nep-dev New Economics Papers
on Development
Issue of 2018‒04‒16
eleven papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Ethnic Favoritism: Winner Takes All or Power Sharing? Evidence from school constructions in Benin By Pierre André; Paul Maarek; Fatoumata Tapo
  2. Geography and Agricultural Productivity: Cross-Country Evidence from Micro Plot-Level Data By Tasso Adamopoulos; Diego Restuccia
  3. Determinants of Loans’ Growth in Microfinance Institutions: The Case of Sub-Saharan Africa and Comparisons with other Regions of the World By Eliud Moyi; Eftychia Nikolaidou
  4. Employment and growth in Indonesia (1990–2015) By Nomaan, Majid.; Nayantara, Sarma.
  5. Assessing the CPIA-Based Classification of Low-Income Countries in the Joint IMF-World Bank Debt Sustainability Framework By Nguema-Affane, Thierry
  6. Causal effects of PetroCaribe on sustainable development: a synthetic control analysis By Acel Jardón; Onno Kuik; Richard S.J. Tol
  7. The capability approach as a framework for assessing the role of microcredit in resource conversion: the case of rural households in the Madagascar highlands By Sandrine Michel; Holimalala Randriamanampisoa
  8. Child Exposure to Climate Change: A Regional Index of Vulnerability for Better-Targeted Policies By Molina, Oswaldo; Saldarriaga, Victor
  9. The effects of External Debt on Growth in Sub Saharan Africa By Adonia Chiminya; J. Paul Dunne; Eftychia Nikolaidou
  10. The Distributional Effects of Government Spending Shocks in Developing Economies By Davide Furceri; Jun Ge; Prakash Loungani; Giovanni Melina
  11. Human Resources in Healthcare and Health Outcomes in India By Motkuri, Venkatanarayana; Mishra, Uday Shankar

  1. By: Pierre André; Paul Maarek; Fatoumata Tapo (Université de Cergy-Pontoise, THEMA)
    Abstract: Ethnic favoritism often distorts public policies in fractionalized countries, especially in Subsaharan Africa. We estimate the impact of a change in the ethnic group of the education minister and of the president on school construction in Benin. We estimate difference in differences and regression discontinuities based on the dates of the changes, and we find that school constructions are more frequent when the district is coethnic with a new education minister, but less frequent when the district is coethnic with a new president. The effects are very large in magnitude: a coethnic education minister approximately doubles the number of school constructions, a coethnic president approximately divides this number by two. These results suggest that the president does not systematically favor his own ethnic group but has to share power in order to survive. By appointing politicians from other ethnic groups in the government, she redistributes power to these groups, as ministers have the discretionary power to favor their own group. This specific pattern of ethnic favoritism vanishes after the democratization of Benin, in 1991. The checks and balances created by democracy seemingly prevented ethnically targeted public policies.
    Keywords: School constructions, clientelism, ethnic favoritism, power sharing, Benin, Africa
    JEL: H41 H52 O10 O12
    Date: 2018
  2. By: Tasso Adamopoulos; Diego Restuccia
    Abstract: Why is agricultural productivity so low in poor countries relative to the rest of the world? Is it due to geography or constrained economic choices? We assess the quantitative role of geography and land quality for agricultural productivity differences across countries using high-resolution micro-geography data and a spatial accounting framework. Our rich spatial data provide in each cell of land covering the entire globe actual yields of cultivated crops and potential yields for 18 crops, which measure the maximum attainable output for each crop given soil quality, climate conditions, terrain topography, and a level of cultivation inputs. While there is considerable heterogeneity in land quality across space, even within narrow geographic regions, we find that low agricultural productivity in poor countries is not due to poor land endowments. If countries produced current crops in each cell according to potential yields, the rich-poor agricultural yield gap would virtually disappear, from more than 200 percent to less than 5 percent. We also find evidence of additional productivity gains attainable through the spatial reallocation of production and changes in crop choices.
    Keywords: agriculture, land quality, productivity, spatial allocation, crop choice, cross-country.
    JEL: O11 O14 O4
    Date: 2018–04–11
  3. By: Eliud Moyi (School of Economics, University of Cape Town); Eftychia Nikolaidou (School of Economics, University of Cape Town)
    Abstract: The purpose of this study is to identify factors that explain variations in loan growth in sub-Saharan African microfinance institutions and, if such factors exist, to investigate whether they predict loan growth differences in other regions.To address these objectives, the study merges data from 745 microfinance institutions with macro-institutional data from 37 countriesin Sub-Saharan Africa. The data is corrected for dynamic panel bias by applying a modelling strategy that accommodates endogeneity through the two-step system generalised method of moments estimators. The results show that loan growth is higher in microfinance institutions that are facing lower risk exposure, those that are having higher capital asset ratios and among those that are already having high loan growth. Furthermore, results indicate that loan growth is higher in countries with better economic prospects, and in those with sound private sector policies and regulations. Against expectations, loan growth is faster in countries with poor legal rights of borrowers and lenders. Results also suggest that variables that enter the Sub-Saharan Africa regressions significantly do not enter the regressions for the other regions with the same effect.These results point to the need for interventions that mainstream regional and even country-level heterogeneity.
    Date: 2018
  4. By: Nomaan, Majid.; Nayantara, Sarma.
    Abstract: This paper examines the employment situation in Indonesia during and in the aftermath of the Asian Financial Crisis and the Great Recession, including importantly how the quality of work responded to the changing composition of Indonesia’s growth process. The authors find that many labour market indicators have moved in an encouraging direction, but a decomposition of labour productivity indicates that productivity growth has been driven primarily from efficiencies “within” sectors rather than the allocation of labour across sectors. Facilitating and managing the structural transformation process in a fair and inclusive manner can further support Indonesia’s socioeconomic development.
    Keywords: employment, economic growth, economic recovery, poverty alleviation, Indonesia
    Date: 2018
  5. By: Nguema-Affane, Thierry
    Abstract: The purpose of the paper is to assess the relevance of the current classification of LICs in three groups based on CPIA thresholds in the Joint IMF-World Bank Debt Sustainability Framework for Low-Income Countries (LIC DSF). Using exploratory multivariate analysis techniques – the principal components analysis (PCA) and cluster analysis (CA) – on annual country profiles over ten years, we find that the current calculation of the CPIA index is solid and that a classification of LICs in three groups is also sound. However, the composition of the groups derived from the CA is different from the actual composition. In addition, the CPIA thresholds associated with the generated LIC groupings are lower than the actual thresholds. Having in mind calls for more risk rating categories in the DSF, a deeper analysis shows that a classification of LICs in four groups appears to be a better alternative. A grouping in five categories based on the proposed and actual CPIA thresholds in classifications in three clusters is appealing although it does not meet predefined suitability requirements.
    Keywords: CPIA, Debt Sustainability Framework, Exploratory Multivariate Analysis
    JEL: C1 F53
    Date: 2016–10–01
  6. By: Acel Jardón (Institute for Environmental Studies, Vrije Universiteit, Amsterdam); Onno Kuik (Institute for Environmental Studies, Vrije Universiteit, Amsterdam); Richard S.J. Tol (Department of Economics, University of Sussex; Department of Spatial Economics, Vrije Universiteit, Amsterdam; Institute for Environmental Studies, Vrije Universiteit, Amsterdam; Tinbergen Institute, Amsterdam; CESifo, Munich)
    Abstract: We examine the causal effects of the energy subsidy programme PetroCaribe in the three dimensions of sustainable development: economic, social and environmental. We use the synthetic control method to construct a counterfactual and compare it to the outcomes of the beneficiary countries and thus estimate the magnitude and direction of the PetroCaribe effect. PetroCaribe had a positive effect on economic growth in most of the beneficiary countries without a deterioration of their environmental quality. However, this economic boost was not followed by an improvement in social development.
    Keywords: energy subsidy; synthetic control method; sustainable development
    JEL: Q43 Q48 Q54 Q56
    Date: 2018–04
  7. By: Sandrine Michel (ART-Dev - Acteurs, Ressources et Territoires dans le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVD - Université de Perpignan Via Domitia - UM3 - Université Paul-Valéry - Montpellier 3 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique); Holimalala Randriamanampisoa
    Abstract: This article applies the capabilities approach in order to analyse microcredit as a tool for resource conversion permitting poor households to take advantage of latent opportunities. This approach calls for linking microcredit with the choices of the poor themselves. A sample of 290 rural households from the Madagascar highlands has been surveyed two consecutive years. To characterize the dimensions of poverty based on social practices of the poor and to inform about the most relevant dimensions available for a conversion process, data have been processed by a factor analysis. A hierarchical classification then permits the distribution of the households over three capabilities levels. Finally, an ordered multinomial logit brings out how microcredit influences the likelihood that a household receiving such a loan will reach a higher capability level. The main findings indicate that the microcredit represents a robust means to obtain a higher level of capability regardless the starting situation. Moreover, when the process of borrowing endures, poor households enter into a learning process which increases the effect of microcredit. Regardless of the gender of the household head, microcredit increases the probability to reach an enhanced level of capability, except for the poorest household headed by a woman. The education of the head of household improves the effect of microcredit only if the productive system implemented needs competences related to the educational attainment. JEL classification: O12, I32, G21
    Keywords: Resource conversion process,Multidimensional poverty,Capability approach,Microcredit
    Date: 2017–08–30
  8. By: Molina, Oswaldo; Saldarriaga, Victor
    Abstract: A growing body of evidence suggests that changes in global temperature may have drastic and long-lasting impacts on human health. Even more, these consequences may vary widely across different geographic areas. We explore the regional differences in the effects of exposure to high temperature variability – an important consequence of climate change – on a particularly vulnerable demographic group: infants. We use the case of Peru, a large and geographically diverse developing country, as a setting to showcase the potential scale of these differences. We bring together monthly, high resolution data on air temperatures with measures of physical health for children born between 1985 and 2000. We find that exposure to temperatures above the historical local mean during pregnancy negatively affects health at birth. Even more salient, the negative effects persist over time, impairing the physical growth of children. We then combine our results with forecasted temperatures to construct a regional index for child vulnerability to future temperature variability. This indicator shows that country-level measures of the potential impact of climate change may hide important heterogeneities across geography. In fact, we predict that while most regions will face a reduction of up to 0.1 standard deviations in our aggregate measure of child health by 2030, this impact could be up to three times as large in the most affected areas. Our methodology can be easily replicated in other countries to identify the most vulnerable populations. This information could improve the geographical allocation of resources and contribute to the design of more effective strategies aimed at preventing or mitigating the consequences of climate change.
    Keywords: Climate Change, Temperature Variability, Vulnerability, Child Development, Health
    JEL: I10 I15 J13 Q54
    Date: 2018–03–08
  9. By: Adonia Chiminya (School of Economics, University of Cape Town); J. Paul Dunne (School of Economics, University of Cape Town); Eftychia Nikolaidou (School of Economics, University of Cape Town)
    Abstract: The paper contributes to the external debt and economic growth literature by providing empirical evidence from 37 Sub Saharan African countries over the period 1980-2012 using panel data methods. Special attention is paid to heterogeneity and non-linearity while stratification of the panel based on a range of factors (income, conflict and natural resource abundance) is used in order to test the robustness of results. The paper employs a recent panel analysis technique, the common correlated effects (CCE) estimator, which allows for heterogeneity across countries in model parameters and cross sectional dependence. In overall terms, the findings point to a negative linear effect of external debt on growth both in the short run and long run. When different groups of countries are considered, similar results supporting the negative effect of debt on growth are obtained for the sub sample of low income, resource abundant and conflict countries but not for the sub sample of non-conflict, non-resource abundant and middle income countries. In addition, when non linearity is considered, contrary to previous studies we do not find evidence of an inverted U shaped relationship.
    Date: 2018
  10. By: Davide Furceri; Jun Ge; Prakash Loungani; Giovanni Melina
    Abstract: We construct unanticipated government spending shocks for 103 developing countries from 1990 to 2015 and study their effects on income distribution. We find that unanticipated fiscal consolidations lead to a long-lasting increase in income inequality, while fiscal expansions lower inequality. The results are robust to several measures of income distribution and size of the fiscal shocks, to an alternative identification strategy, across expansions and recessions and across country groups (low-income countries versus emerging markets). An additional contribution of the paper is the computation of the medium-term inequality multiplier. This is on average about 1 in our sample, meaning that a cumulative decrease in government spending of 1 percent of GDP over 5 years is associated with a cumulative increase in the Gini coefficient over the same period of about 1 percentage point. The multiplier is larger for total government expenditure than for public investment and consumption (with the former having larger effect), likely due to the redistributive role of transfers. Finally, we find that (unanticipated) fiscal consolidations lead to an increase in poverty.
    Date: 2018–03–14
  11. By: Motkuri, Venkatanarayana; Mishra, Uday Shankar
    Abstract: The paper examined the growth and adequacy of the workforce engaged in health care sector in India for two decades based on Census data along with the association between health workers density and educational development and then selected health outcome (i.e. IMR). Despite the remarkable improvement in health workers density particularly during 2001-11, the country is falling short of the same. It is observed that there is a significantly positive association between density of health workforce and educational development. There is a significant and strong positive relationship / association between the density of health workers and health outcomes.
    Keywords: Human Resources in Health, Health Workers, Health, Health Outcomes, India
    JEL: I10 I18 I19 I2
    Date: 2018–03

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