nep-dev New Economics Papers
on Development
Issue of 2018‒11‒05
twelve papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Precipitation and Economic Growth By Michael Berlemann; Daniela Wenzel
  2. Globalisation and the Gender Earnings Gap: Evidence from Sri Lanka and Cambodia 1992-2015 By Robertson, Raymond; Lopez-Acevedo, Gladys; Savchenko, Yevgeniya
  3. The impacts of institutional quality and infrastructure on overall and intra-Africa trade By Jiang, Yushi; Borojo, Dinkneh Gebre
  4. Violent Conflict, Transport Costs, and Poverty: An Instrumental Variables Approach with Geospatial Data for Nigeria By Federico Barra; Claudia Berg; Philip Verwimp
  5. What Remains of Cross-Country Convergence? By Johnson, Paul; Papageorgiou, Chris
  6. Micro-Entrepreneurship and Subjective Well-Being: Evidence from Rural Bangladesh By Faress Bhuiyan, Muhammad; Ivlevs, Artjoms
  7. Financial constraints matter : Empirical evidence on borrowing behavior, microfinance and firm productivity By M.A. Boermans; Daan Willebrands
  8. Education and Labour Earnings Inequality in Tanzania: Evidence from Quantile Regression Analysis By Mlacha, Cornel J.; Ndanshau, Michael O.A
  9. Utilities Governance, Incentives, and Performance: Evidence from the Water Sector in India By Nyathikala, Sai Amulya Nyathikala; Jamasb, Tooraj; Llorca, Manuel; Kulshrestha, Mukul Kulshrestha
  10. Obesity inequality and the changing shape of the bodyweight distribution in China By Nie, Peng; Ding, Lanlin; Sousa-Poza, Alfonso
  11. Subjective well-being and social comparison: A comparative study on rural Thailand and Vietnam. By Thi Kim Cuong Pham; Phu Nguyen-Van; Huu Thanh-Tam Nguyen; Thi Anh-Dao Tran; Kone Noukignonb
  12. Distribution and productivity growth: an empirical exercise applied to selected Latin American countries By Douglas Alcantara Alencar; Frederico Gonzaga Jayme Jr.; Gustavo Britto; Claudio Puty

  1. By: Michael Berlemann; Daniela Wenzel
    Abstract: As the ongoing process of global warming goes along with changes in both mean precipitation and precipitation extremes, the scientific interest in the effects of rainfall on economic prosperity has recently grown significantly. However, the few existing empirical studies of short-run growth effects of precipitation deliver inconclusive results. The medium- and long-run growth perspective is yet mostly unexplored. In this paper we deliver a systematic analysis of the short- and long-run growth effects of rainfall based on a large panel dataset covering more than 150 countries over the period of 1951 to 2013. We find strong and highly robust empirical evidence for long-lasting negative growth effects of rainfall shortages in poor and underdeveloped countries, which are not driven by the subsample of Sub Saharan African countries.
    Keywords: economic growth, precipitation
    JEL: O44 Q54 Q56
    Date: 2018
  2. By: Robertson, Raymond (Texas A&M University); Lopez-Acevedo, Gladys (World Bank); Savchenko, Yevgeniya (Georgetown University)
    Abstract: This paper focuses on how the forces of globalisation, specifically the Multi-Fibre Arrangement (MFA), have affected women's wages in the apparel sector in developing countries. Using household and labour force surveys from Cambodia and Sri Lanka, we find large positive wage premiums and a closing of the male-female wage gap during the MFA period, but smaller premiums and a widening wage gap after the end of the MFA. Our results suggest that apparel exports continued to benefit women in developing countries post-MFA.
    Keywords: apparel, Multi-Fibre Arrangement, textile, wages, women, working conditions
    JEL: F16 J21 J24 J30 J31 J81 L67
    Date: 2018–09
  3. By: Jiang, Yushi; Borojo, Dinkneh Gebre
    Abstract: The authors examine the impacts of quality of institutions, border and transport efficiency, physical and communication infrastructure on overall and intra-Africa trade covering 44 African countries and their 173 trade partners for the periods 2000-2014. Aggregate indicators are derived for quality of economic institutions, border and transport efficiency, physical and communication infrastructure using principal component analysis. The findings disclose that intra-Africa and overall Africa's trade robustly determined by quality of institutions, border and transport efficiency, physical and communication infrastructure. The estimates also indicate that the marginal effect of the quality of institutions, physical and communication infrastructure on trade flow appears to be increasing in GDP per capita. In contrast, the marginal effect of border and transport efficiency on trade decreases in GDP per capita. The authors compute simulation of improving each indicator to the best performer in the sample. The findings are robust to estimation method conducted to account for potential endogeneity.
    Keywords: Trade flow,transport efficiency,quality of institutions,physical and communication infrastructure,gravity model,African countries
    JEL: F1 F14
    Date: 2018
  4. By: Federico Barra; Claudia Berg; Philip Verwimp
    Abstract: The nexus of conflict, transportation costs, and poverty is one which has received scant attention in the literature. This paper explores the effect of conflict on poverty in Nigeria, taking accessibility into account. The analysis relies on household data from the Living Standards Measurement Study (LSMS) and on conflict data from Armed Conflict Location Events Dataset (ACLED). To account for methodological challenges in the conflict data, we implement a ‘hot spot’ strategy whereby incidents within a limited geographic area over time are grouped. To address the potential endogeneity of conflict, we use past incidences of violence to instrument for more recent conflict. Transport costs are instrumented using the natural path, the time it takes to reach the market absent any roads. We find that decreasing transportation costs decreases multidimensional poverty and that its impact is stronger in areas of low conflict. We also find suggestive evidence that conflict and poverty are negatively correlated in Nigeria.
    Keywords: Multi-dimensional poverty, conflict, Nigeria, geospatial
    Date: 2018–10
  5. By: Johnson, Paul; Papageorgiou, Chris
    Abstract: We examine the record of cross-country growth over the past 50 years and ask if developing countries have made progress on closing income gap between their per capita incomes and those in the advanced economies. We conclude that, as a group, they have not and then survey the literature on absolute convergence with particular emphasis on that from the last decade or so. That literature supports our conclusion of a lack of progress in closing the income gap between countries. We close with a brief examination of the recent literature on cross-individual distribution of income which finds that, despite the lack of progress on cross-country convergence, global inequality has tended to fall since 2000.
    Keywords: Economic growth, convergence, catching up, global inequality
    JEL: E01 E13 F41 O11 O47
    Date: 2018–08
  6. By: Faress Bhuiyan, Muhammad (Carleton College); Ivlevs, Artjoms (University of the West of England, Bristol)
    Abstract: Microcredit has long been hailed as a powerful tool to promote livelihoods and reduce poverty through entrepreneurship. However, its impacts on people's subjective well-being remain underexplored. We present a unified theoretical framework for analyzing the effect of microcredit-enabled entrepreneurship on overall life satisfaction – a key manifestation of subjective well-being. Empirically, we apply an instrumental variable approach to a unique census-like household survey conducted in three villages of Bangladesh in 2013. In spite of having no direct effects, we find that microcredit borrowing has an indirect negative effect on overall life satisfaction, through increased worry. On a positive note, we find that female micro-borrowers experience an increase in satisfaction with financial security and achievement in life. We also provide evidence that micro-borrowers with higher levels of assets experience an increase in satisfaction with financial security.
    Keywords: microcredit, entrepreneurship, life satisfaction, happiness, depression, worry, female empowerment, Bangladesh
    JEL: I31 J16 L26
    Date: 2018–09
  7. By: M.A. Boermans; Daan Willebrands
    Abstract: This paper examines the effect of financial constraints on firm performance using a sample of small business owners who are client at a microfinance institution (MFI). In developing countries, a lack of access to finance is seen as a key obstacle to successful entrepreneurship and economic growth. However, empirical evidence on this is still fragmented and sparse. This study contributes to the literature by applying an alternative measure of financial constraints based on actual lending and borrowing behavior to test how borrowing affects firm productivity. We use survey data of 615 entrepreneurs from Tanzania to analyze the relationship between financial constraints and labour productivity. Using OLS regression and propensity score matching techniques the results show that financial constraints impede labour productivity and are important barriers to successful entrepreneurship. Further tests suggest that financial constraints matter regardless of the measurement method used, thereby comforting researchers in a fragmented field which applies a wide range of financial constraints variables.
    Keywords: Entrepreneurship, credit constraints, access to finance, firmperformance
    Date: 2018
  8. By: Mlacha, Cornel J.; Ndanshau, Michael O.A
    Abstract: This paper aims to investigate the relationship between education and labour earning inequalities by using 2014 Integrated Labour Force Survey data for Tanzania. The quantile regression method is applied to compute returns to education at different points of earnings distribution. The estimation result reveals that there is significant variation in the coefficients of marginal returns to education across earning distributions; and, the estimated coefficients are higher at the top of earning distribution. This finding suggests education could contribute to widening of earnings dispersion in Tanzania. Accordingly, it is important to have policy in Tanzania to reduce disparities in the levels of education attained between the least and the most educated individuals.
    Keywords: Earning Inequality, Returns to Education, Quantile Regression, Tanzania.
    JEL: I24
    Date: 2018–09–15
  9. By: Nyathikala, Sai Amulya Nyathikala; Jamasb, Tooraj; Llorca, Manuel; Kulshrestha, Mukul Kulshrestha
    Abstract: Network utilities across the world are subject to regulation and political scrutiny. In developing countries, managing the trade-offs between socioeconomic and environmental objectives in public water and energy utilities is particularly challenging. These industries share important underlying technical and economic features. Therefore, many economic, governance, and policy lessons are transferable across these sectors. In India, the water sector suffers from mounting financial losses, lack of access, and poor quality of service. There is a dearth of literature on the multi-faceted nature of utility performance related to water utilities. We examine the socioeconomic and environmental aspects of urban water supply in India. We use a stochastic frontier analysis approach and distance functions to analyse the performance of 304 urban water supply utilities in three Indian states during the period 2010-2015. The results suggest that incentive-based economic reform and regulation would help the utilities improve their performance. More specifically measures to improve cost recovery, billing efficiency and reduce losses would help the utilities to enhance service delivery, expand coverage and induce efficiency in the sector. The results also show the dependence of water utilities on groundwater sources which is unsustainable in the long run. We highlight the need for designing economic incentives to improve the performance of utilities and enable them to achieve social and sustainability objectives.
    Date: 2018
  10. By: Nie, Peng; Ding, Lanlin; Sousa-Poza, Alfonso
    Abstract: Using data from the China Health and Nutrition Survey (CHNS), this study analyses changes in bodyweight (BMI and waist circumference) distributions between 1991 and 2011 among adults aged 20+ in China. To do so, we quantify the source and extent of temporal changes in bodyweight and then decompose the increase in obesity prevalence into two components: a rightward shift of the bodyweight distribution (mean growth) and a (re)distributional skewing. Our analysis reveals a clear rightward distributional shift combined with a leftward skewing. Although the relatively large size of this skewing in the first decade analysed reflects an increase in obesity inequality, this inequality growth subsides in the second decade. Nevertheless, over the entire 20-year period, obesity inequality increases significantly, especially among females, younger age groups, rural residents and individuals with low socioeconomic status.
    Keywords: BMI,Waist circumference,Obesity inequality,Decomposition,China
    JEL: D30 D63 I10 I14
    Date: 2018
  11. By: Thi Kim Cuong Pham; Phu Nguyen-Van; Huu Thanh-Tam Nguyen; Thi Anh-Dao Tran; Kone Noukignonb
    Abstract: This paper analyzes the determinants of the households’ welfare perception using a survey database on rural areas in Thailand and Vietnam which have similar economic and social conditions. Welfare perception corresponds to the households’ subjective assessment of their general situations. We focus on the social comparison and take into account geographical isolation, relative poverty, harsh living conditions, economic and environmental risks as well as the households’ degree of risk acceptance. Our study shows that households, in both countries, are sensitive to income and relative poverty, but only Thai households are concerned with wealth comparison. In particular, this comparison is asymmetric. Environmental risks as well as households’ attitude to risks differently affect the households’ well-being in both countries. However, we observe a similarity in the effect of the risks’ monetary consequences.
    Keywords: environmental risks, economic risks; rural area, social comparison; subjective well-being.
    JEL: I31 O12 Q56
    Date: 2018
  12. By: Douglas Alcantara Alencar (UFPA); Frederico Gonzaga Jayme Jr. (Cedeplar-UFMG); Gustavo Britto (Cedeplar-UFMG); Claudio Puty (UFPA)
    Abstract: In this article we analyze, from a Latin American structuralist perspective, whether productivity growth is affected by growth in income and employment. In order to test our hypothesis, we have chosen a sample of Latin American countries that represent 86% of the region’s gross domestic product. We perform an econometric test of the so-called Kaldor-Verdoon parameter and the employment growth parameter for the selected countries.
    Keywords: Demand-led growth, Endogenous technological change, Wage-led and profit-led demand regimes, Productivity regime, Latin American structuralism.
    JEL: O4 O3 E3
    Date: 2018–10

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