nep-dev New Economics Papers
on Development
Issue of 2019‒04‒15
twenty papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Do Constraints on Women Worsen Child Deprivations? Framework, Measurement, and Evidence from India By Posso, Alberto; Smith, Stephen C.; Ferrone, Lucia
  2. Present Bias and Underinvestment in Education? Long-run Effects of Childhood Exposure to Booms in Colombia By Bladimir Carrillo
  3. Investing in agriculture when it is worth it. Evidence from rural Uganda. By Olivia Bertelli
  4. The impact of blackouts on the performance of micro and small enterprises: Evidence from Indonesia By Anna Falentina; Budy Resosudarmo
  5. The Agricultural mechanization in Africa: micro-level analysis of state drivers and effects By Kirui, Oliver Kiptoo
  6. Formal Education and Disaster Response of Children: Evidence from Coastal Villages in Indonesia By Shoji, Masahiro; Takafuji, Yoko; Harada, Tetsuya
  7. Violence and Human Capital Investments By Foureaux Koppensteiner, Martin Foureaux; Menezes, Livia
  8. Universal Basic Incomes vs. Targeted Transfers: Anti-Poverty Programs in Developing Countries By Hanna, Rema; Olken, Benjamin A.
  9. Managing the Impact of Climate on Migration: Evidence from Mexico By Chort, Isabelle; de la Rupelle, Maëlys
  10. Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture By Douglas; Udry Gollin, Christopher
  11. The Effect of Parental Job Loss on Child School Dropout: Evidence from the Occupied Palestinian Territories By Di Maio, Michele; Nistico, Roberto
  12. Inefficient water pricing and incentives for conservation By Ujjayant Chakravorty; Manzoor H. Dar; Kyle Emerick
  13. The Political Economy of Foreign Aid and Growth:Theory and Evidence By Sultan Mehmood; Avner Seror
  14. Post-intervention morbidity and growth among Zambian children who received multiple micronutrient supplementation using spirulina platensis: evidence from a randomized trial in Zambia By Masuda, Kazuya; Chitundu, Maureen
  15. Foreign direct investment in the African food and agriculture sector: trends, determinants and impacts By Husmann, Christine; Kubik, Zaneta
  16. Financial Deepening, Terms of Trade Shocks, and Growth Volatility in Low-Income Countries By Kangni R Kpodar; Maelan Le Goff; Raju J Singh
  18. Test LOT Quality Assurance Sampling Method in Estimating Communes with Improved Latrine in Vietnam By Nguyen, Cuong
  19. Community participation and the quality of rural infrastructure in Ethiopia By Shigute, Z.
  20. Early Life Exposure to Above Average Rainfall and Adult Mental Health By Mochamad Pasha; Marc Rockmore; Chih Ming Tan

  1. By: Posso, Alberto (RMIT University); Smith, Stephen C. (George Washington University); Ferrone, Lucia (UNICEF)
    Abstract: This paper provides a framework for analyzing constraints that apply specifically to women, which theory suggests may have negative impacts on child outcomes (as well as on women). We classify women's constraints into four dimensions: (i) domestic physcial and psychological abuse, (ii) low influence on household decisions, (iii) restrictions on mobility, and (iv) limited information access. Each of these constraints are in principle determined within households. We test the impact of women's constraints on child outcomes using nationally representative household Demographic and Health Survey data from India, including 53,030 mothers and 113,708 children, collected in 2015-16. Outcomes are measured as multidimensional deprivations, utilizing UNICEF's Multidimensional Overlapping Deprivation Analysis index, incorporating deficiencies in children's access to water, sanitation, housing, healthcare, nutrition, education and information. We identify causal impacts using a Lewbel specification and present an array of additional econometric strategies and robustness checks. We find that children of women who are subjected to domestic abuse, have low influence in decision making, and limited freedom of mobility are more likely to be deprived.
    Keywords: child deprivations, MODA, child health, child nutrition, education, bargaining, empowerment, domestic abuse, mobility restrictions, information access, gendered constraints, multidimensional measurement, Lewbel estimation, instrumental variables, matching
    JEL: I15 I25 I32 O15
    Date: 2019–03
  2. By: Bladimir Carrillo
    Abstract: This paper examines the long-run impacts of income shocks by exploiting variation in coffee cultivation patterns within Colombia and world coffee prices during cohorts’ school-going years in a differences-in-differences framework. The results indicate that cohorts who faced higher returns to coffee-related work during school-going years completed fewer years of schooling and have lower income in adulthood. These findings suggest that leaving school during temporary booms results in a significant loss of long-term income. This is consistent with the possibility that students may ignore or heavily discount the future consequences of dropout decisions when faced with immediate income gains.
    Keywords: Coffee price shocks, transitory income shocks, human capital accumulation, opportunitycost of schooling, long-run impacts, schooling.
    JEL: J24 O12 O13
    Date: 2019–03–28
  3. By: Olivia Bertelli (PSL, Université Paris-Dauphine, LEDa)
    Abstract: One of the reasons for the persistent low agricultural productivity in Sub-Saharan Africa is the lack of adoption of pro table agricultural technologies. Yet, what is pro table in a controlled experimental setting may not be pro table in a real-world setting. Estimating the returns to a single input is, in fact, challenging as farmers may respond to adoption by re-optimizing the use of other inputs. This paper explores farmers behavioral response to a positive random shock on future productivity by disentangling inputs returns from farmers' response. Using a unique household panel dataset collected in rural Uganda, I proxy a future productivity shock with the birth of a female calf against that of a male calf. Calves have no technical returns, but female calves will become cows producing milk, providing a stable source of income, while bulls and oxen are of little use in this context. The main OLS and di erence-in-di erences results show the existence of a crowd-in e ect. Farmers react to the birth of a female calf by increasing inputs' expenditures. They invest more on their cattle's health, increase hired labor and are more willing to pay for cattle-related investments but not for other activities. This increase in investments leads to an increase in milk production and revenues that lasts over time. Further results show that economies of scale associated with the number of female animals seem to explain this behavioral response.
    Keywords: cattle, investments, Sub-Saharan Africa.
    JEL: C26 C33 D24 O12 O13 O55 Q12
    Date: 2019–03
  4. By: Anna Falentina; Budy Resosudarmo
    Abstract: Reliability of electricity supply is one of pressing challenges to many micro and small enterprises (MSEs) in developing countries. MSEs play a pivotal role in employment generation in these countries, but productivity of MSEs is relatively low. Little is known about how blackouts affect performance of MSEs. This paper is the first study to estimate the impact of power blackouts on productivity of manufacturing MSEs and to discuss the role of the government in addressing problem. We employ a pseudo-panel dataset covering six firm cohorts within 21 Indonesian national electricity company working areas from 2010 to 2015. Our identification strategy involves first examining blackouts determinants and then using these determinants as instruments in an IV dynamic panel fixed effects estimation while controlling for factors potentially affect productivity and correlated with blackouts. We find that electricity blackouts reduce the average labor productivity and the resultant loss amounts to approximately IDR 71.5 billion (USD 4.91 million) per year in Indonesia. Therefore, it is crucial to improve electricity supply reliability in developing countries. We find that introducing a captive generator as a way to cope with power outages, is positively associated with productivity, and MSEs that have captive generators benefit more when the power supply is poor. Our findings will assist policy makers to prioritize addressing power blackouts relative to other constraints MSEs face.
    Keywords: micro and small enterprises, power blackouts, productivity, captive generators, pseudo-panel data analysis
    JEL: H54 L53 L94
    Date: 2019
  5. By: Kirui, Oliver Kiptoo
    Abstract: This paper examines the state, drivers and, consequently, the impacts of agricultural mechanization in eleven countries in Africa. Using representative multistage stratified household survey data and robust analytical approaches, findings show light hand-held tools and equipment remain the main type of machinery in most countries – about 48% of the sampled households have access to light machinery compared to 35% that have access to animal-powered machinery, and only about 18% that use tractor-powered machinery. Significant drivers of agricultural mechanization include the size of the household, gender of the household head, participation in off-farm economic activities, distance to the input and output markets, farm size, land tenure, type of farming system, access to extension services, and use of fertilizer and pesticides. This study finds that after controlling for socio-economic, demographic, and regional determinants, agricultural mechanization, significantly increases the amount of cropland cultivated (extensification) and is also accompanied by input intensification especially in countries where land expansion is limited. We further find significant but mixed impact of agricultural mechanization on use of household and hired labor. Finally, agricultural mechanization significantly raises the productivity of maize and rice in all cases. These findings point to the importance of developing favorable arrangements that would avail mechanization to small and medium scale farmers. This would involve providing incentives for private sector to scale agricultural mechanization initiatives and targeting and engaging women farmers and the youth by investing in supportive infrastructure and training.
    Keywords: Crop Production/Industries, Demand and Price Analysis, Farm Management, Labor and Human Capital
    Date: 2019–04–08
  6. By: Shoji, Masahiro; Takafuji, Yoko; Harada, Tetsuya
    Abstract: Although children are exposed to a high mortality risk during disasters, what determines their disaster response, especially during earthquakes, remains largely unexplored. The goal of this study is to examine the association between formal education and earthquake response. Using a unique survey collected from elementary school students in the coastal villages of Indonesia, we show that students’ attitude to learning science is positively associated with their risk perception, perceived coping ability, knowledge about the disaster mechanism and response, and propensity to respond appropriately. Parents’ disaster experience also significantly affects these outcomes. In contrast, attitude to religious class explains none of outcomes. Locus of control is associated with perception and knowledge, but not the response. Our findings suggest that the effects of education on the disaster mortality of children could vary with the school curriculum.
    Keywords: formal education; disaster response; earthquake; children; locus of control; Indonesia
    JEL: I25 O13 Q54
    Date: 2019–04–11
  7. By: Foureaux Koppensteiner, Martin Foureaux (University of Surrey); Menezes, Livia (University of Leicester)
    Abstract: In this paper, we investigate the effect of student exposure to homicides on their educational performance and human capital investments. Combining a number of large georeferenced administrative datasets from Brazil, we estimate the effect of exposure to homicides in the public way on these outcomes. Using within-school and within-corridor estimates, we show that violence in the surroundings of schools has a detrimental effect on school attendance and on standardised test scores in math and Portuguese language and increases dropout rates. We construct measures of student exposure to homicides on their way from home to school and find that exposure on the school path increases dropout rates substantially. Exceptionally rich data on student- and parent-reported aspirations and attitudes towards education allow us to explore the channels underlying these effects.
    Keywords: homicides, human capital investments, education, Brazil
    JEL: I25 K42 O12
    Date: 2019–03
  8. By: Hanna, Rema (Harvard Kennedy School); Olken, Benjamin A. (Massachusetts Institute of Technology)
    Abstract: Developing country governments are increasingly implementing cash assistance programs to combat poverty and inequality. This paper examines the potential tradeoffs between targeting these transfers towards low income households versus providing universal cash transfers, also known as a Universal Basic Income. We start by discussing how the fact that most households in poor countries do not pay income taxes changes how we conceptually think about Universal Basic Incomes. We then analyze data from two countries, Indonesia and Peru, to document the tradeoffs involved. The results suggest that, despite the imperfections in targeting using proxy-means tests, targeted transfers may result in substantially higher welfare gains than universal programs, because for a given total budget they deliver much higher transfers to the poor. On the other hand, targeted transfers do lead to more horizontal equity violations, and do create an implied tax on consumption in the region where benefits are phased out. We discuss how alternative targeting approaches, such as community-targeting and self-targeting, can be used to further improve targeting in some situations.
    Date: 2018–08
  9. By: Chort, Isabelle (Université de Pau et des pays de l’Adour); de la Rupelle, Maëlys (Paris School of Economics)
    Abstract: This paper uses state-level data on migration flows between Mexico and the U.S. from 1999 to 2011 to investigate the migration response to climate shocks and the mitigating impact of an agricultural cash-transfer program (PROCAMPO) and a disaster fund (Fonden). While lower than average precipitations increase undocumented migration, especially from the most agricultural states, Fonden amounts decrease the undocumented migration response to abnormally low precipitations during the dry season. Changes equalizing the distribution of PROCAMPO and favoring vulnerable producers in the non irrigated ejido sector mitigate the impact of droughts on migration, especially for a high initial level of inequality.
    Keywords: international migration, climate, public policies, weather variability, natural disasters, Mexico-U.S. migration, inequality
    JEL: F22 Q54 Q18 Q18 J61
    Date: 2019–03
  10. By: Douglas; Udry Gollin, Christopher
    Abstract: Standard measures of prouctivity display enormous dispersion across farms in Africa. Crop yields and input intensities appear to vary greatly, seemingly in conflict with a cmodel of efficient allocation across farms. In this paper, we present a theoretical framework for distinguishing between measurement error, unobserved heterogeneity, and potential misallocation. Using rich panel data from farms in Tanzania and uganda, we estimate our model using a flexible specification in which we allow for several kinds of measurement error and heterogeneity. We find that measurement, error and heterogeneity together account for a large fraction - as much as ninety percent - of the dispersion in measured productivity. In contrast to some previous estimates, we suggest that the potential for efficiency gains through reallocation of land across farms and farmers may be relatively modest.
    Date: 2019
  11. By: Di Maio, Michele (University of Naples Parthenope); Nistico, Roberto (University of Naples Federico II)
    Abstract: We study the effect of parental job loss on child school dropout in developing countries. We focus on Palestinian households living in the Occupied Palestinian Territories and having the household head employed in Israel during the Second Intifada (2000-2006). We exploit quarterly variation in conflict intensity across districts in the OPT to instrument for Palestinian workers' job loss in Israel. Our 2SLS results show that parental job loss increases child school dropout probability by 9 percentage points. The effect varies with child and household characteristics. We provide evidence that the effect operates through the job loss-induced reduction in household income.
    Keywords: job loss, school dropout, conflict, Second Intifada, Occupied Palestinian Territories, Israel
    JEL: H56 I20 J63
    Date: 2019–03
  12. By: Ujjayant Chakravorty; Manzoor H. Dar; Kyle Emerick
    Abstract: We use two randomized controlled trials in Bangladesh to study a simple water conservation technology for rice production called “Alternate Wetting and Drying (AWD)”. Despite proven results in agronomic trials, our first experiment shows that AWD only saves water and increases profits in villages where farmers pay a marginal price for water, but not when they pay fixed seasonal charges. The second RCT randomly distributed debit cards that can be used to pay volumetric prices for irrigation water. This low-cost, scalable intervention causes farmers to place more value on the water-saving technology. Demand for the technology becomes less price-sensitive.
    Date: 2019
  13. By: Sultan Mehmood (University of Paris - IX); Avner Seror (Chapman University)
    Abstract: In this paper, we demonstrate that even when foreign aid is used to fund patronage, it may still have a positive - and significant - effect on economic growth in developing countries. First, we present a theory that formalizes the effect of aid on economic growth and patronage. Next, we provide evidence from Pakistan consistent with the predictions of the model that foreign aid increases economic growth, despite being used for patronage. The identification strategy we propose allows us to provide causal evidence for the predictions of the model.
    Keywords: Foreign aid, Economic growth, Political Economy, Patronage
    JEL: F35 D72 O1
    Date: 2019
  14. By: Masuda, Kazuya; Chitundu, Maureen
    Abstract: In infants, micronutrient deficiency is known to be associated with growth faltering and morbidity. We recently reported that a 12-month intervention of home fortification of complementary foods using spirulina reduced upper respiratory infections but did not affect the linear growth of Zambian infants. The intervention, originally designed to run for 12 months, was extended by 4 months. This study aimed to evaluate whether a reduction in the morbidity seen with 12-month spirulina supplementation remained persistent after the 16-month intervention, and over the subsequent 1.5-year nonintervention period. The secondary objective was to evaluate if any differences in the growth indicator emerged long-term. We used longitudinal data from a randomized trial conducted in Luapula province, Zambia. A total of 501 infants aged 6-18 months were randomly given daily supplements of maize-soya based porridge with spirulina (SP) or without spirulina (CON). In 2016 and 2018, we collected information on the change in infants’ anthropometric status and morbidity (probable pneumonia, cough, probable malaria, and fever). The registration number of the initial clinical trial is NCT03523182 (Clinical Children in the SP group were 13% less likely to contract an upper respiratory infection after the 16-month intervention. After the 18-month nonintervention period, children in the SP group were 14% (95% CI: 2%, 25%; P
    Keywords: malnutrition, home-fortification, infant growth, morbidity, Zambia
    Date: 2019–03
  15. By: Husmann, Christine; Kubik, Zaneta
    Abstract: In this paper, we seek to answer three research questions: (1) What is the pattern of foreign direct investment (FDI) in the African food and agriculture sector in the last 15 years? (2) What are the drivers of FDI in the African food and agriculture sector? (3) What is the evidence on the impacts of private-sector investments in the African food and agriculture sector on the product and labor markets, with particular focus on income effects? Our analysis shows that a total of $48.737 billion was invested in the African food and agriculture sector by foreign private-sector investors between 2003 and 2017, with a noticeable peak in FDI inflows observed after the 2008/09 agricultural commodities shocks suggesting that international investors want to capitalize on high food prices. The initiatives such as the New Alliance for Food Security and Nutrition and Grow Africa, which aim to create a conducive environment for investment, might have also contributed to the growth of FDI volumes reported over the last years. Our econometric analysis reveals that market potential is one of the main drivers of FDI in food and agriculture sector in Africa. More specifically, population size consistently has a significant impact on sectoral FDI inflows in Africa, irrespective of the model specification. Among the supply-side factors, the size of agricultural land turns out to be an important predictor of FDI inflows. Agglomeration effects are also observed, with a lagged volume of FDI inflows having a very strong impact on the level of current FDI. Finally, infrastructure or institutional quality play an essential role in attracting investment. These findings give support to various strands of literature that we drew upon in the theoretical framework. Uncovering the impacts that private-sector investment has on the population proved not to be straightforward. Even though the literature is relatively abundant, it is flawed with multiple methodological issues that limit its internal and external validity. Despite these caveats, most of the studies reviewed in our paper seem to suggest positive impacts on farm and labor income. The effects on equality and poverty are not clear, as some investment schemes may be biased towards the better-off households. However, wage-employment opportunities generated by private-sector investment seem to benefit the poorest, especially when they target unskilled labor or women. Finally, there is evidence that private-sector investment might act as a driver of technical innovation. However, many research gaps remain.
    Keywords: Agricultural and Food Policy, International Development, Labor and Human Capital
    Date: 2019–04–12
  16. By: Kangni R Kpodar; Maelan Le Goff; Raju J Singh
    Abstract: This paper contributes to the literature by looking at the possible relevance of the structure of the financial system—whether financial intermediation is performed through banks or markets—for macroeconomic volatility, against the backdrop of increased policy attention on strengthening growth resilience. With low-income countries (LICs) being the most vulnerable to large and frequent terms of trade shocks, the paper focuses on a sample of 38 LICs over the period 1978-2012 and finds that banking sector development acts as a shock-absorber in poor countries, dampening the transmission of terms of trade shocks to growth volatility. Expanding the sample to 121 developing countries confirms this result, although this role of shock-absorber fades away as economies grow richer. Stock market development, by contrast, appears neither to be a shock-absorber nor a shock-amplifier for most economies. These findings are consistent across a range of econometric estimators, including fixed effect, system GMM and local projection estimates.
    Date: 2019–03–25
  17. By: Eline D'Haene; Sam Desiere; Marijke D'Haese; Wim Verbeke; Koen Schoors (-)
    Abstract: The impact of religious behaviour on food systems in developing economies has been understated in scholarly studies. With its different Christian, Islamic, and traditional faiths, Ethiopia emerges as a natural experiment to investigate the impact of religious practices on demand. The inclusion of livestock products in Ethiopian diets is extremely low, even by African standards; a phenomenon often explained by supply and marketing problems combined with low income levels. We deviate from this dominant narrative and single out the impact of religion. We show how fasting practices of Orthodox Christians, the largest religious group, affect milk intake decisions and channels through which consumed milk is sourced. Employing countrywide data collected by the Living Standards Measurement Studies, we find, as expected, that the Orthodox fasting adversely affect milk consumption and decreases the share of milk sourced from own production in Orthodox families, an effect we quantify in this paper. Moreover, we observe spillover effects of Orthodox fasting on other religious groups in dominant Orthodox localities. Our findings improve the understanding of the broader societal implication of religiously inspired consumption rituals and underscore the challenges resulting from religion-induced demand cycles to design policies that aim at developing the livestock sector.
    Date: 2019–04
  18. By: Nguyen, Cuong
    Abstract: In this study, we will simulate different ways of select households according to the LC-LQAS method, and examine the accuracy of these ways to measure the percentage of communes having the sanitation coverage of 70%. We tried different sampling methods which differ in the number of clusters (village) and the number of households selected in each communes. The results suggest that the methods identify communes with the sanitation rate of at least 70% quite well. More than 90% of communes are correctly identified. The number of clusters selected in a commune plays an important role in reducing the mean squared error and increasing the correct prediction rates. Possible, two clusters within a commune with the total number of sampled households of 19 is the best choice.
    Keywords: Sampling method, LC-LQAS method, household survey, sanitation, Vietnam.
    JEL: C15 C8
    Date: 2017–07–19
  19. By: Shigute, Z.
    Abstract: Ethiopia’s Productive Safety Net Program (PSNP) is one of the world’s largest food security programs. The program supports chronically food insecure rural households and at the same time promotes long-term food security through the creation of rural infrastructure. While studies on the PSNP have examined various features of the program, there is limited knowledge on the quality and durability of infrastructure built through the program. Ensuring and maintaining the quality of local public goods built through the PSNP and similar social protection programs is a costly and recurring issue. Motivated by the long-term objective of the program, this paper analyses the role played by a key design feature of the PSNP, that is, its Community Based Participatory Watershed Development approach in influencing a project’s physical condition and its operational status. The paper is based on survey data and technical assessments provided by soil and water conservation engineers covering a sample of 249 Soil and Water Conservation (SWC) projects located in 53 watershed communities. The survey is complemented by qualitative information gathered through interviews and discussions. The location of multiple projects, with differing levels of participation in the same watershed communities permits estimation of the effects of community participation after controlling for community fixed effects. We find that projects in which beneficiaries play a larger role in project monitoring and evaluation are substantially less likely to be damaged and be in better operational condition. These results support the idea that community participation translates into more durable infrastructure.
    Keywords: Productive Safety Net Program, community participation, quality rural infrastructure, Ethiopia
    Date: 2019–03–29
  20. By: Mochamad Pasha (Consultant, World Bank, Indonesia); Marc Rockmore (Department of Economics, Clark University); Chih Ming Tan (Department of Economics, University of North Dakota)
    Abstract: We study the effect of early life exposure to above average levels of rainfall on adult mental health. While we find no effect from pre-natal exposure, post-natal positive rainfall shocks decrease average Center for Epidemiological Studies Depression (CESD) mental health scores by 15 percent and increase the likelihood of depression by 5 percent, a more than 20 percent increase relative to the mean. These effects are limited to females. We rule out prenatal stress and income shocks as pathways and find evidence suggestive of increased exposure to disease.
    Keywords: Acute myocardial infarction, instrumental variables, mortality
    JEL: I15 O12
    Date: 2018–05

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