kazianga; Zaki Wahhaj
  16. Return Migration and Self-Employment: Evidence from Kyrgyzstan By Brück, Tilman; Mahe, Clotilde; Naudé, Wim

  1. By: Hoekman, Bernard; Sanfilippo, Marco
    Abstract: This paper exploits a firm-level dataset for nineteen Sub-Sharan African countries that provides information on the share of total sales to government entities to provide new insights into the relative importance of participation in public procurement activity for different types of firms. We investigate whether participation in public procurement is associated with realization of the types of goals that underlie industrial policy - an improvement in measures of firm performance - and find that firms that sell a larger share of their output to government entities have better productivity performance. This is most strongly the case for domestically-owned firms, especially small companies, firms engaged in manufacturing activities and those located in the capital city. A positive relationship between participation in public procurement and performance is not observed for foreign-owned firms or companies that are in the service sector.
    Keywords: Firm performance; productivity; government demand; public procurement; industrial policy; Sub-Saharan Africa
    JEL: H57 O12
    Date: 2018–02
  2. By: Axel Dreher; Andreas Fuchs; Sarah Langlotz
    Abstract: This article analyzes whether foreign aid affects the net flows of refugees from recipient countries. Combining refugee data on 141 origin countries over the 1976-2013 period with bilateral Official Development Assistance data, we estimate the causal effects of a country’s aid receipts on both total refugee flows to the world and flows to donor countries. The interaction of donor-government fractionalization and a recipient country’s probability of receiving aid provides a powerful and excludable instrumental variable, when we control for country- and time-fixed effects that capture the levels of the interacted variables. Although our results suggest that aid induces recipient governments to encourage the return of their citizens, we find no evidence that aid reduces worldwide refugee outflows or flows to donor countries in the short term. However, we observe long-run effects after four three-year periods, which appear to be driven by lagged positive effects of aid on growth.
    Keywords: foreign aid, Official Development Assistance, migration, refugees, displaced people, humanitarian crises, repatriation policies
    JEL: F22 F35 F59 H84 O15 O19
    Date: 2018
  3. By: Florian Dorn; Clemens Fuest; Niklas Potrafke
    Abstract: This paper re-examines the link between globalization and income inequality. We use data for 140 countries over the period 1970-2014 and employ an IV approach to deal with the endogeneity of globalization measures. We find that the link between globalization and income inequality differs across different groups of countries. There is a robust positive relationship between globalization and inequality in the transition countries including China and most countries of Middle and Eastern Europe. In the sample of the most advanced economies, neither OLS nor 2SLS results show any significant positive relationship between globalization and inequality. We conclude that institutions providing income insurance and education, which characterize most advanced economies but are less developed in transition economies, may have moderated effects of globalization on income inequality.
    Keywords: globalization, income inequality, redistribution, instrumental variable estimation, panel econometrics, development levels, transition economies, China
    JEL: D31 D63 F02 C26 H11 H20
    Date: 2018
  4. By: Bertazzini, Mattia C.
    Abstract: Between 1935 and 1940 the Italians built an extensive road network to facilitate the occupation of Ethiopia and secure control over the Horn of Africa, but were expelled in 1941. This provides a unique case study to examine the long-run effect of cheap transport networks on the concentration of economic activity in developing countries. The results show that cells located next to Italian paved roads are significantly richer today and that the relationship is causal. Persistence is explained by a combination of direct and indirect mechanisms: colonial roads attracted economic activity through lower transport costs until 1960. After that date, the advantage of treated locations persisted only indirectly through increasing returns to scale.
    Keywords: colonial transport infrastructure; roads; increasing returns to scale
    JEL: N70 N77 O18 R12
    Date: 2018–01
  5. By: Gold, Robert; Görg, Holger; Hanley, Aoife; Seric, Adnan
    Abstract: We compare the performance of Northern and Southern multinationals in Sub-Saharan Africa, and contrast it with local firms in the host country. Employing unique firm level data for 19 Sub-Saharan African countries, we show that firms receiving FDI outperform domestic ones, while the origin of the foreign investor is of minor importance. We use four different definitions of "South" to compare Northern and Southern FDI. Overall, we do not find strong differences in terms of firm productivity growth between Northern and Southern FDI, irrespective of how the latter is defined. We also find that employment growth is generally higher for firms receiving FDI from other African investors as compared to Northern FDI, and they also receive more technology transfer from their parent company abroad.
    Keywords: South-South FDI,productivity,performance differences,Africa
    JEL: F23 O14
    Date: 2017
  6. By: Daniela Campus; Gianna Claudia Giannelli
    Abstract: Dramatic spikes in food prices, like those observed over the last years, represent a real threat to food security in developing countries with severe consequences for many aspects of human life. Price instability can also affect the intra-household allocation of time, thus changing the labour supply of women, who traditionally play the role of `shock absorbers'. This paper explores the nature of time poverty by examining how changes in the prices of the two major staples consumed, matooke and cassava, have affected the paid and unpaid labour time allocation in Ugandan households. We exploit the panel nature of the Uganda National Household Survey by adopting a Tobit-hybrid model. Our results show that gender differentials in the intra-household allocation of labour actually occur in correspondence with changes in food prices. We find that, overall, women work significantly more, since the additional hours women work in the labour market are not counterbalanced by a relevant reduction in their other labour activities. For men, we do not find any significant effect of price changes on hours of work.
    Keywords: food prices, labour supply, gender, Uganda.
    Date: 2017
  7. By: Philippe De Vreyer (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine, DIAL - Développement, institutions et analyses de long terme); Sylvie Lambert (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)
    Abstract: This paper uses a novel survey to re-examine inequality and poverty levels in Senegal. In order to account for intra-household inequalities, the paper uses consumption data collected at a relatively disaggregated level within households. This data reveal that first, mean consumption is higher than measured by standard consumption surveys; and second, that consumption inequality in this country is also much higher that what is commonly thought, with a Gini index reaching 48. These findings affect global poverty estimates in opposite directions and in this context, nearly compensate for each other. Intra-household consumption inequalities are shown to account for nearly 14% of total inequality in Senegal. These results are robust to the existence of plausible measurement errors. As a result of this intra-household inequality, “invisible poor” exist with 12.6% of the poor individuals living in non-poor households.
    Keywords: Inequality,Poverty,Household surveys,Intra-household allocation,Senegal
    Date: 2018–03
  8. By: Eleonora Bertoni; Michele Di Maio (Università di Napoli Parthenope; Inter American Development Bank.); Vasco Molini (World Bank); Roberto Nisticò (Università di Napoli Federico II and CSEF)
    Abstract: TThis paper quantifies the microeconomic impact of the Boko Haram conflict on various educational outcomes of children living in North-East Nigeria during the period 2009- 2016. Using an individual panel fixed-effects regression and exploiting both over-time and within-district variation in household-level conflict exposure, we show that conflict reduces school enrollment and increases the probability of school dropout. In addition, using a standard difference-in-difference estimation strategy, we show that conflict reduces the years of education completed. As for the mechanisms explaining the decision to abandon school, we document that conflict increases the child's probability of working in the household's non-farm enterprise, a choice likely to be motivated by the conflict -induced worsening in the quality of the school supply. Finally, we find that conflict also worsen the general health conditions of the students.
    Keywords: Boko Haram, conflict , education, Nigeria
    JEL: D22 D24 N45 O12
    Date: 2018–03–17
  9. By: Edgar Salgado Chavez (Department of Economics, University of Sussex)
    Abstract: This paper evaluates the effect of conflict over the formation of trust and identity. It finds that Peruvian individuals exposed to violent events during their impressionable years trust less government institutions, and feel less identified with their neighbors, while more identified with religious groups. The effect on identification is heterogeneous by the indigenous origin of the individuals. Individuals who own an agricultural plot embedded in a communal arrangement at the local level exhibit even smaller levels of identification with their local neighbours while higher levels of identification with their ethnic group. In line with recent literature, these findings suggest that conflict has a small but persistent effect on the formation of trust and identity, which is a central feature to understand the interaction between culture and institutions, and ultimately to understand the persistent consequences of wars.
    Keywords: beliefs; conflict; identity
    JEL: D74 N16 P26
    Date: 2018–03
  10. By: Banerjee, Swapnendu
    Abstract: We in this paper make an attempt to examine whether having a woman chief minister helps in reducing actual crime and increase reported crime against women. Also we examine whether economic progress affects crime against women. We find evidence that having a women chief minister has no effect on actual and reported crime against women whereas economic progress does lead to reduced crime against women. We also look at other socio-economic factors and find that increased female labour force participation, urbanization and policing increases reporting of crime whereas increased female literacy doesn’t necessarily lead to increased reporting of crime against women.
    Keywords: Crime against women, Economic progress, Women Chief Minister
    JEL: J1 J12 J16
    Date: 2018–02–07
  11. By: Majlesi, Kaveh (Lund University); Narciso, Gaia (Trinity College Dublin)
    Abstract: We analyze the effects of the increase in China's import competition on Mexican domestic and international migration. We exploit the variation in exposure to competition from China, following its accession to the WTO in 2001, across Mexican municipalities and estimate the effect of international competition on the individual decision to migrate. Controlling for individual and municipality features, we find that individuals living in municipalities more exposed to Chinese import competition are more likely to migrate to other municipalities within Mexico, while a negative effect is found on the decision to migrate to the US. In particular, we find that Chinese import competition reduces migrants' negative self- selection: the rising international competition lowers the likelihood of low-educated, low-income people to migrate to the US, by making them more financially constrained. We do not find any evidence that changes in demand for Mexican workers in the US drive our results.
    Keywords: import competition, domestic migration, international migration, negative self-selection
    JEL: F14 F16 F22 O15 R23
    Date: 2018–02
  12. By: Remi Jedwab; Adam Storeygard
    Abstract: Previous work on transportation investments has focused on average impacts in high- and middle-income countries. We estimate average and heterogeneous effects in a poor continent, Africa, using roads and cities data spanning 50 years in 39 countries. Using changes in market access due to distant road construction as a source of exogenous variation, we estimate an 30-year elasticity of city population with respect to market access of 0.05-0.20. Our results suggest that this elasticity is stronger for small and remote cities, and weaker in politically favored and agriculturally suitable areas. Access to foreign cities matters little.
    Keywords: Transportation Infrastructure; Paved Roads; Urbanization; Cities; Africa;Market Access; Trade Costs; Highways; InternalMigration; Heterogeneity
    Date: 2017
  13. By: Dalton, Patricio (Tilburg University, Center For Economic Research); Rüschenpöhler, Julius (Tilburg University, Center For Economic Research); Zia, Bilal
    Abstract: Small-scale entrepreneurs are ubiquitous in developing countries, yet very few graduate to become larger businesses. We ask whether such entrepreneurs even aspire to grow, and if so on which dimensions of the business? Among a representative sample of retail shop owners in Jakarta, we find that the average business has strong short- and long-term aspirations for growth in shop size, number of employees, number of customers, and sales. Yet, there is pronounced heterogeneity with more than half the businesses reporting no aspirations for growth in the next 12 months, and 16 percent failing to imagine an ideal business over the long-term. We find that entrepreneurs with low profits, business skills, and agency beliefs, as well as those who are older, female, and less educated have significantly lower aspirations. We also show that aspirations predict future-oriented behaviors such as savings, credit use, business expansion, and innovation, even after controlling for business practices. These results have important implications for the design and targeting of business growth programs and policies.
    Keywords: aspirations; micro-enterprises; innovation; small business growth; firm performance; technology adoption; self-efficacy; locus of control
    JEL: O12 L26 M20 O17 M50
    Date: 2018
  14. By: Lionel Roger
    Abstract: Night-time light emissions are a popular proxy for growth in circumstances where official data are deemed unreliable. We show that the underlying relationship varies substantially across countries, undermining the imposition of a single slope common in the literature. We propose a two-step method to improve country-specific growth estimates informed by night-light data, making use of a machine-learning algorithm to discern factors driving differences in the luminosity-growth elasticity across countries. The improved performance of this strategy over existing approaches is established in a number of simulation exercises. Applied to African data between 1992 and 2013 we find little evidence of an `African Growth Miracle' undetected by official statistics, as suggested by Young (2012); instead, we observe that countries which recently revised their GDP figures tend to report substantially inflated growth rates over recent years, in line with Jerven (2014)'s hypothesis of purely `statistical growth'.
    Keywords: night lights, economic growth, african growth miracle
    Date: 2018
  15. By: Harounan Kazianga (Oklahoma State University); Zaki Wahhaj (University of Kent)
    Abstract: We present findings from a pilot study exploring whether and how existing ties between urban migrants and rural farmers may be used to provide the latter improved access to formal insurance. Urban migrants in Ouagadougou (the capital of Burkina Faso) originating from nearby villages were offered, at the prevailing market price, a rainfall index insurance product that can potentially protect their rural relatives from adverse weather shocks. The product had an uptake of 22% during the two-week subscription window. Uptake rates were higher by 17-22 ppts among urban migrants who were randomly offered an insurance policy that would make pay-outs directly to the intended beneficiary rather than the subscriber. We argue that rainfall index insurance can complement informal risk-sharing networks by mitigating problems of informational asymmetry and self-control issues.
    Keywords: Microinsurance markets, Indexed insurance, Rainfall, Migration, Informal insurance networks
    JEL: O15 O16 G21
    Date: 2018–03
  16. By: Brück, Tilman (ISDC - International Security and Development Center); Mahe, Clotilde (Maastricht University); Naudé, Wim (Maastricht University)
    Abstract: A common finding of the migration literature is that migrants are more likely to choose self-employment upon return to their origin countries than non-migrants. This has led to the belief that return migration stimulates entrepreneurship in source countries and hence supports economic development. In this paper, we test these assertions, drawing on the Life in Kyrgyzstan Study, a rich longitudinal data set from a transition economy with high levels of international temporary migration. We find that for return migrants, self-employment is often a temporary occupational choice, suggesting that self-employment serves as a 'parking lot'. In addition, we find evidence that return migrants who were self-employed before migrating are less likely to opt for self-employment on their return, implying that migration disrupts self-employment trajectories. Both findings cast doubt on the common narrative of return migration stimulating entrepreneurship and therefore economic development.
    Keywords: occupational choice, entrepreneurship, migration, transition economies, Central Asia, Kyrgyzstan
    JEL: F22 J24 L26 P20
    Date: 2018–02

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