nep-dev New Economics Papers
on Development
Issue of 2018‒07‒16
fifteen papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. The Effect of Forest Access on the Market for Fuelwood in India By Branko Boskovic; Ujjayant Chakravorty; Martino Pelli; Anna Risch
  2. Cohesive Institutions and Political Violence By Fetzer, Thiemo; Kyburz, Stephan
  3. Human Capital, Labor Market Outcomes and Horizontal Inequality in Guatemala By Carla Canelas; Rachel Gisselquist
  4. The Impact of Primary School Investment Reallocation on Educational Attainment in Rural Areas of the People’s Republic of China By Haepp, Tobias; Lyu, Lidan
  5. Understanding poverty dynamics in Rwanda By Bizoza, Alfred; Jäger, Philipp; Simons, Alexandre
  6. Natural Disasters, Public Spending, and Creative Destruction: A Case Study of the Philippines By Jha, Shikha; Quising, Pilipinas; Ardaniel, Zemma; Martinez, Jr., Arturo; Wang, Limin
  7. My Choice: Female Contraceptive Use Autonomy in Bangladesh By Blunch, Niels-Hugo
  8. Spillovers as a Driver to Reduce Ex-post Inequality Generated by Randomized Experiments: Evidence from an Agricultural Training Intervention By Kazushi Takahashi; Yukichi Mano; Keijiro Otsuka
  9. International Remittances and Poverty Reduction: Evidence from Asian Developing Countries By Yoshino, Naoyuki; Taghizadeh-Hesary, Farhad; Otsuka, Miyu
  10. Subjective Well-Being among Communities Left Behind by International Migrants By Lara, Jaime
  11. What do we know about the impact of microfinance? The problems of power and precision By Dahal, Mahesh; Fiala, Nathan
  12. The Long-Run and Gender-Equalizing Impacts of School Access: Evidence from the First Indochina War By Dang, Hai-Anh H.; Hoang, Trung X.; Nguyen, Ha
  13. Effect of Microfinance on Poverty and Welfare: New Evidence from 9 provinces in Cambodia By Dina Chhorn
  14. Sexual Exploitation of Trafficked Children: Evidence from Bangladesh By Masahiro Shoji; Kenmei Tsubota
  15. Climate change and agriculture: farmer adaptation to extreme heat By Fernando M. Aragón; Francisco Oteiza; Juan Pablo Rud

  1. By: Branko Boskovic; Ujjayant Chakravorty; Martino Pelli; Anna Risch
    Abstract: Fuelwood collection is often cited as the most important cause of deforestation in developing countries. Use of fuelwood in cooking is a leading cause of indoor air pollution. Using household data from India, we show that households located farther away from the forest spend more time collecting. Distant households are likely to sell more fuelwood and buy less. That is, lower access to forests increases fuelwood collection and sale. This counter-intuitive behavior is triggered by two factors: lower access to forests (a) increases the fixed costs of collecting, which in turn leads to more collection; and (b) drives up local fuelwood prices, which makes collection and sale more profitable. We quantify both these effects. Using our estimates we show that a fifth of the fuelwood collected is consumed outside of rural areas, in nearby towns and cities. Our results imply that at the margin, fuelwood scarcity may lead to increased collection and sale, and exacerbate forest degradation.
    Keywords: energy access, cooking fuels, deforestation, forest cover, fuelwood collection
    JEL: D10 O13 Q42
    Date: 2018
  2. By: Fetzer, Thiemo (University of Warwick); Kyburz, Stephan (Center for Global Development)
    Abstract: Can institutionalized transfers of resource rents be a source of civil conflict? Are cohesive institutions better in managing distributive conflicts? We study these questions exploiting exogenous variation in revenue disbursements to local governments together with new data on local democratic institutions in Nigeria. We make three contributions. First, we document the existence of a strong link between rents and conflict far away from the location of the actual resource. Second, we show that distributive conflict is highly organized involving political militias and concentrated in the extent to which local governments are non-cohesive. Third, we show that democratic practice in form having elected local governments significantly weakens the causal link between rents and political violence. We document that elections (vis-a-vis appointments), by producing more cohesive institutions, vastly limit the extent to which distributional conflict between groups breaks out following shocks to the available rents. Throughout, we confirm these findings using individual level survey data.Keywords: conflict, ethnicity, natural resources, political economy, commodity prices. JEL Classification: Q33, O13, N52, R11, L71
    Date: 2018
  3. By: Carla Canelas (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Rachel Gisselquist (UNU-WIDER - United Nations University-Word Institut for Development Economic Research)
    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.
    Abstract: Avec la deuxième population indigène en pourcentage en Amérique Latine, le Guatemala est un cas important pour comprendre les inégalités horizontales et les politiques autochtones. Cet article présente une analyse nouvelle des données d'enquête, en tenant compte de la population indigène et ladino, ainsi que de la diversité ethnolinguistique au sein de la population indigène. Dans l'ensemble, notre analyse illustre à la fois la profondeur et la persistance des inégalités horizontales dans les résultats de l'éducation et du marché du travail et une large tendance à une plus grande égalité. Les écarts de revenue ont été réduits, entre autres facteurs, par des résultats scolaires améliorés. Les différents groupes ethniques montrent également des profils distincts de salaires et d'écarts de salaire, et il existe des signes d'un effet de « sol collant » aux extrémités inférieures du spectre du revenu affectant certains groupes plus que d'autres. Nos résultats suggèrent que l'accent mis sur la fracture indigène / non indigène trouvée dans une grande partie de la littérature économique en Amérique Latine obscurcit une diversité significative au sein de la population indigène. Nous postulons que l'examen approfondi d'une telle diversité dans le groupe ait des implications pour des théories plus larges de la politique ethnique et, en particulier, pour comprendre la faiblesse comparative de la mobilisation politique indigène au Guatemala au niveau national.
    Keywords: inequality,ethnicity,schooling,earnings,inégalité,ethnicité,scolarité,gains,Guatemala
    Date: 2017–10
  4. By: Haepp, Tobias (Asian Development Bank Institute); Lyu, Lidan (Asian Development Bank Institute)
    Abstract: We analyze the effect of removing village-level primary schools and effectively merging these into larger township-level schools on educational attainment in rural areas of the People’s Republic of China. We employ individual- and village-level information from the China Household Ethnic Survey, which covers regions that are intensively affected by the removal campaign. We find a negative effect of school removals on primary school and junior high school completion rates. However, we also find positive effects on educational attainment beyond junior high school for those students who began their education in the new merged primary schools. This effect can be attributed to resource pooling and higher teacher quality in the new schools. The adverse effects are more severe for girls, especially if the new schools do not provide boarding and are located far away from student residences, and for children whose parents have low educational attainment, thus exacerbating gender inequality and the intergenerational transmission of education inequality. Our findings provide an important reference for other developing countries that will need to reallocate primary school investment in the future.
    Keywords: primary education; school removals; educational attainment; People’s Republic of China
    JEL: H52 I21 I24 J62
    Date: 2018–03–13
  5. By: Bizoza, Alfred; Jäger, Philipp; Simons, Alexandre
    Abstract: Poverty rates in Rwanda have fallen substantially in the last decades. So far, however, it is not well understood what has driven this poverty decline. Thus, in this paper, we rely on a newly available household panel dataset collected in 2010/11 and 2013/14 to investigate poverty and poverty trajectories in Rwanda. According to our estimates increased labor market participation among originally poor households - especially off-farm employment - has facilitated poverty escape. Even though overall poverty rates have declined, our analysis reveals that a non-negligible part of originally non-poor households have fallen below the poverty line between the two survey waves. The estimates suggest that lower educated households are more vulnerable of becoming impoverished.
    Keywords: Poverty,Rwanda,EICV
    JEL: I32
    Date: 2018
  6. By: Jha, Shikha (Asian Development Bank Institute); Quising, Pilipinas (Asian Development Bank Institute); Ardaniel, Zemma (Asian Development Bank Institute); Martinez, Jr., Arturo (Asian Development Bank Institute); Wang, Limin (Asian Development Bank Institute)
    Abstract: Typhoons, floods, and other weather-related shocks can inflict suffering on local populations and create life-threatening conditions for the poor. Yet, natural disasters also present a development opportunity to upgrade capital stock, adopt new technologies, enhance the risk-resiliency of existing systems, and raise standards of living. This is akin to the “creative destruction” hypothesis coined by economist Joseph Schumpeter in 1943 to describe the process where innovation, learning, and growth promote advanced technologies as conventional technologies become outmoded. To test the hypothesis in the context of natural disasters, we look at the case of the Philippines—among the most vulnerable countries in the world to such disasters, especially typhoons. Using synthetic panel data regressions, we show that typhoon-affected households are more likely to fall into lower income levels, although disasters can also promote economic growth. Augmenting the household data with municipal fiscal data, we show some evidence of the creative destruction effect: Municipal governments in the Philippines helped mitigate the poverty impact by allocating more fiscal resources to build local resilience while also utilizing additional funds poured in by the national government for rehabilitation and reconstruction.
    Keywords: natural disasters; typhoons; poverty; household income mobility; foreign aid; fiscal transfers; municipalities; public spending; creative destruction
    JEL: H72 H75 H76 O53 Q54 R11
    Date: 2018–03–07
  7. By: Blunch, Niels-Hugo
    Abstract: Previous research has examined the incidence and correlates of contraceptive use and of several dimensions of female autonomy but only rarely the intersection of the two: female contraceptive use autonomy (CUA). Using a nationally representative household survey for two cohorts of married women, I examine female CUA incidence and correlates in Bangladesh focusing on the role of education. Female CUA is found to differ substantially across cohorts, with women from the younger cohort being far more likely to have complete autonomy over contraceptive use than women from the older cohort. Detailed decompositions reveal that the improvement in education across cohorts is the main correlate of the improved generational CUA gap. Health knowledge, especially knowledge that the use of condoms can help avoid contracting HIV/AIDS, is found to be part of the transmission mechanism between female education and female CUA but also to additionally exert its own, additional influence on CUA. I also discuss the implications of the analysis conducted here for the specification of spousal education variables and geographic fixed effects for future related research.
    Keywords: Contraceptive use,female autonomy,spousal education differentials,gender norms,decomposition analysis,Bangladesh
    JEL: D13 I12 I21
    Date: 2018
  8. By: Kazushi Takahashi; Yukichi Mano; Keijiro Otsuka
    Abstract: Randomized experiments ensure equal opportunities but could generate unequal outcomes by treatment status, which can be socially costly. This study demonstrates a sequential intervention to conduct rigorous impact evaluation and subsequently to mitigate ‘“experiment-driven’ driven” inequality, using Cote d’Ivoire as a case. Specifically, control farmers were initially restricted from exchanging information with treated farmers, who received rice management training, to satisfy the stable unit treatment value assumption. We then encouraged information exchange between the two groups of farmers one year after the training. We found positive training effects, but initial performance gaps created by our randomized assignment disappeared over time because of information spillovers and, hence, eventually control farmers also benefitted from our experiment.
    Keywords: Inequality, Program evaluation, Randomised experiment, Spillover
    Date: 2018–06–14
  9. By: Yoshino, Naoyuki (Asian Development Bank Institute); Taghizadeh-Hesary, Farhad (Asian Development Bank Institute); Otsuka, Miyu (Asian Development Bank Institute)
    Abstract: International remittances represent the second most important source of external funding for developing countries after foreign direct investment (FDI). We examine the impact of international remittances on poverty reduction using panel data for 10 Asian developing countries. In terms of the dependent variables, we set three poverty indicators: poverty headcount ratio, poverty gap ratio, and poverty severity ratio. Results show that international remittances have a statistically significant impact on the poverty gap ratio and poverty severity ratio under the random effect model of ordinary least squares (OLS) estimates. A 1% increase in international remittances as a percentage of gross domestic product (GDP) can lead to a 22.6% decline in the poverty gap ratio and a 16.0% decline in the poverty severity ratio in the sample of 10 Asian developing countries from 1981 to 2014. In addition, results show that per capita GDP increase and trade openness can decrease poverty measures, and higher inflation rates may be one of the causes of the poverty.
    Keywords: remittances; poverty reduction; developing Asia
    JEL: I31 I32 I38
    Date: 2017–07–07
  10. By: Lara, Jaime
    Abstract: This article assesses the impact of international migration on the subjective well-being of communities of origin in Mexico. Using a representative national survey and an empirical strategy with instrumental variables, we find that higher migratory intensity, at the municipal level, increases life satisfaction among men and women. There is a negative effect on emotional states of women, but an improvement in emotional states of men. Without controlling for schooling, a variable affected by international migration, men have a lower satisfaction with their perspective of future. Overall, the evidence in Mexico shows that the effects of international migration in the communities of origin are complex and with differential effects based on gender.
    Keywords: life satisfaction; emotions; Mexican migration
    JEL: I31 O15
    Date: 2018
  11. By: Dahal, Mahesh; Fiala, Nathan
    Abstract: Six randomized control trials were published simultaneously in one issue of the 'American Economic Journal: Applied Economics' in 2015. The studies show no or minimal impact from providing microloans to clients and have led many researchers and policy makers to conclude that microfinance has been proven to have little or no positive impacts on people's lives. We review in detail these six studies and find three main results. First, unsurprisingly, the insignificant results are replicable using the researcher's original data. Many coefficients are large, but very noisy. Second, every one of the studies is significantly underpowered. This is generally due to low take-up of the financial product offered. Pooling the data from the six studies together improves power for most outcomes, but minimum detectible effect sizes are still very large. Third, when we run analysis on the pooled sample, we find a treatment effect of 29% increase in profits, significant at the 5% level. We also obtain large impacts on business growth and household assets, but not for overall consumption. These results suggest that existing research on the impact of microfinance is generally underpowered to identify impacts, whether modest or zero, reliably. We end by discussing ways to improve future research on this topic.
    Keywords: microfinance,RCTs,replication,power calculations
    JEL: C13 D14 O10
    Date: 2018
  12. By: Dang, Hai-Anh H.; Hoang, Trung X.; Nguyen, Ha
    Abstract: Very few studies currently exist on the long-term impacts of schooling policies in developing countries. We examine the impacts—half a century later—of a mass education program conducted by the Democratic Republic of Vietnam in the occupied areas during the First Indochina War. Difference-in-difference estimation results suggest that school-age children who were exposed to the program obtained significantly higher levels of education than their peers who were residing in French-occupied areas. The impacts are statistically significant for school-age girls and not for school-age boys. We find beneficial spillover and inter-generational impacts of education: affected girls enjoyed higher household living standards, had more educated spouses, and raised more educated children. We discuss various robustness checks and extensions that support these findings.
    Keywords: education achievement,reading literacy,school policy,popular education,difference-in-difference,long-term impact,war
    JEL: H0 I2 O1 P3
    Date: 2018
  13. By: Dina Chhorn
    Abstract: The most recent studies at national level give emphasis to the failure of microfinance services in Cambodia since the bad practice is subordinate to high interest rate, non-productive loan, over-indebtedness, landless and migration. This paper examines the effect of microfinance, also putting weight on access to formal and productive loans, by using cross-sectional data in 2015 of 411 households, who are beneficiaries of the Agriculture Cooperative (AC) community supported by the World Vision, in 9 provinces of Cambodia. The binary choice model as well as bivariate and censoring model along with addressing the endogenous treatment effect were applied. The findings show that access to microfinance services in every aspect reduces poverty and promotes household’s welfare, proxied by per capita income, except there is insignificant effect on per capita economic assets and expenditure on child’s well-being after the Wald test of exogeneity and the Newey’s minimum chi-squared estimator with the twostep option were computed. However, these results must be interpreted with caution because the data is subject to specific sample selection.
    Keywords: Microfinance, poverty, welfare, Cambodia
    JEL: D33 D63 F16 F15 I24 I3
    Date: 2018
  14. By: Masahiro Shoji; Kenmei Tsubota
    Abstract: Although human trafficking is a serious humanitarian problem of global scale, there is very little knowledge about the issue. Using a nationally representative survey of child sex workers in Bangladesh, this study examines the extent to which trafficking victims are forced to expend more effort than non-trafficked sex workers. To control for endogeneity of trafficking victimization, we use frequency of natural disasters occurred in their hometown as an instrumental variable. We find that the victims face higher exposure to violence and drug use, and lower freedom to quit the job. They also trade sex with more clients at a lower wage. However, victimization is not associated with condom use or prevalence of sexually transmitted diseases. These results suggest that while owners commit violence to extract the victims’ efforts, some of them also maintain the victims’ productivity.
    Keywords: human trafficking, commercial sex worker, worst form of child labor, forced labor, Bangladesh
    Date: 2018–06–14
  15. By: Fernando M. Aragón (Institute for Fiscal Studies); Francisco Oteiza (Institute for Fiscal Studies and EDePo @ Institute for Fiscal Studies); Juan Pablo Rud (Institute for Fiscal Studies and Royal Holloway)
    Abstract: This paper examines how farmers adapt, in the short-run, to extreme heat. Using a production function approach and micro-data from Peruvian households, we find that high temperatures induce farmers to increase the use of inputs, such as land and domestic labor. This reaction partially attenuates the negative effects of high temperatures on output. We interpret this change in inputs as an adaptive response in a context of subsistence farming, incomplete markets, and lack of other coping mechanisms. We use our estimates to simulate alternative climate change scenarios and show that accounting for adaptive responses is quantitatively important.
    JEL: O13 O12 Q12 Q15 Q51 Q54
    Date: 2018–02–23

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