nep-dev New Economics Papers
on Development
Issue of 2019‒07‒22
twelve papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. International Migration Intentions and Illegal Costs: Evidence from Africa-to-Europe Smuggling Routes By Guido, Friebel; Miriam, Manchin; Mariapia, Mendola; Giovanni, Prarolo
  2. Allocation of implementing power: Evidence from World Bank projects By Silvia, Marchesi; Tania, Masi
  3. Is favoritism a threat to Chinese aid effectiveness? A subnational analysis of Chinese development projects By Dreher, Axel; Fuchs, Andreas; Hodler, Roland; Parks, Bradley; Raschky, Paul A.; Tierney, Michael J.
  4. Are some dictators more attractive to foreign investors? By François, Abel; Panel, Sophie; Weill, Laurent
  5. Migration and Informal Insurance By Costas Meghir; Ahmed Mushfiq Mobarak; Ahmed Corina Mommaerts; Ahmed Melanie Morten
  6. Wasted windfalls: Inefficiencies in health care spending in oil rich countries By Olive Nsababera
  7. Assessing the Effects of an Education Policy on Women's Well-being: Evidence from Benin By Sarah Deschênes; Rozenn Hotte
  8. Marriage Market Responses in the Wake of a Natural Disaster in India By Shreyasee Das; Shatanjaya Dasgupta
  9. Are Public Schools Ready to Integrate Math Classes with Khan Academy? By Ferman, Bruno; Finamor, Lucas; Lima, Lycia
  10. Capital Flight, Foreign Direct Investment and Natural Resources in Africa By Leonce Ndikumana; Mare Sarr
  11. Inequality, poverty and the intra-household allocation of consumption in Senegal By Philippe de Vreyer; Sylvie Lambert
  12. Income Levels, Governance and Inclusive Human Development in Sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo

  1. By: Guido, Friebel; Miriam, Manchin; Mariapia, Mendola; Giovanni, Prarolo
    Abstract: Irregular migrants from Africa and the Middle East ow into Europe along land and sea routes under the control of human smugglers. The demise of the Gaddafi regime in 2011 marked the opening of the Central Mediterranean Route for irregular border-crossing between Libya and Italy. This resulted in the immediate expansion of the global smuggling network, which produced an asymmetric reduction in bilateral distance between country pairs across the Mediterranean sea. We exploit this source of spatial and time variation in irregular migration routes to estimate the elasticity of migration intentions to illegal moving costs proxied by distance. We build a novel dataset of geolocalized time-varying migration routes, combined with cross-country survey data on individual intentions to move from Africa (and the Middle East) into Europe. Netting out any country-by-time and pair-level confounders we find a large negative effect of distance along smuggling routes on individual migration intentions. Shorter distances increase the willingness to migrate especially for youth, (medium) skilled individuals and those with a network abroad. The effect is stronger in countries closer to Libya and with weak rule of law.
    Keywords: International Migration, Human Smuggling, Illegal Migration, Libyan Civil War
    JEL: K23 K42
    Date: 2018–11
  2. By: Silvia, Marchesi; Tania, Masi
    Abstract: In this paper we explore the factors that determine the level at which World Bank projects are implemented. In particular, focusing on the importance of informational asymmetry between levels of government, we empirically assess whether this choice is influenced by the relative importance of local information at the recipient country level. Using an AidData dataset that provides information on more than 5800 World Bank projects for the period 1995-2014, and controlling for characteristics at both country and project level, we find that transparency does influence the probability that a project is implemented locally rather than nationally. More specifically, a one standard deviation decline in transparency increases the probability that a World Bank project will be implemented locally by 3 percent.
    Keywords: World Bank projects, Implementing Agency, Transparency.
    JEL: F35 O19 D83
    Date: 2019–01
  3. By: Dreher, Axel; Fuchs, Andreas; Hodler, Roland; Parks, Bradley; Raschky, Paul A.; Tierney, Michael J.
    Abstract: Chinese aid comes with few strings attached, allowing recipient country leaders to use it for domestic political purposes. The vulnerability of Chinese aid to political capture has prompted speculation that it may be economically ineffective, or even harmful. We test these claims by estimating the effect of Chinese aid on subnational economic development - as measured by per-capita nighttime light emissions - and whether this effect is different in politically favored jurisdictions than in other parts of the country. Contrary to the conventional wisdom, we do not nd that the local receipt of Chinese aid undermines economic development outcomes at either the district level or provincial level. Nor does political favoritism in the allocation of Chinese aid towards the home regions of recipient country leaders reduce its effectiveness. Our results - from 709 provinces and 5,835 districts within 47 African countries from 2001-2012 - demonstrate that Chinese aid improves local development outcomes, regardless of whether such aid is allocated to politically consequential jurisdictions.
    Keywords: foreign aid,development finance,aid effectiveness,favoritism,economic growth,Africa,China
    JEL: D73 F35 O19 O47 P33 R11
    Date: 2019
  4. By: François, Abel; Panel, Sophie; Weill, Laurent
    Abstract: Since political uncertainty is greater in dictatorships than in democracies, we test the hypothesis that foreign investors scrutinize public information on dictators to assess this risk. In particular, we as-sume they use five suitable dictators’ characteristics: age, political experience, education level, ed-ucation in economics, and prior experience in business. We perform fixed effects estimations on an unbalanced panel of 100 dictatorial countries from 1973 to 2008 to explain foreign direct investment (FDI) inflows. We find that educated dictators are more attractive to foreign investors. We obtain strong evidence that greater educational attainment of the leader is associated with higher FDI. We also find evidence that the leader having received education in economics and prior experience in business is associated with greater FDI. By contrast, the leader’s age, and political experience have no relationship with FDI. Our results are robust to several tests and checks, including a comparison with democracies.
    JEL: F21 F23
    Date: 2019–07–08
  5. By: Costas Meghir (Cowles Foundation, Yale University, NBER, IZA, CEPR, and Institute for Fiscal Studies); Ahmed Mushfiq Mobarak (Cowles Foundation, Yale University); Ahmed Corina Mommaerts (University of Wisconsin – Madison); Ahmed Melanie Morten (Stanford University and NBER)
    Abstract: Do new migration opportunities for rural households change the nature and extent of informal risk sharing? We experimentally document that randomly offering poor rural households subsidies to migrate leads to a 40% improvement in risk sharing in their villages. We explain this finding using a model of endogenous migration and risk sharing. When migration is risky, the network can facilitate migration by insuring that risk, which in turn crowds-in risk sharing when new migration opportunities arise. We estimate the model and ?nd that welfare gains from migration subsidies are 42% larger, compared with the welfare gains without spillovers, once we account for the changes in risk sharing. Our analysis illustrates that (a) ignoring the spillover effects on the network gives an incomplete picture of the welfare effects of migration, and (b) informal risk sharing may be an essential determinant of the takeup of new income-generating technologies.
    Keywords: Informal Insurance, Migration, Bangladesh, RCT
    JEL: D12 D91 D52 O12 R23
    Date: 2019–07
  6. By: Olive Nsababera (Department of Economics, University of Sussex, Brighton, UK)
    Abstract: This paper examines the long-term impact of refugee camps on the health of local residents in Tanzania. Taking height-for-age z-score (HAZ) as a proxy for health, the paper exploits the fact that different birth cohorts were exposed to different stages of the camps’ lifecycle. Temporal variation through birth cohorts is combined with geographic variation in a difference-in-difference estimation approach. First, the paper examines the generation that were children at the opening of the camps and are now adults (as of 2012). It finds a negative and localised health effect that has persisted into adulthood. The result is comparable to a 2.9% to 5.9% reduction in adult hourly earnings. However, those that were exposed for a longer duration were less affected suggesting that subsequent economic development around camps mitigated the initial adverse effect. Second, this paper compares the subsequent generation that was born once the camps were already in operation, and those born after camps closed. It finds no observable difference in the HAZ score between those born during camps operation and in the post-camp period.
    Keywords: refugees, child health, Tanzania
    JEL: I15 O10 O15 J13
    Date: 2019–07
  7. By: Sarah Deschênes (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); Rozenn Hotte (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: In this paper, we examine the effect of an education policy on women's well- being through the analysis of the impact of a school construction program in Benin. We exploit a sharp increase in school constructions in the 1990s in this country, to assess the causal impact of a primary education program on primary school attendance, age at marriage and tolerance of intimate partner violence (IPV). Using a double dfference method, along with a regression kink design, we find that the program increased the probability to attend primary school in rural areas. The policy also increased age at marriage and decreased the probability to find wife beating tolerable. We show that, in this context, the benefits of girls' education have percolated down to women's well-being beyond the initial goal of the policy.
    Keywords: Education,Marriage,Intimate Partner Violence,Women,Sub- Saharan Africa
    Date: 2019–07
  8. By: Shreyasee Das (Department of Economics, Temple University); Shatanjaya Dasgupta (Department of Economics, Beloit College)
    Abstract: With increasing occurrences of natural disasters globally, there is a need to study their demographic effects both in the short- and long-run. In the backdrop of the 2001 Gujarat earthquake that resulted in over 20,000 casualties and large-scale loss of property, this paper analyzes marriage market responses in the event of a natural disaster. Using the 2004-05 round of the India Human Development Survey and employing a difference-in-differences strategy, we find a statistically significant reduction in women's marriage age, a lower probability of marital matches within the same villages, a decrease in spousal educational difference and probability of marrying a husband with more education, and an increased likelihood of women marrying into poorer households. Additionally, we discuss how our results could be affected by several channels and provide empirical evidence on changes in dowry payments as a potential mechanism.
    Keywords: Marriage; India; Gujarat Earthquake
    JEL: J12 J16 O53
    Date: 2019–07
  9. By: Ferman, Bruno; Finamor, Lucas; Lima, Lycia
    Abstract: We study the impacts of the program Khan Academy in Schools using a randomized control trial in Brazilian primary public schools. Once a week, teachers would take their students to the school's computer lab and teach using the Khan Academy platform, instead of their standard math classes. We find positive effects of the program on measures of attitudes towards math, which were not translated to a positive average treatment effect on students' math proficiency. We also explore treatment heterogeneity by quality of implementation, suggesting that the program can have positive effects when there are no infrastructure problems and when the implementation modality is based on one computer per student. These results highlight the implementation challenges associated with educational tech-interventions in developing countries.
    Keywords: Education technology, personalized learning, productivity in education, randomized control trial
    JEL: C93 I21 J24
    Date: 2019–06–27
  10. By: Leonce Ndikumana (Department of Economics and PERI, University of Massachusetts Amherst); Mare Sarr (School of International Affairs, Pennsylvania State University)
    Abstract: This paper provides theoretical and empirical insights into the puzzling simultaneous rise in foreign direct investment inflows in Africa and capital flight from the continent over the past decades. Indeed, paradoxically, even as African countries have become more attractive to foreign private capital, they have continued to experience capital exodus in the context of improved economic performance, especially since the turn of the century. This paper explores three questions. First, does foreign direct investment fuel capital flight as has been established in the case of external borrowing? In other words, is there an FDI-fueled capital flight phenomenon akin to debt-fueled capital flight? Second, is natural resource endowment a possible channel for the capital flight-FDI link, given that resource-rich countries tend to be both preferred destinations of FDI and prominent sources of capital flight? Third, does the quality of institutions mitigate the impact of natural resources on capital flight? The paper develops a theoretical model that conceptualizes these linkages and sets the stage for an econometric investigation of these questions. The results from econometric analysis based on a sample of 30 African countries over the period 1970-2015 show that FDI flows are positively related to capital flight, suggesting a possible FDI-fueled capital flight phenomenon. However, there is no evidence for an FDI overhang effect; past stock of FDI has no impact on capital flight. High natural resource rents are associated with high capital flight and the quality of institutions does not mitigate this link. The paper offers some policy insights derived from the empirical results.
    Keywords: capital flight; foreign direct investment; natural resources; Africa
    JEL: F3 O16 O55
    Date: 2019
  11. By: Philippe de Vreyer (DIAL - Développement, institutions et analyses de long terme, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique); 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: Intra-household inequalities have long been a source of concern for policy design, but there is very little evidence. The current practice of ignoring inequality within households could lead to an underestimation of both overall inequality and poverty levels, as well as to the misclassification of some individuals as regards to their poverty status. Using a novel survey for Senegal in which consumption data were collected at a disaggregated level, this paper quantifies these various effects. In total, two opposing effects, one on mean and one on inequality, compensate each other in terms of the overall poverty rate, but individual poverty statuses are affected. Intra-household consumption inequalities accounts for 14% of inequality in Senegal. We uncover the fact that household structure and organization are key correlates of intra-household inequality and individual risk of poverty.
    Keywords: Inequality,Poverty,Household sruveys,Intra-household allocation,Senegal
    Date: 2019–07
  12. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This study examines how income-driven governance affects inclusive human development in Sub-Saharan Africa with data for the period 2000-2012. The empirical evidence is based on the Generalised Method of Moments (GMM) and Tobit regressions. Nine bundled and unbundled concepts of governance are used: political (voice & accountability and political stability/no violence), economic (government effectiveness and regulation quality) and institutional (corruption-control and the rule of law) governances. The main finding is that ‘middle income’-driven governance has a higher effect on inclusive human development than ‘low income’-driven governance. Policy implications are discussed in the light of: (i) the contemporary relevance of findings; (ii) the pivotal role of a higher income level in the post-2015 sustainable development agenda; and (iii) inconsistent strands in the literature and in foreign aid policies.
    Keywords: Inclusive development; Income levels; Governance; Africa
    JEL: D31 I10 I32 K40 O55
    Date: 2019–01

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